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Thursday, April 21, 2011

World steel production hits monthly record

Thursday, Apr21, 2011 |Reuters

LONDON - Global crude steel production hit a new monthly record in March, data showed, driven by growth in Asia even while Japan's production slipped after earthquakes and a tsunami hit.

Global crude steel production was at 129.3 million tonnes in March, up seven per cent from March 2010, according to data from the World Steel Association (Worldsteel).

Asia led the upward trend, even though output in Japan, the world's second-largest steel producer, fell 2.7 per cent to 9.1 million tonnes after last month's disaster.

The natural disaster caused closures and delays at various factories and affected heavily the automotive and manufacturing sectors, major consumers of Japanese steel.

JFE Steel Corp, the world's fifth-biggest steelmaker, said on Tuesday it faced rising inventories due to weak demand from domestic manufacturers and might need to cut production ahead.

Growth in the rest of the region, however, more than offset the decline in Japan to reach 237.3 million tonnes in March.

Output in top producer China hit a new record at 59.4 million tonnes, up nine per cent from March last year.

India's growth was also steep, up 8.6 per cent to 6.3 million tonnes.

Crude steel production in South Korea and Taiwan rose by whopping rates of 14 per cent and 13 per cent, respectively, from March last year but from a lower base.

Growth in the developed economies was mixed.

While crude steel production in the EU rose four per cent to 16.2 million tonnes, output in the United States fell 0.2 per cent to 7.1 million. (sourced Reuters)

Atlas iron ore output drops, shares rise

Thursday, 21 Apr 2011 | AAP

Atlas Iron Ltd reported a slight fall in iron ore production and exports in the third quarter due to the weather in what has been an otherwise buoyant period for the miner.

The Perth-based company processed 1.184 million tonnes of ore, a six per cent drop on the December quarter figure of 1.261 million tonnes.

It said it was on track to export a record 1.5 million tonnes of ore in the June 2011 quarter, after the company shipped 1.39 million tonnes (wet) in the March quarter.

That was a drop of two per cent on the previous quarter.

The slight blip did not worry traders, who had pushed up the company's share price by 11 cents, or 3.12 per cent, to $3.64 by the close of trade.

Major miners Rio Tinto Ltd and Fortescue Metals Group's recorded more adverse effects from flooding in Australia's north, with production slumping by more than 15 per cent for both.

Atlas Iron achieved a series of milestones during the quarter including posting a maiden profit for the first half of $30.1 million.

The company, which has a market capitalisation of $2.9 billion, was added to the S&P/ASX 100 index and bought a controlling stake in fellow iron ore miner Giralia Resources NL.

Atlas Iron said in a statement that it had ramped up iron ore exports from 1 million tonnes per annum to about 6 million tonnes, having shipped a record 547,404 tonnes in the month of March.

Cash costs (excluding royalties) for the quarter were within it's targeted $40 to $43 per tonne range and the company had $293 million cash on hand.

"The company is generating its largest cash flows since commencing operations in 2008, while also on track to meet its target of exporting at a rate of 12Mtpa (million tonnes per annum) by the end of 2012," it said.

"Atlas is working to become a globally significant supplier of steel making raw materials through the discovery and development of low capital cost iron ore projects close to port."

Newcastle coal exports rise for week

Thursday, 21 Apr 2011, 5:56 PM | Reuters

Coal shipments from Newcastle port, which ships mostly thermal coal used in power plants, rose 2.7 per cent in the week ending April 18, Newcastle Port Corporation said on its website.

Exports from the eastern coast port were 2.204 million tonnes in the week, up from 2.146 million the previous week.

Newcastle ships out coal produced in Australia's eastern state of New South Wales.

Australia's thermal coal prices on the globalCOAL weekly index, a benchmark for Asia, closed at $US121.22 per tonne for the week to date on Thursday, down from $US123.86 a week earlier.

The vessel queue at the port rose slightly to right ships last week from seven, while the average waiting time for vessels at the port was steady at around six and a half days.

Twenty-four ships were travelling to the port to load coal, down from 23 last week, the port said.

In a separate report, the Hunter Valley Coal Chain Coordinator (HVCCC), which helps coordinate coal exports, also put the number of vessels in the queue at the port at eight by midnight on Wednesday. (By Reuters)

China Coal-Prices scale 4-mth high on summer buying

Thu Apr 21, 2011 7:24am GMT
* Qinhuangdao prices rise to 4-mth high, port stocks drop
* Warnings of coal shortage help boost domestic prices
* March coal imports at 9.05 million tonnes
By Fayen Wong 
SHANGHAI, April 21 (Reuters) - Expectations that China would boost its coal imports over the summer months rose when its
domestic thermal coal prices climbed further to scale a four-month high and port stocks dropped again to a five-month
low this week.
 Coal with a heating value of 5,500 kcal/kg rose for the third week up to 785-795 yuan ($121.83) a tonne on Thursday,
while 6,000 kcal/kg NAR coal steadied at 845 yuan, according to industry data website SXCOAL (
 On other price monitors such as the Bohai-Rim price index, the price of 5,500 kcal/kg NAR coal has risen 1.9 percent from a
week ago to hit 799 yuan this week, a sign that the price advantage for imports could be even wider.
"Demand has picked up a lot since power plants are restocking in advance," said a Guangzhou-based trader. 
 "Just look at the falling port stocks. It's definitely bullish for prices." 
 Stocks at top coal port Qinhuangdao posted its 7th straight week of declines, with stocks falling another 7 percent to 5.96
million tonnes, bringing total declines since the start of the month to 19.6 percent.
 Analysts said Beijing's decision to build an emergency stockpile of 5 million tonnes of steam coal by end-May also
added to expectations that spot supplies would tighten.
 China Shenhua Energy Co Ltd , the country's largest coal producer, said on Thursday it had been told by its
state-own parent that it needs to help build 1.7 million tonnes of coal inventory as part of the government's planned emergency
stock this year.
 Domestic coal prices were also boosted by warnings that a growing list of regions were facing coal shortages and that the
government may start rationing power this month because of tight coal supplies and hydropower generation.
China has warned that power shortages this summer could be the worst for years, with power generation and transmission
systems unable to cope with rising demand. The east, north and south of China are likely to be hit the hardest.
 The latest gain in prices could buoy utilities' and traders'import appetite, should the price discount widen. 
 However, some overseas traders said Indonesian sub-bituminous coal prices were also swiftly rising on strong
demand, with a major supplier having sold 12 shipments into China at around $92 a tonne for 5,000 kcal/kg NAR coal.
 Weekly Qinhuangdao prices for (Yuan)       PORT STOCKS 
 >6,000 kcal/kg     >5,500 Kcal/KG    (Mln Tonnes)  WEEK TO 
 835-845            785-795            5.957      Apr  18 
 835-845            780-790            6.399      Apr  11    
 825-835            770-780            6.877      Apr  04    
 820-830            770-780            7.412      Mar  29 
 820-830            765-775            7.735      Mar  21 
 825-835            770-780            7.835      Mar  14 
 820-830            765-775            8.398      Mar  07 
 825-835            770-780            8.472      Mar  02 
 825-835            770-780            7.533      Feb  21 
 825-835            775-785            7.284      Feb  14 
 825-835            775-785            7.426      Feb  07   
 825-835            775-785            6.859      Jan  31   
 825-835            775-785            7.071      Jan  24   
 835-845            780-790            7.210      Jan  17   
 835-845            780-790            6.954      Jan  10   
 835-845            780-790            7.049      Jan  04   
 835-845            780-790            7.104      Dec  30   
 835-845            780-790            7.590      Dec  24   
 840-850            790-800            7.006      Dec  20   
 845-855            795-805            6.711      Dec  13   
 845-855            795-805            6.663      Dec  06   
 860-870            805-815            5.789      Nov  29   
 850-860            795-805            6.170      Nov  22   
 840-850            790-800            6.197      Nov  15   
 840-850            790-800            6.387      Nov  08   
 825-835            765-775            6.805      Nov  01   
($1 = 6.526 Chinese yuan)

(Editing by Jacqueline Wong,Thomson Reuters)

Kumba reports 23% dip in production

Flooding of the Crocodile River near Thabazimbi, and the wettest March recorded at Sishen leads to drop in production

April21, 2011 09:25:55 AM

Kumba Iron Ore has reported a 23% drop in the quarter ending March 2011, and blamed the dip on web pit conditions that have hampered production.

