The UK's Coal Authority has approved a bid by a company to explore whether coal seams beneath the Humber could be used to produce "clean" energy.
Studies by the Clean Coal Company suggest there are coal reserves of 200m tonnes between Grimsby and Immingham.
That would be enough to meet half the energy needs of Grimsby and Hull for at least 30 years, the company said.
In a process called gasification, coal would be turned into a gas underground and then used as a fuel.
Carbon dioxide would be separated during the gasification process and stored in the underground cavities left by burning the coal.
The Humber is one of five locations around the UK coast to be surveyed by the company for potential energy use.
The site stretches over 50 sq miles (80 sq km), with survey boreholes being drilled at depths of up to 0.7 miles (1.2 km).
COAL GASIFICATION
The process of underground coal gasification works by pumping a mix of water and air or oxygen in to a coal seam, through a borehole
The coal is burnt underground, and the gas produced in the process can then be used as a fuel
Supporters of the process say immediate benefits include no need for traditional mining
The company said the investigations, which will be carried out in the first half of 2010, would have no detrimental impact on marine life, shipping or fishing in the estuary.
If the project does go ahead it would lead to a multi-million pound investment in North East Lincolnshire and create up to 30 jobs.
According to Clean Coal, this would be the first time that the gasification of underground coal would be potentially available to the UK energy market.
The gas extracted in the process can be used to power electricity generating turbines, industrial heating, or used in jet and diesel oil production.
Clean Coal chairman Rohan Courtney said: "Recent developments in directional drilling technology and the growing need for new, secure and environmentally benign sources of energy means that underground coal gasification now merits serious investigation.
"This is an exciting and commercially viable development which can bring significant long-term benefit to Humberside."
A Friends of the Earth spokesman said: "As long as no danger was posed to marine wildlife, and all the C02 produced by any gasification of the coal seam was fully captured and stored underground, then it's definitely a potential source of energy that should be looked at."
Source: BBC
Thursday, December 10, 2009
China To Triple Manganese Ore Imports From China
China will triple its manganese ore imports from Ghana, according to information from global steel industry sources.
Manganese ore which is an important raw material for the production of steel is in high demand following the rising demand for steel and the decline in manganese ore stocks.
China which imports about 80% of its manganese ore from Gabon, South Africa, Australia, the ASEAN region and Ghana is intent on doubling the overall import figure.
China plans to triple the 45,000 tonnes manganese ore import from Ghana by 1.8 times.
Available statistics show that from January to October of 2009 the manganese ore from Gabon through China’s Guangdong port reached 349,000 tonnes up by 41.4%, ore from South Africa rose to 218,000 tonnes, up by 11.1%. The ore from Australia was 166,000 tonnes down by 62.6% and from Brazil, China imported 152,000 tonnes, a significant increase by 1.3 fold. Imports from the four countries accounted for 83.7% of the total manganese ore imports through the Guangdong port. An additional, 78,000 tonnes import was from ASEAN.
According to Guangzhou Customs’ available data of December 3, 2009, from January to October of 2009 manganese ore and concentrate imported through Guangdong port reached 1.059 million tonnes worth US$230 million down by 3.7% year-on-year and 55.3% year-on-year.
Compared with September imports, October imports decreased some 14.9 million tonnes up by 39.1% year-on-year worth US$25.93 million down by 60.1% yearon-year.
China’s growing interest in Ghana can be seen in the fact that it has shown a strong interest in the country’s nascent oil industry. About two days ago, China gave money to Ghana to develop its oil infrastructure. China has also been a strong contender for the stake of Kosmos Energy in Ghana’s largest oil field, the Jubilee field.
In October 2009, a Chinese mining company , Bosai Minerals Group Co. Ltd., offered to pay $30 million for the Awaso bauxite mine in Ghana.
World aluminae giant, Rio Tinto, owners of the mine were reported to have agreed to sell 80% stake in the mine to Bosai.
Manganese ore which is an important raw material for the production of steel is in high demand following the rising demand for steel and the decline in manganese ore stocks.
China which imports about 80% of its manganese ore from Gabon, South Africa, Australia, the ASEAN region and Ghana is intent on doubling the overall import figure.
China plans to triple the 45,000 tonnes manganese ore import from Ghana by 1.8 times.
Available statistics show that from January to October of 2009 the manganese ore from Gabon through China’s Guangdong port reached 349,000 tonnes up by 41.4%, ore from South Africa rose to 218,000 tonnes, up by 11.1%. The ore from Australia was 166,000 tonnes down by 62.6% and from Brazil, China imported 152,000 tonnes, a significant increase by 1.3 fold. Imports from the four countries accounted for 83.7% of the total manganese ore imports through the Guangdong port. An additional, 78,000 tonnes import was from ASEAN.
According to Guangzhou Customs’ available data of December 3, 2009, from January to October of 2009 manganese ore and concentrate imported through Guangdong port reached 1.059 million tonnes worth US$230 million down by 3.7% year-on-year and 55.3% year-on-year.
Compared with September imports, October imports decreased some 14.9 million tonnes up by 39.1% year-on-year worth US$25.93 million down by 60.1% yearon-year.
China’s growing interest in Ghana can be seen in the fact that it has shown a strong interest in the country’s nascent oil industry. About two days ago, China gave money to Ghana to develop its oil infrastructure. China has also been a strong contender for the stake of Kosmos Energy in Ghana’s largest oil field, the Jubilee field.
In October 2009, a Chinese mining company , Bosai Minerals Group Co. Ltd., offered to pay $30 million for the Awaso bauxite mine in Ghana.
World aluminae giant, Rio Tinto, owners of the mine were reported to have agreed to sell 80% stake in the mine to Bosai.
Large Lead and Zinc Deposit Discovered In Hubei Province
Interfax China reports that a large-sized lead and zinc deposit, containing 1.5 million tonnes of lead and zinc resources was recently discovered by local authorities in Shennongjia district in western Hubei Province.
According to a Changjiang Times report, exploration work at the deposit is now being funded by the central government.
An employee from the Hubei Provincial Institute of Geological Survey, which is now conducting exploration work at the deposit, said that it will take 4 to 5 years to complete the exploration work at the deposit. Then we will look for a company to cooperate on production. He declined to disclose further details of the deposit.
