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Saturday, January 15, 2011

Anglo's American's Kumba Iron Ore to Object to ICT Mine Right Application

By Carli Lourens - Jan 14, 2011

Kumba Iron Ore Ltd., a unit of Anglo American Plc, said it will object to South Africa’s acceptance of an application by Imperial Crown Trading Ltd. for a 21.4 percent mining right at its Sishen mine in South Africa.
The application was submitted on Dec. 9 and accepted on Dec. 23, Pretoria-based Kumba said in a statement today. The acceptance means the application will now be evaluated before a decision is made about granting the mining right, Kumba said.
The company, the world’s fourth-largest supplier of seaborne iron ore, is already challenging the government’s earlier award of a partial prospecting right over the mine to Imperial in the North Gauteng High Court in Pretoria. Imperial’s owners include Jagdish Parekh, who is investing in ArcelorMittal South Africa Ltd. together with South African President Jacob Zuma’s son, Duduzane.
“This means that this whole issue that we had hoped would have been put to bed already is just carrying on,” Ron Klipin, an analyst at SA Stockbrokers, said by phone from Johannesburg.
Kumba’s Sishen Iron Ore Co. “does not believe that it was lawful for the Department of Mineral Resources to have accepted ICT’s application, pending the High Court Review initiated in May 2010, over the prospecting right awarded to ICT,” it said.
Appeal the Decision
SIOC, part-owned by Exxaro Resources Ltd., is in the process of objecting to the application and will launch an appeal against the decision, Kumba said.
ArcelorMittal South Africa, controlled by the world’s largest steelmaker, previously held the partial right over Sishen mine, facilitating iron ore supplies at below-market prices. Iron ore is a steelmaking ingredient.
Kumba Chairman Lazarus Zim resigned last month to avoid a conflict of interest as he sets up a steel company to rival ArcelorMittal South Africa. Zim had earlier excluded himself from board decisions over Kumba’s Sishen deposit because of his relationship with ICT’s Parekh. Parekh’s mobile phone was switched off when Bloomberg News called seeking comment.
Zingaphi Jakuja, spokeswoman for the Department of Mineral Resources, said she couldn’t immediately comment when Bloomberg News contacted her on her mobile phone.
Kumba was unchanged at 450 rand at the 5 p.m. close in Johannesburg, giving it a market value of 145 billion rand ($21 billion).
ArcelorMittal, based in Luxembourg, is the world’s largest steelmaker.

Source: Bloomberg

Energy commodity report: January 14, 2011

January 14, 2011

All prices unless otherwise stated are for the close of January 13.2012 baseload German power: €53.25/MWh, down 1.11%2012 CIF ARA Coal: €119.32/t, down 0.51%Front month UK natural gas: GBp56.35/therm, down 0.79%EU emission allowances (EUAs) for December 2011 delivery: €14.28/t, up 0.21%Certified Emission Reduction(s) (CERs) for December 2011 delivery: €10.90/t, down 0.27%Brent crude oil futures for front-month 2010 delivery: US$98.45/bbl, up 0.4% as of GMT 8:45, January 14WTI crude oil futures for front-month 2010 delivery: US$90.97/bbl, down 0.3%, as of GMT 8:45 January 14
Latest buzz
Oil traders experienced a muddled day of trading on Thursday, as an increase in new jobless claims in the US, weighed on the market, causing benchmark crude for February delivery on the NYMEX to hit an intraday low of US$90.75/bbl and prompting profit-taking. As the day went on, a stronger euro, pushed up by a €5bn Spanish debt auction, pushed the US dollar lower, allowing the commodity to recover most of its earlier losses. As a result, oil settled down US$0.46 at US$91.40/bbl, after an intraday high of US$92.37/bbl. First-time claims for unemployment benefits rose by 35,000, the largest weekly increase seen in six months, to 445,000 in the week ended January 8.e
As of writing, Brent crude has returned to the same level it was trading at this time yesterday. The spread between New York and Brent crude is now an impressive US$7.87/bbl, owing much to a leak on the Trans Alaska pipeline, given that Brent is delivered by sea, while WTI is physically delivered via pipeline to the landlocked hub at Cushing, Oklahoma.
Alyeska Pipeline Service Co intends to shut the Trans Alaska pipeline system today to install a by-pass and stop a leak on the line. The pipe will close at 18.00h and may be shut for as long as 48 hours, according to a statement from the company. During this time, a section will be put in so that crude can be transported around a breach at pump station 1. The pipeline was temporarily restarted on January 11, to prevent freezing within the pipe. The situation has forced BP, ConocoPhillips and Exxon Mobil to shut-in 95% of their production from the North Slope area. As of mid-day Thursday, the pipeline was transporting crude at a rate of around 320,000bbl a day, roughly half its full capacity.
Norway has dramatically cut its estimate of undiscovered or unproven oil reserves, by 21%, from 20.8bnbbl boe to 16.4bn boe, compared to 2006 after disappointing drilling results. Oil production fell in 2010 by 10% YoY, while proven oil reserves have fallen from 5.2 to 4.8bnm3. The Norwegian Petroleum Directorate (NPD) said that the discovery of proven reserves equal to around 400mm3 of oil equivalent over the past five years had contributed to the revision, together with “disappointing drilling results” in deep-water areas of the Norwegian Sea. Norwegian oil production is now expected to fall by 5.8% in 2011. The news has prompted oil officials to call for more debate over opening up the Lofoten region in the Arctic to oil exploration. The region currently remains off limits due to environmental concerns and its importance to the fishing industry. On the positive side, natural gas sales rose by 3% in 2010 to 105.6bnm3 and are expected to rise to 109.1bn3 in 2011 and 112.2bnm3 in 2015. Some positive potential comes from an agreement made between Norway and Russia over the much disputed Barents Sea. Should this area be opened up for exploration, there is a chance that large discoveries could be made once more.
Natural gas for February delivery on the NYMEX dropped by US¢13, or 2.7%, to US$4.41/MBtu on Thursday, weighed down by the combination of disappointing US employment data and a distinct lack of bullish sentiment on the global financial markets. The news that 138bnft3 of gas was withdrawn from storage in the week ending January 7 (according to a EIA report), appears to have little impact. The drawn-down was slightly below some analysts’ expectation, but was still significantly above the five-year average of 108bnft3. Also weighing on the market was the growing consensus among forecasters that the US will see a general shift to milder weather towards the end of this month, which will reduce heating demand.
Australian thermal coal prices, traded at close to US$140/t on Thursday, with support coming from the flooding situation in Queensland. Thermal coal on the globalCOAL Newcastle index for the week to date, finished at US$138.58/t, up US$9.08 WoW. The index hit a high of US$141.25/t on Monday and traders have reported that recent spot prices have climbed as high as US$143.50/t. Meanwhile, India’s coal minister, Sriprakesh Jaiswal, has said that Indian coal imports may double over the course of this year to 104Mt in the year ending March 2012, while Helen Lau at UOB Kay Hian Ltd has predicted that Chinese purchases of international coal could rise by 30%, to 210Mt in 2011. Yesterday saw South Korea’s five utilities look for 1.2Mt of thermal coal in the spot market for February and March to reduce the risk from further shipment delays. Buyers have been turning to Indonesia, Colombia and South Africa to make up for the shortfall, but the latter two countries are suffering from supply disruptions themselves due to weather and logistical constraints.
Yesterday saw prompt physical coal prices for delivery into Europe fall by around US$2.00/t. Two March delivery DES ARA cargoes traded via brokers at US$127.00/t and US$127.50/t, down US$2.00, while a March DES ARA cargo was bid at US$127.00 and offered at US$127.50, also down US$2.00, according to Reuters.
Over in China, thermal coal with a heating value of 5500kCal/kg traded at CNY780-790/t (US$118-119.68/t), while inventories at the port of Qinhuangdao fell by 1.3% to 6.95Mt on week. The situation in Australia has prompted the return of some Chinese coal miners, such as Shenhua Group and China National Coal Group to the overseas spot market. They appear to be exercising some restraint in terms of volume in an effort to not depress prices. Unfortunately for the rest of the market, a 10% export tax, means that such companies are only interested in selling premium bituminous coal, further limiting volumes.
The Dec11 EUA contract hit an intraday low of €14.17/t, prior to the UK government’s auction of 4.4M EUAs. The auction cleared at €14.00/t with a cover ration of 6.61. The news, released just after 10:00am GMT, caused the contract to hit an intraday high of €14.40/t, before a weakening energy complex fuelled bearish sentiment. Yesterday saw the issuance of 4.23M CERS to 45 CDM projects, pushing down the value of all CER contracts. The Dec11 CER-EUA spread widened by €0.05 to -€3.38 and the Dec12 spread widened by €0.08 to -€3.89.
Source: IFandP Newsroom

German crude steel output up by 34pct YoY

January 12, 2011

The German economy continued to recover from the recession. Crude steel output in Germany climbed to 3.2 million tonnes in December 2010, up by 4.5% YoY.
The German Steel Federation said that crude steel output in Germany climbed to 3.2 million tonnes in December 2010, up by 4.5% YoY as the economy continued to recover from the recession.
Over the full year 2010, production in Germany rose 34.1% to 43.8 million tonnes of steel versus the previous year, when demand was heavily burdened by the financial crisis.
Capacity utilization in 2010 averaged 84% in Germany, beating the 78% average recorded globally.
The federation wrote in a statement that "For next year, crude steel production in Germany is expected to continue rising, by around 2% to 44.5 million tonnes, in line with the unchanged recovery in the wider economy."
source:steelguru

ArcelorMittal mulls USD 200 million investment in new line

January 13, 2011

ArcelorMittal, Brazil, investment, steel ArcelorMittal may invest USD 200 million in a new Brazilian line with capacity to produce 500,000 tonnes of galvanized steel a year
Bloomberg reported that ArcelorMittal may invest USD 200 million to produce steel for Brazil's auto industry.
Mr Benjamin Baptista Filho, CEO of South American flat carbon steels unit, said that the new line would have the capacity to produce 500,000 tonnes of galvanized steel a year at ArcelorMittal's plant in the Brazilian state of Santa Catarina.
ArcelorMittal will likely make a decision by the end of March 2011 and the line would start operating in the first half of 2014.