Kumba says steel output amounted to 8,8 million metric tonnes compared with 11,5 million tonnes last year this time.

The company says total sales of 10.4 Mt decreased by only 5% as the reduction in saleable production during the quarter was supplemented by sales from finished product stockpiles.

Export sales volumes dropped by 8% mainly as a result of shipments being impacted by lower production volumes.

Kumba's operating performance during Q1 2011 was impacted by excessive rainfall at Sishen, Kolomela and Thabazimbi Mines which it is says resulted in conditions that hampered "mining activities and plant throughput".

Twice the annual rainfall was recorded in the areas mined during the first two months of 2011.

Production at Sishen Mine of 8.5Mt declined by 2.5Mt when compared with Q1 2010.

Sishen Mine's DMS and Jig plants' production were down 1.9Mt and 0.5Mt respectively, due to the inability of the mining equipment to safely access the mining areas and wet feedstock material that caused blockages in the plants.

The Crocodile River flooded near Thabazimbi Mine and led to a dip of production to 246Kt (kilotonnes), a large decrease of 237Kt. (sourced Busines Day)

Anglo faces questions about dust-related illnesses

Workers illness to be put on agenda at Anglo American AGM on

Thursday, April21,2011 06:46:38 AM

ANGLO American, one of the world’s largest resources companies, is likely to face some tough questions about sick workers in SA at its annual general meeting today.

A representative of Alpheus Blom, a worker who contracted silicosis at a South African gold mine, is likely to raise the question of what Anglo is doing about dust-related illnesses for a second time in two years at today’s meeting of shareholders, said Richard Meeran, a lawyer from Leigh Day & Co.

Mr Meeran, who successfully spearheaded claims for workers made sick by asbestos and mercury in SA, is a consultant for the legal team representing 18 South African workers afflicted with silicosis, a lung illness brought on by inhaling silica- laden dust while mining for gold.

Preparatory work has been going on since 2004 for the court case due to start next year to decide the merits of the compensation demands from sick employees who once worked for Anglo’s subsidiary Anglo American SA, which was the holding company of gold mines.

Silicosis, which damages the lungs by scarring, leaves the victim susceptible to tuberculosis and other respiratory illnesses such as bronchitis and emphysema.

Anglo spokesman Pranill Ramchander said the company’s response was unchanged.

"Anglo American does not believe that it is in any way liable for the silicosis claims brought by former gold mine workers and is defending the actions," he said.

"The claimants were employed by South African gold mining companies in which Anglo American had an interest of less than 25%. Anglo American maintains that these companies were responsible for the health and safety of their employees and took reasonable steps to protect them," he said.

It will be interesting to see how Anglo CEO Cynthia Carroll and chairman John Parker respond to the issue raised given the strong emphasis they have brought to the company on health and safety and community relationships.

Tony Davies, an occupational medicine specialist, said if the test case was successful, claims against SA’s gold miners could run into billions of rand.

The statutory maximum payment for a mineworker with silicosis is a once-off R38000 and those with silicosis and tuberculosis could receive a maximum R80000 once- off payment.

One of the claimants in the Anglo case is seeking R3m, which is not the highest claim, Mr Meeran said. He declined to put a total value on the claims against Anglo American SA or give a range of the claims brought against the group.

Graham Briggs, the CEO of Harmony Gold, said yesterday that dust reduction at gold mines was one of the mining industry’s four main issues it was tackling to improve safety and health.
(sourced Business Day)

Shenhua Group to build up 1.7 million mt of emergency coal reserves

Thursday, 21 April 2011 13:47:23 (GMT+2)

China's state-owned Shenhua Group Corporation announced that, in line with national emergency coal reserve plans, it plans to build up 1.7 million mt of emergency coal reserves. These reserves will be distributed between the company's storage facilities at various Chinese ports as follows; Huanghua Port (800,000 mt), Qinhuangdao Port (500,000 mt), Zhuhai Port (300,000 mt), Guangzhou Port (100,000 mt).

(sourced steelorbis)
Tags: coking coal , raw mat , China , Far East , East Asia and Pacific , Southeast Asia , steelmaking , investments

BHP Billiton boosts iron ore output, warns on coal

Apr 20, 2011 7:54am GMT
* BHP says Australia floods will hurt coal business for rest of 2011
* Force majeure still applies at most metallurgical coal mines
* Output of iron ore, copper up on year

By James Regan

SYDNEY, April 20 (Reuters) - BHP Billiton , the world's biggest mining house, warned on Wednesday that persistent rains in Australia were delaying a recovery in its coal operations after a devastating March quarter cut production by nearly a fifth.

BHP Billiton is the latest miner to caution investors to brace for a dramatic fall in Australian coal exports this year, as the full impact of floods at the start of the year in Australia's eastern Queensland state becomes clearer.

The company's iron ore mines in Western Australia, which were also hit by torrential rains between January and March, recorded a modest 7 percent year-on-year rise in March quarter output, setting the division on course for a record year, BHP Billiton said.

Iron ore is BHP Billiton's top revenue earner, followed by coal.

The company has already earmarked nearly $10 billion of a planned $80 billion capital-spending spree over the next five years to expand iron ore and coal mining.

Analysts believe this demonstrates the challenges that the industry is having satisfying rising demand for industrial raw materials as industrialisation in China spreads to India and other Asian countries.

BHP Billiton's production of steel-making coal is mostly centred on the Bowen Basin, which bore the brunt of the flooding.

BHP Billiton said its output of metallurgical coal in the March quarter dropped 18 percent year-on-year to 6.67 million tonnes.

Queensland lost up to 30 million tonnes of coal production when monsoon rains and a cyclone battered the eastern seaboard, exacting a costly economic toll on one of the most resilient economies, recent government and private figures show. [ID:nL3E7EV482]


Coal is Australia's top export earner and the drop, equivalent to 15 percent of annual output, threatens to curb economic growth and exacerbate a worldwide shortfall of coal as miners struggle to restart their flooded mines.

The problem lies with water-logged pits at some mines that were taking much longer to drain, BHP Billiton said, adding it would probably be the end of 2011 before operations returned to normal.

Water pumping equipment suppliers said they had been stretched by persistent rainfall beyond the typical March end to the wet season.

"We allowed six months and it looks more like nine," said UBS head of resources research Glyn Lawcock.

Lawcock predicted the delays would support metallurgical coal prices, which stand at around $300 a tonne and had been expected to fall over the rest of the year as production bounced back.

"They may drift a bit slower than we had anticipated given volumes are going to be slow to come back," he said.

Fellow miners Rio Tinto RIO.L> and Wesfarmers reported falls of 12 percent and 34 percent, respectively, in March quarter metallurgical coal output due to floods.

"There are still quite a lot of pits across the Bowen Basin with a lot of water in them," said Dave Walker, who manages water pumping for Total Water Management, which specializes in draining mines.

"There's no equipment available right now, it's all out," Walker said. "And that's contributing to delays in the recovery."


BHP flagged in January that the Queensland floods would hit sales and production of coal through at least the first half.

"Force majeure remains in place for the majority of our Bowen Basin products with production, sales and unit costs likely to be impacted, to some extent, for the remainder of the 2011 calendar year," the miner said in a statement on Wednesday.

The Queensland Resources Council industry group anticipates that total Queensland coal production for fiscal 2010/11 will be reduced to 170 million tonnes from a previous estimate of 200 million tonnes, based on its feedback from coal-handling terminals.

The council's board of directors includes executives from some of the biggest coal mining companies, including BHP Billiton, Xstrata , Rio Tinto and AngloAmerican .

BHP's Sydney shares closed up 1.2 percent at A$47.23, in line with Rio Tinto and the wider market .

BHP Billiton's production of iron ore, its biggest single commodity, jumped to 33.2 million tonnes in the March quarter, up 7 percent from a year earlier, but eased 1 percent on the previous quarter because of Australia's wet summer.

The north Australian floods sent steel-making coal output tumbling 18 percent from a year earlier.