Source: Steel Guru
According to a Changjiang Times report, exploration work at the deposit is now being funded by the central government.
An employee from the Hubei Provincial Institute of Geological Survey, which is now conducting exploration work at the deposit, said that it will take 4 to 5 years to complete the exploration work at the deposit. Then we will look for a company to cooperate on production. He declined to disclose further details of the deposit.
Source: Steel Guru
Ivanhoe Set To Begin Work On Mongolia Copper-Gold Mine
Ivanhoe Mines will begin full-scale construction at the Mongolian Oyu Tolgoi copper-gold mining complex in 2010, with a year-long budget of US$758 million.
The Vancouver-based company said the 2010 budget, approved with its partner Rio Tinto PLC, provides for an early start on a site-wide development program at the southern Mongolian mining complex.
“The approval of the 2010 construction budget represents the next big step toward bringing this project into production,” said president and CEO John Macken.
“Ivanhoe is considering a schedule that could see construction of the initial open-pit mine completed in 2012 and commercial production begin in 2013.”
Work in 2010 is planned to include pouring concrete for the foundation of the 100,000 tonne-per-day concentrator, installation of a 20-megawatt power station and 35-kilovolt distribution system and construction on a highway link to the Mongolia-China border and a regional airport.
Ivanhoe Mines recently signed the long-awaited deal with Mongolia to develop the Oyu Tolgoi project after a heated national debate over how to exploit the country’s mineral wealth.
The agreement on the gold and copper mine in the Gobi desert was renegotiated repeatedly after opponents complained it shortchanged Mongolia, which lies wedged between Russia and China and has long been wary of foreign domination.
Ivanhoe Mines also has an 80 per cent stake in SouthGobi Energy Resources Ltd., focused on exploring and developing metallurgical and thermal coal deposits in Mongolia and Indonesia.
Source: Canadian Press
The Vancouver-based company said the 2010 budget, approved with its partner Rio Tinto PLC, provides for an early start on a site-wide development program at the southern Mongolian mining complex.
“The approval of the 2010 construction budget represents the next big step toward bringing this project into production,” said president and CEO John Macken.
“Ivanhoe is considering a schedule that could see construction of the initial open-pit mine completed in 2012 and commercial production begin in 2013.”
Work in 2010 is planned to include pouring concrete for the foundation of the 100,000 tonne-per-day concentrator, installation of a 20-megawatt power station and 35-kilovolt distribution system and construction on a highway link to the Mongolia-China border and a regional airport.
Ivanhoe Mines recently signed the long-awaited deal with Mongolia to develop the Oyu Tolgoi project after a heated national debate over how to exploit the country’s mineral wealth.
The agreement on the gold and copper mine in the Gobi desert was renegotiated repeatedly after opponents complained it shortchanged Mongolia, which lies wedged between Russia and China and has long been wary of foreign domination.
Ivanhoe Mines also has an 80 per cent stake in SouthGobi Energy Resources Ltd., focused on exploring and developing metallurgical and thermal coal deposits in Mongolia and Indonesia.
Source: Canadian Press
Australia Coal, Iron Ore Earnings At Record Levels
AUSTRALIA'S export earnings from resources dropped 2 per cent in the September quarter on the back of the rising Australian dollar, but export volumes for iron ore and coal reached record levels.
The latest mineral statistics report from the Australian Bureau of Resource Economics, (Abare), today showed that earnings from energy and mineral resources fell to $30.2 billion, with a 10 per cent increase in the value of the Australian dollar against the US currency playing a major factor in the decline.
Export earnings for coal and iron ore were lower during the September quarter but export volumes of the commodities reached record levels, the report found.
Abare’s deputy executive director, Terry Sheales, said: "Strong demand for coal and iron ore from Japan, the Republic of Korea and China underpinned record export volumes in the September quarter.”
The report also found that production was higher in the quarter for about two-thirds of Australia's major mineral and energy commodities. Significant increases in production were observed for diamonds, iron, steel, refined gold, iron ore, mined nickel and coal.
Commodities recording significant increases in export earnings in the September quarter included liquefied petroleum gas, up 47 per cent to $292 million, nickel, up 31 per cent to $833m and liquefied natural gas, up 8 per cent to $1.7 billion.
The increases were offset by commodities, which recorded declines in export earnings, including metallurgical coal, down 11 per cent to $5.5bn, and thermal coal, down 9 per cent to $3.2bn.
source: The Australian
The latest mineral statistics report from the Australian Bureau of Resource Economics, (Abare), today showed that earnings from energy and mineral resources fell to $30.2 billion, with a 10 per cent increase in the value of the Australian dollar against the US currency playing a major factor in the decline.
Export earnings for coal and iron ore were lower during the September quarter but export volumes of the commodities reached record levels, the report found.
Abare’s deputy executive director, Terry Sheales, said: "Strong demand for coal and iron ore from Japan, the Republic of Korea and China underpinned record export volumes in the September quarter.”
The report also found that production was higher in the quarter for about two-thirds of Australia's major mineral and energy commodities. Significant increases in production were observed for diamonds, iron, steel, refined gold, iron ore, mined nickel and coal.
Commodities recording significant increases in export earnings in the September quarter included liquefied petroleum gas, up 47 per cent to $292 million, nickel, up 31 per cent to $833m and liquefied natural gas, up 8 per cent to $1.7 billion.
The increases were offset by commodities, which recorded declines in export earnings, including metallurgical coal, down 11 per cent to $5.5bn, and thermal coal, down 9 per cent to $3.2bn.
source: The Australian
Hana Mining Discovers More Copper In Ghanzi
Hana Mining has announced completion of 14 new RC drill holes at its Ghanzi copper-silver project in Botswana which extends total mineralisation in the Company's current focus area, Banana zone.
During an interview with Mineweb, Hana Mining CEO Marek Kreczmer said the findings will likely increase the overall resource to 80 - 100m tonnes. This also extends mineralisation by 1600m along strike for two sections in the Banana zone, the South Limb and Southwest Fold Closure.
