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Friday, May 27, 2011

Turkish exploration body locates coal reserves

Friday, 27 May 2011

Turkey's mining exploration institute has recently located 2.8 billion tons of coal reserves in multiple areas. The institute is currently planning the privatization of these reserves for the construction of coal-fired power plants.

The fields will be opened to investors after detailed feasibility studies are conducted to determine potential environmental impacts and to measure the business aspects of the investments. The General Directorate of Mineral Research and Exploration, or MTA, is planning the privatization of recently located coal reserves in Turkey for the construction of coal-fired power plants. The total amount of the coal reserves is reported to be 2.8 billion tons.

According to information received by the Anatolia news agency, the Energy Ministry and Electric Generation Inc or EÜAŞ, has started feasibility studies to find the most appropriate investment method to channel the newly located coal reserves into the electricity generation sector.

Data from the MTA showed that 1.8 billion tons of the new coal reserves are in Karapınar, a district of the Central Anatolian province of Konya; 515 million tons are in the Afşin-Elbistan region of the southeastern province of Kahramanmaraş; and 498 million tons are in the Çerkezköy district of the Thracian province of Tekirdağ. According to MTA, 2.6 billion tons of the total reserves are of exploitable quality. The installation capacities of the potential power plants are 5,000 megawatts in the Konya region and around 1,000 megawatts in the other two.

On average, 1 megawatt of power can supply electricity to as many as 300 households per year. The institution is planning to open the fields to investors after detailed feasibility studies are conducted to determine the potential environmental impacts and to measure the business aspects of the investments. The Energy Ministry and EÜAŞ are considering three chief investment models to offer investors for the coal-fired power plant projects.

Ministry and EÜAŞ officials came together with private sector representatives last week. Energy Minister Taner Yıldız chaired the meeting, in which the private sector was informed about the newly located coal fields and the potential power plant investments on these fields and their opinions were solicited by the state authorities.

According to information received by Anatolia, the private sector representatives requested more incentives for such investments, particularly ministry assistance in acquiring Environmental Impact Assessment reports from the Environment and Forest Ministry, something they said was the hardest part of their operations. Some private sector representatives asked for a purchase guarantee from the government authorities.

(sourced Hurriyet Daily News)

Indonesia to audit 8000 mining permits after new laws

Friday, 27 May 2011

Indonesia will audit over 8,000 existing mining permits to make sure they are in line with mining and environmental laws. Indonesia finance minister said that days after the country passed new regulations on environmental protection.

President Susilo Bambang Yudhoyono last week signed a two-year moratorium on permits for logging and another decree allowing underground mining in protected forests if conditions such as an environmental assessment had been met. The rules were softer than expected by environmentalists and it was not clear if the audit of permits would lead to any cancellations.

Indonesia had already stopped issing new mining permits ahead of mining regulations stemming from a 2008 law.

Finance Minister Agus Martowardodjo said that "There are many overlapping permits, and permits where it needs to be confirmed whether they are in line with mining practices in term of protecting the environment.”

Higher commodity prices are attracting increased investment interest in mining metals such as nickel in Indonesia, despite red tape, poor infrastructure and corruption. But the severe bottleneck in mining licence issuance threatens further development of Indonesia's resources.

Global miners with projects in Indonesia include Newmont Mining Corp, Freeport-McMoRan Copper & Gold and BHP Billiton . Indonesia is the world's top exporter of thermal coal and tin.

(sourced from Reuters)

Iron ore exports from Goa highest in 2010-11

May 27, 2011, 02.39 am IST | TNN

PANAJI: The mining industry in Goa may have had a bad patch in the past year with agitations by locals and transporters and a ban on transportation of ore by Karnataka, but iron ore exports from Goa were the highest ever at over 54 million tonnes.

"In the financial year 2010-11, Goa's export of iron ore has been the highest so far," Goa mineral ore exporters' association (GMOEA) executive director S Sridhar told TOI.

The final figures are still being tabulated but exports are to the tune of more than 54 million tonnes, he said. The figure has proved wrong analysts who had said the ban by Karnataka on transportation of iron ore to Goa, would affect exports.

From Goa, iron ore is exported to various countries but the maximum goes to China. The other countries which import iron ore from Goa include Japan, Korea, and some European countries. Ore is exported in the form of lumps, fines and pellets.

Despite problems faced by the industry, exports increased. "The high demand for low grade ore from China helped our exports go high," Sridhar said.

On an average, low grade iron ore exported to China was of Fe 52% content though iron ore fines of Fe 48% were also exported. The ore is made marketable after undergoing a processing technology available in China. The state government earned a royalty of more than 900 crore, sources said.