Australian oil and gas producer Santos also reported a big drop in March quarter output, cut its full-year production forecast because of adverse weather, and warned it would take months to return operations to normal after the disruptions caused by rains. [ID:nL3E7FJ43A]

BHP Billiton is the world's largest supplier of traded hard coking coal, via a joint venture with Japan's Mitsubishi Corp , and is also the third-largest iron ore producer -- positions that have enabled it to reap record profits from surging demand from Asian steelmakers.

In iron ore production, BHP ranks behind Brazil's Vale and Britain-based Rio Tinto.

Strong demand from China, the world's top steel producer and iron ore consumer, and tight supplies, have pushed iron ore prices to record highs this year, with spot prices IODBZ00-PLT .IO62-CNI=SI now standing around $180 a tonne, just below their February all-time high of around $200.

This should help drive a swift recovery in iron ore production in the current quarter.

In copper, another commodity in strong demand from China and other rapidly industrialising nations of Asia, BHP Billiton reported a 19 percent jump in March quarter output, from a year earlier when production had been disrupted by a mine accident.

The recovery in copper production was in line with BHP Billiton's previous forecast. (Editing by Clarence Fernandez and Muralikumar Anantharaman, sourced Thomson Reuters)

Mongolia halts coal exports to China - mining group

Thursday, 21 April 2011 11:00

Mongolia has halted truck deliveries of coal from the South Gobi region to China, with the ban expected to last about two days, after China closed a part of the border citing a technical glitch,

a lobby group for the Mongolian mining sector said.

The South Gobi region is the location of the Tavan Tolgoi property, one of the world's biggest coal deposits. Mongolia has yet to build railway infrastructure in the region and exporters continue to depend on trucks. "The Chinese side said they had some problems (at the border crossing of Zamyn Uuud) with their computer software registering the vehicles," said Baasanjav Enkhbaatar, chairman of the Mongolian Mining Club.
"It affected all the traders in Mongolia and so the Mongolian government is taking countermeasures."

Official Chinese news agency Xinhua said Mongolia suspended coal deliveries following a spate of accidents on a dirt road running from Tavan Tolgoi. Citing local media, it said 23 people were killed in 31 road accidents on the Tavan Tolgoi highway in 2010, with another three fatalities in the first quarter of 2011.

Officials at the Mongolian Mining Corp were not immediately available for comment.
"The Mongolian government does close off shipments for a day or two when there has been an accident -- sometimes there is so much dust caused by the trucks and local herds or herdsmen are hit," said Jim Reichert, senior infrastructure specialist with the World Bank in Ulan Bator.
"They need to build a railway as soon as possible to transport the coal -- there are any number of reasons to do that," he said.
Private financing was available to build railways south to China, but the Mongolian government blocked construction in order to concentrate on a cross-country rail network that would link Tavan Tolgoi with Russia and the Pacific coast.
The Tavan Tolgoi project is estimated to contain 6 billion tonnes of coal reserves and its eastern block is scheduled to be listed on an overseas stock exchange within a year.
The government is currently assessing bids for the western block of the project from ArcelorMittal , Vale and Xstrata , among others.
China imported 16.59 million tonnes of coal from Mongolia in 2010, up 176 percent on the year and behind only Indonesia, Australia and Vietnam.

Mongolia hopes to become China's biggest foreign supplier, but its transportation infrastructure is already creaking under the strain. The Mongolian Mining Corp and South Gobi Resources also have mining operations in the South Gobi region.

David Bartel, vice-president in charge of Mongolian operations at South Gobi Resources, said deliveries from the company's mine were not affected. "The block is just from the Tavan Tolgoi area -- they have not stopped shipments from our mine," he said.

The mine is about 400 km from Tavan Tolgoi and 45 km from China and the company is currently building a dedicated road to the border, he said. Source: Reuters

CSN sells Riversdale stake for $830 mln

Wed Apr 20, 2011 1:37pm GMT

* CSN sells its 19.9 pct stake in Riversdale to Rio Tinto
* CSN sells 47 mln Riversdale shares at A$16.50 each

SAO PAULO, April 20 (Reuters) - Brazilian steelmaker CSN (CSNA3.SA: Quote)(SID.N: Quote) struck a deal to sell its 19.9 percent stake in Australian coal miner Riversdale to mining giant Rio Tinto for A$780 million ($830 million), according to a securities filing.

Sao Paulo-based CSN, Brazil's largest diversified steelmaking group, sold 47.29 million Riversdale shares at a price of A$16.50 each, the filing said. The shares (RIV.AX: Quote) closed little changed at A$16.50 in Sydney on Wednesday.

Earlier in the day, Rio Tinto (RIO.AX: Quote)(RIO.L: Quote) said it had won control of 72 percent of Riversdale after CSN accepted the offer.

Rio Tinto became Riversdale's controlling shareholder on April 8 despite failing to persuade India's Tata Steel (TISC.BO: Quote) and CSN to sell their combined 47 percent stake in the company over the previous three months.

CSN shares rose 1.8 percent to 24.43 reais on Wednesday in Sao Paulo. The shares are down 8.3 percent this year, the smallest decline among Brazilian steelmakers listed in the Bovespa stock exchange. ($1=0.94 Australian dollars) (Reporting by Guillermo Parra-Bernal and Alberto Alerigi Jr; editing by John Wallace, Sourced Thomson Reuters)

Brazil's Vale says Guinea halts railway upgrade

Apr20, 2011 10:50pm GMT

* Miner Vale says gov't seeks revision of project
* Guinea says agreement scrapped, seeks competitive bid

RIO DE JANEIRO/CONAKRY, April 20 (Reuters) - Brazilian mining giant Vale (VALE5.SA: Quote) said on Wednesday that Guinea has halted a railroad upgrade project there, days after the country's president said the contract was canceled.

Vale, which holds an interest in the giant Simandou iron ore deposit in Guinea's south, had offered to pay $1 billion to rebuild a 640 kilometer (398 mile) railway line connecting the interior city of Kankan to the coastal capital Conakry.

The project's cancellation could sour relations between Guinea and Vale, the world's largest iron ore producer, which is betting heavily on the African nation for iron output growth.

"The government of Guinea is asking for a revision of technical specifications to continue the revitalization of the railroad, and decided to paralyze activities until the new parameters have been defined," Vale said in a statement.

Guinea President Alpha Conde, who was elected in November, said over the weekend the agreement with Vale had been accepted out of respect for former Brazilian President Luiz Inacio Lula da Silva but would now be open to competitive bidding.

A mines ministry official confirmed the cancellation of the agreement but declined to provide further detail on what it signifies for Vale's operations in the country.

"We can't say anything about the cancellation of the Kankan-to-Conakry railway project because the president has already said it all," ministry official Guillaume Curtis said.

"But what I can tell you is that we are going to review all of these joint ventures that were signed at the expense of the Guinean state," he said.

Vale signed a $2.5 billion joint venture agreement with BSGR, a company run by Israeli billionaire diamond trader Beny Steinmetz, giving it a 51 percent stake in two blocks of the Simandou deposit -- the rights to which are still contested by Australian miner Rio Tinto (RIO.AX: Quote).

Rio officials are in talks over the contested blocks.

Guinea's government is also in the process of finalising a new mining code, which Conde has said aims to give the state an interest of at least 33 percent in all of the country's mining projects -- up from an average 15 percent now. (Reporting by Saliou Samb and Brian Ellsworth; Writing by Richard Valdmanis; Editing by Anthony Barker, sourced : Thomson Reuters)

India imports more coal from Indonesia

April20, 2011

Indonesian coal exports jumped 23.31 percent during March 2011. The world’s largest coal exporter shipped 27,164,079 mt of coal in March up 23.32 percent from its February exports of 22.02 million tons, according to the industry sources. India and china have taken a share of 28.37 percent and 16.52 percent respectively.

India has imported a total tonnage of around 7.707 MMts up 66.42 percent (4.631 MMts in February) and Chinese imports reached 4.488 MMts up 5.99 percent (4.234 MMts in February).

India remained the largest importer of Indonesian coal since January 2011. China was the largest Indonesian coal importer during 2009 and 2010, but India pushed China to second place in this year.

44.89 percent of total Indonesian coal exports in March goes to fuel hungry countries India and China.

