Minerals and Metals

Steep Fall In China Iron Ore Imports

noreply@blogger.com (hamilton) — Wed, 11 Nov 2009 14:03:00 +0000

China's imports of iron ore in October fell almost 30 percent to 45.47 million tonnes, down from a record the previous month but still high enough to raise further concerns about oversupply in the country's steel sector.

Steel product exports stood at 2.71 million tonnes over October, up nearly 10 percent compared with September and another positive sign of a recovery taking root in China's crucial foreign markets, but overcapacity concerns remain.

China imported 64.55 million tonnes of iron ore in September, a surprising record after steel mills cranked up output to 1.69 million tonnes per day. Imports over the first 10 months reached 514.81 million tonnes, up 37 percent compared to the same period of last year, with China's steel mills maintaining record output levels despite a collapse in export markets.

Sustained demand from China has already pushed spot Indian benchmark prices up to more than $100 per tonne for the first time since mid-August.

Despite widespread concerns that China's mills are producing too much steel, analysts said that demand has held out so far, driven by record automobile sales and stimulus-driven investment in infrastructure.

Daily crude steel output stood at 1.67 million tonnes in October, according to figures released on Wednesday by the National Bureau of Statistics, only slightly lower than the record set in August and September.

At a press briefing last week, the China Iron and Steel Association repeated its concerns about domestic overcapacity, but also conceded that growing demand meant benchmark iron ore prices were likely to rise in 2010.

It said the domestic Chinese market would have to absorb an additional 47 million tonnes of crude steel supply as a result of falling global demand.

Source: Alibaba News Channel

Ferrochrome Demand "Non-Existant"

noreply@blogger.com (hamilton) — Wed, 11 Nov 2009 14:01:00 +0000

Ferrochrome producers must cut production by as much as 50% of capacity to allow supply and demand to again dictate price direction, says Danko Konchar, chairman of Kermas Group. That's because demand from steelmakers probably won't rebound quickly.

Konchar, whose firm runs South Africa's privately owned Samancor Chrome, tells an international ferroalloys conference in Monte Carlo: "Cut production-- there is no demand yet." According to a Reuters report of the meeting, Konchar also says that "demand will come but you need to be patient."

"Today there is no demand but the price in chrome ore is not going down too much," he added. "Price is connected to supply and demand ... at the moment, this movement of price in the third and fourth quarter is not due to demand."

Ferrochrome, used in making stainless steel to prevent corrosion, currently is traded at about 88¢/lb, Reuters reports, which is well below levels above $2.50 a lb in April last year.

Taking his own medicine, Konchar says Samancor, the world's second-largest ferrochrome producer, shut down all its mining and smelting operations between December last year and the end of February 2009 after demand slumped. He tells Reuters that his organization since then has kept production between 55%-60% of capacity.

"If (producers) don't cut, they will ruin their future position," he says. "The price will not be related to production ... the suggestion is to cut now and not have up, down, up, down (of price volatility)."

Source: Purchasing.com

BC Iron Secures Off-Take Agreement

noreply@blogger.com (hamilton) — Wed, 11 Nov 2009 13:58:00 +0000

BC Iron yesterday announced a $53.8 million off-take agreement with a Hong Kong-based industrial and trading company for its Nullagine Joint Venture (NJV) iron ore project with Fortescue Metals.

Under the terms of the agreement, the project will deliver 20 million tonnes of iron ore to the off-take partner over the eight-and-a-half years.

The $53.8 million worth of pre-payments will go towards having the project operational by late-2010.

The first $16 million tranche will be drawn down in December this year.

According to BC Iron managing director Mike Young, the agreements would not only underpin project finance, but also establish long-term relationships with customers.

“We are extremely pleased to have secured not only our first off-take agreements but also a significant project finance facility on very attractive terms,” he said.

“This will allow us to push ahead with development of the project, without the complexity that comes with conventional finance agreements.”

As per the terms of the agreement, iron ore pricing will be related to the annual benchmark reference price.

If there is no benchmark in place, the ore will be priced according to a pre-agreed index system.

BC Iron will issue the Hong Kong company with a total of eight million options with a two year term.

Six million of the options will be priced at $1.35, while the remaining two million will be $1.50.

Source: Australian Mining

Altius Announces Plans For New Iron Ore Company

noreply@blogger.com (hamilton) — Tue, 10 Nov 2009 15:10:00 +0000

Altius Minerals Corporation is pleased to announce that it has entered into an agreement with a private company with respect to its Kamistiatusset iron ore project in western Labrador, Canada. A primary condition of the agreement is that the private company is obligated to form a new public company ("Newco") that will focus on the western Labrador iron ore mining district of Canada. Newco is wholly responsible for the recruitment of a Management and Board acceptable to Altius. Organization of the board, management and capital structuring of Newco is presently underway and will be reported upon once completed.

As part of the commercial agreement a substantial drilling program, with a budget of approximately $5 million dollars, is anticipated to commence early in 2010 to provide sufficient data to generate an NI 43-101 resource estimate of the iron ore zones discovered by Altius in its 2008-2009 drilling program. Previous drilling by Altius on the project has outlined an area of magnetite rich iron mineralization that displays comparable grade, thickness and geometry to other producing deposits in the district. For further details regarding the 2008-2009 exploration program at the Kamistiatusset property please see the following link - http://www.altiusminerals.com/kamistaitussett.php.