The highlights of the recent drilling results show that four new holes in the South Limb extend mineralised strike length by 600 metres to 1.8km. Ten new holes in the Southwest fold represent new mineralised strike length of 1000 metres in an area never tested by any type of drilling.
The company said the results in the South Limb show continuation of mineable grade copper/silver mineralisation trending south from previously released results.
Results from the Southwest fold show lower grade, near surface mineralisation over large widths (16 to 48 metres) and at shallow dip. Hana said the main copper minerals in the Southwest fold are malachite and chalcocite, unlike other areas which are predominantly bornite and chalcopyrite.
Kreczmer said he has been spending the past weeks in Botswana's capital, Gaborone, meeting with government officials and looking at various office spaces. He said they hope to have an established office early 2010 in Gaborone.
In June, the company announced that its drilling results have shown an inferred resource of 2.9 billion pounds of copper and 51.5 million ounces of silver at its Ghanzi Copper-Silver deposit.
The company, which is headquartered in Vancouver, Canada and is listed on the TSX (Toronto Stock Exchange) Venture Exchange and the Frankfurt Exchange says it views Botswana as a very favourable area for conducting business and also commended the government's support for developing mining diversification.
The mineralisation at the Ghantsi Copper-Silver property is classified as a sediment-hosted copper-silver deposit. Among the best-known deposits of similar type is the vast Kuperschiefer deposit in Poland where mineralisation occurs to a vertical depth of at least 700 metres and is open.
The company said this type of copper deposit can generate a resource that is both very large and of attractive grade, making it viable for world-scale mining opportunities.
The Ghanzi Project consists of five licence blocks covering 2,200 square kilometres. The area is host to widespread sediment-hosted copper-silver mineralisation. The property has been explored intermittently since 1962 by numerous companies. Hana Mining said the exploration work was done when copper prices were lower than today and regional infrastructure was not as advanced as at present.
The company plans to get power from the Maun grid, which is situated on the northern end of the property and to use the Trans-Kalahari Highway which passes within 10 kilometres of the north end of the property as well.
Hana Mining recently raised about $3.2 million in funding as part of a financing package announced on May 29, 2009 and will now work towards enhancing the value of the deposit by completing power and infrastructure studies and expanding the resource base through testing of drill-ready targets.
Source: Mmegi Online
During an interview with Mineweb, Hana Mining CEO Marek Kreczmer said the findings will likely increase the overall resource to 80 - 100m tonnes. This also extends mineralisation by 1600m along strike for two sections in the Banana zone, the South Limb and Southwest Fold Closure.
The highlights of the recent drilling results show that four new holes in the South Limb extend mineralised strike length by 600 metres to 1.8km. Ten new holes in the Southwest fold represent new mineralised strike length of 1000 metres in an area never tested by any type of drilling.
The company said the results in the South Limb show continuation of mineable grade copper/silver mineralisation trending south from previously released results.
Results from the Southwest fold show lower grade, near surface mineralisation over large widths (16 to 48 metres) and at shallow dip. Hana said the main copper minerals in the Southwest fold are malachite and chalcocite, unlike other areas which are predominantly bornite and chalcopyrite.
Kreczmer said he has been spending the past weeks in Botswana's capital, Gaborone, meeting with government officials and looking at various office spaces. He said they hope to have an established office early 2010 in Gaborone.
In June, the company announced that its drilling results have shown an inferred resource of 2.9 billion pounds of copper and 51.5 million ounces of silver at its Ghanzi Copper-Silver deposit.
The company, which is headquartered in Vancouver, Canada and is listed on the TSX (Toronto Stock Exchange) Venture Exchange and the Frankfurt Exchange says it views Botswana as a very favourable area for conducting business and also commended the government's support for developing mining diversification.
The mineralisation at the Ghantsi Copper-Silver property is classified as a sediment-hosted copper-silver deposit. Among the best-known deposits of similar type is the vast Kuperschiefer deposit in Poland where mineralisation occurs to a vertical depth of at least 700 metres and is open.
The company said this type of copper deposit can generate a resource that is both very large and of attractive grade, making it viable for world-scale mining opportunities.
The Ghanzi Project consists of five licence blocks covering 2,200 square kilometres. The area is host to widespread sediment-hosted copper-silver mineralisation. The property has been explored intermittently since 1962 by numerous companies. Hana Mining said the exploration work was done when copper prices were lower than today and regional infrastructure was not as advanced as at present.
The company plans to get power from the Maun grid, which is situated on the northern end of the property and to use the Trans-Kalahari Highway which passes within 10 kilometres of the north end of the property as well.
Hana Mining recently raised about $3.2 million in funding as part of a financing package announced on May 29, 2009 and will now work towards enhancing the value of the deposit by completing power and infrastructure studies and expanding the resource base through testing of drill-ready targets.
Source: Mmegi Online
Iron Ore Holdings Reaches Agreement Over Phil's Creek
ASX-listed Iron Ore Holdings has reached a final land access agreement with the Martu Idjya Banyjima Native Title Group (MIB) covering the Phil’s Creek iron-ore project, in the Central Pilbara of Western Australia.
This was the second, and final native title agreement covering this project, ensuring that a mining tenure could now be granted.
“This is yet another milestone in the progress of the company towards production at its Phil’s Creek project. We look forward to our future collaboration with the MIB people who will also benefit as a stakeholder in our future progress,” said company MD Matt Rimes.
“The process of negotiation with MIB has allowed us to develop a solid working relationship which will also offer further employment opportunities to local communities as well as the associated financial benefits which will flow from the development of our projects.”
Iron Ore Holdings said in a statement that the agreement followed extensive consultation with the MIB, and was another step in the company’s path towards iron-ore production at Phil’s Creek.
The Phil’s Creek project was expected to be Iron Ore Holding’s first production opportunity. The formal mine gate sale agreement with diversified giant Rio Tinto was now in its final stages and production of up to 1,5 million tons a year was expected to start in late 2010.
Source: Mining Weekly
This was the second, and final native title agreement covering this project, ensuring that a mining tenure could now be granted.
“This is yet another milestone in the progress of the company towards production at its Phil’s Creek project. We look forward to our future collaboration with the MIB people who will also benefit as a stakeholder in our future progress,” said company MD Matt Rimes.