Top five Indonesian coal importers in March were India, China, Japan South Korea and Taiwan.

According to market players, since 2009 Indonesian coal witnessed higher exports due to the increased demand from India and China. Chinese and Indian end-user are always keep an eye on Indonesia for their coal needs, due to the fact that Indonesia is closer to their ports. This results in lesser voyage time resulting in lesser sea freights., which makes their landed cost competitive compare to other origin of coal as well as indigenous coal.

Increase in Indonesian exports of Low rank coal picked up in recent months. Due to domestic coal shortage, Indian consumers have devised a primitive method of blending of Low rank high moisture coal of Indonesia with the available domestic coal. Indian domestic coal characterized by high ash (30% to 40%) and low moisture (9%) which can advantageously blend with Indonesian Low rank coal of high Moisture (<50%) and low ash (<8%).

Also the increase of Bio Mass and Co-generation capacities Low rank coals have become the order of the day. Also the higher discount prevailing for Low rank coals have encouraged their usage.

Due to the spate of demand for Low ranking coal (<3200 GAR coals with Moisture of up to 50%) Sumatra based LRC suppliers were also targeting Indian market for their exports. In view of this encouraging business Industry is worried and closely watching the proposed Indonesian Govt. policy of banning exports of Low ranking coals. Indonesian government proposed the coal producers to up-grade their coal to higher energy value prior to export to have high price. The Government regulation is expected in Year 2014.

One of the Indian traders commented that due to the Somali pirate's threat to the Indian coal vessels heading to the west coast of Indian ports , buyers of South African coal may avoid pirate's dominated zone for safety of their crew members and cargo. Unless there is a firm action from Indian naval forces as well as international community on pirate attacks on the vessel which were passing through pirate attack zone, the growth of coal trade between India and south Africa will be affected.

For a short term, Indian coal buyers may look at alternative sources of supply. Will SOMALI PIRATES force Indian coal buyers to reduce procurement from South Africa? Register your opinion Yes, For A Short Period, No, May Be.

However, the next few months being summer months in India the demand for power, steel and cement increases thereby the movement in coal may be witnessed resulting in higher consumption.

Indonesia already successfully implemented monthly coal reference price for its coal. Coal ministry also fine tuning their coal reference prices on monthly basis. Coal producers were asked to comply with the government declared index prior to conclude any short term and long terms coal sales agreement with its buyers.

Indonesia’s Ministry of Energy and Mineral Resources has set the April 2011 Indonesian Coal Reference Price for thermal coal at US$ 122.02 per ton, which is 0.33 percent lesser than March 2011 price of US$ 122.43 per mt fob vessel.

Instead of minor dropping in HBA, Indonesian coal prices were still at stable position. small scale mines from Kalimantan were offering 6300 GAD coal between US$ 82 - 87 per MT and premium coal supplier's prices were already in high nineties or at three digits pricing, an international trader said.

According to market stakeholders, the prices may stand stable due to Japan's earth quake, tsunami and nuclear power plants blast, but the prices and demand are expected to move more stronger in coming months.

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April20, 2011

Delhi based Knowledge Infrastructure Systems Pvt. Ltd once again offered the lowest price of US$ 93.44 per metric ton for calorific value of 6000 GAD and 15 percent total moisture coal for TNPL against its recent tender.

According to E-Tender conducted by TNPL at 3 PM IST today, US$ 98.60 was quoted as lowest price, our sources said.

However, the manual bid which opened at around 4.30 PM IST today, shows US$ 93.44 PMT as the lowest price. Knowledge Infrastructure would emerge as lowest and emerged as the contract winner. This price includes US$ 2-3 logistics cost making the net CIF price around US$ 90 - 91 per MT, which was almost same or little above than current FOB price of 6300 GAD coal of Indonesian Origin.

CEPL, another bidder who has emerged as L2 is very close with US$ 95 PMT but all other participants were above US$ 100 pmt and even some offered at US$ 115 per MT, said a trader who is familiar with the tender.

On 25th of last month, TNPL has finalized 160,000 MT of coal at US$ 97.10 from Knowledge infrastructure. Within 25 days TNPL, successfully brought down the price by US$ 3.66 per MT and Knowledge infrastructure become lowest bidder again and may bag another 160,000 MT from TNPL to supply from July 2011.

TNPL over the period of several years got the exposure and experiencing the market pulse so well and pitching their next move intelligently to secure the best of the world.

One of the far east trader commented that, the way TNPL conduct the e-auction and manual bid whichever is low is really revealing and appreciable. This gives excitement and hope for the bidders at different stages. It looks like a business combined with excitement filled game.

He also commented and wonder why the other state PSU such as TNEB is not adopting the same methodology and getting the best rates.

According to the tender issued on 2 April 2011, the quality of coal should be Gross Calorific Value (adb) 6000 Kcal/Kg basis and will be rejected if GCV is below 5600 kcal/kg. The Inherent Moisture (adb) of around 10 pct, Total Moisture (arb) 15 pct basis and above 23 pct will be rejected. The Ash content (adb) 8 pct max , Sulphur (ADB) 0.8 pct max and Volatile Matter (adb) 25 to 45 pct and above 45 pct will be rejected.

TNPL tender terms say, the winner will be selected based on the lowest bid either from e-tender or sealed manual tender price. The manual bids were opened around 4.30 pm IST today, and Knowledge infrastructure's price was the lowest among the all other participants. Most probably, TNPL, will award the 160,000 MT of coal supply order to Knowledge infrastructure.

TNPL's latest tender price is 3.76 percent or US$ 3.66 lower than its last purchased price of US$ 97.10 per MT. TNPL is a regular importer of Indonesian coal, for its paper factory in Karur district, India.

Adani Enterprise, Gupta coal, MSTC, Rudhra Energy, Star Coal, Starmin, MSTC, Phonex Comtrade, and Coastal Energy are other participants of this tender.

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Rains hit Anglo American Q1 coal, iron ore

Thu Apr 21, 2011 8:13am GMT

* Iron ore output down 19 percent, copper down 14 percent
* Metallurgical coal down 37 percent after floods
* Copper down 14 percent due to rains, lower grades
* Shares dip 0.3 percent in early trade

By Clara Ferreira-Marques

LONDON, April 21 (Reuters) - Miner Anglo American stuck to its production targets on Thursday despite a first quarter that saw floods and heavy rains hampering output, with coal output from its Australian operations down by over a third.

Anglo, the world's fifth-biggest diversified miner, is the latest operator to detail the impact of freak weather across its operations. BHP Billiton warned on Wednesday that persistent rains in Australia were delaying a recovery in its coal operations.

Anglo said iron ore production fell 19 percent while copper dropped 14 percent, the latter hit by both heavy rains and lower grades. Iron ore and copper are the Anglo-South African group's most profitable products.

"It was pretty much as anticipated. We have had an awful lot of rain in Queensland and that has had an impact on everyone operating in the region," analyst Charles Kernot at Evolution said.

"To some extent they are a bit worse than BHP, but each operator is going to be slightly differently impacted."

Shares in the miner dipped 0.3 percent to 3,167 pence at 0750 GMT in London trade, underperforming a 0.7 percent rise in the broader mining sector.

Analysts at Oriel said the production numbers were worse than expected across many divisions: "Nonetheless, the company has said that full year targets should be achievable as production shortfalls are made up during the back end of the year, notably in platinum."

Anglo, Australia's fourth biggest producer of coal and its number two exporter, said output of metallurgical coal, used for steelmaking, dropped over a third to 2.1 million tonnes from its Australian mines.

Australia's Queensland state lost up to 30 million tonnes of coal production when monsoonal rains and a cyclone battered the eastern seaboard between November and February.

"A number of initiatives are in progress for the remainder of 2011 to mitigate the production shortfall from Q1," the miner said in its statement.

Iron ore production dropped to 9.9 million tonnes due to heavy rains that made access to pits virtually impossible -- its flagship Sishen Mine in South Africa saw twice the annual rainfall recorded during the first two months of the year.

Anglo confirmed Kumba production is expected to be flat and said plans were in place to recover the shortfall in production by the end of 2011.