Source: Bloomberg

ArcelorMittal SA to hike steel prices by 5pct

January 14, 2011

Steel market: ArcelorMittal South Africa surged the most in six months after saying it will increase prices next month.
Bloomberg reported that ArcelorMittal South Africa surged the most in six months after saying it will increase prices next month.
The company will raise prices by an average of 5% for deliveries from February 1st 2011
Source: Bloomberg

Chinese domestic steel prices at 27 month high level

Saturday, 15 Jan 2011

The Chinese domestic steel prices continue to exhibit firmness as they have been on increasing trend since November beginning. The prices have crossed the last high on April 15th 2010 when CLPPI was 7285, CFPPI was at 7463 and CHISPI was at 7386.These levels were last seen in October 2008 beginning, when the prices crashed from peak in July 2008 beginning to almost half by December 2008 beginning.The Chinese Long Product Price Index CLPPI has gone up by 515 points or 7.5% whereas the Chinese Flat Products Index CFPPI went up by 546 points or 7.9%. The overall price index CHISPI has surged by 533 points or 7.7 during last 75 days.
Source:steelguru

Steam coal price at Newcastle climbs to US$ 136 as on Friday, January 14, 2011

Steam coal prices at Australia’s Newcastle port, an Asian benchmark, rose by 4.9% in the week.
According to the globalCOAL NEWC Index, steam coal prices at the New South Wales port climbed to USD 136.30 per tonne from USD 129.90 per tonne in the previous week.
Coal, Australian thermal coal, 12000- btu/pound, less than 1% sulfur, 14% ash, FOB Newcastle/Port Kembla, US$ per metric tonneAs of: Friday, January 14, 2011
Source: globalCOAL

US EPA revokes mountaintop removal mining permit of Arch Coal in West Virginia

US’s Environmental Protection Agency took the unusual step of revoking a permit Thursday for the country's largest surface mine, a setback for the controversial practice of mountaintop removal that helps produce 10% of the US's coal.
EPA announced it revoked Arch Coal’s proposed Spruce number one mine in West Virginia, which would have seen the destruction of more than 2,000 acres of mountain tops, because it would have created an unacceptable risk to the environment.
It said “The project would have used unsustainable mining practices that jeopardized the health of Appalachian communities and clean water.”
The EPA's assistant administrator for water, Peter S. Silva, said the Spruce No 1 coal mine, whose expansion was scaled back from 3,113 acres to win a permit from the US Army Corps of Engineers in 2007, would use destructive and unsustainable mining practices that jeopardize the health of Appalachian communities and clean water on which they depend.
The 2,300 acre operation at the Mingo Logan Coal Co's Spruce No 1 coal mine in West Virginia has been mired in litigation since 1998. The Bush administration had approved the construction of the project in 2007.
The decision is expected to be challenged by Arch Coal.
The EPA's decision could affect dozens of other mining projects across Appalachia, where firms have been blasting the peaks off mountains for years to reach coal seams and then depositing the remaining rubble in surrounding valleys. While the federal government issued permits for hundreds of these activities under the Clinton and George W Bush administrations, the EPA adopted new environmental guidelines in April and is now reviewing 33 other pending permits.
Sourced from washingtonpost.com

Iron ore price negotiations - BHP adopts weekly auction - Report

China Securities Journal, citing a procurement manager at an unidentified steel mill in southern China, reported that mining giant BHP Billiton Ltd has begun auctions for spot iron ore shipments to Chinese steel mills marking the latest shift in its pricing strategy to cash in on rocketing prices.
The report said that BHP has started to auction 170,000 tonne spot iron ore shipment every fortnight to Chinese customers.
If true, it clearly indicates gigantic shift from annul bench mark price to quarterly index based price to monthly finally down to spot, reflecting that at the end of the day market forces prevail.
Iron ore spot market is continuing its upward momentum with approaching spring festival holidays and concerns on supply side. Reports are filtering in for transactions at USD 184 CFR levels on limited high grade parcels from India as well as concerns of a tropical cyclone threatening to interrupt production and shipments in Australia. As the higher grade cargos are very few, talks of up to USD 190 per tonne CFR are starting to be heard.
With the gradual shift form benchmark pricing based long term contracts to spot cargos, it has become more vital for both sellers as well as buyers to precisely monitor the daily movements of iron ore spot prices to keep tab on trends and spot opportunities.

Steam coal price may reach USD 150 a tonne

According to Credit Suisse Group AG, power station coal may rise to USD 150 a tonne in the coming weeks, driven by extreme weather conditions, before declining in the year.
Mr Joachim Azria a New York based analyst with Credit Suisse said that “The unexpected cold weather so far this season has taken a toll on global energy inventories and reset energy prices to varying degrees. We expect coal prices to move above USD 150 in coming weeks and possibly higher if there are further significant disruptions to supply.”
Mr Azria said that prices first rose because of a colder than normal winter in the Northern Hemisphere, prompting restocking by countries including China. Further price increases were supported by supply fears because of heavy rains in Indonesia, Australia and Colombia, as well as floods in Queensland state.
According to IHS McCloskey, power station coal at the port of Newcastle in Australia’s New South Wales, the benchmark for Asia, jumped 4.5% to USD 131.80 a tonne in the week ended January 7th 2011.
Sourced from Bloomberg

Friday, January 14, 2011

Alpha Lifts 2011 Coking Coal Forecast on Australian Floods

Source :Bloomberg, by Mario Parker - Jan 14, 2011

Alpha Natural Resources Inc., the third-largest U.S. coal producer, lifted its 2011 forecast for coking coal because Australia’s worst flooding in 50 years may increase demand.
The company expects to ship between 13 million and 14.5 million tons of metallurgical coal, used to forge steel, up from an earlier forecast of 11.5 million to 13.5 million tons shipped, according to a statement today from Abingdon, Virginia- based Alpha.
Queensland supplies 50 percent of the world’s seaborne metallurgical coal, or about 140 million metric tons a year, according to Bank of America Merrill Lynch. The flooding in that region has affected an area larger than Texas and California combined.
“As a leading supplier and exporter of metallurgical coal in the United States, Alpha expects to benefit from the combination of a strong seaborne metallurgical coal market and increased metallurgical shipments,” Chief Executive Officer Kevin Crutchfield said in the statement.
Alpha fell $2.57, or 4 percent, to $61.43 as of 9:37 a.m. on the New York Stock Exchange. The shares have risen 26 percent in the year before today.
The company also said it expects its cost of coal sales for 2010 in the Eastern U.S. to be higher than earlier forecast. Alpha forecast the cost of coal sales to be as much as 7.9 percent higher, at $61.50 per ton, from its earlier expectation of as low as $57.
Alpha blamed poor rail service, bad weather, delayed export shipments and geology problems at its Emerald Mine near Waynesburg, Pennsylvania, for the lower operating results during the fourth quarter.

Commodities-Climate & Weather news; 2-week heavy rain alert for north Australia

Jan. 13, 2011
The prevailing La Nina event, blamed for triggering record-breaking rains over Australia, may be just peaking and is quite sometime away from a wind-down.
Northern Australia is likely to experience above average rainfall for at least another week or two, according to the Bureau of Meteorology (BoM), the national forecaster.
ACTIVE TROUGH
The potential for tropical cyclones to form in the surrounding seas will also remain at a moderate to high level whilst the Australian monsoon trough is active in the area.
La Nina refers to a cooling event in the central and east equatorial Pacific, with strong winds pushing warm waters towards Australia and the adjoining west Pacific.
The warm waters fuel convection and sets up thunder clouds, which in turn breed tropical storms and cyclones.
The December to March Australian monsoon is a successor event to its better known northern hemisphere counterpart, the Indian or Asian monsoon.
Studies have shown that preceding Australian conditions may have virtually had no significant correlation with succeeding Indian conditions.
But comparable Indian conditions have shown significant correlations with many succeeding Australian regional values.
For instance, India saw some heavy to very heavy rains batter the country in what was a linear extension of the very same La Nina conditions in the Pacific.
That such strong wet weather should have come virtually on the heels of a record-smashing drought underwritten by the year 2009 El Nino year had made scientists and researchers sit up and take notice.
Nobody had bargained for the scale and intensity of the rain fury unleashed over the continent in the far-east.
But researchers at the Tokyo-based Regional Institute for Global Change (RIGC) had flagged the possibility of ‘stronger than usual La Nina' well in advance.
And this is what has proved now, with the BoM itself saying in its latest update that a major La Nina event continues to affect the Pacific Basin.
Long-range models surveyed suggest that this event may be at its peak, and will persist into the southern hemisphere autumn.
But RIGC researchers are of the view that the event could last through the whole of this year even while progressively weakening and may peter out in 2012 only.
THIRD WETTEST
Previous strong La Nina events, such as those of 1974 and 1955, have also been associated with widespread and severe flooding in eastern Australia.
Sea surface temperatures off the Queensland coast in recent months have been at or near record levels.
The current event has contributed to 2010 being Australia's third wettest year on record, and Queensland having its wettest December on record.

Source: www.thehindubusinessline.com ByVinson Kurian,Thiruvananthapuram

Coal at 28-Month High to Beat Oil, Gas on Australia Floods: Energy Markets

Source: Bloomberg, by Dinakar Sethuraman and Ben Sharples - Jan 13, 2011

Coal for producing power may beat oil and natural gas this year as disruptions from Australia to South Africa drive prices for the fuel to a 28-month high.