The mining season saw uprisings by locals, closure of some mines, strike by ore transporters, rise in export duty imposed by the Central government and an attack on activist Nilesh Gaonkar at Verna earlier this month.

Condemning the assault on Gaonkar, GMOEA president Shivanand Salgaocar had urged the government to spare no efforts in identifying the culprits and to ensure they get the highest possible punishment.

He hoped no mining company operating in Cavrem is involved in the incident. "Differences in opinion exist in every society or group of people, but in a civilized society like ours, these disagreements have to be resolved through mutual discussions or through due judicial or administrative process," Salgaocar said. (sourced TimesofIndia)

New Mangalore Port sees iron ore exports rising

Fri, May27, 2011
By A.J.Vinayak

Iron ore has played a major role in the overall traffic scenario of New Mangalore Port over the years. From 2004-05 till 2008-09, iron ore fines contributed more than 16 per cent to the total traffic of the port. In 2008-09, the share of iron ore to the total traffic went up to more than 22 per cent. In 2009-10, the share came down to nearly 15 per cent of the total traffic. The port faced a major blow in 2010-11 when the Karnataka Government banned the mining and export of iron ore fines in the State. However, the Supreme Court recently revoked that ban, bringing a sigh of relief to ore exporters.

In an interview to Business Line, Mr P. Tamilvanan, Chairman, New Mangalore Port Trust, spoke on the iron traffic scenario. Excerpts:

How is the iron ore cargo movement, after the Supreme Court lifted ban on its export?

Following the court verdict, around 1.5 lakh tonnes of iron ore fines, which were lying at the port, were exported in March.

We allowed the State authorities, including the Forest Department and the Department of Mines and Geology, to come and check the stock whenever they needed. See, we are always for the best system.

How do you foresee the scenario?

As far as iron ore cargo is concerned, we are optimistic with all the facilities we have. We expect the cargo volume to go up.

What impact did the ban have on the port?

For the first time, the overall traffic volume at the port came down from 35 million tonnes to 31.5 million tonnes in 2010-11. The volume of iron ore fines came down from 5.4 million tonnes in 2009-10 to 0.9 million tonnes in 2010-11. This was a big blow to the port. The deployment of labour also came down considerably.

How was the situation prior to the ban?

In 2002-03, the port did not have iron ore fines handling by private players. Only KIOCL Ltd was handling iron ore pellets then at its captive berth. Suddenly, the port started receiving the iron ore fines cargo in a big way. In 2003-04, we handled 1.6 million tonnes of iron ore fines. Then iron ore started coming and started establishing. Without any facility the traffic of iron ore fines was going on in NMPT.

Did you feel the need for additional infrastructure then?

Earlier vessels of 35,000 tonnes parcel size were coming to the port. Then we thought we should have a bigger berth, and started construction of berth no. 14 with a length of 350 metres and draught of 14 metres. This enabled us to handle parcel size of more than 75,000 tonnes vessels.

We did not stop with that. We went on an open tender and deployed 104-tonne capacity mobile crane. Then gearless vessels started coming to the port.

All these factors helped us handle more cargo. At one point of time, in 2008-09, we handled 8.1 million tonnes of iron ore fines.

What role did KIOCL play?

KIOCL is one of the major users of the port. They (the company) have a captive berth and loading arm to handle iron ore pellets. In 1999-2000, the company handled 6.1 million tonnes of iron ore pellets.

But in 2006-07, it came down to 6 lakh tonnes as it had to close down mining operation at Kudremukh.

Following this, the port allotted 11 acres of land to KIOCL Ltd to put railway lines inside the marshalling yard. In 2010-11, the port handled 2.1 million tonnes of iron ore pellets cargo belonging to KIOCL Ltd. At one point of time, KIOCL had a problem. This had affected the handling of iron ore pellets. (sourced Hindu Business Line)

Keywords: New Mangalore Port, iron ore fines, exports, P. Tamilvanan, KIOCL

Vietnam to raise iron ore export duty in July government

Friday, 27 May 2011

Vietnam government said that it will raise the export duty on iron ore to 40% in early July from 30% now to ensure raw material for its domestic steel industry.

The government in a statement said that the new rate will come into effect on July 2 following a Finance Ministry circular. It added that "The export of iron ore in recent years has led many domestic steel manufacturing enterprises to face shortages of the raw material and forced them to import.”

The Vietnam Steel Association and several domestic steel producers had sought a government ban on the export of processed iron ore.