Production of copper, which accounts for almost a third of operating profit, dropped to 138,800 tonnes, hit by weather but also lower grades at its Chilean Collahuasi and Los Bronces mines. The expansion of the Los Bronces project is on target for first production in the last quarter of the year.

Nickel production increased 27 percent to 6,100 tonnes while platinum refined production increased by 19 percent, despite lower production at its mines after safety-related stoppages.

Diamond production increased by 5 percent to 7.4 million carats.

The key to Anglo's future performance and production is its hefty project pipeline, including Barro Alto Nickel in Brazil and the Minas Rio project, also in Brazil, which could help the group nearly double iron ore production by 2014.

Analysts say overall production could double from 2009 levels by the end of the decade. (Reporting by Clara Ferreira-Marques; Editing by Sudip Kar-Gupta and Jon Loades-Carter, sourced Thomson Reuters)

Tata Steel sells 51 pct in refractory unit to Japan's Krosaki

Thu Apr 21, 2011 8:04am GMT

* Deal values refractory business at $255 million
* Tata to retain 26.5 pct in refractory unit
* Tata Steel shares up 1 pct in Mumbai trade

MUMBAI, April 21 (Reuters) - Tata Steel , the world's seventh-largest steelmaker, on Thursday agreed to sell 51 percent stake in a refractories business to Japan's Krosaki Harima Corp , valuing the unit at 11.30 billion rupees ($255 million).

Krosaki, an associate company of Japan's largest steelmaker Nippon Steel Corp , is a leading refractory player with global presence and access to advanced technology.

Tata Refractories is the largest company in its segment in India, and manufactures a range of dolomite, high alumina and silica refractories, which are used in linings for furnaces, kilns, incinerators and reactors.

It posted revenue of 9.1 billion rupees and operating profit of 1 billion rupees in fiscal year ended March 2010.

Tata Steel will hold 26.5 percent stake in the business.

Earlier this year, Nippon and Tata Steel said their $480 million cold-rolled sheet steel joint venture will begin production in India by late 2013, and agreed to discuss expanding co-operation. [ID:nTOE70607K]

At 1.13 p.m. (0743 GMT), shares in Tata Steel, valued by the market at $12.7 billion), were up 1 percent at 630.80 rupees in a firm Mumbai market . ($1 = 44.3 rupees) (Reporting by Prashant Mehra; Editing by Ranjit Gangadharan,sourced Thomson Reuters)

Australia's Whitehaven says Yanzhou Coal on bid shortlist

Thu Apr 21, 2011 7:33am GMT

* Whitehaven says not been advised Yanzhou has pulled out
* Whitehaven shares drop 5% as hedge funds flee
* India's Aditya Birla lodged bid - sources
By Michael Smith

SYDNEY, April 21 (Reuters) - China's Yanzhou Coal Mining Co is on a shortlist of bidders for Whitehaven Coal , the Australian company said on Thursday, responding to media reports that Yanzhou had pulled out of bidding for the $3.6 billion company.

The media reports sparked a sell-off in Whitehaven's shares, which sent the stock down as much as 6 percent in its most active trade since the firm put itself up for sale last October.

Whitehaven released the statement after online publication dealReporter said Yanzhou was not going ahead with an offer.

Bloomberg later quoted Yanzhou board secretary Zhang Baocai as saying: "We are currently not in any talks to buy Whitehaven."

"We currently don't have any special interest in it. We have looked at this target but that doesn't mean we will necessarily buy it," he was quoted as saying by phone from Canada.

Whitehaven had previously not revealed any of the parties on its shortlist, but said on Thursday Yanzhou was in the running.

"Whitehaven has not been advised of any change to this status," the miner said in a statement.

Yanzhou and India's Aditya Birla had lodged final bids for the company, sources told Reuters last week. One source said Yanzhou's bid involved scrip.

Whitehaven said in February it had selected a short list of bidders to complete due diligence in a process expected to continue for "a number of months". On April 13, the company said its board was considering a shortlist of bidders. [ID:nL3E7FD0QH]

Birla needs thermal coal for its group companies Hindalco , India's top aluminium producer, and UltraTech Cement , the country's largest cement producer.

Large Whitehaven shareholder Alpha Natural Resources was not expected to bid after agreeing in January on a $7.1 billion deal to buy Massey Energy Co .

Sources familiar with the deal have said previously that Whitehaven was seeking bids of at least A$7.50 per share which would value the target at around A$3.7 billion.

Whitehaven shares fell 4.5 percent to close at A$6.78.

Goldman Sachs and Grant Samuel are advising Whitehaven. UBS is advising Yanzhou. (Additional reporting by Sonali Paul; Editing by Balazs Koranyi and Mark Bendeich, sourced Thomson Reuters)

Wednesday, April 20, 2011

BHP Billiton boosts Q3 iron ore output, warns on coking coal

Tue Apr 19, 2011 10:41pm GMT

SYDNEY, April 20 (Reuters) - BHP Billiton , the world's biggest mining house, reported a 7 percent jump in iron ore production for the third quarter on Wednesday but warned that persistent rains in Australia continued to curtail its coking-coal operations.

The company's metallurgical coal production is mostly centred In the northern Australian state of Queensland, which was inundated by record floods in the March quarter. BHP Billiton said wet conditions were likely to continue to impact its operations there for the remainder of calendar 2011.

BHP Billiton is the world's largest supplier of traded hard coking coal via a joint venture with Japan's Mitsubishi Corp .

In iron ore production, BHP is ranked a distant third behind Brazil's Vale and Britain-based Rio Tinto . (Reporting by James Regan; Editing by Mark Bendeich, sourced Thomson Reuters)

Tuesday, April 19, 2011


Tuesday, 19 April 11

One of Indonesia's largest coal miner PT Adaro Energy Tbk (ADRO) plans to spend US$100 million in coking coal project dubbed IndoMet Coal, a joint venture company with BHP Billiton.

Adaro, via a subsidiary namely PT Alam Tri Abadi, owns 25% shareholding in IndoMet Coal and BHP controls the remaining stake in the coking coal miner with concessions in South and East Kalimantan, as quoted by Insider Stories.

Insider Stories furhter said, Adaro owns 25% shareholdings in seven units of BHP such as PT Maruwai Coal, PT Juloi Coal, PT Kalteng Coal, PT Sumber Barito Coal, PT Lahai Coal, PT Ratah Coal, and PT Pari Coal.

“At end of first quarter last year, we acquired 25% stake from BHP worth US$334.73 million. We will spend US$100 million in 2011,” said Adaro Corporate Secretary Devindra Ratzarwin as quoted by Investor Daily today.

He said the investment in IndoMet Coal is beyond the total capital expenditure set by Adaro.

Adaro plans to spend US$608 million-US$628 million capex this year. For routine expenses, the company will spend US$175 million and US$250 million to purchase heavy equipments, said Insider Stories.

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TNPL to conduct E-Auction to secure 160,000 MT of coal

Tuesday, 19 April 11

Tamil Nadu Newsprint and Papers Limited (TNPL) a state utility of Tamil Nadu, India to conduct reverse auction on 20 April 2011, between 14:00 - 15:00 hrs Indian standard time to procure 160,000 MT +/- 5 percent of Non-Coking imported Coal with Gross Calorific Value (ADB) 6000 Kcal/Kg, on delivered at TNPL factory siding at Pugalur basis.

Nine Indian based coal trading companies, including Adani, Gupta coal, Knowledge Infra, Rudhra Energy, MSTC, CEPL, Star Coal, Starmin and Phonex have qualified to participate tomorrow’s electronic bidding to supply 160,000 tons 6000 GAD coal, our sources said.

Total tendered quantity to be delivered in four shipments starting from July 2011.

Bidders are request to offer price based on C&F Tuticorin basis inclusive of all port charges and arrange delivery of such Coal to TNPL site by wagons (all activities of stevedoring, handling, arranging railway rakes, loading, transportation etc are in supplier’s scope), the tender terms said.

According to the tender issued on 2nd April 2011, the quality of coal should be Gross Calorific Value (adb) 6000 Kcal/Kg basis and will be rejected if GCV is below 5600 kcal/kg. The Inherent Moisture (adb) of coal around 10 pct, Total Moisture (arb) 15 pct basis and above 23 pct will be rejected. The Ash content (adb) 8 pct max , Sulphur (ADB) 0.8 pct max and Volatile Matter (adb) 25 to 45 pct and above 45 pct will be rejected.