Altius will retain a 100% interest in the Kamistiatusset project until such time as Newco incurs the $5 million in exploration expenditures on the property. At that time Altius will transfer its 100% interest in the project to Newco in exchange for a 3% gross sales royalty and for an initial 50% equity interest in Newco.

Source: Benzinga

Zambia Copper Production Rises Says Central Bank

noreply@blogger.com (hamilton) — Tue, 10 Nov 2009 15:08:00 +0000

Zambia's copper production for the nine months to September 2009 increased to 514,320 tonnes compared with 429,792 tonnes in the same period last year, the central bank said on Tuesday.
The central bank said copper exports in the period under review rose to 496,111 tonnes from 411,533 tonnes in 2008.

Cobalt output dropped to 2,816 tonnes from 3,526 tonnes in the corresponding period last year and exports fell to 3,225 tonnes from 3,488 tonnes, the Bank of Zambia (BoZ) said.

Source: Reuters

Mounting Copper Stockpiles Force China Re-Think

noreply@blogger.com (hamilton) — Tue, 10 Nov 2009 15:05:00 +0000

Copper stockpiles held in duty-free warehouses in China, the top user, may be re-exported after surging to as much as 350,000 tons from almost none at the start of the year, according to Xi’an Maike Metal International Group.

“We can hardly find buyers for refined copper,” said Luo Shengzhang, general manager of the copper department at Xi’an Maike. The company ranks among the country’s three biggest importers, according to the executive. “China’s got to export some copper from now and next year,” Luo said in an interview.

Copper, used to make pipes and wires, has more than doubled this year as China’s 4 trillion yuan ($586 billion) stimulus spending, increased state stockpiling and a lack of scrap material boosted China’s imports to a record. That’s helped to drive Chinese prices below London’s since at least July.

Xi’an Maike has had to re-route some bonded copper to London Metal Exchange warehouses in South Korea because the company was unable to find buyers in China, with local supply outpacing demand, said Luo. The effect of the stimulus package was wearing off and local scrap supply was improving, he said.

‘Bearish for London’

“We do see the trend of more copper being re-routed, though our estimate for bonded copper isn’t as big,” Grace Qu, an analyst at CRU International Ltd., said from Beijing today. A shift of the metal from bonded stockpiles “to LME reported inventory would be bearish for London prices,” she said.

Luo’s estimate of the bonded-zone stockpiles compares with 60,000 tons by Macquarie Group Ltd. in July. It’s also more than triple the inventory in Shanghai Futures Exchange warehouses, which stood at 104,275 tons as of the week of Nov. 2. A bonded zone holds imported goods before duty has been paid.

Three-month copper in London traded today at $6,548 a ton compared with $3,070 at the end of last year. Futures in Shanghai have also more than doubled this year to a high of 51,580 yuan ($7,554) a ton today.

Still, buying the metal from overseas to sell in the Chinese market has not been profitable since at least July, according to Bloomberg calculations. Prices in Shanghai were more than 1,300 yuan a ton lower than London yesterday, after accounting for China’s 17 percent value added tax.

In addition to the bonded-zone stockpiles, China may also hold 150,000 tons in the Shanghai area, including in exchange- monitored warehouses; 235,000 tons at the State Reserve Bureau, which maintains government holdings; and 200,000 tons with fabricators and private investors, Luo, 36, said yesterday.

Refined-copper exports by China were 10,705 tons in September, 70 percent more than a month ago and the highest this year, according to data by the Beijing-based customs office. Refined-copper imports in the first nine months were 2.58 million tons, 165 percent more than a year ago.

Xi’an Maike’s inbound shipments of refined copper may total about 400,000 tons this year, ranking among the top three importers by volume, according to Luo. The country’s imports of refined copper may halve to 1.6 million tons in 2010 from an estimated 3 million tons this year, he said.

Source: Bloomberg

Rocklands Rebuffs Jindal Revised Offer

noreply@blogger.com (hamilton) — Mon, 09 Nov 2009 23:31:00 +0000

Jindal Steel and Power (JSPL) has raised its bid for Australian coal miner Rocklands Richfield to match a counteroffer by a Chinese firm, only to be rebuffed by the Aussie firm.

Rocklands said the AUS $0.52 a share offer by China’s Meijin Energy was still “superior” than the revised bid made by Naveen Jindal’s JSPL.

The Australian firm has asked the Indian company to place a better bid. Jindal Steel had earlier offered AUS $0.42 a share and signed a term sheet with the Rocklands management on September 22.

After Meijin threw its hat in the bid ring, JSPL revised the offer to AUS $0.50, valuing the company at AUS $194.98 million, or around Rs 841 crore.

The latest Jindal offer is the same as the Ruias-owned Essar Group’s offer in October. Essar entered the fray in October 7 but dropped out of the race on October 20. Meijin Energy joined the bid battle on November 2 at a time when Jindal Steel was carrying out due diligence on Rocklands.

In the revised offer, JSPL wanted Rocklands to reject the Meijin offer, proposed infusion of new equity and sought board representation, all of which had been rejected by the Australian company.

Rocklands said the Chinese were giving a better deal, mainly because of the higher price.

JSPL, which has a steel mill and a power plant in Chhattisgarh and is expanding in Orissa, already owns 14.16 per cent in Rocklands.

The company is looking for coking coal abroad since there is an acute shortfall of the crucial raw material, used in steel making, in India.