Much of Vietnam's exports of raw minerals such as iron ore go to China. Vietnam had to spend $6.16 billion last year to import steel and steel products, a rise of 15 percent from 2009, government statistics show.

Between January and May this year, the cost of importing the products rose an estimated 15.6% from a year earlier to USD 2.6 billion. (sourced from Reuters)

E auction of coal to continue in India - Mr Jaiswal

Friday, 27 May 2011

ET reported that union minister for coal Mr Sriprakash Jaiswal has ruled out scrapping e auction of coal, rejecting the demand of the power ministry.

The power ministry had said last week that e auctions should be stopped until enough coal is supplied to power plants. About 10% of the coal is sold through this electronic auction platform every year. E auction is a major revenue earner for CIL as coal is sold at 80% to 90% premium over base prices.

CIL intends to sell around 45 million tonnes coal this year through e auction of which around 5 million tonnes is likely to be through forward auction.

Mr Jaiswal said that "Any step to curb e auction will only increase pithead stock. E auction of coal was stopped due to litigations soon after it was started. It was resumed after the Supreme Court allowed it. There is already a huge stock of coal lying at pitheads which is creating problems. If e auction is stopped another 10% stock will accumulate."

CIL's pit head stocks at present is about 64 million tonnes, down a little from about 70 million tonnes during the beginning of the current financial. Large stocks of coal if accumulated at a single location catches fire, specially during summers, leading to destruction of stocks, hence CIL is always trying to reduce its pit head stocks.

On coal block auction, Mr Jaiswal said that "The competitive bidding round for coal blocks in the country will be held soon."

Though the exact number of coal blocks that will be put on auction is not known, it is believed that the government is ready with 50 to 75 blocks. The launch of the competitive bidding rounds were delayed due to the controversy over classification of certain coal blocks as 'Go' and 'No Go' areas by the Environment Ministry. The issue is likely to be resolved at the scheduled review meeting convened by Prime Minister Manmohan Singh on coal production on June 7th 2011. CIL can also participate in the coal block auction if it feels so. (sourced Economic Times)

Rio Tinto lifts force majeure at Australian coal mine

Friday, 27 May 2011

Rio Tinto PLC has now lifted force majeure on sales of coal from the last of its Australian coal mines after recovering from flooding early in the year.

A spokesman for the company said that the clause, which releases a company from supply obligations due to circumstances beyond its control, was lifted at the London based company's Hail Creek mine in central Queensland state on May 12.

The spokesman said that force majeure was declared at Rio Tinto's four Queensland coking coal mines in late December following monsoon rains and lifted at three mines in February and March.

Hail Creek mine, located 90 kilometers southwest of Mackay, supplies steel mills in Asia and Europe. Rio Tinto has previously said hard coking coal production fell to 1.63 million metric tonnes in the first three months of the year, down 29% on the previous quarter and 12% on the same period a year earlier. (sourced Dow Jones)

Vale to boost northeast Brazil port capacity

Friday, 27 May 2011

Brazilian miner Vale SA said it will invest USD 2.9 billion to expand capacity of its Ponta da Madeira iron ore port terminal in northeast Brazil, allowing the port to also become a major agricultural exporting hub.

Vale will install a fourth pier at Ponta da Madeira in Maranhao, carry out dredging work and improve railroad access to turn the port into Brazil's largest in terms of handling capacity and volume in 2012, Vale in a statement said that At that time the port's capacity will rise to 150 million metric tons a year.

In addition to handling more iron ore, Ponta da Madeira will export soybeans and corn produced in northeast, north and centerwest Brazil, using a new railroad route provided by the North-South Railroad, which is operated by Vale and interconnected with its Carajas Railroad, the company said. Rail access to the port, near the city of Sao Luis, will be enhanced by Vale laying a second track on a 115 kilometer stretch of the Carajas Railroad, which brings ore from its Carajas mines.

The expanded Ponta da Madeira port will be an alternative to three major grain and cargo ports in south and southeast Brazil: Rio Grande in Rio Grande do Sul state, Paranagua in Parana state and Santos in Sao Paulo state.

Vale said that the fourth pier being built at Ponta da Madeira will be able to receive and load two ships simultaneously, of between 150,000 and 400,000 tonnes capacity. The port is already one of the world's largest, and the only one that can fully load the 346,000 tonne bulk carrier Berge Stahl and the 400,000-ton Vale Brasil.

(Sourced from Dow Jones Newswires)

Chinese coal imports in April down by 17pct

Friday, 27 May 2011

According to statistics released by the China's General Administration of Customs, China's coal imports hit 11.1 million tonnes in April 2011, down 2.42 million tonnes or 17.9% from a year earlier, while rising 22.65% versus 9.05 million tonnes in March 2011.