Thermal coal may climb about 14 percent to $150 a metric ton in coming weeks, while increased stockpiles limit gains for oil and natural gas, Joachim Azria, a New York-based analyst at Credit Suisse Group AG, said in a Jan. 10 report. Helen Lau, a Hong Kong-based analyst at UOB Kay Hian Ltd., said on Jan. 4 coal may advance as much as 15 percent. Prices at the Australian port of Newcastle were at $131.80 a ton on Jan. 7, the highest since September 2008, according to IHS McCloskey data.
“There’s definitely more possible upside in the coal market at the moment than there is in the oil market,” Ben Westmore, an energy economist at National Australia Bank Ltd. in Melbourne, said in a Jan. 12 interview.
Spot prices at Newcastle, the world’s biggest coal-export facility, have jumped 20 percent in less than six weeks, according to Petersfield, England-based McCloskey. The worst floods in Queensland state in 50 years shut mines and closed transport lines, disrupting supplies. Coal shipped via South Africa’s Richards Bay, Africa’s largest terminal for the fuel, gained about 18 percent. Oil in New York rose 5.5 percent in the same period, while natural gas added 3.3 percent.
“Coal should continue to outperform oil and gas in 2011,” said Azria, who estimates as much as 2 million tons of thermal supplies have been disrupted by the Australian floods.
Asian Economies
Australia & New Zealand Banking Group Ltd. increased its spot thermal coal price forecast to $140 a ton, from $120 a ton, for the three months to March 31, Mark Pervan, head of commodity research in Melbourne, said in a note on Jan. 7.
Demand for coal is growing faster than oil and gas as China and India boost imports to feed economies that are outpacing the rest of the world. China, which relies on the fuel for 70 percent of its energy, may increase overseas purchases by 30 percent this year, according to Lau, while imports to India may double, India Coal Market Watch said. Coal will remain the world’s most-used fuel for power generation through 2035, the International Energy Agency said in November.
Prices at Newcastle jumped 43 percent last year, while oil futures in New York gained 15 percent. Natural gas dropped 21 percent.
While coal is rising, the fuel is still more than 30 percent below the record set more than two years ago. Newcastle coal traded at $192.50 a ton in July 2008 as floods hampered supplies, according to McCloskey data on Bloomberg.
Disaster Zone
An area bigger than Texas and California covering more than 75 percent of Australia’s Queensland state has been declared a disaster zone. Fifteen people are dead and 61 missing after a flash flood smashed through Toowoomba on Jan. 10, taking the total killed to 26 since the deluge started in November. Brisbane, Australia’s third-largest city, was inundated with muddy water, flooding 15,000 properties, smashing roads and shuttering the city center.
The flooding has cut coal output by about 4.5 million tons since the start of December, about 3 million tons of which is coking coal, used by steelmakers, and the rest thermal coal, according to Colin Hamilton, a London-based analyst at Macquarie Group Ltd. The state exports about 50 million tons of thermal coal a year, according to Macquarie.
“It was a perfect storm for coal, with cold weather in the northern hemisphere boosting demand and excessive rainfall first in Colombia, Indonesia and now in Australia creating vast shortfalls in supply,” Amrita Sen, a London-based analyst for Barclays Plc, said in an e-mail on Jan. 10.
World’s Biggest Supplier
Indonesia, the world’s biggest supplier of thermal coal, increased the reference price for the fuel by 8.7 percent in January to $112.4 a ton, the Directorate General of Coal and Minerals said on its website. Prices have climbed 25 percent since September.
Coal shipped through Richards Bay was disrupted last month by derailments that depleted stockpiles at the terminal, threatening to curtail first-quarter exports, port Chief Executive Officer Raymond Chirwa said on Jan. 4. India bought almost a third of Richards Bay’s exports last year.
Prices at the port were at $126.39 a ton on Jan. 7, after rising 60 percent last year.
Asian Driver
“You have strong underlying fundamentals for coal,” said Emmanuel Fages, a Paris-based analyst at Societe Generale SA. “Bottlenecks remain on the supply side, so Asia is sucking up resources even more from traditional suppliers of the West, like Colombia or South Africa. You are bound see price increases over the medium term.”
China’s coal imports may rise to 210 million tons in 2011 from an estimated 166 million last year, according to Lau. The country, which became a net importer of the fuel for the first time in 2009, boosted overseas purchases by 35 percent through November 2010, according to government data.
While oil imports to China will continue to increase this year, they may not match last year’s 17 percent pace, as growth in refining capacity slows, Lawrence Eagles, a New York-based analyst with JPMorgan Chase & Co., said in a Jan. 10 note.
India may double imports of thermal coal to 104 million tons in the year ending March 2012, according to Coal Minister Sriprakash Jaiswal. That compares with 3 percent growth in oil consumption, according to the Paris-based IEA.
“Long-term fundamentals for coal are more robust than for oil or gas, because the price increases are really driven by speculative expectations at present for oil and gas,” Fages said. If growth slows in China, it would take only about a month for oil and gas “to come down to much lower levels,” he said.
Reporter:Dinakar Sethuraman in Singapore at dinakar@bloomberg.net

Arcelormittal, Nunavut Join Forces to Offer $1.51 a Share for Baffinland

Source: Bloomberg, by Thomas Biesheuvel and Natalie Doss - Jan 14, 2011

ArcelorMittal, the largest producer of steel, joined with Nunavut Iron Ore Acquisition Inc. in a bid for Baffinland Iron Mines Corp. valued at about C$519 million ($522 million) that seeks to end a three-month takeover battle.
The two companies offered C$1.50 ($1.51) a share for 100 percent of Baffinland, Luxembourg-based ArcelorMittal said in a statement today. Nunavut previously bid C$1.45 a share for 60 percent and ArcelorMittal C$1.40 apiece for the entire company.

ArcelorMittal and Nunavut, backed by Houston-based private equity-firm Energy & Minerals Group, were vying for Baffinland’s Mary River project in the Canadian Arctic. ArcelorMittal, based in Luxembourg, is seeking greater access to iron ore as prices for the steelmaking material rise. ArcelorMittal would hold 70 percent of Baffinland and Nunavut the rest under the new offer.
The Mary River project contains an estimated 365 million metric tons of reserves and 500 million tons of resources in three deposits that have been partially explored.
“Together with Nunavut Iron, we are providing a more attractive offer to Baffinland shareholders than either of us were prepared to provide on our own,” Peter Kukielski, head of mining at ArcelorMittal, said in the statement.
Daniella Dimitrov, vice chairwoman of Baffinland, Richard McCloskey, chief executive officer, and Michael Zurowski, executive vice president, didn’t immediately return telephone calls seeking comment.
Baffinland rose 3 cents, or 1.9 percent, to C$1.54 as of 9:47 a.m. in Toronto Stock Exchange trading. ArcelorMittal slid 0.3 percent to 27.195 euros by 4.11 p.m. in Amsterdam.
The new bid’s value was calculated using the 345.86 million of outstanding Baffinland shares, according to Bloomberg data.

Shanxi Minmetals Industrial & Trading obtains approval for Mexican project

Tuesday, 04 January 2011 13:19:35 (GMT+2)

The development and reform commission of China's Shanxi Province has announced that local trading firm Shanxi Minmetals Industrial and Trading Co., Ltd (Shanxi Minmetals Industrial and Trading) has received approval from China's National Development and Reform Commission (NDRC) for its new iron ore project in the southern state of Jalisco in Mexico.
The project, which will involve both open-pit and underground mining, has estimated total reserves of 58.8 million mt of iron ore, with an annual iron ore output of 1.45 million mt.
Shanxi Minmetals Industrial and Trading signed the agreement to purchase the Mexican project in September 2009, and has since obtained mining rights and enviromental approvals.
Shanxi Minmetals Industrial and Trading mainly exports coke and bauxite, and also processes imported materials including manganese ore, chromium ore and iron ore and exports the processed products. Shanxi Minmetals Industrial and Trading is the third largest coke exporter and fourth largest bauxite exporter in China.
Source:steelorbis.com

China’s Inner Mongolia region produces 782 million mt of coal in 2010

Friday, 14 January 2011 14:26:40 (GMT+2)

According to the Coal Mine Security Supervision Bureau of China's Inner Mongolia Autonomous Region, in 2010 the region produced 782 million mt of coal, an increase of 181.4 million mt compared to the previous year, thus becoming the first region in China to produce more than 700 million mt of coal in a single year.
There are currently over 1,000 coal mines in China's Inner Mongolia Autonomous Region. During China's 12th five-year plan period (2010-15), the Inner Mongolia government plans to give priority to the construction of several major coal projects, including the Eerduosi, Xilinguole and Hulunbeier projects.
Source: steelorbis.com

Coal Glossary

A
accessed--Coal deposits that have been prepared for mining by construction of portals, shafts, slopes, drifts, and haulage ways; by removal of overburden; or by partial mining (see also virgin coal).
accessibility--In reference to coal resources (core meaning), the absence of land use restrictions and the assumption that ownership or leaseholds will be obtainable for mining (see also environmental restrictions, industrial restrictions). Many technological restrictions were traditionally applied as demonstrated reserve base criteria, but (extended meaning) with the advent of available resource studies, specific technologic restrictions may be incorporated in accessibility factors (see also restricted resources).
accessibility factor--The estimated regional ratio of accessible reserve base to the demonstrated reserve base or of accessible resources to identified resources.
accessible reserve base--The portion of the demonstrated reserve base estimated by EIA to be accessible, determined by application of one or more accessibility factors within an area. An accessible reserve base may be referred to as accessible resources because it is a subset of accessible resources and is usually part of a single resource study.
accessible resources--The portion of identified resources estimated to be accessible, determined by application of one or more accessibility factors within an area.
as-received condition or as-received basis--Represents an analysis of a sample as received at a laboratory.
availability--In reference to coal resources, the absence of land-use or environmental restrictions and technological restrictions.
available reserves-- the remaining reserves after deducting the leased reserves from proven reserves. In EIA coal supply modeling, the difference between estimated recoverable reserves and recoverable reserves at active mines; in modeling context, these reserves are considered not presently obligated for existing mines and, therefore, would be available to supply new mines in the future.
available resources--In U.S. Geological Survey studies, the quantity of remaining identified resources available for development and potential extraction at the time of determination after adjusting for geologic considerations, land-use restrictions, and/or technological restrictions (see also accessible reserve base).
B
bed, coalbed--All the coal and partings lying between a roof and floor.