Australia, South Africa and Indonesia are the three most sought-after destinations for steel companies seeking to own coking coal. China, which has large deposits of coking coal, rations export, thereby dictating the price.

The Rocklands acquisition will give JSPL entry into the Chinese coking coal market, which foreign companies find difficult to access.

The Aussie company has two metallurgical coke plants in China following its acquisition of China Coke and Chemicals in October 2007. These units make met coke from local coal.

Source: Calcutta Telegraph

Chambishi Metals Resumes Operations

noreply@blogger.com (hamilton) — Mon, 09 Nov 2009 23:27:00 +0000

Zambia's largest cobalt smelter, Chambishi Metals PLC, has started to receive concentrate supplies from Congo's Katanga province, allowing it to resume operations after nearly 12 months of inactivity, an official with Zambia Consolidated Copper Mines Investments Holdings told Dow Jones Newswires Monday.

"The smelter resumed operations on Friday and they have already started producing cobalt," the ZCCM-IH official said by telephone from Lusaka, the Zambian capital. Chambishi Metals is operated by U.K.-based Enya Holdings, while ZCCM-IH holds a minority stake in the smelter.

The plant, which was closed in December last year due to plunging global metals prices, had initially been expected to resume output in May, but delayed supplies of concentrates hampered the start-up.

In addition from getting supplies from Congo, Chambishi also expected to process copper concentrates from Baluba Copper Mines, now owned by NFCA Mining, a unit of China Nonferrous Metal Mining Group Co. (8306.HK). Chambishi Metals has the capacity to produce 4,000 tons of cobalt and 40,000 tons of copper a year.

Baluba is expected to start supplying the plant early next year. However, management of the plant has rejected supplies from other Zambian mines, saying they would be expensive to process because of their low grades.

Analysts say the delayed resumption of output has led to a global cobalt shortage, aiding cobalt prices on the international market.

According to Sikufela Mundia, the president of Zambia's National Union of Miners and Allied Workers Union, management has also started recruiting workers but is yet to sign a recognition deal with the unions.

Chambsihi laid off around 700 workers when it closed in December, while in total some 10,000 Zambian miners were laid off after global copper prices slumped last year. Around 2,000 miners have since been rehired as a result of a resurgent market.

Zambia is Africa's largest copper producer and the second-leading cobalt producer after Congo

Source: Trading Markets/Dow Jones

Orissa Suspends 30 Iron Ore Mines

noreply@blogger.com (hamilton) — Mon, 09 Nov 2009 23:25:00 +0000

Orissa has ordered the suspension of work in at least 30 iron ore mines after the operators failed to produce documents to show their mining activities were legal, a senior mines department official said Monday.

The state mines department served notices in October to the mine operators in mineral-rich Keonjhar district, asking them to produce necessary documents so they could continue operations.

'The suspension notices were served Saturday after they failed to do so,' deputy director of mines Purna Chandra Patra told IANS.

The state government had last month set up a task force headed by the chief secretary to check illegal mining.

The mines department served the notices to operators after it was asked by the task force to verify documents of about 600 mine operators in the state following reports that many were operating without valid mining and environmental clearances.

Source: Sify

Benga Coal Mining Prject Gets Go-Ahead

noreply@blogger.com (hamilton) — Mon, 09 Nov 2009 23:21:00 +0000

The consortium developing a US$ 270 million coal mining project at Benga in Mozambique’s Moatize province has approved the first phase of the undertaking, the Noticias newspaper reported.

The consortium comprises Riversdale Mining of Australia, with a 65 percent stake, and India’s Tata Steel, with a 35 percent shareholding. The companies expect to produce 5.3 million tons of coal in the first stage of the joint venture, providing 1.7 million tons of high-quality coking coal and 300,000 tons of export thermal coal.

Riversdale CEO Michael O´Keefe told Noticias approval of the project’s initial phase allows his company to proceed with mining operations in Mozambique. There is great expectation for the venture due to investment involved and its impact on employment, he added.

Work to build the mine will begin before the end of this year after final environmental approval is given.

“We’re committed to bringing the Benga project into first production during the 2010 and we will be supplying world coking coal markets in 2011, initially via our relationship with project partner Tata Steel of India, “ said O’Keefe.

The Indian-Australian joint venture plans to build a thermal power station in Moatize that will come on line in 2013 with a 500 MW generating capacity.

The Benga mining concession is for 25 years.

Source: macauhub

Japan Iron Ore Imports At Record High

noreply@blogger.com (hamilton) — Sun, 08 Nov 2009 12:40:00 +0000

According to the latest data from Japan’s Ministry of Finance, Japan’s iron ore imports in September surged above 10 million tonne for the first time over the past 9 months up by 12% YoY to 10.82 million tonne. However, imports in the first 9 months were still down by 31% from the same period of 2008 to 72.4 million tonne.

Meanwhile, Japan’s coal imports fell for the 2nd consecutive month to a 4 month low of 13.9 million tonne in September. However, coking coal imports to Japan rose to 6 million tonne, the highest level since January.

Source: Steel Guru

China "To Remain Coal Importer"

noreply@blogger.com (hamilton) — Sun, 08 Nov 2009 12:36:00 +0000

Chinese coal imports are set to continue to grow strongly for metallurgical as well as thermal coal as demand for electricity and high-quality coal increases, said Peabody Energy Corp. Chief Executive Greg Boyce said Friday at a media conference in Sydney.