“The process of negotiation with MIB has allowed us to develop a solid working relationship which will also offer further employment opportunities to local communities as well as the associated financial benefits which will flow from the development of our projects.”
Iron Ore Holdings said in a statement that the agreement followed extensive consultation with the MIB, and was another step in the company’s path towards iron-ore production at Phil’s Creek.
The Phil’s Creek project was expected to be Iron Ore Holding’s first production opportunity. The formal mine gate sale agreement with diversified giant Rio Tinto was now in its final stages and production of up to 1,5 million tons a year was expected to start in late 2010.
Source: Mining Weekly
Xstrata Coal Customers "Against Moving To Quaterly Contracts"
XSTRATA COAL says its coking coal customers are "uniformly" against moving to quarterly contract prices, setting the scene for a stoush between coal buyers and sellers over moves to abandon the one-year contract system.
BHP Billiton wants to ditch contracts, but Mark Eames, the head of Xstrata's Australian coal business, told investors the steel mills that buy coking coal were ''fundamentally opposed'' to the move.
A large proportion of coking coal is now sold on one-year contracts. Prices are set early in the year after lengthy negotiations.
But in recent months, miners including BHP, Anglo Coal and Macarthur Coal have indicated they plan to move towards pricing based on a changeable index.
Xstrata customers have told the Anglo-Swiss group that abandoning one-year contracts would disrupt the steel mills' ability to supply their customers.
''For them to effectively set a price for their customers without knowing the costs of their inputs exposes them to considerable additional risk,'' Mr Eames said at an investor briefing in London.
''It exposes the steel makers to considerable uncertainty.''
On the other hand, analysts say that miners advocating the changes stand to gain from index pricing, because it will allow prices to rise more quickly, in line with booming demand from China and India.
Xstrata, the world's biggest thermal coal producer, also said it was keeping a close eye on opportunities in the NSW coal industry, which has recently been swept up in a series of takeovers.
''There remains some potential for consolidation,'' said Peter Freyberg, the chief executive of Xstrata Coal. ''We already have a very significant presence, as do a lot of the other major players.''
However, in a possible reference to a $480 million purchase by the mining tycoon Nathan Tinkler, he said recent deals in the sector appeared to have been overpriced.
Mr Eames gave a bullish view on the outlook for coking coal and thermal coal prices - similar to the upbeat forecasts from other coal companies - as the world economy gathers pace.
Thanks to surging demand from China and dwindling global supply, he said this year's prices would be the second highest on record.
''We are still awaiting recovery in some of our key markets … When these come back in, it bodes very well for the future,'' he said.
In a sign of the potential in China, Mr Eames said the country was building the equivalent of all of Britain's power stations every 15 months, and most were coal-fired plants.
Source: Sydney Morning Herald
BHP Billiton wants to ditch contracts, but Mark Eames, the head of Xstrata's Australian coal business, told investors the steel mills that buy coking coal were ''fundamentally opposed'' to the move.
A large proportion of coking coal is now sold on one-year contracts. Prices are set early in the year after lengthy negotiations.
But in recent months, miners including BHP, Anglo Coal and Macarthur Coal have indicated they plan to move towards pricing based on a changeable index.
Xstrata customers have told the Anglo-Swiss group that abandoning one-year contracts would disrupt the steel mills' ability to supply their customers.
''For them to effectively set a price for their customers without knowing the costs of their inputs exposes them to considerable additional risk,'' Mr Eames said at an investor briefing in London.
''It exposes the steel makers to considerable uncertainty.''
On the other hand, analysts say that miners advocating the changes stand to gain from index pricing, because it will allow prices to rise more quickly, in line with booming demand from China and India.
Xstrata, the world's biggest thermal coal producer, also said it was keeping a close eye on opportunities in the NSW coal industry, which has recently been swept up in a series of takeovers.
''There remains some potential for consolidation,'' said Peter Freyberg, the chief executive of Xstrata Coal. ''We already have a very significant presence, as do a lot of the other major players.''
However, in a possible reference to a $480 million purchase by the mining tycoon Nathan Tinkler, he said recent deals in the sector appeared to have been overpriced.
Mr Eames gave a bullish view on the outlook for coking coal and thermal coal prices - similar to the upbeat forecasts from other coal companies - as the world economy gathers pace.
Thanks to surging demand from China and dwindling global supply, he said this year's prices would be the second highest on record.
''We are still awaiting recovery in some of our key markets … When these come back in, it bodes very well for the future,'' he said.
In a sign of the potential in China, Mr Eames said the country was building the equivalent of all of Britain's power stations every 15 months, and most were coal-fired plants.
Source: Sydney Morning Herald
Wednesday, December 9, 2009
Baosteel Replaces CISA As Lead Iron Ore Negotiator
Action seems to be hotting up on the iron ore price negotiation front with steelmaker Baosteel Group replacing China Iron and Steel Association (CISA) as the chief negotiator for the Chinese side in its talks with the big three iron ore suppliers, BHP Billiton, Rio Tinto and Vale.
The negotiations, which are likely to start by the end of December, also assume significance against the backdrop of Rio and BHP further consolidating their mining operations over the weekend.
This year's iron ore price negotiations reached an impasse in June after China's chief negotiator CISA insisted on a 45 percent discount over last year's prices, after a 33 percent cut in benchmark iron ore prices had been reached by the "Big Three" with other Asian steel mills.
Chinese steel mills have since then started sourcing ore supplies from the spot market or signed individual contracts with the "Big Three", for a 33 to 28 percent cut, without revealing details.
Baosteel, the country's largest steel mill, was always at the forefront of the iron ore pricing talks since 2003, but was replaced by CISA this year as prices continued to increase.
The bitter and protracted row over the ore talks raised doubts in industry circles on whether the association was the right candidate to spearhead the negotiations.
"Next year's iron ore talks could see results, as Baosteel has several years of experience in iron ore talks. They are also capable of formulating decisions that can best encompass the prevailing market trends," said Yu Liangui, a steel analyst with Mysteel Research Institute.
During the 2007 negotiations Baosteel achieved the first price agreement of that year with Vale of Brazil, only 9.5 percent up from the previous year. Achieving the first agreement of the year was crucial, as it prevented the levels of other international agreements pushing the price up for China. This meant that in 2007, China's steelmakers achieved record profits on the back of stable and relatively low production costs.