bench--A subdivision and (or) layer of a coal bed separated from other layers by partings of non-coal rock.
bench sample--a face or channel sample taken of just that contiguous portion of a coalbed that is considered practical to mine, also known as a "bench;" For example, bench samples may be taken of minable coal where impure coal that makes up part of the geologic coalbed is likely to be left in the mine, or where thick partings split the coal into two or more distinct minable seams, or where extremely thick coalbeds cannot be recovered by normal mining equipment, so that the coal is mined in multiple passes, or benches, usually defined along natural bedding planes.
Brown coal (Lignite)-- also known as "wood coal", is brownish-black in color and considered the lowest rank of coal. The moisture content of brown coal is high, between 30% and 45%, and volatile matter above 36%. It is low in calorific value, easy to weathering and crack. It could also burn spontaneously as been oxidized easily. Therefore, brown coal is unsuitable for long-distance transportation. But, it could be mined easily because of shallow burying depth, hence low in development and utilization costs.
C
clean coal yield
--In EIA models, the portion of reserves that will be salable coal after preparation, if any is done (see salable coal).
Coal chemical-- An industry that converts coal into gas, liquid and solid products or semi-products, as well as chemical and energy products after further processing. It includes coke making, calcium carbide chemical, coal gasification, etc. Due to reducing oil resources worldwide, the future of coal chemical industry is wide and promising.

coal preparation/washing--The treatment of coal to reject waste. In its broadest sense, preparation is any processing of mined coal to prepare it for market, including crushing and screening or sieving the coal to reach a uniform size, which normally results in removal of some non-coal material. The term coal preparation most commonly refers to processing, including crushing and screening, passing the material through one or more processes to remove impurities, sizing the product, and loading for shipment. Many of the processes separate rock, clay, and other minerals from coal in a liquid medium; hence the term washing is widely used. In some cases coal passes through a drying step before loading.

coal-producing region--An area that collectively encompasses a group of geographically contiguous or logically associated States or areas that currently or historically mine and market coal.

coal sampling--The collection and proper storage and handling of a relatively small quantity of coal for laboratory analysis. Sampling may be done for a wide range of purposes, such as: coal resource exploration and assessment, characterization of the reserves or production of a mine, to characterize the results of coal cleaning processes, to monitor coal shipments or receipts for adherence to coal quality contract specifications, or to subject a coal to specific combustion or reactivity tests related to the customer's intended use. During pre-development phases, such as exploration and resource assessment, sampling typically is from natural outcrops, test pits, old or existing mines in the region, drill cuttings, or drilled cores. Characterization of a mine's reserves or production may use sample collection in the mine, representative cuts from coal conveyors or from handling and loading equipment, or directly from stockpiles or shipments (coal rail cars or barges). Contract specifications rely on sampling from the production flow at the mining or coal handling facility or at the loadout, or from the incoming shipments at the receiver's facility. In all cases, the value of a sample taken depends on its being representative of the coal under consideration, which in turn requires that appropriate sampling procedures be carefully followed.

For coal resource and estimated reserve characterization, appropriate types of samples include:
face channel or channel sample--a sample taken at the exposed coal in a mine by cutting away any loose or weathered coal then collecting on a clean surface a sample of the coal seam by chopping out a channel of uniform width and depth; a face channel or face sample is taken at or near the working face, the most freshly exposed coal where actual removal and loading of mined coal is taking place. Any partings greater than 3/8 inch and/or mineral concretions greater than ?inch thick and 2 inches in maximum diameter are normally discarded from a channel sample so as better to represent coal that has been mined, crushed, and screened to remove at least gross non-coal materials.

column sample--a channel or drill core sample taken to represent the entire geologic coalbed; it includes all partings and impurities that may exist in the coalbed.

composite sample--a recombined coalbed sample produced by averaging together thickness-weighted coal analyses from partial samples of the coalbed, such as from one or more bench samples, from one or more mine exposures or outcrops where the entire bed could not be accessed in one sample, or from multiple drill cores that were required to retrieve all local sections of a coal seam.

coal supply region--An area in which the EIA coal reserves data are aggregated and allocated to a set of uniform, typical criteria for purposes of modeling. The criteria of a coal supply region may include coal heat and sulfur content or other quality parameters, coal rank, geographic continuity, traditional mining regions, State or county boundaries, transportation corridors and barriers, and marketing factors. Coal supply regions may vary for different modeling criteria; they may include the coal reserves of an entire State or a contiguous group of States; some major producing States may be split into more than one region.

coal zone--A series of laterally extensive and (or) lenticular coal beds and associated strata that arbitrarily can be viewed as a unit. Generally, the coal beds in a coal zone are assigned to the same geologic member or formation.

coalbed--All the coal and partings lying between a roof and floor.
Coalfield-- large area of coal-bearing zones formed by carbonaceous materials in the development of geological history.

committed reserves--In EIA coal supply modeling, synonymous with recoverable reserves at active mines; in modeling context, these reserves are considered obligated for existing mines and, therefore, not part of the reserves that would be available to supply new mines in the future.
compliance coal--A coal or a blend of coals that meets sulfur dioxide emission standards for air quality without the need for flue gas desulfurization.
cumulative depletion--The sum in tons of coal extracted and lost in mining to a stated date for a specified area or a specified coal bed.
D
demonstrated reserve base (DRB)--A collective term for the sum of coal in both measured and indicated resource categories of reliability; the DRB represents 100 percent of coal in place as of a certain date. Includes beds of bituminous coal and anthracite 28 inches or more thick and beds of subbituminous coal 60 inches or more thick that can be surface mined. Includes also thinner and/or deeper beds that presently are being mined or for which there is evidence that they could be mined commercially at this time. Represents that portion of the identified resources of coal from which reserves are calculated.

demonstrated resources--Same qualifications as identified resources, but includes measured and indicated degrees of geologic assurance and excludes the inferred.