"China turning net importer is a structural change. We expect Chinese rapid coal demand growth to continue for some time," said Boyce, who expects "healthy" increases in coal contract prices for the 2010-2011 Japanese financial year starting April 1.

This contract year coking prices settled at US$125 a metric ton and thermal coal prices at US$72/ton.

"There is no question that coal demand is continuing to increase. Spot prices for metallurgical coal are higher than benchmark prices and we are seeing economies starting to recover," Boyce told reporters.

During January-September, China imported nearly 26 million tons of coking coal, up nearly fivefold on the year and coming at a crucial time for miners when coking coal demand in other major countries plummeted. Australia supplied 17.4 million tons of those imports.

Total coal imports to China until September are at nearly 86 million tons, up more than double on the year.

During the first nine months of the year, Peabody has committed nearly 3.3 million tons of coal for China deliveries, including more than 1.7 million tons from its Australian operations.

"It looks to us like (China's) strategy is to satisfy an increasing amount of electricity demand in southern and eastern China from imported coal and to actually keep the coal mined in northern and western China there and convert it in the region," said Boyce.

During the September quarter, the U.S.-based company established a trading hub in Singapore for its expanding trading activities, as well as a representative office in Jakarta.

Peabody has extensive operations in Australia and expects those operations to contribute 30%-40% of earnings over the next two years. It plans to double output to up to 36 million tons over the next five years from existing mines in New South Wales and Queensland.

The bulk of Peabody's output volume comes from its U.S. operations that currently produce about 225 million tons a year.

Third-quarter profit released last month was US$106.8 million, down 71% on sharply lower margins in the Pacific market, but still beating analyst expectations. For 2009, Peabody said it expects earnings before interest, taxes, depreciation and amortization of US$1.2 billion to US$1.3 billion.

Aside from rail and port infrastructure bottlenecks at the Newcastle and Dalrymple ports, Boyce said he was concerned about the Australian government's proposed emissions trading scheme, or ETS, which he said unduly impacts underground "gassy" mines.

"Australia's is the only proposed ETS to include fugitive emissions from coal mines," he said, adding that the company's expansion plans in Australia may be scaled back depending on the eventual shape of the scheme. Other areas in Peabody's focus included Mozambique's nascent coal mining sector, he said.

Australia's parliament is due to vote on the emissions trading scheme in mid-November.

Infrastructure constraints were "always an issue" in Australia but Boyce said he was confident to execute Peabody's expansion plans with current rail and port projects in the works.

In New South Wales, Peabody forms part of the Newcastle Coal Infrastructure Group that includes BHP Billiton Ltd. among others, and in September agreed to a coal export plan that could see capacity of Australia's biggest coal export port double to 180 million tons by 2016.

"We're confident that the current commitments match our expansion plans," Boyce said.

Aside from expanding organically in Australia, Peabody said it's "very interested" in Mongolia's Tavan Tolgoi coking coal project.

Last month Mongolia's government signed a significant investment agreement for another giant project, the US$4 billion Oyu Tolgoi copper-gold mine, expected to act as a blueprint for billions of investment in the country.

"Without an investment agreement on Oyu Tolgoi, nothing on Tavan Tolgoi was going to happen. We're very interested in Tavan Tolgoi. It's early (in the process) and we'd look to do it with a partner," said Boyce. Other bidders for Tavan Tolgoi include BHP Billiton, Brazil's Vale and Chinese companies.

Peabody already has a joint venture in Mongolia, recently spending US$23 million on a 50% interest in a Mongolian joint venture with London-based Polo Resources Ltd.

Source: Marketwatch

Evraz Buys 90% Stake In Vanadium-Tula

noreply@blogger.com (hamilton) — Sat, 07 Nov 2009 11:19:00 +0000

Interfax reportsthat the Russian Federal Antimonopoly Service has allowed the Evraz Group's Nizhny Tagil Iron & Steel Works to acquire 90.84% in OJSC Vanadium-Tula setting a number of requirements.

The Ukraine Antimonopoly Committee in June this year allowed the Cyprus based Evraz Group member Mastercroft Limited to acquire over 50% in Vanadium-Tula.

Mr Alexei Agureyev vice president for PR of Evraz said "The deal has not yet been done. LLC Sibmetinvest and NTMK filed the request with the FAS to acquire 90.84% of Vanadium-Tula in September 2009. The FAS granted the request on November 2nd. The law allocates one year from the date permission has been received to complete the transaction."

He said the regulator's approval was needed because Vanadium-Tula was one of the biggest ferrovanadium and Nitrovan vanadium producers.

Vanadium-Tula is one of world's leading producers of vanadium compounds. Siberian Mining and Metallurgical Company bought the plant from OJSC Koks a member of the Industrial metallurgical Holding, at the end of 2007. The plant used slag supplied by Evraz steel mills as feedstock.

Sources: Steel Guru, Interfax

Congo Holds Key To Freeport Project

noreply@blogger.com (hamilton) — Sat, 07 Nov 2009 11:17:00 +0000

The massive copper and cobalt mine Tenke Fungurume is more than 9,000 miles from Arizona, but key decisions about the new operation's future in central Africa are being made in Phoenix.

Tenke is operated and majority-owned by Freeport-McMoRan Copper & Gold Inc., which runs its $17.8 billion-a-year global enterprise from its headquarters in a downtown office high-rise at 1 N. Central Ave.