"It would suit Baosteel better if it is able to reach a first price agreement with Vale as it is a long-term price advocator. Such a move would also be a blow to BHP, which always prefers to use the spot price to follow the long-term price," said Yu.
However, he warned that inordinate delays in fixing a price would be detrimental for Chinese steelmakers as prices may go up once the global economy starts recovering.
Baosteel is planning to replace its present chief negotiator Ding Shouhu in next year's talks, while Rio Tinto may also have a new representative, according to sina.com.
The real challenge in next year's talks would be to achieve a price that is in the best interests of all concerned. That seems to be a tough task as international analysts have predicted a 20 to 30 percent increase in iron ore prices for 2010.
The decision of Rio Tinto and BHP Billiton to merge their Australian iron ore resources is also not good news for Chinese steelmakers.
The two mining giants signed a binding agreement last week to consolidate their iron ore operations in Western Australia. Plans for the joint venture were originally announced in June and are awaiting regulatory approval.
"China will face a more serious threat if the Rio and BHP joint venture gains ground as their resource monopoly will help them in controlling capacities and prices," said Zhang Ye, vice-general manager of China National Minerals, a wholly owned subsidiary of metals trader China Minmetals.
Zhang said Chinese steel mills should look at diversifying their iron ore supplies further and also improve the negotiation tactics at the talks.
Yang Siming, chairman of Nanjing Iron & Steel Group, said benchmark iron ore prices might rise 5 to 10 percent next year. But the bigger worry for Chinese mills would be the skyrocketing ocean freight charges.
Analysts also feel that the joint moves by BHP and Rio would propel Chinese steelmakers to the industry consolidation mode.
The Chinese government has for long wanted to consolidate the fragmented industry as domestic steel firms are disadvantaged in annual international iron ore negotiations due to the low industry concentration.
The nation's iron ore imports rose 36.8 percent to 45.5 million tons in the first 10 months from a year earlier, Customs said on Nov 12.
Source: China Daily
The negotiations, which are likely to start by the end of December, also assume significance against the backdrop of Rio and BHP further consolidating their mining operations over the weekend.
This year's iron ore price negotiations reached an impasse in June after China's chief negotiator CISA insisted on a 45 percent discount over last year's prices, after a 33 percent cut in benchmark iron ore prices had been reached by the "Big Three" with other Asian steel mills.
Chinese steel mills have since then started sourcing ore supplies from the spot market or signed individual contracts with the "Big Three", for a 33 to 28 percent cut, without revealing details.
Baosteel, the country's largest steel mill, was always at the forefront of the iron ore pricing talks since 2003, but was replaced by CISA this year as prices continued to increase.
The bitter and protracted row over the ore talks raised doubts in industry circles on whether the association was the right candidate to spearhead the negotiations.
"Next year's iron ore talks could see results, as Baosteel has several years of experience in iron ore talks. They are also capable of formulating decisions that can best encompass the prevailing market trends," said Yu Liangui, a steel analyst with Mysteel Research Institute.
During the 2007 negotiations Baosteel achieved the first price agreement of that year with Vale of Brazil, only 9.5 percent up from the previous year. Achieving the first agreement of the year was crucial, as it prevented the levels of other international agreements pushing the price up for China. This meant that in 2007, China's steelmakers achieved record profits on the back of stable and relatively low production costs.
"It would suit Baosteel better if it is able to reach a first price agreement with Vale as it is a long-term price advocator. Such a move would also be a blow to BHP, which always prefers to use the spot price to follow the long-term price," said Yu.
However, he warned that inordinate delays in fixing a price would be detrimental for Chinese steelmakers as prices may go up once the global economy starts recovering.
Baosteel is planning to replace its present chief negotiator Ding Shouhu in next year's talks, while Rio Tinto may also have a new representative, according to sina.com.
The real challenge in next year's talks would be to achieve a price that is in the best interests of all concerned. That seems to be a tough task as international analysts have predicted a 20 to 30 percent increase in iron ore prices for 2010.
The decision of Rio Tinto and BHP Billiton to merge their Australian iron ore resources is also not good news for Chinese steelmakers.
The two mining giants signed a binding agreement last week to consolidate their iron ore operations in Western Australia. Plans for the joint venture were originally announced in June and are awaiting regulatory approval.
"China will face a more serious threat if the Rio and BHP joint venture gains ground as their resource monopoly will help them in controlling capacities and prices," said Zhang Ye, vice-general manager of China National Minerals, a wholly owned subsidiary of metals trader China Minmetals.
Zhang said Chinese steel mills should look at diversifying their iron ore supplies further and also improve the negotiation tactics at the talks.
Yang Siming, chairman of Nanjing Iron & Steel Group, said benchmark iron ore prices might rise 5 to 10 percent next year. But the bigger worry for Chinese mills would be the skyrocketing ocean freight charges.
Analysts also feel that the joint moves by BHP and Rio would propel Chinese steelmakers to the industry consolidation mode.
The Chinese government has for long wanted to consolidate the fragmented industry as domestic steel firms are disadvantaged in annual international iron ore negotiations due to the low industry concentration.
The nation's iron ore imports rose 36.8 percent to 45.5 million tons in the first 10 months from a year earlier, Customs said on Nov 12.
Source: China Daily
Indian Sponge Iron Prices Up 5 Per Cent In Two Days
Sponge iron producers in India have raised basic selling prices of their products by 5.25 per cent in the last two days on apprehensions that the ongoing raids to stop illegal iron ore mining across the country may create scarcity of the raw material in the short term.
With the current upward revision, high quality of sponge iron was quoted at Rs 14,200 a tonne while the mid and low grade steel-making raw material was sold at Rs 13,700-14,000 a tonne.
Producers, however, consider the current trend a “blessing in disguise” as after several months of poor demand there is a revival in steel and thereby, sponge iron industry is in sight. Sponge iron producers are looking for an opportunity to raise their products’ selling prices further to cash in on the anticipated rise in demand.