depleted resources--Resources that have been mined; includes coal recovered, coal lost in mining, and coal rendered subeconomic as a result of mining the recovered coal. See cumulative depletion.
depletion--The subtraction of both the tonnage produced and the tonnage lost in mining from the demonstrated reserve base and identified resources to determine the remaining tonnage as of a certain time.
depletion factor--The multiplier of the tonnage produced that takes into account both the tonnage recovered and the tonnage lost due to mining. The depletion factor is the reciprocal of the recovery factor in relation to a given quantity of production.
Designed production capacity--the actual maximum production capacity under the premise of safety and with the existing equipments, technologies and workers in an enterprise.
dry, mineral-matter-free basis--A type of calculated analytical value of a coal sample expressed as if the total moisture and mineral matter had been removed. Mineral matter free is not the same as ash free.
E
economic--Term that implies that profitable extraction or production under realistic investment assumptions has been established, analytically demonstrated, or assumed with reasonable certainty.
environmental restrictions--Land-use or subsurface restrictions that constrain, postpone, or prohibit mining in order to protect environmental resources of an area; for example, surface- or groundwater quality, air quality affected by mining, or plants or animals or their habitats.
estimate--A determination as to the amount or tonnage of coal in an area. The term estimate indicates that the quantities of resources are known imprecisely. An estimate differs from an assessment, which is an analysis of all data concerning an area's coal resources and reserves with the objective of reaching a judgment about the geologic nature and economic potential of the coal resources and reserves of the area.
estimated recoverable reserves--See recoverable reserves.
F
floor--The upper surface of the stratum underlying a coal seam. In coals that were formed in persistent swamp environments, the floor is typically a bed of clay, known as "underclay," representing the soil in which the trees or other coal-forming swamp vegetation was rooted.
G
geologic assurance--State of sureness, confidence, or certainty of the existence of a quantity of resources based on the distance from points where coal is measured or sampled and on the abundance and quality of geologic data as related to thickness of overburden, rank, quality, thickness of coal, areal extent, geologic history, structure, and correlations of coal beds and enclosing rocks. The degree of assurance increases as the nearness to points of control, abundance, and quality of geologic data increases.
geologic considerations--Conditions in the coal deposit or in the rocks in which it occurs that may complicate or preclude mining. Geologic considerations are evaluated in the context of the current state of technology and regulations, so the impact on mining may change with time.
grade (of coal)--See quality.
H
hypothetical resources
--Undiscovered coal resources in beds that may reasonably be expected to exist in known mining districts under known geologic conditions. In general, hypothetical resources are in broad areas of coalfields where points of observation are absent and evidence is from distant outcrops, drill holes, or wells. Exploration that confirms their existence and better defines their quantity and quality would permit their reclassification as identified resources. Quantitative estimates are based on a broad knowledge of the geologic character of coalbed or region. Measurements of coal thickness are more than 6 miles apart. The assumption of continuity of coalbed is supported only by geologic evidence.
I
identified resources--Specific bodies of coal whose location, rank, quality, and quantity are known from geologic evidence supported by engineering measurements. Included are beds of bituminous coal and anthracite 14 inches or more thick and beds of subbituminous coal and lignite 30 inches or more thick that occur at depths to 6,000 feet and whose existence and quantity have been delineated within specified degrees of geologic assurance as measured, indicated, or inferred.
indicated resources--Coal for which estimates of the rank, quality, and quantity have been computed partly from sample analyses and measurements and partly from reasonable geologic projections. Indicated resources are computed partly from specified measurements and partly from projection of visible data for a reasonable distance on the basis of geologic evidence. The points of observation are 0.5 to 1.5 miles apart. Indicated coal is projected to extend as a 0.5-mile-wide belt that lies more than 0.25 miles from the outcrop or points of observation or measurement.
industrial restrictions--Land-use restrictions that constrain, postpone, or prohibit mining in order to meet other industrial needs or goals; for example, resources not mined due to safety concerns or due to industrial or societal priorities, such as to preserve oil or gas wells that penetrate the coal reserves; to protect surface features such as pipelines, power lines, or company facilities; or to preserve public or private assets, such as highways, railroads, parks, or buildings.
inferred reserve base--the resources in the inferred reliability category that meet the same criteria of bed thickness and depth from surface as the demonstrated reserve base.
inferred resources--Coal in unexplored extensions of demonstrated resources for which estimates of the quality and size are based on geologic evidence and projection. Quantitative estimates are based largely on broad knowledge of the geologic character of the bed or region and where few measurements of bed thickness are available. The estimates are based primarily on an assumed continuation from demonstrated coal for which there is geologic evidence. The points of observation are 1.5 to 6 miles apart. Inferred coal is projected to extend as a 2.25-mile-wide belt that lies more than 0.75 miles from the outcrop or points of observation or measurement.
--A line on a map drawn through points of equal thickness of a designated unit (such as a coal bed).
L
land-use restrictions--Constraints placed upon mining by societal policies to protect surface features or entities that could be affected by mining. Because laws and regulations may be modified or repealed, the restrictions, including industrial and environmental restrictions, are subject to change.
M
marginal reserves
--Borders on being economic. See economic.
measured resources--Coal for which estimates of the rank, quality, and quantity have been computed, within a high degree of geologic assurance, from sample analyses and measurements from closely spaced and geologically well known sample sites. Measured resources are computed from dimensions revealed in outcrops, trenches, mine workings, and drill holes. The points of observation and measurement are so closely spaced and the thickness and extent of coals are so well defined that (for older estimates) the tonnage was judged to be accurate within 20 percent of true tonnage (statistical measures of error are no longer considered reliable for most measured resources). Although the spacing of the points of observation necessary to demonstrate continuity of the coal differs from region to region according to the character of the coalbeds, the points of observation are not greater than 0.5 mile apart. Measured coal is projected to extend as a 0.25-mile-wide belt from the outcrop or points of observation or measurement.
minable--Capable of being mined under current mining technology and environmental and legal restrictions, rules, and regulations.
O
original (resources/reserves)--The amount of coal in the ground before any production.
overburden--Any material, consolidated or unconsolidated, that lies between a coal deposit and the surface. Overburden is reported in feet and (or) meters and used to classify the depth to an underlying coal bed.
P
preparation plant--Broadly speaking, any facility where coal is prepared for market; usual accepted meaning is a rather elaborate collection of facilities where coal is separated from its impurities, washed and sized, and loaded for shipment. Also known as a wash plant or coal washer.
Q
quality or grade--An informal classification of coal relating to its suitability for use for a particular purpose. Refers to individual measurements such as heat value, fixed carbon, moisture, ash, sulfur, phosphorus, major, minor, and trace elements, coking properties, petrologic properties, and particular organic constituents. The individual quality elements may be aggregated in various ways to classify coal for such special purposes as metallurgical, gas, petrochemical, and blending usages.
R
rank
--The classification of coal relative to other coals, according to their degree of metamorphism, or progressive alteration, in the natural series from lignite to anthracite (Standard Classification of Coal by Rank, 1992, American Society for Testing and Materials, ASTM Designation D-388-91a).
recoverability--In reference to accessible coal resources, the condition of being physically, technologically, and economically minable. Recovery rates and recovery factors may be determined or estimated for coal resources without certain knowledge of their economic minability; therefore, the availability of recovery rates or factors does not predict recoverability.
recoverable coal--Coal that is, or can be, extracted from a coal bed during mining.
recoverable reserves, estimated recoverable reserves--Reserve estimates (broad meaning) based on a demonstrated reserve base adjusted for assumed accessibility factors and recovery factors. The term is used by EIA to distinguish estimated recoverable reserves, which are derived without specific economic feasibility criteria by factoring (downward) from a demonstrated reserve base for one or more study areas or regions, from recoverable reserves at active mines, which are aggregated (upward) from reserve estimates reported by currently active, economically viable mines on Form EIA-7A.
recoverable reserves at active mines--The amount of in situ coal that can be recovered by mining existing reserves at mines reporting on Form EIA-7A (see committed reserves).
recovery factor--The percentage of total tons of coal estimated to be recoverable from a given area in relation to the total tonnage estimated to be in the demonstrated reserve base. For the purpose of calculating depletion factors only, the estimated recovery factors for the demonstrated reserve base generally are 50 percent for underground mining methods and 80 percent for surface mining methods. More precise recovery factors can be computed by determining the total coal in place and the total coal recoverable in any specific locale.
recovery percentage/rate--The ratio of coal extracted from a bed as compared to the total quantity of coal originally in the bed.
remaining (resources/reserves)--The amount of coal in the ground after some mining, excluding coal in the ground spoiled or left in place for which later recovery is not feasible.
regional reserves, regional reserve estimates--Same as reserves; alternative wording is used by EIA to distinguish regional reserves, which are derived by factoring (downward) from a demonstrated reserve base for one or more study areas or regions, from reserves at active mines, which are aggregated (upward) from reserve estimates reported by individual mines on Form EIA-7A.
remaining (resources/reserves)--The amount of coal in the ground after some mining, excluding coal in the ground spoiled or left in place for which later recovery is not feasible.
reserve(s)--Root meaning: The amount of in-situ coal in a defined area that can be recovered by mining at a sustainable profit at the time of determination. Broad meaning: That portion of the demonstrated reserve base that is estimated to be recoverable at the time of determination. The reserve is derived by applying a recovery factor to that component of the identified resources of coal designated as the demonstrated reserve base.
reserves at active mines--The amount of in situ coal that can be recovered by mining existing reserves at mines reporting on Form EIA-7A (see committed reserves).
resources--Naturally occurring concentrations or deposits of coal in the Earth's crust, in such forms and amounts that economic extraction is currently or potentially feasible.
resource reserves--refers to the proven geological reserves.

restricted coal resources--In U.S. Geological Survey studies, the quantity of remaining resources that is not available for development at the time of determination because of geologic considerations, land-use restrictions, and/or technological restrictions.
restricted resources--Those parts of any resource category that are restricted or prohibited from extraction by laws or regulations. Also, coal or a portion of the coal in categorically minable depths or thicknesses that is not economic at the time of determination.
roof--The rock immediately above a coal seam. The roof is commonly a shale, often carbonaceous and softer than rocks higher up in the roof strata.

run-of-mine--The raw coal recovered from a mine, prior to any treatment.
S
salable coal--The shippable product of a coal mine or preparation plant. Depending on customer specifications, salable coal may be run-of-mine, crushed-and-screened (sized) coal, or the clean coal yield from a preparation plant.
sample--A representative fraction of a coal bed collected by approved methods, guarded against contamination or adulteration, and analyzed to determine the nature; chemical, mineralogic, and (or) petrographic composition; percentage or parts-per-million content of specified constituents; heat value; and possibly the reactivity of the coal or its constituents.
seam--A bed of coal lying between a roof and floor. Equivalent term to bed, commonly used by industry.
speculative resources--Undiscovered coal in beds that may occur either in known types of deposits in a favorable geologic setting where no discoveries have been made, or in deposits that remain to be recognized. Exploration that confirms their existence and better defines their quantity and quality would permit their reclassification as identified resources.
strip or stripping ratio--The amount of overburden that must be removed to gain access to a unit amount of coal.
Discussion: A stripping ratio may be expressed as (1) thickness of overburden to thickness of coal, (2) volume of overburden to volume coal, (3) weight of overburden to weight of coal, or (4) cubic yards of overburden to tons of coal. A stripping ratio commonly is used to express the maximum thickness, volume, or weight of overburden that can be profitably removed to obtain a unit amount of coal.
strip or surface mining--The extraction of coal by using surface mining methods such as area strip mining, contour strip mining, or open-pit mining. The overburden covering the coal is removed and the coal extracted using power shovels, front-end loaders, or similar heavy equipment.
T
technological restrictions--Constraints related to economics and safety placed upon mining by contemporary technology or prescribed by law; the restrictions may change with advances in science or modifications in the law. For purposes of assessing impacts on minability, geologic considerations are included as technological restrictions. A secondary basis for accessibility is the technological restrictions that may affect economic minability of specific coal resources in a locality at the time of the evaluation. Technological restrictions include constraints on the economic or safe mining of the coal with contemporary technologies, which constraints are related to the nature of the coalbeds or local geology; for example, specific coalbed thickness or overburden characteristics known to deter economic mining of coal meeting broad regional DRB criteria, localized geologic structural problems, or unsafe or illegal proximity to another mine.

U
underground mining
--The extraction of coal or its products from between enclosing rock strata by underground mining methods, such as room and pillar, longwall, and shortwall, or through in-situ gasification.
undiscovered resources--Unspecified bodies of coal surmised to exist on the basis of broad geologic knowledge and theory. Undiscovered resources include beds of bituminous coal and anthracite 14 inches or more thick and beds of subbituminous coal and lignite 30 inches or more thick that are presumed to occur in unmapped and unexplored areas to depths of 6,000 feet. The speculative and hypothetical resource categories comprise undiscovered resources.

V
virgin coal--
Coal that has not been accessed by mining. See accessed.

North China ports see coal stocks drop to 14.61 Million tonnes coal

Source:en.sxcoal.com Jan 14, 2011

Coal stockpiles at four major loading ports in northern China further dropped in the week from Jan 7 to 13, falling for the fourth consecutive week, as power plants began to replenish inventory for the Spring Festival and less inflows from suppliers, according to Qinhuangdao Seaborne Coal Market..
As of Jan 13, a total of 14.61 million tonnes coal was stockpiled in ports of Qinhuangdao, SDIC Cafeidian, Jingtang and Tianjin, falling 824,000 tonnes or 5.34% from a week ago.
The stockpile was a decrease of 2.29 million tonnes from 16.9 million tonnes on Dec 16, 2010,
Qinhuagndao, China’s top loading port of the fuel, had 6.92 million tonnes coal in stock on Jan 13, reducing 10,000 tonnes or 0.14% from a week before, data showed.
Meanwhile, coal stocks at ports of SDIC Cafeidian, Jingtang and Tianjing, fell 12.79%, 6.66% and 10.48% from a week ago to 1.84 million, 2.94 million and 2.85 million tonnes, respectively, according to statistics.

Recently, sleets and freezing temperature in parts of southern China has boosted electricity demand and power plants are sending vessels to load coal at northern ports to build up stockpiles before the Spring Festival, which falls on Feb 3 this year.