The mine is located in the economically unstable Democratic Republic of Congo, making it a risky venture for the world's largest publicly traded copper company.
The country is rife with political and social unrest, and transportation routes for hauling equipment and minerals to and from the $2 billion project are scarce. A review of mining contracts by the African government also threatens Freeport's ownership stake.

But the potential payoffs are huge.

Freeport executives and mining analysts say Tenke possesses the largest copper-ore reserve in the world.

While the global economic crisis temporarily squelched demand for copper and drove down the price of the metal last year, demand is expected to explode as countries such as China and India expand and worldwide supply remains constrained.

"Tenke Fungurume is one of the most attractive new copper projects in the world over the last two decades," Peter Ward, a stock analyst with Barclays Capital in New York, wrote in an October report on Freeport.

Ward, who recently toured the mine, estimates future demand for the metal will be strong enough to support 35 additional copper mines the size of Tenke.

Freeport began shipping copper cathode in March. The mine has produced 90 million pounds of copper and is expected to yield 250 million pounds of copper and 18 million pounds of cobalt annually at full production.

Freeport is well-versed in doing business in unstable regions of the world.

For more than 30 years, it has operated the Grasberg copper and gold mine in Indonesia. The area surrounding Grasberg in the remote, mountainous area of Indonesia's Papua province has been the site of a several violent attacks by political separatists in recent months.

Some experts say Congolese officials' contract review of the Tenke mine could hinder the value of the project.

The DRC, which is financially dependent on mineral exports, launched the review of several mining contracts in 2007 to determine whether they were negotiated fairly. It has completed most of its reviews except for a few, including Freeport's.

Freeport President Richard Adkerson was not available for comment.

In an Oct. 21 conference call with analysts, Adkerson said the company was "working very cooperatively" to address the government's concerns. He said the firm made offers to the government but declined to specify.

Adkerson called the company's current contract, in place since 2005, "very favorable" to the government.

Freeport owns about a 58 percent stake in Tenke. Canadian mining firm Lundin Mining Corp. owns about 25 percent. The DRC owns about 18 percent and is entitled to 2 percent of the royalties and 30 percent of the taxes.

It reportedly is asking to increase its ownership stake to 45 percent, Ward's report said.

It is possible the government could ask Freeport to make a larger social investment in the country, Ward said.

Freeport and Lundin have invested $1.9 billion in the project thus far, including about $180 million in taxes to the government; $30 million for housing, education and other community-development programs; and $20 million for national highway improvements.

Significant contract revisions or a cancellation could scare away investors, hurting the financially burdened country, said Olufemi Babarinde, associate professor of global studies at Thunderbird School of Global Management in Glendale. He studies African business issues.

Gerry Keim, a management professor at Arizona State University's W.P. Carey School of Business in Tempe, agreed, adding that the DRC runs the risk of deterring future business investments there.

But he doubts whether that would prevent the government from taking a bigger stake in the project.

"There may be short-term benefits to the government in power if they are able to renegotiate a contract like this and get a bigger slice of the pie," Keim said. "The long-term costs are usually going to be borne by people who are not in power right now."

Freeport said it has no timeline on when a decision will be made.

But news agencies reported that the government gave Freeport several deadlines to reach an agreement. Those deadlines, including two in October, have passed without action.

Source: Arizona Republic

Iron Ore Exploration Intensifies In Cameroon

noreply@blogger.com (hamilton) — Sat, 07 Nov 2009 11:13:00 +0000

Exploration works are currently going on in Mongmamel, some 60 kilometres from Kribi towards Campo in Cameroon, to determine the amount of iron ore and its richness for imminent exploitation. A Chinese firm, "SINOSTEEL" under its programme, "China NCEII Iron Ore Exploration Project Management", is currently digging and extracting samples of the mineral for studies.

The President, General Manager of SINOSTEEL, Tianwen Huang, went visiting the site Wednesday November 4, 2009. Though he declined disclosing to the press the purpose of his visit to Cameroon and to the site, officials of the company who opted for anonymity said the visit was to appraise work on the project. Workers on the site told CT that they have been working there for over six months and that their work consists in detecting and extracting the mineral. They disclosed that already extracted quantity is packaged and sent abroad for proper study.

The Director of Mines and Geology in the Ministry of Industries, Mines and Technological Development, Oscar Matip, who accompanied the SINOSTEEL officials to the sites said the Chinese firm wants to confirm earlier diagnoses of the presence of minerals on the sites. Earlier studies, he said, showed that some 350 million tons of reserves were there and that the sampling work the Chinese firm is undertaking could also improve on earlier findings. He disclosed that the ongoing certification work on the site will permit them to determine how much of the mineral is there. "This will be followed by an evaluation of the quantity of the reserve and then exploitation", Mr. Matip said, adding that it is only then that an exploitation contract could be signed between the extracting firm and the government of Cameroon.

Over 1,800 metres of the sampling works have already been executed and officials of the Ministry said, government, through control teams from the Ministry as well as the South Regional Delegation of Industries, Mines and Technological Development, ensures the control of the project.

SINOSTEEL Corporation is a central enterprise under the administration of the State-Owned Assets Supervision and Administration Commission. It is mainly engaged in developing and processing of metallurgical mineral resources, trading and logistics of metallurgical raw materials and products, and related engineering technical service and equipment manufacture.