“The industry was operating with virtually ‘zero’ margin and working just to honour the commitments. Profit margins had bottomed out due to high iron ore prices and low demand from steel industry,” said Amitabh Mudgal, vice president (Marketing and Corporate Affairs) of Monnet Ispat, one of the largest players in the industry.
With revival in the construction sector, it is likely to see a huge investment in the coming months. Pending projects are likely to get second round of funding by December-end.
Also steel scrap, another raw material for steelmaking, was selling at $340 a tonne as against $290-315 a tonne a month ago. As a result, billet and re-bar producers raised prices in tandem to sell their produce at Rs 23,000 a tonne and Rs 26,700 a tonne, respectively.
Meanwhile, R K Sharma, Secretary General of the Federation of Indian Minerals Industries (FIMI), the apex mining trade body, said the closure of 56 mines (50 in Orissa and 6 in Andhra Pradesh) is unlikely to result in scarcity of iron ore in the country. Rival iron ore producers always take advantage of closures of mines and they raise production. Hence, there would no shortage of iron ore in the country, Sharma said.
According to sources, the government suspended mining activity in 128 mines and cancelled 482 trading licences in Orissa for acts of irregularities following vigilance raids.
The government is also cracking down companies and traders, engaged in illegal mining in Goa. Goa, Andhra Pradesh and Orissa, the major ore producing states in the country, together contribute 50 per cent of exports.
Source: Business Standard
With the current upward revision, high quality of sponge iron was quoted at Rs 14,200 a tonne while the mid and low grade steel-making raw material was sold at Rs 13,700-14,000 a tonne.
Producers, however, consider the current trend a “blessing in disguise” as after several months of poor demand there is a revival in steel and thereby, sponge iron industry is in sight. Sponge iron producers are looking for an opportunity to raise their products’ selling prices further to cash in on the anticipated rise in demand.
“The industry was operating with virtually ‘zero’ margin and working just to honour the commitments. Profit margins had bottomed out due to high iron ore prices and low demand from steel industry,” said Amitabh Mudgal, vice president (Marketing and Corporate Affairs) of Monnet Ispat, one of the largest players in the industry.
With revival in the construction sector, it is likely to see a huge investment in the coming months. Pending projects are likely to get second round of funding by December-end.
Also steel scrap, another raw material for steelmaking, was selling at $340 a tonne as against $290-315 a tonne a month ago. As a result, billet and re-bar producers raised prices in tandem to sell their produce at Rs 23,000 a tonne and Rs 26,700 a tonne, respectively.
Meanwhile, R K Sharma, Secretary General of the Federation of Indian Minerals Industries (FIMI), the apex mining trade body, said the closure of 56 mines (50 in Orissa and 6 in Andhra Pradesh) is unlikely to result in scarcity of iron ore in the country. Rival iron ore producers always take advantage of closures of mines and they raise production. Hence, there would no shortage of iron ore in the country, Sharma said.
According to sources, the government suspended mining activity in 128 mines and cancelled 482 trading licences in Orissa for acts of irregularities following vigilance raids.
The government is also cracking down companies and traders, engaged in illegal mining in Goa. Goa, Andhra Pradesh and Orissa, the major ore producing states in the country, together contribute 50 per cent of exports.
Source: Business Standard
China Gets Ready To Take On Iron Ore Giants
China’s iron and steel industry looks set for mergers and integrations next year, as the sector gets ready to build its bargaining power to take on BHP Billiton and Rio Tinto.
A planned $US116 billion ($128.3 billion) joint venture of the Pilbara iron ore assets owned by BHP Billiton and Rio Tinto has upset many customers, including those in China.
The mining giants signed a binding contract for the merger of their iron ore operations on Saturday, expected to create $US10 billion in synergies for the companies.
But China’s official China Daily News said today that the move was conveying ‘‘severe price pressure to domestic iron and steel companies’’ and plans were made to respond.
‘‘Chinese companies have to concentrate and strengthen the bargaining power in price negotiations by integrating numerous smaller companies into several big strong players,’’ the news organisation said on its website.
‘‘Chinese industry has been considering the integrations, but must speed up.
‘‘The two giant iron ore suppliers have an over 30 per cent market share in total on the global iron ore market, and the merger makes a stronger monopoly,’’ it said.
In benchmark price negotiations for iron ore this year, Chinese steel companies were represented largely by the China Iron and Steel Industry (CISA), which demanded a better deal than competitors elsewhere.
But CISA came under criticism after its demands were rebuffed by iron ore sellers, and many Chinese companies were left paying spot prices, which were higher than benchmark prices.
The joint venture between BHP Billiton and Rio Tinto still must clear regulatory hurdles, including from European and Chinese regulators.
Source: Sydney Morning Herald
A planned $US116 billion ($128.3 billion) joint venture of the Pilbara iron ore assets owned by BHP Billiton and Rio Tinto has upset many customers, including those in China.
The mining giants signed a binding contract for the merger of their iron ore operations on Saturday, expected to create $US10 billion in synergies for the companies.
But China’s official China Daily News said today that the move was conveying ‘‘severe price pressure to domestic iron and steel companies’’ and plans were made to respond.
‘‘Chinese companies have to concentrate and strengthen the bargaining power in price negotiations by integrating numerous smaller companies into several big strong players,’’ the news organisation said on its website.
‘‘Chinese industry has been considering the integrations, but must speed up.
‘‘The two giant iron ore suppliers have an over 30 per cent market share in total on the global iron ore market, and the merger makes a stronger monopoly,’’ it said.
In benchmark price negotiations for iron ore this year, Chinese steel companies were represented largely by the China Iron and Steel Industry (CISA), which demanded a better deal than competitors elsewhere.
But CISA came under criticism after its demands were rebuffed by iron ore sellers, and many Chinese companies were left paying spot prices, which were higher than benchmark prices.
The joint venture between BHP Billiton and Rio Tinto still must clear regulatory hurdles, including from European and Chinese regulators.
Source: Sydney Morning Herald
Tuesday, December 8, 2009
Queensland To Float QR Coal
THE Queensland Government will float its $7 billion coal and freight rail business next year, after overhauling its $16 billion privatisation strategy.