TNPL is a traditional consumer of Indonesian coal, for its paper factory in Karur district, India. TNPL has closed its latest tender to procure at US$ 97.10 PMT on 25 March 2011. Indo government has declared, Indonesian Coal Reference Price for thermal coal for April supply at US$ 122.02 per ton, which was 0.33 percent lesser than March 2011 price of US$ 122.43.

TNPL tender terms say, the winner will be selected based on the lowest bid either from E-tender or sealed manual tender price. The manual bids were also expected to open tomorrow after completion of reverse bidding, said a source familiar to TNPL, tender process.

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JFE Steel may cut output as quake hurts demand

Tue Apr 19, 2011 7:41am GMT

* Fall in March crude steel output may be less than 1 mln tonnes
* Japan February crude steel output was 8.93 mln tonnes
* JFE faces higher inventories, may consider output cuts
* Slumping car production is a concern (Adds March crude steel estimate)

TOKYO, April 19 (Reuters) - JFE Steel Corp , the world's fifth-biggest steelmaker, is facing rising inventories due to weak demand from domestic manufacturers following last month's devastating earthquake and tsunami and may need to cut production ahead, the company's president said on Tuesday.

Eiji Hayashida, also chairman of Japan's Iron and Steel Federation, told a news conference for the industry body that the impact of the quake on the output of steelmakers may have been smaller than expected in March, but that shutdowns of car and parts plants may take a heavy toll on steelmakers' production after May.

The magnitude 9.0 earthquake and tsunami on March 11 has forced Toyota Motor Corp and many Japanese carmakers to operate at 50 percent of their target plans as the quake disrupted their parts supply chains and triggered power outages and an ongoing nuclear crisis.

"JFE will decide in early May whether it needs to cut output after seeing carmakers' production levels," Hayashida said.

He said Japan's crude steel output in March may have been reduced by less than 1 million tonnes from February's 8.93 million tonnes, smaller than expected by many industry watchers.

The disaster will end a run of 16 consecutive monthly year-on-year rises in crude steel output, which had become increasingly robust on buoyant exports to Asian consumers.

The earthquake prompted JFE, Nippon Steel Corp and Sumitomo Metal Industries Ltd to temporarily halt their 7 blast furnaces in east Japan, but damage to production facilities was relatively small except for Sumitomo Metal's Kashima plant, which is located closest to the earthquake's epicentre.

Hayashida said demand from domestic manufacturers has been slumping since the quake, and he expects domestic demand for crude steel to decline this financial year despite a pick up in reconstruction demand after the summer.

The steel body will on Wednesday reveal crude steel output data for March and for the 2010/11 financial year ended on March 31.

(Reporting by Yuko Inoue; Editing by Chris Gallagher and Joseph Radford, sourced Reuters)

POSCO ups steel prices by 16-18 pct - sources

Tue Apr 19, 2011 7:57am GMT
* Hot-rolled, cold-rolled, plate prices to rise by 160,000 won/T
* First rise since June to be effective for orders from April 22
* Price increases more than market expected
* POSCO shares close flat; shipbuilders drop on margin concerns
(Recasts lead, adds details and quotes, closes shares)

By Hyunjoo Jin and Cho Mee-young

SEOUL, April 19 (Reuters) - South Korean steel giant POSCO will raise domestic steel prices by 16-18 percent this week, industry sources said, the first hike in 10 months and higher than the market expected.

Clients including shipbuilders, auto makers and electronics manufacturers, under pressure from a government struggling to curb inflation, are likely to find it hard to pass on price hikes to customers.

While POSCO officials declined to comment on the long-awaited price increases, industry sources said the country's top steelmaker will raise prices of hot-rolled, cold-rolled and thick plates by 160,000 won ($147) a tonne each for orders coming from April 22.

Iron ore indexes IODBZ00-PLT, based on China spot deals and which global miners use to compute supply contract prices, have surged more than 30 percent since July last year.

POSCO's earlier failure to raise prices to cover surging costs hit its earnings and it failed to meet its annual profit target last year.

It is expected to post another decline in profits for the January to March period from a year ago when it reports results on Friday.

"The hike was bigger than the market expected," said Kim Hyun-tae, a Hyundai Securities analyst. "The market forecast was smaller because a planned hike was delayed and there was some pressure to cooperate with the government working to stem inflation."

Asia's fourth-largest economy, heavily dependent on energy and other commodity imports, is trying to tame inflation partially fuelled by multi-year high prices for raw materials such as crude, grains, metals, coal and iron ore. South Korea's regional neighbours are also fighting inflation.

Privately-owned crude oil refiners earlier this month were forced to make their first coordinated price cut since the sector was liberalised in 1997. That saddled them with a bill as high as 700 billion Korean won ($643 million).

South Korea's annual producer inflation rose to a 28-month high in March, boding ill for the consumer inflation outlook.


POSCO's price hikes, the first since June 2010, initially buoyed shares of the world's third-largest steelmaker by more than 2 percent before all the gains were shaved on the view that global steel demand, led by China, may cool.

Shares of shipbuilders lost as much as 4 percent on news of POSCO's price hikes as it accounts for more than 30 percent of steel plates for Hyundai Heavy Industries , Samsung Heavy Industries and Daewoo Shipbuilding & Marine Engineering .

"The scale of the price hike was comparatively big...of course, it will have an impact and be tough to deal with, but it is up in the air if (the steel price increase) can be passed onto the vessel rates because the overall market situation needs to be considered," said a shipbuilding industry source, who declined to be identified because of the sensitivity of the issue.

Han Changhee, LG Electronic's vice president of marketing strategy for the company's home appliance division, said in a separate meeting with reporters on Tuesday that raw material costs keep rising and have risen more than 20 percent so far this year, led by steel and copper. It is inevitable product prices will have to be raised Han said.

Jun Min-kyoo, an analyst at Korea Investment & Securities, said: "I expect companies will be unable to raise prices much because of the sluggish consumption, which may reduce their profits."

While analysts think the price increase will improve POSCO's earnings in the second quarter from the previous quarter, some suggest Japan's earthquake and China's tightening may keep its earnings under pressure.

Japan's earthquake and tsunami on March 11 disrupted production in Asia's top steel exporter, raising expectations of higher demand for South Korean products.

Yet hopes for a recovery in the steel market have been dashed by China, the world's biggest producer, which raised banks' required reserves on Sunday for the fourth time this year to keep inflation in check.

A weaker-than-expected market has forced many Asian mills to put off price increases or even to cut prices. China's major steelmaker, Angang , will join its peer Baoshan Iron & Steel Co Ltd in cutting main steel product prices for May bookings.

Hwang Eun-yeon, executive vice president at POSCO, said he expects Japanese steelmakers to temporarily increase exports following the quake to offset slumping demand in the domestic market.

POSCO previously said it would be more flexible in pricing steel products from the second quarter of this year, dropping its quarterly pricing scheme.

Shares of POSCO closed flat in a broader market down 0.70 percent on Tuesday.

($1 = 1088.500 Korean Won) (Additional Reporting by Jumin Park, Yeonhee Kim and Miyoung Kim; Editing by David Chance and Matt Driskill, sourced Thomson Reuters)

Monday, April 18, 2011

BHP Billiton's $48bn iron expansion defies carbon tax uncertainty

April 19, 2011 12:00AM
By Matt Chambers and Sid Maher, The Australian

BHP Billiton plans to defy uncertainty over a carbon price and the imposition of a mining tax to pursue a $48 billion expansion of its iron ore operations - one of the biggest resources projects in the nation's history.

The expansion of the mining monolith's Pilbara iron ore mines, ports and railways in Western Australia is flagged in federal and state approval applications and comes as the company today prepares to resume delicate talks with the government on Labor's plan to price carbon.

As frustration grows within Labor ranks that Tony Abbott is "getting away with murder" on the carbon tax debate, Climate Change Minister Greg Combet is preparing to confront industry concerns that a carbon price would disadvantage key Australian industries compared with their global competitors.