Source: AllAfrica.com

India's Iron Ore Exports Up 88 Per Cent In September

noreply@blogger.com (hamilton) — Fri, 06 Nov 2009 10:30:00 +0000

India's iron ore exports in September were 6.25 million tonnes, up 88 percent from a year earlier, the Federation of Indian Mineral Industries (FIMI) said on Friday.
Exports during April to September were 45.03 million tonnes, up from 39.8 million tonnes in the same period a year ago, the trade body said.

Source: Reuters

Jindal Has Competition In Race For Rocklands

noreply@blogger.com (hamilton) — Fri, 06 Nov 2009 10:26:00 +0000

Jindal Steel & Power Limited has a new competitor in the race to acquire Australian coal miner Rocklands Richfield.

China’s Meijin Energy Group has come up with a higher offer, which has found favour with the existing management of Rocklands.

The Australian company has asked Jindal Steel to come back with a matching or higher bid, otherwise, it would terminate the ongoing discussions and allow the Chinese player to start exclusive talks.

Meijin is the third company to bid for Rocklands in as many months — India’s Essar Group had thrown its hat in the ring but soon opted out, leaving Naveen Jindal’s JSPL alone in the race.

Meijin Energy has offered to pay Australian dollar (AUD) 0.52 a share for Rocklands, higher than the AUD 0.42 being offered by JSPL.

Incidentally, Essar had offered AUD 0.50 a share for the Australian company but it did not receive formal support from the Rocklands management.

A Rocklands notice to the Australian Securities Exchange said it had received the Meijin bid on November 2, and after “careful consideration” it found that the bid was “superior” to the Jindal offer, which is 37 per cent lower.

However, the Rocklands board told its shareholders that neither the Jindal nor the Meijin proposals were formal offers at this stage. They are preliminary in nature and subject to due diligence, it said.

JSPL is carrying out a due diligence exercise after both parties signed a term sheet on September 22. According to the pact, Jindal was to complete the due diligence by October 31 and negotiate an implementation agreement by November 15.

On October 28, JSPL sought another month to complete the due diligence and sign the deal by December 15.

JSPL plans to invite Rocklands chairman Benny Wu to India for deliberations after it finishes its groundwork.

JSPL vice-chairman Naveen Jindal plans to visit Australia and China — where Rocklands has large operations — reflecting the Indian company’s keenness and commitment to the proposal.

Before the Meijin proposal came, both Rocklands and JSPL had agreed to extend the due diligence date to November 24 and seal the deal by December 8.

However, JSPL now faces the risk of being beaten by the Chinese company, which claims to be one of the biggest coke producers in China owning 10 coal mines with a combined reserve of 2 billion tonnes. The Meijin proposal values Rockland at AUD 200 million.

JSPL is one of the largest steel long products manufacturers in India with a mill in Chhattisgarh. It also runs a power plant there. The company is building a plant in Orissa and also expanding its power plant capacity in Chhattisgarh.

As the bid battle continues, JSPL has built up a strong position in Rocklands. It now holds a 14.16 per cent stake in the company. The shares were bought in three tranches from the open market and at a price lower than its own offer and that of Meijin.

Rocklands has two main assets — met coke plants in China and coal mines in Australia.

Source: Calcutta Telegraph

Vale Running At Maximum Capacity

noreply@blogger.com (hamilton) — Fri, 06 Nov 2009 10:21:00 +0000

Vale SA, the world’s largest iron-ore producer, is operating at maximum capacity as sales worldwide rebound after the crisis and are expected to grow further next year, the company’s chief executive officer said.

“It’s going to grow,” Chief Executive Officer Roger Agnelli said today in an interview with Bloomberg Television in London when asked about Chinese iron-ore demand next year. “That’s for sure. Demand in Brazil is also going to grow.”

Rio de Janeiro-based Vale is restarting iron-ore plants, including higher-cost mines, idled during the economic contraction, and boosting output to meet higher demand from China, Europe, Japan and Brazil. Third-quarter ore shipments climbed 36 percent from the previous quarter, while average prices increased about 20 percent, the company said Oct. 28.

Vale Chief Financial Officer Fabio Barbosa said Oct. 29 the company could “soon” boost iron-ore output to full capacity of about 310 million metric tons a year. In 2008 Vale produced 301.6 million tons. Vale said on Oct. 21 it plans to increase output to 450 million tons by 2014 with the start-up of a new mine to produce high-grade Carajas ore in northern Brazil.

“The reality is we can count on China continuing to grow, Latin America is going to grow and India is growing,” Agnelli said today. Recovery in the U.S. will take longer, he said.

Agnelli said 2010 will be a “very nice year” for commodities, because of strong demand in Asia. Chinese iron-ore imports climbed 30 percent in September to a record 64.55 million tons, as third-quarter GDP growth reached 8.9 percent, according to government statistics.

Vale’s iron-ore shipments rose to 73 million tons in the third quarter, from 53.8 million in the prior period. Third- quarter shipments to China reached a record 39.8 million tons, Vale said on Oct. 28.

Rising imports in China are an “irreversible” trend because of high local production costs, Barbosa told analysts Oct. 29 in a conference call.

Agnelli said he expects iron-ore price negotiations with China to be “tense.” More time is needed to see a clear price trend, he said.

“I think this year it’s going to be less tense, but tense,” he said. “They are tough negotiators. We have to be patient, it will be a little bit different from last year.”