Queensland Rail is considered the pick of a suite of state assets the Government plans to sell. It has decided to offload QR's coal and freight network via an initial public offering and lease out the Abbot Point coal terminal, Port of Brisbane and Queensland Motorways.
The Queensland Government will retain ownership of QR's passenger business. The coal and freight arm is to be renamed QR National and floated in the last quarter of 2010. The Queensland Government will retain a stake of 25 to 40 per cent, but will sell down its interest over time.
Queenslanders will be given priority to buy shares. Individual investors or companies will be limited to owning 15 per cent of QR National.
Source: Melbourne Age
Queensland Premier Anna Bligh has faced a backlash against her privatisation plans, with 80 per cent of Queenslanders opposed to the mass sale of assets.
The Queensland Government has already put Forestry Plantations Queensland up for sale. A 99-year lease to the Port of Brisbane will be sold in mid-2010, followed by a 99-year lease in Abbot Point at the end of the year. A 50-year franchise of Queensland Motorways will be sold by mid-2011.
Queensland Rail is considered the pick of a suite of state assets the Government plans to sell. It has decided to offload QR's coal and freight network via an initial public offering and lease out the Abbot Point coal terminal, Port of Brisbane and Queensland Motorways.
The Queensland Government will retain ownership of QR's passenger business. The coal and freight arm is to be renamed QR National and floated in the last quarter of 2010. The Queensland Government will retain a stake of 25 to 40 per cent, but will sell down its interest over time.
Queenslanders will be given priority to buy shares. Individual investors or companies will be limited to owning 15 per cent of QR National.
Source: Melbourne Age
Queensland Premier Anna Bligh has faced a backlash against her privatisation plans, with 80 per cent of Queenslanders opposed to the mass sale of assets.
The Queensland Government has already put Forestry Plantations Queensland up for sale. A 99-year lease to the Port of Brisbane will be sold in mid-2010, followed by a 99-year lease in Abbot Point at the end of the year. A 50-year franchise of Queensland Motorways will be sold by mid-2011.
Puda Coal In Equity Transfer Agreement
Puda Coal, Inc.,a supplier of metallurgical coking coal used for steel manufacturing in China, has closed an 18% equity transfer agreement with Shanxi Jianhe Coal Industry Ltd. Co.
In May 2009, Puda entered into an equity transfer agreement to acquire 18% of Jianhe Coal. Pursuant to the agreement, the stockholder owning the other 82% of Jianhe Coal guaranteed the company first priority rights to purchase the remaining shares of Jianhe Coal within the 24-month period following execution of the Agreement.
The company said it will be paid proportionate semi-annual dividends based on its 18% ownership. Total dividends for Jianhe Coal will be no less than 80% of its annual net profit.
China-based Puda Coal, through its subsidiaries, supplies metallurgical coking coal used to produce coke for steel manufacturing in China. The company currently possesses 3.5 million metric tons of annual coking coal capacity.
SourcE: Trading Markets
In May 2009, Puda entered into an equity transfer agreement to acquire 18% of Jianhe Coal. Pursuant to the agreement, the stockholder owning the other 82% of Jianhe Coal guaranteed the company first priority rights to purchase the remaining shares of Jianhe Coal within the 24-month period following execution of the Agreement.
The company said it will be paid proportionate semi-annual dividends based on its 18% ownership. Total dividends for Jianhe Coal will be no less than 80% of its annual net profit.
China-based Puda Coal, through its subsidiaries, supplies metallurgical coking coal used to produce coke for steel manufacturing in China. The company currently possesses 3.5 million metric tons of annual coking coal capacity.
SourcE: Trading Markets
Ferrochrome Producers Reducing Output
TEX reports that the movements to reduce production of ferrochrome are enlarging. Both companies of Assmang and Samancor Chrome in South Africa have entered into the structure to reduce their production of ferrochrome and, following these reductions in South Africa, Eti Krom of Turkey has also moved to reduce their production of ferrochrome.
Eti Krom announced on the end of last week that this reduction in production of ferrochrome has been implemented immediately. Eti Krom had so far operated the facilities by 80% of total capacity but has now decreased this operation rate to 50% of the capacity. Assmang of South Africa already said that one small electric furnace is suspended to operate from the end of November.
Also, Samancor Chrome has possessed 16 electric furnaces but a number of electric furnaces under operations in November has decreased to 10 furnaces.
According to a preliminary report compiled and released by International Chrome Development Association, the world output of high carbon ferrochrome in July to September quarter of 2009 was 1,713,000 tonnes, up by 22.2% QoQ as compared with that of 1,401,000 tonnes in the preceding quarter of April to June 2009 quarter.
The production activities of stainless steel in China have stalled and, since such major stainless steel companies as Taiyuan iron & Steel, Baosteel and Zhangjiagang Pohang Stainless Steel have been reducing their production by reason of maintenance of their facilities, the output of stainless steel in China for October to December quarter is anticipated to have a decline of 13% to 15% from that for the preceding quarter of July to September.
Also, the production of stainless steel in Europe was once forecasted to expand but the reality is supposed to be unable to increase as expected. Furthermore, the output of stainless steel products in Japan still depends on exports and, accordingly, one of leading stainless steel companies in Japan is moving to reduce their production from November.
Source: Steel Guru/Tex
Eti Krom announced on the end of last week that this reduction in production of ferrochrome has been implemented immediately. Eti Krom had so far operated the facilities by 80% of total capacity but has now decreased this operation rate to 50% of the capacity. Assmang of South Africa already said that one small electric furnace is suspended to operate from the end of November.
Also, Samancor Chrome has possessed 16 electric furnaces but a number of electric furnaces under operations in November has decreased to 10 furnaces.
According to a preliminary report compiled and released by International Chrome Development Association, the world output of high carbon ferrochrome in July to September quarter of 2009 was 1,713,000 tonnes, up by 22.2% QoQ as compared with that of 1,401,000 tonnes in the preceding quarter of April to June 2009 quarter.
The production activities of stainless steel in China have stalled and, since such major stainless steel companies as Taiyuan iron & Steel, Baosteel and Zhangjiagang Pohang Stainless Steel have been reducing their production by reason of maintenance of their facilities, the output of stainless steel in China for October to December quarter is anticipated to have a decline of 13% to 15% from that for the preceding quarter of July to September.