Wednesday, January 12, 2011

Flood risk shuts Port of Brisbane

Brisbane (Energy Publishing) - 11, Jan.2011

In yet another blow to the coal industry, the Port of Brisbane was shut today as the city began to prepare for the possibility of flooding in the CBD.
With Brisbane’s Wivenhoe Dam overflowing and an imminent King Tide expected, a massive flow of water is surging down the Brisbane River, currently flowing out at more than 3 knots at the port. This has made it dangerous for ships to load and all ships were ordered out to sea.
Brisbane port coal terminal services south-east Queensland mines, predominantly the thermal mines of New Hope (see earlier story today) which also owns the terminal. Roughly 10Mtpa is exported from the port.

Meanwhile, businesses in the centre of town began sending employees home around mid-morning.

Russia's coal output rises 6.3 percent in January-November

Source: SteelOrbis, Published: 03 Jan 2011 22:44:19 PST
SteelOrbis - According to the data issued by Russia's Ministry of Economic Development, in the first 11 months of this year Russia registered a 6.3 percent year-on-year growth in its coal output to 287 million mt, including 61 million mt of coking coal - up 10.8 percent year on year. The growth of coal output during this period was due to increased demand in the domestic and external markets and due to the improvement of external economic conditions.
According to preliminary data, in January-November 2010, Russia's total shipments of coal to the domestic market amounted to 177.8 million mt - up 8.2 percent year on year, including 35.1 million mt of coal for coking needs - up 3.3 percent year on year.

In January-October 2010, Russia exported 95 million mt of coal - up 10.3 percent year on year, while the increase rate of coal exports amounted to 5.5 percent for non-CIS countries, and to 71.7 percent for CIS countries, which was due to the increase of coal exports to Ukraine (from 6 million mt in January-October 2009 to 10.6 million mt in January-October 2010, i.e., an increase of 76.7 percent). The share of exports in the overall amount of coal output in January-October 2010 increased to 36.7 percent from 35.7 percent in the same period last year.
Meanwhile, in the first 10 months of this year, Russia's imports of coal decreased by 22.1 percent year on year to 14.6 million mt.

In November, coal prices in Russia increased by 0.6 percent month on month. The most significant increase in coal prices in Russia occurred in January-May 2010, which comparing to December last year amounted to an increase of 16.4 percent for coal in general, and a 37.3 percent rise for coking coal.

Jalal Abad produces 878,000 mt of iron ore in first nine months of Iranian year


Wednesday, 12 January 2011

Iranian iron ore producer Jalal Abad produced 878,000 mt of iron ore in the first nine months of the current Iranian year (started March 21), which is 26 percent more compared to the same period of the previous Iranian year, according to the Iranian Mines and Mining Industries Development and Renovation Organization (IMIDRO).
Iron ore miner Jalal Abad exploited about 3,416,000 mt of run of mine iron ore in the first nine months of the current Iranian year.

Straits Asia surges on Indonesia coal licence

News via Reuters by Thomson, Wednesday, 12 January 2011

Shares of Singapore-listed coal miner Straits Asia Resources (STRL.SI) jumped as much as 9.8% to a 41-month high after it got a license, which would lead to new coal mining rights in Indonesia.

At 9:19 a.m., Straits Asia shares were up 6.4% at S$2.81, with over 9.1 million shares changing hands. “The licence brings them one step closer towards attaining full mining rights in the area and is positive for them. They are one of the few foreign-owned entities that are allowed to mine for coal in Indonesia,” said a local trader. Straits Asia said on Tuesday it had received a principle licence for the northern leases at the Sebuku mines in Indonesia. The principle licence is the precursor to a borrow and use licence that will give Straits Asia the rights to extract coal in the mines, the company said in a statement.

Australia's Dalrymple exports coal at 60 pct normal volumes

Jan 12, 2011 Reuters
Australia's Dalrymple Bay Coal Terminal has been exporting coal at about 60 percent of normal volumes in January, a spokesman for the port said on Jan 12.
So far this month, the terminal has shipped out about 1.5 million tonnes of coal, about 60 percent of the 2.5 million tonnes it would ship out when unaffected by flooding at inland mines.
There were still signs that stockpiles at inland mines may be running out, with two small mines canceling trains scheduled to haul coal from their mines to the ports, he said.

Source: Reuters

Gansu raw coal output exceeds 40Mt last year 2010

Source:en.sxcoal.com, Jan 12, 2011

Northwestern China’s Gansu province recorded 45.32 million tonnes of raw coal production in 2010, the first time to break 40 million tonnes, sources learnt from the provincial Administration of Coal Mine Safety.
The whole year output was an increase of 13.99% as compared with that in 2009, it said.
In terms of ownership, provincial-owned coal mines produced 32.93 million tonnes coal, growing 4.91% year on year; municipal and county-owned coal mines produced 4.32 million tonnes, jumping by 30.78% from last year, and township coal mines produced 8.06 million tonnes, surging 59.37% on year, it noted.
During the 11th Five-Year Plan period (2006-2010), Gausu produced a total of 202.6 million tonnes of raw coal, growing 42.58% from that in the 10th Five-Year plan (2001-2005), it added.

Queensland's southeastern mines are stopped

News via Coalportal.com Jan 12, 2011

Queensland’s continuing flood crisis has now hit coal mining in the state’s southeast, with the major miner, New Hope Corporation, confirming a halt to operations, sources reported.
New Hope says that while its two open cut pits, New Acland and Oakleigh in the Clarence-Moreton Basin west of Brisbane, are operational, floods have stopped coal shipments, either by road or rail, it noted.
The two mines account for New Hope’s 5Mtpa output, most of it exported through the New Hope-owned Brisbane port coal terminal.
New Hope’s confirmation follows news that global giant Peabody Energy has suspended mining at its Wilkie Creek thermal coal export operation in the Surat Basin that also ships through Brisbane - and a halt to rail shipments to the port from the Syntech Resources company’s Surat Basin Cameby Downs mine, which shipped its first export coal to Brisbane less than two months ago.

Mozambique denies India 5 more coal concessions

News via Reuters, Jan 12, 2011

Mozambique on Jan 10 turned down a request by the Indian government for five coal concessions, saying the Asian giant should first develop its two existing blocks in the southern African nation, sources reported.
They must develop what they have first, Abdul Razak, deputy minerals minister, told a news briefing after talks with Indian Coal minister Sriprakash Jaiswal.
Jaiswal arrived in Mozambique on Jan 9 with officials from Coal India Limited (CIL) to try to secure additional exploration rights in Mozambique, home to some of the world's richest untapped deposits, to meet India's fast-rising demand.
CIL was awarded rights last month to two blocks totaling 200 sq km in Mozambique's Moatize region. The blocks are thought to have reserves of 1 billion tonnes of coking and thermal coal, according to the report.
CIL officials said on Jan 9 that, all being well, the state-run firm would invest $400-million and employ 3 000 people in the next five years at the two coal blocks and would import 10-million tonnes of coal in the next decade.

Shaanxi coal sales first hit 300Mt last year 2010

Northwestern China’s Shaanxi province, the third largest coal producer in China, posted coal sales of over 300 million tonnes in 2010 for the first time, sources learnt from the provincial coal industry bureau, local paper reported.
Thanks to intensified efforts to adjust industrial structure, Shaanxi saw its coal sales surging for five straight years during the 11th Five-Year Plan (2006-2010), an average increase of 40 million tonnes per year, Sanqin Metropolis reported.
Shaanxi’s coal output amounted to 355 million tonnes in 2010, increasing 202 million tonnes from 153 million tonnes in 2005, growing 40.37 million tonnes each year on average, according to the report.
By 2015, the end of the 12th Five-Year Plan, the province’s coal production is expected to reach 600 million tonnes, averagely rising 50 million tonnes per year, according to the province’s coal industry development plan.

News via en.sxcoal.com, 11 Jan, 2011

China coal benchmark price drops for a fourth week

China’s Qinhuangdao coal, a national benchmark for the power-station fuel, fell for a fourth week as supplies remained above normal and the government capped prices, sources reported.
Power-station coal with an energy value of 5,500 kilocalories per kilogram declined 0.6 percent from a week earlier to a range of 770 yuan to 780 yuan a tonne, data from China Coal Transport and Distribution Association showed on Jan 10.
Coal stockpiles at the port dropped 1 percent to 6.98 million tonnes last week, according to data on Jan 10. That is a relatively high level for supplies at this time of year, according to Wu Jie, an analyst at Orient Securities Ltd.
Coal stockpiles remain ample despite freezing weather, Wu said by phone from Shanghai today. The cap on the 2011 contract coal price also curbs the rise of spot prices.
China’s government in Dec ordered a freeze on 2011 contract prices for thermal coal supplies to power stations at 2010 levels, after the nation’s inflation rose to the highest in 28 months in November.
Power-station coal stockpiles stood at 57.07 million tonnes as of Dec. 20, equivalent to 15 days of use. In previous years, supplies at this time of year were equal to about ten days of demand, David Fang, a director at the coal association, said by phone from Beijing on Jan 10.
The decline in prices will be limited because rising global coal costs will support Chinese demand, according to Fang.

News via en.sxcoal.com, 11 Jan, 2011

Indonesia coal benchmark price gains for fourth month

Indonesia increased the reference price for coal sales for the fourth straight month, raising it by 8.7% in January, the Ministry of Energy and Mineral Resources said.
The benchmark for coal with a gross energy value of 6,322 kilocalories a kilogram was set at $112.4 per tonne in Jan from $103.41 a tonne in December, the Directorate General of Coal and Minerals at the energy ministry said.
Below is a list of price references and markers, used to calculate prices for other coal types of similar quality from eight leading coal brands in Southeast Asia’s biggest economy, as compiled by the energy ministry.
Grades are in kilocalories a kilogram, while prices are in U.S. dollars a tonne.