Chinese steelmakers, which didn’t settle contract prices with iron-ore suppliers and who are buying on the spot market, are now seeking a new “united” price system for 2010, involving elements of both spot and contract prices, the People’s Daily Online reported Oct. 27.

Iron-ore prices in the spot market for delivery to China have risen 15 percent since the beginning of September, and are now higher than average annual contract prices, according to specialist London-based publication Metal Bulletin.

Source: Bloomberg

France Iron Ore Imports Sharply Down

noreply@blogger.com (hamilton) — Thu, 05 Nov 2009 10:27:00 +0000

France imported around 1.42 million tonnes of iron ore in September. Total imports of iron ore reached 4.94 million tons from January to September 2009, down by 60.9% compared to the same time of last year of 12.629 million tonnes.

During the first 9 months, Brazil was the top iron ore exporter to France at 2.44 million tonnes down by 69.5% from a year ago followed by with Canada 2.127 million tonnes up by 83% and Mauritania 259,000 tonnes, down by 85.6% compared to the same period of last year.

Source: Steel Guru

FIRB Approves Chinese Mining Investment

noreply@blogger.com (hamilton) — Thu, 05 Nov 2009 10:18:00 +0000

The Foreign Investment Review Board has cleared the way for a $271 million Chinese investment in mining on the Eyre Peninsula in South Australia.

China's third-largest steel group Wuhan Iron and Steel is taking a 60 per cent stake in Adelaide-based Centrex Metals' iron ore rights to five tenements on southern Eyre Peninsula.

Wuhan will also emerge with a direct 13 per cent stake in Centrex.

Centrex Metals chairman David Lindh says the cornerstones are now in place for a rapid escalation of the company's iron ore growth on Eyre Peninsula into a billion-dollar business.

He says it will position Centrex as a major player in the Australian iron ore industry.

In a statement to the Australian Stock Exchange, Centrex says the approval is unconditional.

Mineral Resources Minister Paul Holloway says Chinese investment in iron ore mining on Eyre Peninsula will create jobs.

He says the Wilgerup iron ore project will create up to 150 jobs, as well as more employment indirectly.

Mr Holloway says Centrex Metals plans to export 1.6 million tonnes of iron ore annually.

The council at Port Lincoln is to vote soon on whether to seek a parliamentary inquiry into the approval process for ore exports through its port.

Centrex managing director Gerard Anderson thinks that is unnecessary.

"I would have thought the Port Lincoln council at this time when the fishing industry is facing the likelihood that people are going to be laid off that they'd be doing everything they could to try and attract new businesses in the area," he said.

Source: ABC Australia

China Expects 10 Per Cent Iron Ore Price Hike

noreply@blogger.com (hamilton) — Wed, 04 Nov 2009 23:23:00 +0000

The China Iron and Steel Association (CISA) forecasts a 10% increase in the contract price for iron ore, compared with a 33% drop in 2009.

Negotiations for 2010/2011 fiscal year prices will begin soon, and Luo Bingsheng, CISA's vice chairman, tells Reuters a pickup in steel production above the expected 117 million metric tons this year will require more ore and justify a "modest" price increase. Hu Kai, an analyst with the Umetal consultancy, also tells the news service that "steel demand will be boosted in the next year and that will support higher ore prices."

As has been reported earlier, China wants a special deal in annual iron ore price talks as the world's biggest consumer of the steelmaking ingredient. Luo says CISA doesn't believe CISA has to follow prices set by other countries. However, analyst Su-Aik Lim at Fitch Ratings in Beijing tells Reuters that preferential treatment of China could cause problems. "I think (a separate pricing system) definitely gives Chinese steel mills a price advantage, and will that lead to them flooding the market with cheap steel?" she says. So, "implementation is going to be tough."

Source: Purchasing.com

Tata To Revive Production Capacity At Corus

noreply@blogger.com (hamilton) — Wed, 04 Nov 2009 14:59:00 +0000

Tata Steel today said its European subsidiary Corus will be able to meet full capacity utilisation by the end of the current fiscal, riding on revival in global demand.

Corus, which had cut production capacity of its mills by as much as 50 per cent amid the demand slump last year, has currently revived the utilisation of its mills to 80 per cent.

"In October, the capacity utilisation had touched 80 per cent. It should be 85 per cent by the end of November and 100 per cent by the end of this financial year," Tata Steel Vice-Chairman B Muthuraman said on the sidelines of CII Steel Summit here.

Corus produces about 20 million tonnes of steel per annum.

"Demand is coming back in the west," he added.

Globally, steel producers have started reviving their production capacities with the rise in demand for their products. ArcelorMittal had revived the capacity utilisation of its mills to about 61 per cent in the past three months and aims to take it up to 70 per cent in the ongoing quarter.

However, the world's largest steel maker had warned against the over production at Chinese still mills and the resultant influx of cheap steel goods, especially in the South Asian market.

But, Muthuraman said the production by Chinese steel mills is only meant to feed its domestic market and there is no threat of dumping of cheap steel items.

"Chinese steel production will meet its internal demand, which is high," he added.

Source: Business Standard

BHP Opens WA Iron Ore Hub

noreply@blogger.com (hamilton) — Wed, 04 Nov 2009 14:57:00 +0000

Diversified giant BHP Billiton on Wednesday officially opened the Newman Mining Hub at its Western Australia iron-ore operations.