The rising coal imports are attributed to the shrinking coal price spread at home and abroad. Previously, heavy flooding attacked Australia's Queensland which severely hampered coal production and exports of the region. Coal buyers in southern China tend to the domestic market, which pushed China domestic coal prices up. (sourced Steel Home)

Newcastle thermal coal price declines to AUD 116

Friday, 27 May 2011

Power-station coal prices at Australia’s Newcastle port, an Asian benchmark, declined 1.6% in the week ended May 20th 2011. Coal prices at the New South Wales port fell to AUD 116.80 a tonne from AUD 118.74 the previous week.

Xstrata Plc the world’s largest exporter of power station coal, BHP Billiton Ltd. and Rio Tinto Group are among mining companies that ship coal through Newcastle. (sourced Bloomberg)

South Africa mining wage negotiations begin

Friday, 27 May 2011

Chamber of Mines said that the 2011 wage negotiations in the gold and coal mining sectors have begun, with the National Union of Mineworkers demanding a 14% basic wage increase.

Chamber of Mines industrial relations adviser Elize Strydom in a statement said that "From our initial analysis, the demand for a new minimum monthly wage constitutes an increase of 25%.”

She added that "This, together with the demand for an increase of basic salaries of 14% as well as a demand for approximately 45 percent increase in the living out allowance (which for gold currently adds another ZAR 1400 to the remuneration package), reflect a disregard for Consumer Price Index which is currently just slightly above four percent.”

However, NUM national spokesman Lesiba Seshoka said the 25% increase mentioned by the chamber was a creation of their imagination... they are acting like mathematicians. He said the NUM's demand for a 14% increase was reasonable.

Headline inflation might be around four percent, but workers would suffer more than others from the increases in food and fuel inflation.

Strydom, who would lead the negotiations for the mining companies negotiating at the Chamber of Mines, said NUM's demands were concerning.

She said that "We are therefore concerned, particularly as the mining companies have gone to great lengths to share with all interested parties the severe cost pressures in the industry. The gold mining companies have been at pains to highlight the significant disjuncture between the gold price in dollars and the financial situation of the South African gold companies at the quarterly releases of their companies.”

The NUM represents the largest number of employees in the mining industry.

(sourced TimesLive)

Iron prices recede on dormant steel prices and burgeoning stockpile in China

Friday, 27 May 2011

The spot market was devoid of much activity a reflection of dormancy in the domestic steel market in China. The slow moving raw material has led to record pile up at ports touching 89 million tonnes.

The cumulative impact has been gravitational on the spot prices which have outstripped the futures with a yawning gap affecting the nearby contracts and forwards.

At the same time the steel production has remained bullish averaging above 1.9 million tonnes since January and 1.94 million tonnes in the first 10 days of May. The real impact of the power rationing will be felt only by the end of June. Hence the deluge of material will keep the chips down for the time barely leaving any scope for revival in ore prices immediately. More info..visit steelguru.

POSCO to lower stainless steel prices for June

Fri May 27, 2011 9:31am GMT

SEOUL May 27 (Reuters) - POSCO , the world's third-biggest steelmaker, will lower prices of its major stainless steel products by 300,000 won ($275.36) a tonne for June, a company spokesman said on Friday, reflecting a recent fall in nickel prices.

Its June prices of hot-rolled and cold-rolled stainless steel products would be cut to 3.6 million won and 3.87 million won per tonne, respectively. ($1 = 1089.500 Korean Won) (Reporting by Ju-min Park; Editing by Jacqueline Wong, Thomson Reuters)

Japan steel body: expects 11/12 crude output to drop slightly yr/yr

Fri May 27, 2011 8:42am GMT

TOKYO May 27 (Reuters) - Japan's steel industry body said on Friday that it expects crude steel output in the country to drop to just below 110 million tonnes in the 2011/12 financial year from 110.8 million tonnes in 2010/2011.

(Reporting by Yuko Inoue; Editing by Joseph Radford,Thomson Reuters)

Miners back Govt plan to freeze mining permits - The Jakarta Post

Wednesday, 25 May 11

Indonesian coal miners hailed the government’s decision to impose a moratorium on the issuance of new mining permits, saying the freeze would be needed to give authorities time to settle the growing conflicts resulting from overlapping permits, reports The Jakarta Post.

Speaking with Jakarta post reporter Rangga D. Fadillah,the Indonesian Coal Mining Association (APBI) said, association fully supported the government’s plan, since overlapping permit conflicts had been a problem for coal mining businesses operating in Indonesia.