Leaders of major coal companies - including BHP, Rio Tinto, Xstrata, Anglo American Coal, Centennial Coal and Peabody Energy - will be in Canberra today for talks on "special circumstances" facing the industry.

Resources Minister Martin Ferguson is due to brief business leaders on negotiations with the steel, liquefied natural gas and coal industries on transitional assistance in the wake of their calls for exemptions.

The Australian has obtained documents circulated to the industry transitional working group that compare emissions regimes in Europe and New Zealand with Kevin Rudd's 2009 carbon pollution reduction scheme.

The committee, which includes representatives of Woodside Petroleum, BHP Billiton, Rio Tinto, Xstrata Coal, BlueScope Steel, OneSteel, Shell and Origin Energy, has been provided with details of a speech by Productivity Commission chairman Gary Banks, which outlined its approach to comparing international carbon prices.

The meetings come after the Climate Change Department yesterday reported Australia's emissions rose 0.5 per cent last year, driven in part by a 44 per cent increase in iron and steel production. The jump came despite a fall in carbon emissions from electricity generators, as cooler weather and higher use of gas and hydroelectricity lowered demand for coal-fired power.

But carbon emissions from industrial processes increased 13.4per cent on the back of the surge in iron and steel production.

As the carbon debate raged in Canberra, BHP Billiton flagged the expansion of its Pilbara region iron ore mines, ports and railways that could triple the company's production over the next decade if Chinese growth continued to support demand. The staged project, known as the Port Hedland outer harbour development, would rival the West Australian LNG operations Gorgon and the North West Shelf as the nation's biggest resources projects. It would also boost the nation's annual commodities revenue by $US22bn a year based on analysts' long-term estimates for iron ore prices.

A spokesman for Mr Abbott said last night it could only be assumed that BHP Billiton, in announcing such a large expansion, believed that the proposed carbon tax would be weakened from its current proposed form.

BHP yesterday began federal and West Australian approval processes to expand its Port Hedland shipping capacity by 240 million tonnes of iron ore a year through eight new shipping berths built in four stages at the end of a planned jetty stretching 4km into the Indian Ocean.

The miner has been forced to build the project because it was unable to get access to Rio Tinto's more-easily expanded Pilbara ports after both a full Rio takeover and an iron ore merger failed. BHP ships about 150 million tonnes of iron ore a year from Port Hedland and recently revealed $US8.4bn plans to grow that to 240 million tonnes soon after 2014.

The extra annual production flagged yesterday would bring capacity to 480 million tonnes a year.

As well as BHP's plans, Rio Tinto has ambitions to grow its Australian iron ore capacity from about 225 million tonnes to 433 million tonnes.

Andrew Forrest's Fortescue Metals Group plans to grow from about 50 million tonnes a year to 350 million tonnes, which is why analysts expect prices to drop.

BHP plans to give board approval for the first of four stages for the outer harbour project at the end of next year, with first production expected in 2016. Each stage would take between two and three years to build.

Yesterday, amid a growing backlash from unions and the business community over the carbon tax, senior federal ministers, including Infrastructure Minister Anthony Albanese, played down the latest opinion poll which put Labor's standing at its lowest in 15 years.

Mr Albanese said all governments pursuing economic reform faced poor results.

Julia Gillard promised to cushion the impact of electricity prices on pensioners, but warned that prices would continue to rise.

"But what I will do when we price carbon is I will make sure pensioners receive more assistance than the pricing impacts that they're going to experience," the Prime Minister said. "So they'll actually end up better off as a result of pricing carbon."

Tony Abbott, touring mining operations in Western Australia, moved to capitalise on the increasing pressure from unions and business on the government over the carbon tax.

After food and grocery producers joined mining companies to warn the levy could destroy jobs and cut living standards, the Opposition Leader said Australian workers were beginning to understand that their jobs would be less secure if the carbon tax went ahead.

"We are competing in an uncertain and difficult global environment so workers are entitled to feel a bit insecure about their jobs and that insecurity is going to be worse if this carbon tax goes ahead because Australian business will have a burden on their competitiveness that overseas businesses won't face," Mr Abbott said.

He said he did not think Ms Gillard could give a guarantee that no jobs would be lost through the carbon tax.

Greens leader Bob Brown, speaking ahead of today's multi-party climate change committee meeting with the government, urged Labor "to hold its nerve" in the face of bad polls and vocal opposition to the tax.

"This is going to be a real test of resolve of the Labor government," Senator Brown said.

Additional reporting: Ben Packham, sourced :The Australian


Tuesday, 19 April 11

Karnataka Power Corporation (KPCL) a state utility of Karnataka, India called for open tender for supply of one million tons of 6300 Kcal/kg coal on air dried basis on delivered basis. The delivery of first cargo should starts from June this year. The supplier must supply at least 100,000 MT of every month starting from June 2011.

Six Indian based coal trading companies have qualified to participate this bidding to supply one million tons 6300 GAD coal. Adani, Bhatia Coal, Coastal Energy, Knowledge Infra and Gupta Coal are qualified parties to participate E-Procurement process. The price bids will be opened on 23rd April 2011, at 11:00 Indian standard time, said our sources from Karnataka.

This coal supply is destined for its 1,720MW Raichur thermal power station(RTPS) in Raichur Karnataka. Due to short of domestic coal linkage to RTPS, the KPCL has to resort to higher usage of imported coal.

Earlier in 2010 due to acute shortage of domestic coal RTPS has concluded two imported coal tenders of 900K MTs and 500K mts respectively.

Both the tenders have been bagged by Nagpur based Gupta Coal Corporation, an Indian coal trading company and the contracts are under execution. According to a coal trader based in Karnataka, the running supply contract was awarded at US$ 67 per MT on delivered basis for 6300 GAD kcal/kg coal with 16 percent total moisture.

A pro-rata penalties are applicable for Gross calorific value and total sulphur and weight basis penalties are applicable for Ash content, Total Moisture and size.

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Euro zone crisis escalates on Greek debt fears

By Matthias Sobolewski and George Georgiopoulos

Mon Apr 18, 2011 8:03pm IST

BERLIN/ATHENS (Reuters) - Rising expectations that Greece will have to restructure its mountain of debt, possibly as early as the summer, sent the euro and the bonds of weak euro zone members tumbling on Monday in a dramatic escalation of the bloc's debt crisis.

German government sources told Reuters in Berlin that they did not believe Greece, which sealed a 110 billion euro ($157.7 billion) bailout from the EU and IMF last year, would make it through the summer without restructuring.

That development, combined with a new threat to Portugal's pending bailout from the success of an anti-euro party in Finnish elections, hammered market faith in the bloc's ability to avert a new wave of contagion to bigger countries like Spain.

After a brief lull in the crisis at the start of 2011, it has blown up again with full force and some analysts are now openly speculating that Greece and possibly other countries could eventually be forced to exit the bloc.

"You may see some countries deciding to leave the euro because they can't deal with the fiscal straitjacket that it imposes on them," Andrew Lynch, a fund manager at Schroders, told Reuters Insider.

A restructuring of Greek debt would be the first by a west European nation in over half a century and represents a challenge of epic proportions for EU policymakers struggling to reconcile the interests of their citizens with the costly steps needed to preserve the integrity of the 17-nation currency area.

The Greek government, saddled with a debt burden that is expected to swell to 160 percent of gross domestic product by 2013, has denied repeatedly that it plans to restructure and a government spokesman in Athens reiterated that stance on Monday, saying "we fully rule out" such a step.

"It would have catastrophic consequences," Bank of Greece Governor George Provopoulos said.

But government sources in Berlin told Reuters that this now looked unavoidable and suggested Greece should move fast, rather than wait until its funding situation gets critical next year.

"Decisive voices within the federal government expect that Greece will not make it through the summer without a restructuring," a high-ranking German coalition source told Reuters.

The euro , which has remained strong through the latest bout of turbulence, fell to its lowest level against the dollar in 11 days and the cost of insuring Greek debt against default shot higher.

Pressure on other so-called peripheral countries mounted as well, with Spanish 10-year bond yields pushing towards record highs near 5.6 percent and Portuguese yields at a new peak above 9.3 percent.

European officials have been at pains to stress that Spain can avoid the contagion that has forced Greece, Ireland and Portugal to seek rescues. Its much larger economy could strain the bloc's resources to breaking point if it did succumb.