The hub would be the centre of the Western Australia iron-ore operations’ mining, crushing and screening activities in the Eastern Pilbara region. It was the key component of the company’s Rapid Growth Project 4 (RGP4), which would increase installed capacity across BHP Billiton’s Western Australia iron-ore operations to 155-million tons a year, the miner said in a statement.

The additional capacity associated with RGP4 would be ramped up during 2010.

The Western Australian Minister for Mines and Petroleum Norman Moore welcomed the official opening of the hub.

“The investment made by BHP Billiton in RGP4 further underpins the importance of the Pilbara region to Western Australia's resources industry and to the Australian economy,” he said.

BHP Billiton iron-ore president Ian Ashby said that the Newman Hub was a key component of RGP4 and would deliver large-scale benefits to the company, its customers, employees and the local communities of Port Hedland and Newman.

“The commissioning of the Newman Mining Hub marks the beginning of an exciting time for our business, with one of our largest expansion projects nearing completion. The further integration of our mine, rail and port facilities will ensure greater efficiency in production across our Western Australia iron-ore business, which in turn is good news for our shareholders, customers and employees.

“We are pleased that the community of Port Hedland will also benefit through significantly reduced dust emissions as we move some of our key production processes inland to the Newman Mining Hub,” he said.

The introduction of the Newman Hub would mean that the company's Mount Whaleback iron-ore operation would be equipped to mine, crush and screen the ore on site rather than having those processes take place in Port Hedland before the product is shipped from Port Hedland.

BHP Billiton's partners in the Western Australia iron-ore operations are Itochu Minerals & Energy of Australia, Mitsui-Itochu Iron, and Mitsui Iron Ore Corporation.

Source: Mining Weekly

Chinese Miners Dig For Investment Opportunities

noreply@blogger.com (hamilton) — Wed, 04 Nov 2009 14:55:00 +0000

Zhang Jian has changed from being owner of a coal mine in north China's Shanxi Province to a shareholder of China's largest coal mining firm, Shanxi Coking Coal Group Co. Ltd..

An order from the National Development and Reform Commission in September required the country's top coal producing province to close about 1,600 of its 2,600 mines by the end of 2010 through mergers and reorganizations.

The plan is that each coal mining companies would have an annual production of at least 3 million tons and each mine would produce at least 900,000 tons in order to end the province's reputation for pollution and fatal mining accidents.

By the end of 2010, all 1,000 coal mines in Shanxi should be mechanized, the commission said.

Zhang's mine in Zuoquan County had an annual production capacity of 300,000 tonnes, so it was targeted for takeover.

"As a shareholder, I retain a 35-percent share in the mine, which is to be developed so it has an annual output of more than 1million tons," said Zhang.

He said the merger process has been supervised by the provincial government, which had conducted an evaluation of the mine's assets.

Unlike Zhang, Wang Jianzhen, general manager of Sanjia Group, a private mining firm in Shanxi, has decided to shift its business focus from coal mining to other sectors -- especially tourism.

"The coal mining sector, which helped start the company, has been badly affected by the economic downturn since last year. It was our investment in tourism that has enabled us withstand the crisis," said Wang.

The company began to diversify 10 years ago. It has invested more than 2 billion yuan (293 million U.S. dollars) to develop Mianshan Mountain in Shanxi into a tourist attraction, which turned in revenues of almost 150 million yuan in the first half year.

"About 500 coal mining firms have invested an estimated 12 billion yuan in tourism," said Ji Zhenfang, director of the Shanxi Tourism Bureau.

Agriculture had also attracted private coal mining firms, said Sun Lianzhu, director of the Shanxi Agriculture Bureau.

He said coal firms had invested about 6.8 billion yuan in the farm produce processing sector. More private investment could be expected to flow to industrial farming and urban-rural integration projects, as many coal firms looked for good investment projects.

Li Baoqing, head of the Shanxi Provincial Development and Reform Commission, said the provincial government planned to open big government projects worth 650 billion yuan to private investors in the next two years to help direct private investment in building infrastructure, and developing public transportation and facilities.

Du Fuxing, chairman of the Shanxi Coking Coal Group Co. Ltd., said Shanxi had more than 5,000 coal mines back in the 1990s.

"Under the circumstances, the more coal we produced, the less money we earned. The resource has been coarsely exploited," he said.

According to the provincial coal industry bureau small mines with an annual production of less than 300,000 tons produced 70 percent of Shanxi's coal, and less than 30 percent of Shanxi mines in Shanxi were mechanized.

"Small coal mines have low recovery rate in mining. They waste 4 tonnes of coal for every tone they extract," said Ding Jigang, an official of the provincial coal industry department.

He said the annual waste of coal resources in Shanxi was estimated at 1.4 billion tons. The industry consolidation would help improve mining technology and make better use of the resources.

Source: Xinhua

Daunia Coal Mine Approved

noreply@blogger.com (hamilton) — Wed, 04 Nov 2009 14:50:00 +0000

BHP Billiton’s Daunia Coal mine has received approval for its environmental impact statement from the Queensland Government.

The BHP Mitsubishi Alliance (BMA) mine is expected to begin production in 2011, with an annual output of up to four million tonnes of semi-hard coking coal and PCI coal.

The mine is located in the northern section of the Bowen Basin, near the Moranbah township.

The open cut coal mine has an expected mine life of 21 years, and is situated to the immediate east of the Poitrel Mine.

All coal will initially be railed to BMA’s Hay Point coal terminal. Total construction time is slated to be between 18 to 24 months.

Source: Australian Mining