News via en.sxcoal.com, 11 Jan, 2011

BHP Coal Contract Change Spares Consumers Price Surge

BHP Billiton Ltd.’s push to set coal prices quarterly rather than annually may spare steelmakers from a surge in costs after flooding in Australia disrupted mine production in Queensland state.
“The market can respond far quicker than with the 12-month pricing and buyers will be prepared for an increase knowing they can always renegotiate the next contract,” said Gavin Wendt, a senior resource analyst at MineLife Pty in Sydney. “It’s a more fluid market. You probably won’t see the sorts of huge price movements that we saw a couple of years ago.”Steelmakers were hit with a threefold increase in annual contract prices to about $300 a metric ton in 2008 after heavy rains and floods affected mining in Queensland. This year, coal production and deliveries have been disrupted after Australia had its wettest September-to-November spring on record. BHP, the world’s biggest mining company, has urged the industry to move to short-term deals to make prices more responsive to market changes. It agreed with Japan’s JFE Holdings Inc. to the first three-month coking coal contract in March.Coking coal and iron-ore suppliers traditionally held annual talks with steelmakers to fix benchmark contracts for the 12 months from April 1, the start of the Japanese financial year. Quarterly accords mean producers can spread price increases caused by the rain over the course of the year.“Producers are not compelled to push for higher prices now to offset lost production, like they have in recent years, most notably the super-spike of $300 a ton,” UBS AG analysts led-by Sydney-based Tom Price said in an e-mailed note today. “They don’t have to wait another-12-months like they used to.”
Force Majeure
Production has been disrupted at mines operated by Macarthur Coal Ltd., Aquila Resources Ltd., Vale SA and Xstrata Plc. They have all declared force majeure, a legal clause invoked by companies when they can’t meet obligations because of circumstances beyond their control.“We’ve moved now to quarterly pricing, in the old days we had annual pricing,” Keith De Lacy, chairman of Macarthur Coal Ltd., the world’s largest producer of pulverized coal used in steel manufacturing, said on Bloomberg Television on Dec. 8. “The market responds a lot quicker to supply and demand.”BHP agreed with Japanese steelmakers to cut coking-coal prices by 7 percent in the three months ending Dec. 31. Kobe Steel Ltd. will pay $209 a metric ton, from $225 a ton in the quarter from July to September, Hiroyuki Hashimoto, a spokesman for Kobe Steel, said Sept. 1. JFE Holdings’ steel unit reached the same agreement, the company said.
Fiona Martin, spokeswoman for BHP, declined to comment on what percentage of the company’s coal contracts are settled on a quarterly basis. BHP Billiton-Mitsubishi Alliance, known as BMA, is the world’s biggest exporter of coal for steelmaking and operates seven mines in Queensland’s Bowen Basin.
Consumers Concerned “All our readings of the consumer side is that they’re very concerned about making sure that they have enough supply,” Andrew Harrington, an analyst at Patersons Securities Ltd. in Sydney, said Dec. 7. “This year has been unusual because we had a fair amount of rain up in the inland of Queensland in August and September, which is usually the dry period.”Queensland’s coal exports are worth about A$100 ($99 million) a day to the state, Michael Roche, chief executive of the Queensland Resources Council, said Dec. 7. “Some open-cut pits are now looking more like dams than mines,” he said.Australia is the largest producer of coal used in steelmaking, contributing more than 40 percent of the global seaborne trade, Deutsche Bank AG. said Oct. 19. The country is the second-largest exporter after Indonesia of the commodity burned for power.

Peabody Energy, Rio Tinto, BHP Billiton, Xstrata and Anglo American have all declared force majeure in the region Queensland

Queensland floods in 2008 left steel producers with a threefold increase in annual contract prices to about US$300 a ton.
Queensland accounts for the majority of the premium hard coking coal supply on a global seaborne basis. Queensland is the biggest global exporter of coal used in steel production.
Collins Stewart believes the current situation is worse than the 2008 flooding, as more mines and transportation infrastructure have been affected this time. About 37% of the world’s traded coking coal has been affected, according to Macquarie.
Mines affected in 2008 took at least six months to recover from the disruption and return to full capacity. The cumulative loss of production is expected to maintain upward pressure on spot prices for several weeks.
Coal stockpiles at Gladstone harbor in Queensland are very low after flooding shut a rail network. Eighteen ships are waiting to load and 12 more are expected at the harbor in the next 10 days.
Meanwhile, Queensland coal miner Macarthur Coal stated on Wednesday that its now expecting first-half profit at the low end of its forecast range due to production issues.
Peabody Energy, Rio Tinto, BHP Billiton, Xstrata and Anglo American have all declared force majeure in the region, which means they won’t be able to meet contractual obligations due to unforeseen circumstances.
About 98 million tons of capacity to produce steelmaking coal is under force majeure, equivalent to 73% of Queensland exports.
Australia shipped 259 million tons of coal for steel and power in 2009, according to the World Coal Association.
Australia is the largest producer of coal used in steelmaking, contributing more than 40% of the global seaborne trade, according to Deutsche Bank AG. The country is the second-largest exporter of the commodity after Indonesia.
Coking coal suppliers traditionally hold annual talks with steelmakers to fix benchmark contracts for the 12 months from April 1.
Steelmakers may agree to monthly pricing for coking coal, as proposed by BHP, in the current environment rather than locking in US$300 a ton for a whole quarter, Macquarie says.
There will be a material impact on Australian exports of coking coal, even if no further rain falls, Morgan Stanley adds.
Flooding is also affecting thermal coal, used by power stations, driving the price of supplies at the port of Newcastle in Australia’s New South Wales, the benchmark for Asia, to the most in 27 months.
Prices jumped 3% to US$126.10 a ton in the week ended Dec. 31, the most since Oct. 2008.

Floods in Australia: what legal implications for Commodity Traders?

Courtsey Reed Smith, The business of relationships, Publication date: Jan 07, 2011