But data on Monday showing an accelerated drop in Spanish housing prices in the first quarter and a treasury bill auction which saw yields spike higher will ring alarm bells across the currency area.

In neighbouring Portugal, representatives of the European Commission, European Central Bank and International Monetary Fund were meeting government officials to set the terms for the bloc's third rescue in a year following multi-billion euro deals for Greece and Ireland.

After an election in Finland, however, that bailout could come under threat.

The anti-euro True Finns party scored big gains in the Sunday vote and vowed immediately to push for changes to a Portuguese rescue that is expected to total 80 billion euros when it is finalised by a mid-May deadline.

It may take weeks to find out whether True Finns will become part of a new government in Helsinki and be able to deliver on that threat.

The party that won the most votes in Finland is pro-European and seems unlikely to compromise its stance even if it does end up in a coalition with True Finns.

But the result underscored the extent of public anger in northern Europe at the seemingly unrelenting series of new aid deals for stricken euro zone countries that mismanaged their economies and finances.

Any delay in approving the bailout deal for Portugal beyond May could leave the country scrambling for new sources of funding. It faces an election on June 5 and has warned it will run out of money around the same time.

"It is extremely difficult for politicians in Europe to ignore the strong signal from Finland," said Steen Jakobsen, chief economist at Saxo Bank.

"Ultimately this could mean a move away from bailouts with no burden sharing by private investors and banks," he added, saying the risks of a Greek restructuring before 2013 had increased sharply.


Greece's debt load of 325 billion euros is nearly double the level most economists see as sustainable and far bigger than that of Argentina when it defaulted in late 2001.

In order to return the country to a sustainable path, most economists agree that it needs to wipe away roughly half the value of its outstanding debt, hitting private creditors with significant "haircuts" on their holdings.

But EU leaders have promised not to make private debt holders pay before 2013.

Doing so in the near-term, when the bloc remains vulnerable, could set off a contagion tsunami that engulfs Greek, German and French banks, raises pressure on Portugal and Ireland to restructure, and infects bigger euro zone members like Spain.

ECB Executive Board member Lorenzo Bini-Smaghi has likened the potential impact to the Lehman Brothers bankruptcy in 2008.

Winning creditor agreement for a milder form of restructuring, like a voluntary extension of debt maturities, will be difficult.

And even if it is achieved, it is unlikely to make enough of a dent in Greece's debt burden to ensure sustainability over the longer-term. Markets may view the "restructuring lite" option as merely the first step in a two-stage restructuring, with the real pain yet to come.

(Reporting and writing by Noah Barkin, editing by Mike Peacock, sourced Reuters)

Global steel use to hit record in 2012 -Worldsteel

Mon Apr 18, 2011 2:50pm GMT

* Global demand will hit record 1.441 billion tonnes in 2012
* China will grow at 5 percent in 2011-2012
* Demand in developed world still below pre-crisis levels
By Silvia Antonioli

LONDON, April 18 (Reuters) - Overall global economic recovery will drive steel consumption to a record 1.441 billion tonnes next year, but austerity measures will slow growth in China, the World Steel Association said on Monday.

While demand in emerging countries in 2012 will be well above pre-crisis levels, steel consumption in developed economies will still lag behind the record levels hit in 2007-2008, Worldsteel data showed.

Steel demand in China, the world's top producer of steel, will grow at a 5 percent pace in the next two years to 605 million tonnes in 2011 and 635 million tonnes in 2012, according to the steelmakers association.

"China will be growing in steel terms but not at 10 percent, rather at 5-6 percent due to the austerity measures (undertaken by the government)," said the designated new Worldsteel director general, Edwin Basson, who will replace Ian Christmas from August.

"Our view is that there will be a significant slowdown in steel production in the second part of this year (in China)," he told reporters in London.

Daily output of crude steel in March 11-20 reached a record 1.945 million tonnes, figures from the China Iron and Steel Association showed last month.

Some other emerging countries may at times outpace Chinese production in percentage terms, but China will continue to grow, according to analyst Michelle Applebaum of Steel Market
Intelligence in Chicago.

"The Chinese are doing everything in their power to slow down inflation," Applebaum said.

"There will be a slight slowdown (in steel production growth) but China will continue to grow because what continues to drive Chinese growth is unstoppable."

In 2012, the emerging and developing economies will account for 72 percent of world steel demand, up from 61 percent in 2007, according to Worldsteel forecasts.

Steel demand in India, a fast growing steel producer, is forecast to grow by 13.3 percent this year and to accelerate to 14.3 percent in 2012.

The growth will be mainly driven by its strong domestic economy, massive infrastructure needs and expansion of industrial production, according to Worldsteel.


In the United States, steel consumption will grow by 13 percent in 2011, reflecting a second round of quantitative easing, the association said.

The EU will grow at 4.9 percent this year and at 3.7 percent in 2012, affected by the construction sector crisis, Worldsteel forecast.

"The underperformance of the construction industry in southern Europe will be a feature for quite a number of years," Basson said.

The global forecast does not take into account potential losses caused by the earthquakes and tsunami that hit Japan, the world's second-largest steel producer, in March.

The steel capacity impacted in Japan could be about 7-10 million tonnes this year, looking at data and information available so far, Basson said.

"The lack of component exports from Japan is impacting the automotive industry around the world," Basson said. "In the automotive sector there will be some decline in steel consumption."

Japan however, will need large volumes of steel long products such as rebar for reconstruction soon, and it will probably import these products from China or Korea, Basson added.

Steel demand in the Middle East and North Africa will suffer the consequences of the political unrest that has shaken the region in the past few months, and steel demand growth in Africa
this year will be 3.1 percent lower than last year's level, according to Worldsteel.
(Editing by Jane Baird, sourced Thomson Reuters)

Iron Ore-Spot prices fall on slow China steel demand

Mon Apr 18, 2011 3:39am GMT

By Manolo Serapio Jr

SINGAPORE, April 18 (Reuters) - Spot prices of iron ore fell on Monday as a wobbly near-term outlook for steel demand in top consumer China kept steelmakers from buying more of the raw material.

Many Chinese steel mills had restocked iron ore ahead of an expected pickup in construction activity in the current quarter, but steel demand had so far been slow, prompting steelmakers to cut prices for May.

"Since last week, purchases were dropping," said an iron ore trader in Shenzhen. "Many mills already have bought a lot for stocks so they can wait for prices to drop before they buy again."

China's latest bank reserve hike on Sunday, the fourth this year, was expected to further tighten credit for steel producers and curb their capacity to buy raw materials, traders said.

Indian ore with 63.5 percent iron content was quoted at $186-$188 a tonne, including freight, on Monday, down from as much as $190 last week.

Iron ore indexes, based on China spot deals and which global miners use in computing supply contract prices, dropped on Friday.

Platts 62 percent iron ore index IODBZ00-PLT fell $1.75 to $181.25 a tonne and a similar benchmark by The Steel Index .IO62-CNI=SI slipped $1.80 to $181.50.

Metal Bulletin's 62 percent gauge .IO62-CNO=MB was off 47 cents at $180.67.

"Market participants are divided over where they see the market heading in the short term," The Steel Index said in a note. "Until clear direction is shown we expect to see prices oscillate a little."

Data on Friday showed China's daily crude steel output stood at 1.92 million tonnes in March, still near the record 1.94 million tonnes in February, as mills anticipated a recovery in demand.

If that production pace continues, Chinese buyers may soon pick up iron ore again, limiting any losses in spot prices.

"I don't see iron ore prices slumping in the near term as global commodity prices are still rising and China itself is also facing high inflation," said an iron ore trader in Beijing.

But price cuts for May by Chinese steelmakers suggest steel demand may not pick up soon.

Major Chinese steelmaker Angang was the latest to drop prices for main products for May bookings. Last week, pricing leader Baoshan Iron & Steel Co Ltd also announced a cut in May prices.

Outside China, Japanese steelmakers kept prices unchanged after last month's deadly earthquake and tsunami crippled production for many manufacturers, disrupted supply chains and delayed construction projects.

(Additional reporting by Ruby Lian in Shanghai;Editing by Clarence Fernandez, sourced Thomson Reuters)