“This is a very good move,” he added.

The number of mining permits issued has increased sharply since the passing of the new mining law in 2009, which empowers local administrations to issue mining permits in their areas.

Since the implementation of the law, the number of mining permits increased to 10,245 as of August, last year, up from 597 permits in 2000, according to government data.

One result of the significant increase in the number of new permits being issued was that many mining permits overlapped one another since they were issued without following a standard mapping system or the procedures that had been laid out by the central government, he said over the phone on Tuesday.

Supriatna said that regional governments also granted many mining concessions without following regulations such as obliging the permit holders to conduct environmental impact analyses (Amdal) and submit explorations.

“Many of those governments didn’t know what to do. They didn’t understand the procedures,” he added.

“Due to these problems, even permits for state-owned coal producer PT Bukit Asam were given to other companies. That’s why verification and permit audits are necessary.”

The newly appointed director general for mineral and coal, Thamrin Sihite, had previously reported that most of the permit overlaps were in Kalimantan.

He pledged that the government would take all necessary measures to solve the problem.

The paper further reported that, coordinating Minister for the Economy Hatta Rajasa said on Monday that the government had temporarily stopped issuing new mining permits and extending the existing ones to settle growing conflicts between mining companies over the overlapping mining territories in the country, Kontan reported on Tuesday.

Hatta added that the moratorium on new mining permits would be lifted only after the mine overlaps were settled.

During the moratorium, the government would audit and verify the thousands of mining permits issued by provincial and regental governments to ensure that there would not be any overlap, he said.

Hatta added that the central government would form a team to be led by the Energy and Mineral Resources Ministry and the Domestic Affairs Ministry to audit mining permits across the country.

Finance Minister Agus Martowardojo said that the verification process was needed not only to settle problems caused by overlapping mining areas but also to ensure that all permit holders followed regulations and did not destroy the environment.

The growing conflicts resulting from the overlapping mining areas have discouraged foreign investors, who are now crucial for boosting mining operations.

The Energy and Mineral Resources Ministry said it expected investment in the mineral and coal mining sector to reach US$3.2 billion this year, a slight increase from last year’s $3.18 billion.

Source: The Jakarta Post, coalspot

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Wednesday, 25 May 11

Coal producer PT Harum Energy Tbk claimed that out of this year's total production target of 10 million tons, 70% or 7 million tons had been sold, reports Bisnis Indonesia, an Indonesian news paper.

Managing Director of Harum Energy, Ray Antonio Gunara, said the company plans to gradually increase production capacity to 10 million tons this year from 7.4 million tons the previous year. As for next year, the target is to reach 14 million tons.

"Out of the total target of 10 million tons this year, 70% has already been contracted. The price cannot yet be determined because it is set per quarter and dependent on index," he said yesterday.

The company might revise its production target upwards if exploration results indicate higher reserve potential.

"For PT Tambang Batubara Harum (TBH), we expect it to enter production phase before the end of this year. We are still in the construction phase and there are administrative permits that need to be cleared. This year’s production is expected to reach 500,000 tons but it depends on the operation commencement," he explained.

Ray is hoping for a slightly higher sales volume than the production target this year. Last year sales reached 8.3 million tons. "We expect sales and bottom line improvement to equal the rate in the first quarter 2011."

This year, the budgeted capital expenditure is US$ 30 million, among others to be used for road hardening to improve transport quality, the construction of a new coal crusher unit, construction of port facilities at TBH, and increasing the number of tugs and barges fleet.

"The additional expenses will likely be funded from internal sources as the amount is not expected to be large," added Ray.

Up to 31 March 2011, the company recorded revenues of Rp 1,51 trillion or up by 69% from same period 2010 of Rp895 billion.

Net income allocated to entity holders is reported increase by 131% to Rp309 billion compared to same period last year Rp134 billion.

Growth in revenue and net income was primarily due to higher average coal selling price and increase of coal sales volume. Combined sales volume of coal from PT Mahakam Sumber Jaya and PT Santan Batubara reached 2.3 million tons in the first quarter of this year, up from 2.1 million tons in the same period of 2010.

The company’s average selling price of coal was US$88 per ton throughout the 1st Q of 2011 or an increase of 36% compared to same period in 2010 due to the rising trend in global coal prices.

"The average price is expected to increase compared to the achievement in the 1st Q of 2011. The average price of the 1st Q of 2011 was actually a carryover of 2010 contracts.

It is expected that the carryover in the 2nd Q of 2011 could be less, so that the average price could be better.

Source: Bisnis Indonesia, coalspot

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