Australia has endured one of the wettest spring seasons in its recorded history. Heavy rain in November and December in eastern Australia caused river levels to rise and flood plains to become saturated. This led to widespread localised flooding and to the severe floods reported by the global media over the New Year period.The most severely affected area covers a wide swathe of the middle part of Queensland State. At least seven major rivers in the area are reported to have flooded. At the time of writing the water levels are still high; states of emergency are in effect across many local authorities in the affected area. Water levels are expected to recede in the coming days but not to return to normal levels for weeks to come.Affected commoditiesBeyond the damage to life, property and infrastructure, the severe rain has impacted Australia's important commodities exporting business. Wheat and sugar trades are amongst those affected. Damage to crops and inland transportation problems have lead to fewer stocks being available for export and a consequential rise in market prices. US Wheat futures were reported to be trading at a five-month high this week following concerns about damage to Australian (the world's fourth largest wheat exporter) crops. Australian sugar export forecasts for this year are reported to have been cut by 25%, exacerbating demand pressure and contributing to raw sugar prices reaching a 30 year high. Conversely, dry bulk freight prices have been forced down by the reduction in cargoes available for seaborne carriage. The Baltic Exchange's dry bulk freight index reached a 20 month low this week.The most seriously affected trade is coal. Coal is Australia's biggest export business, accounting for approximately a quarter of Australia's total goods and services exports over recent years. Australia is the largest exporter of coal in the world, exporting 28% of the world total in 2008-2009, with exporting capacity increasing since then.Australia produces both thermal coal (used in the power generating industry) and metallurgical "coking" coal (used in the production of steel). All of Australia's export output of both types of coal is mined in Queensland and New South Wales in eastern Australia, with Queensland producing the greater quantity. The majority of Queensland's coal is coking coal. Its coking coal exports account for approximately two thirds of world trade. The vast majority of Australian coal imported into China, India and Europe is coking coal. Significant quantities are also exported to Japan, Korea and Taiwan. With demand still strong in China and India in particular and disruptions prevalent elsewhere in the major producing areas (Columbia - heavy rains; Russia - severe drought and now severe cold) analysts are busy speculating on the effect the disruptions to the world's coking coal supply will have on prices of coal and steel, which relies on coking coal availability. Prices of both types of coal have already risen to recent highs and many predict further increases into 2011.Our concern in this article is with the legal implications of the supply disruptions for trading contracts. An English law application is assumed but many of the legal principles will be similar under Australian law governed contracts.Force Majeure?The flooding has affected coal exports in three ways: (1) disruption to production due to flooding at producing mines; (2) disruption to the transportation of coal from mines to export terminals; (3) disruption to loading operations at export terminals.It has been widely reported that many of the major coal producers operating in the area have "declared force majeure" in order to protect themselves from defaulting on contractual obligations to supply coal from mines affected by the flooding. The mine operators reported to have done so include BHP Billiton, Rio Tinto, Anglo American, Xstrata, Peabody Energy, Macarthur Coal, Aquila Resources - Vale, Cockatoo Coal and Wesfarmers. In total the mines affected are estimated to produce over a third of Australia's annual production of coal.Coal is transported from the mines primarily by rail. The rail network is among the busiest for freight traffic in the world with trains of between 1 and 2 kilometres in length carrying 8,000-10,000 tonnes of coal operating 24 hours a day. The main rail operator in the area, QR National has been forced to close parts of three of the four major coal transport lines in the area (Blackwater, Moura, Goonyella) due to the floods. Those closures have restricted or stopped completely the supply of coal to export terminals.Four export terminals are reported to have been affected: Abbot Point, Dalrymple Bay, Hay Point and RG Tanna (Gladstone). At the time of writing supplies of thermal coal to the major thermal coal export terminal at Newcastle in New South Wales do not appear to have been severely affected. At the affected terminals shortages of coal have been reported due to the lack of stock arriving on the rail system and stockpiles being depleted. RG Tanna terminal announced that it would operate at 50% capacity last week. As at the time of writing, the terminal is reporting that coal stocks are "extremely low" with no more coal expected on the Moura rail system until the end of next week. 18 vessels are waiting at the port with a further 12 expected over the next week. Dalrymple Bay is said to have been operating at 60-70% of capacity since 1 January, with stocks due to run out this weekend. Of those stocks that are available for export issues may arise in relation to the condition and specification of the "wet" coal.Who can rely on force majeure?Force Majeure is a concept of French law. It is similar to the English law doctrine of frustration of contract (events arising subsequent to the execution of the contract that, without fault of either party, render performance of the contract impossible or radically different from that which was envisaged). Force Majeure is relevant to English law contracts only insofar as the concept of an agreed and permitted excuse for failure to perform is written into such contracts. English law commodity trading contracts invariably do so and adopt the term "force majeure" to refer to the permitted excuses.No party will have a right to rely on "force majeure" to excuse his performance of any contractual obligation unless: (1) there is a clause in the contract that clearly covers the situation that has in fact occurred or there is wording that excuses performance where any other unspecified events outside that party's control occur; (2) there is a causative link between the events that have occurred and the party's inability to perform its obligations; and (3) the procedure specified in the clause is followed. If all three requirements are satisfied then the party claiming force majeure is entitled only to do what the clause permits. Often clauses permit suspension of obligations for a period of time but they differ about if and when a party is entitled to cancel the contract or whether performance must be made once the FM ceases.Regarding point (1), clauses frequently refer to "floods" but that may not be enough on its own. For example, mine production may not be directly affected by flood water but may be halted because of lack of transportation available due to the closure of rail systems following the floods. Regarding point (2) some clauses require that the FM events must have "prevented" a party from performing its obligations. Others state that it is enough for the events to "hinder" performance for a party to be excused. Often it is difficult to prove that a particular event has prevented a party from performing because it may be able to perform by means other than those anticipated at the time of contracting. Regarding point (3), where both points (1) and (2) are satisfied a party will then need to ensure that it complies with the procedural requirements of the clause regarding, for example, giving notice of the force majeure event to contractual counterparties. Consistent with the law's approach of holding parties to their contracts, a party may be prevented from relying on a force majeure clause unless it has complied with the requirements of the force majeure clause strictly. For more detail on what a force majeure clause should say and how to comply with it in a "force majeure" situation, see our previous alert number 06-045.Those companies who have contracts with one of the coal producers that has declared force majeure should review their contracts and consider whether the relevant producer is actually excused from performance or not - either because the events do not fall within the clause or because the party invoking force majeure has not complied with the procedural requirements of the clause. A general force majeure declaration is of no legal significance unless it triggers the operation of a specific clause in a contract. It is to be expected that traders that have bought coal from one of the producers that have declared force majeure for onward sale will seek to pass on that declaration to their customers and rely on it. Whether they are entitled to do so and thereby avoid their obligation to deliver to their buyer will, again, depend on the precise wording of the FM clause in their contracts. Where the coal to be delivered is stated to be coal produced from specific mines affected by the floods then sellers may have good grounds for arguing that they are prevented from delivering the coal. Where no origin of the coal is specified then sellers will be in a more difficult position, since the law regards their intended source of supply as irrelevant when assessing whether they are able to deliver coal to a buyer. If coal is available elsewhere (albeit at a much higher price) then a seller may be obliged to buy coal from that alternative source or risk being held in default and liable to pay the difference between the contract price and the relevant market price plus any additional freight costs incurred by a buyer. By way of example, the SCoTA contract incorporates this principle at clause 17.8, which states expressly that a failure by the seller's supplier to deliver coal will not constitute a force majeure event.Where under contracts for the sale of commodities FOB at one of the affected export terminals sellers are unable to deliver within agreed loading windows because of reduced operations at the port or a lack of coal available because of rail disruptions, there are stronger grounds for a seller relying on usual force majeure language. If a seller is unable to buy coal already available at the port or already shipped by another party within the loading window save at an exorbitant price then it may well have grounds for arguing that it has been prevented from delivering coal by the consequences of the floods. The point to remember is that (unless permitted to do so by the relevant contract) a seller cannot safely sit back and expect that he will be excused by the restricted flow of coal to and from the port arising because of the floods. The prudent seller will do all that he can to try to source a cargo to perform the contract or risk being held in default. Parties that have chartered vessels to load coal from one of the affected coal terminals may find themselves facing large demurrage liabilities or cancellations of vessels that do not load their cargoes within agreed laycans. It is less usual for charterparties to include force majeure clauses, though some of the less commonly used forms do. The Gencon form for example provides no means for a charterer to avoid obligations because of disruptions of the like experienced in Australia at present. The COAL-OREVOY form, in contrast, does include a force majeure clause. Of course a clause may be agreed as part of the additional terms that invariably supplement the standard Gencon form. The major suppliers tend to operate on their own standard terms and shipments under a COA may be governed by more apposite wording. As ever, it has to be borne in mind that a force majeure clause will not apply to interrupt the running of laytime or demurrage unless it specifically so provides. In relation to time charterparties charterers should consider whether "Exceptions" clauses provide them with a means of avoiding hire payments but often they will not.ConclusionThe severe flooding in eastern Australia will have a major impact on individuals, businesses and the Australian state for weeks to come. It is to be hoped that the rain will subside and the water levels will dissipate quickly. Given Queensland is such a large exporter of commodities, the effect on contracts in an already high/volatile priced market is likely to be dramatic. Of all commodities it is coal which is likely to be most significantly affected given the volume of the world's coking coal exports that are mined in the affected area of Queensland. Weather-related interruption of supply seems to have been a feature for world commodities in 2010. If one believes what one reads in the press La NiƱa's effect will continue well into this year. Events in Australia provide a timely reminder for all those with existing contracts to carefully review the force majeure language in their sale/purchase and shipping contracts so they can act appropriately to protect themselves from delay, disruption and loss adverse weather might cause. When preparing new contracts make it a new year's resolution to pay special attention to the inclusion of tailored FM type language in sale/purchase and shipping contracts to minimise exposure to the supply disruption.

Caltex Australia Shares Fall After Floods in Queensland Shut Oil Refinery

By Ben Sharples - Jan 12, 2011

Caltex Australia Ltd., the nation’s biggest oil refinery, dropped the most in more than six months after heavy rains forced the shutdown of a refinery that supplies about a third of Queensland state’s fuel needs.
Caltex Australia, half-owned by Chevron Corp., fell 5.7 percent, the most since June 25, to A$14.14 at the 4:10 p.m. close in Sydney. That compares with a 0.3 percent increase in the benchmark S&P/ASX 200 Index.
Flooding caused a “steam outage” at the Lytton refinery on Jan. 5, prompting an unscheduled shutdown, the Sydney-based company said in a statement. Partial output will resume tomorrow and progressively increase during the next 10 days, Caltex Australia said. Full operations are dependent on the Port of Brisbane, which has been closed, returning to normal, it said.
Lytton, the smaller of Caltex’s two refineries, is about 20 kilometers (12 miles) east of Brisbane and can process 109,000 barrels of crude a day. Australia’s third-largest city faces its worst deluge since 1893 and more than 75 percent of Queensland, an area bigger than Texas and California combined, has been declared a disaster zone.
The shutdown is expected to cost between A$5 million (A$4.9 million) and A$10 million, in 2011, the fuel producer said. Caltex Australia is doing maintenance at Lytton during the shutdown that had been scheduled for later in the year. Its biggest refinery is at Kurnell, south of Sydney.
‘Severe’ Currents, Debris
Across the river from Lytton, BP Plc’s Bulwer Island refinery is operating normally, Jamie Jardine, an Australian- based spokesman, said by phone. The refinery has a capacity of 88,000 barrels per day.
The Port of Brisbane, Australia’s third-busiest container harbor, is closed to maritime traffic and all ships have been removed because of severe currents and “huge amounts” of debris including boats and pontoons floating downstream, the port said on its website today.
The facility is likely to lose power because of the flooding of electrical substations, it said. Road access is open and is expected to remain passable during the flood. The harbor lies on the southern side of the Brisbane River, 24 kilometers from the city’s central business district.
Heavy rain this week caused a landslide near the city of Toowoomba, cutting part of the West Moreton rail network that carries coal to the port, Mark Hairsine, a spokesman for track manager QR National Ltd. said yesterday.
Queensland in November agreed to sell the Port of Brisbane to a group including Global Infrastructure Partners and Abu Dhabi Investment Authority, raising A$2.1 billion in cash to replace income lost to the financial crisis.

News via Bloomberg, Reporter Ben Sharples in Melbourne at bsharples@bloomberg.net

Coal shortage threatens Queensland power

Via abc.net, by finance reporter Elysse Morgan and staff.
People across flood stricken south east Queensland are facing further electricity cuts, as power stations run low on coal stocks.
The floods have closed mines, and cut transport links; including rail lines, leaving power stations struggling to get enough coal.
CS Energy's Swanbank power station west of Brisbane, which supplies power to a million homes in the city, has three weeks supply left.
But its coal source in the Darling Downs remains cut off.
CS Energy chief executive David Brown says the company is considering trucking in coal in from other areas.
"We'll look at our fuel situation very carefully to ensure continued supply into the grid, we are looking at alternative sources of coal to that station should we not be able to get coal transported to the station," he said.
One of the company's power stations at Kogan Creek near Chinchilla, is relying on its staff being flown in and out to operate it, as it is cut off from any other transport links.
David Brown says a helicopter service has been in place for three weeks now and will remain until the water recedes.
This comes in addition to power cuts made by electricity supplier, Energex overnight.
It cut its power supply to the Ipswich central business district as authorities prepare for the biggest flood in more than 3 decades.
Energex spokesman Danny Donald says it is a question of safety.
"We will commence disconnection of the central business district of Ipswich and quite a number of surrounding suburbs as well," he said.
Energex says supplies will be restored once floodwaters recede and it assesses amount of damage caused to its network.

Monday, January 10, 2011

International Coal Ventures Pvt Ltd. to bid for coal block in Mongolia

Courtsey news Dow Jones Jan 10, 2011

India's International Coal Ventures Pvt plans to bid for developing huge coal reserves in Mongolia's Tavan Tolgoi mining deposit, sources reported.
Government officials and industry executives said that ICVL's interest in the Mongolian block comes at a time when coal and other resource sectors are seeing a wave of multibillion dollar mergers and acquisitions activity globally, much of it driven by increasing consumption in emerging economic giants China and India.
The Indian company is lining up for a tender offer by the Mongolian government scheduled January 17 to develop part of the Tavan Tolgoi mine in the country's southeast. The mine contains some of the world's largest unexploited reserves of coking coal, a key raw material for making steel. Overall, the mine has an estimated coking and thermal coal reserves of 6.4 billion tonnes.
A mines ministry official told Dow Jones Newswires that ICVL will likely bid for a share in the mine's western block with reserves of 1 billion tones.
About 70% of the block is likely to be coking coal, for which Indian steel companies mostly rely on imports, he added.
If ICVL bids, it will face stiff competition from Japanese and Korean companies.