Also, the production of stainless steel in Europe was once forecasted to expand but the reality is supposed to be unable to increase as expected. Furthermore, the output of stainless steel products in Japan still depends on exports and, accordingly, one of leading stainless steel companies in Japan is moving to reduce their production from November.
Source: Steel Guru/Tex
Viable Alternatives To Fossil Fuels "Decades Away"
As the Climate Change talks get underway in Copenhagen this week, there is much attention focused on alternative energy sources that produce little or no greenhouse gas pollution. Some of these energy sources - like wind, solar, biomass and geothermal - are also attractive because they are renewable and offset the need for imported oil, gas or coal. But, it will be a long time before any of these energy sources will be a large-scale alternative to fossil fuels.
Most analysts regard non-fossil fuel-based energies as a supplement rather than as an alternative to traditional energy sources. Even though their development is expanding rapidly, they provide less than one percent of energy needs.
At a recent talk at the James A. Baker Institute for Public Policy at Rice University in Houston, Ambassador Richard Jones, Deputy Executive Director of the International Energy Agency, assessed future energy supplies and demand.
"Modern renewable energy technologies grow," said Richard Jones. "In fact, they see the fastest rate of increase. But their share of total energy use is so small today that even by 2030, they are only taking about [providing] two percent [of the energy consumed worldwide]."
But in some green communities around the world, eco-friendly energies are beginning to replace fossil fuels. In Austin, the capital of Texas, renewable energies are having a major impact. This fast-growing city gets about a tenth of its electrical power from wind turbines in the western part of the state.
Roger Duncan is General Manager of the electrical utility, Austin Energy.
"We get somewhere between 10 and 12 percent of our energy from renewable energy and the remainder from coal, nuclear and gas," said Roger Duncan. "We have plans going forward to get 30 percent of our energy from renewables by the year 2020."
Most power generation in Austin will depend on fossil fuels like coal and natural gas for decades to come. But Duncan says that as those fuels become more expensive, the outlook for renewables improves.
"Fossil fuels are cheap today, but rising in cost," he said. "And we expect them to rise further in the future because of carbon constraints. Some of the renewables are expensive today, but are dropping in cost. And we expect in a few years, or a decade at least, for them to drop substantially in cost."
But at least some of the cost of renewables today is offset by government subsidies that are far higher as a percentage for each unit of energy produced than subsidies for oil, gas and coal.
But Baker Institute energy economist Ken Medlock says the public needs to understand that development of alternative energy through government programs is not free.
"It is going to cost something to do this," said Ken Medlock. "And at the end of the day, if you push too hard, the cost only rises. And who ends up paying for that? Well, it is you and me."
Medlock says development of renewable sources of energy makes sense because fossil fuels will not last forever. But he adds that government should take a different approach.
"If we were to target funds at R&D - basic research and development - rather than implementation of technology that is not quite there yet, I think in the long run we would be much more successful," he said.
In the coming decades, Medlock says, the United States can use as a transitional fuel abundant natural gas that burns 50 percent cleaner than coal. But, he says, rapid advances in the effectiveness of technologies such as solar energy could shorten that time frame.
"At some point, it becomes commercially competitive," said Medlock. "And when that happens, we do not need policy to pick solar versus something else because solar will win out."
Medlock and other experts say there is a major alternative to both fossil fuels and renewables - the conservation of energy through more efficient vehicles, better constructed homes and office buildings, and better methods for monitoring energy use.
Source: Voice Of America
Most analysts regard non-fossil fuel-based energies as a supplement rather than as an alternative to traditional energy sources. Even though their development is expanding rapidly, they provide less than one percent of energy needs.
At a recent talk at the James A. Baker Institute for Public Policy at Rice University in Houston, Ambassador Richard Jones, Deputy Executive Director of the International Energy Agency, assessed future energy supplies and demand.
"Modern renewable energy technologies grow," said Richard Jones. "In fact, they see the fastest rate of increase. But their share of total energy use is so small today that even by 2030, they are only taking about [providing] two percent [of the energy consumed worldwide]."
But in some green communities around the world, eco-friendly energies are beginning to replace fossil fuels. In Austin, the capital of Texas, renewable energies are having a major impact. This fast-growing city gets about a tenth of its electrical power from wind turbines in the western part of the state.
Roger Duncan is General Manager of the electrical utility, Austin Energy.
"We get somewhere between 10 and 12 percent of our energy from renewable energy and the remainder from coal, nuclear and gas," said Roger Duncan. "We have plans going forward to get 30 percent of our energy from renewables by the year 2020."
Most power generation in Austin will depend on fossil fuels like coal and natural gas for decades to come. But Duncan says that as those fuels become more expensive, the outlook for renewables improves.
"Fossil fuels are cheap today, but rising in cost," he said. "And we expect them to rise further in the future because of carbon constraints. Some of the renewables are expensive today, but are dropping in cost. And we expect in a few years, or a decade at least, for them to drop substantially in cost."
But at least some of the cost of renewables today is offset by government subsidies that are far higher as a percentage for each unit of energy produced than subsidies for oil, gas and coal.
But Baker Institute energy economist Ken Medlock says the public needs to understand that development of alternative energy through government programs is not free.
"It is going to cost something to do this," said Ken Medlock. "And at the end of the day, if you push too hard, the cost only rises. And who ends up paying for that? Well, it is you and me."
Medlock says development of renewable sources of energy makes sense because fossil fuels will not last forever. But he adds that government should take a different approach.
"If we were to target funds at R&D - basic research and development - rather than implementation of technology that is not quite there yet, I think in the long run we would be much more successful," he said.
In the coming decades, Medlock says, the United States can use as a transitional fuel abundant natural gas that burns 50 percent cleaner than coal. But, he says, rapid advances in the effectiveness of technologies such as solar energy could shorten that time frame.
"At some point, it becomes commercially competitive," said Medlock. "And when that happens, we do not need policy to pick solar versus something else because solar will win out."
Medlock and other experts say there is a major alternative to both fossil fuels and renewables - the conservation of energy through more efficient vehicles, better constructed homes and office buildings, and better methods for monitoring energy use.
Source: Voice Of America
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