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Friday, June 17, 2011

India's Tata Steel sells Riversdale stake to Rio Tinto

Thu Jun 16, 2011 1:58pm GMT

* To sell shares in ongoing open offer
* Tata will retain 35 pct stake in Mozambique coal assets
* May use funds for expansion, debt repayment
(Adds details, quote, background)

By Prashant Mehra

MUMBAI, June 16 (Reuters) - India's Tata Steel on Thursday agreed to sell its 26 percent stake in Australia's Riversdale to Rio Tinto for $1.1 billion, giving the Anglo-Australian giant full control of the coal miner.

Tata, the world's No 7 steelmaker, will sell shares in an open offer at A$16.5 each. Riversdale shares closed little changed at A$16.50 in Sydney on Thursday before Tata Steel's announcement.

Tata will keep its 35 percent stake in a Riversdale unit that owns coal assets in Mozambique and will discuss ways to enhance participation in the Benga joint venture, the company said in a statement.

Tata Steel said its Riversdale investment has generated a return of about 100 percent over four years.

"The company probably feels cash will be more valuable at this time than holding on to the stake," said a metals analyst at a Mumbai brokerage who declined to be named.

Tata had repeatedly said it would hold on to the Riversdale stake as coal supplies were crucial for its European steel making operations, which account for almost two-thirds of its 28 million tonnes global capacity.

Rio won majority control of Riversdale earlier this year with a $3.9 billion bid for the Africa-focused miner.

In April, Rio raised its holding to 73 percent after striking a deal with Brazilian steelmaker CSN for its 19.9 percent stake in Riversdale and said it planned to delist the company.

Tata Steel, which does not have long-term coal supplies locked-in to fuel its European steel plants, last month warned rising raw material costs could hurt margins for a couple of quarters.

The Indian company may use funds from the sale to repay some of its $13 billion debt, the analyst said. It is also expanding capacity by 3 million tonnes at its India plants.

In January, Tata Steel raised $770 million in a share sale to help fund its expansion plans.

Ahead of the news, Tata Steel shares fell 1.5 percent to 553.25 rupees in a weak Mumbai market
(US$1= 0.936 Australian dollars) (Editing by Tony Munroe, By Reuters)

Zamin Ferrous ships 1st iron ore cargo to China

Thu Jun 16, 2011 4:30pm GMT

* Zamin looks for partners
* Middle-Eastern, Chinese steelmakers interested

LONDON, June 16 (Reuters)- Swiss-based iron ore mining start-up Zamin Ferrous said it shipped its first cargo from its Zamapa mine in Brazil to China and was holding discussions with potential partners over projects in Brazil and Uruguay.

The company sold its first cargo of 31,000 tonnes of iron ore lump and fines to a broker, it said on Thursday.

Zamin Ferrous is now looking for a partnership that would help finance its two iron ore projects.

"Discussions are underway with steel and mining companies," said Martin Kannengieser, its head of business development.

"We had much interest from Chinese and Middle Eastern steelmakers and also from the Americas."

China, the world's largest iron ore consumer, imports about 60 percent of the iron ore it needs to make steel.

Zamin Ferrous expects to produce about 1 million tonnes of iron ore this year at its Brazilian mine and ramp up production to 6-8 million tonnes a year by late 2014. Its Valentines project in Uruguay is expected to start production of 68 percent iron content pellet feed at 18 million tonnes per tonne in 2014.

The company is considering a London flotation that would value the company at 2 -2.5 billion pounds.

A supply deficit has lifted spot iron ore prices in the past year. Iron ore hit a record high at $193 a tonne for 62 percent iron content material on cost-and-freight China basis in February, according to the Platts iron ore index < IODBZ00-PLT>. It was at $175.25 a tonne, on the same basis, on Thursday.

(Editing by Jane Baird)

Indonesia Bumi Q1 net profit up 16.5 pct on higher coal price

Fri Jun 17, 2011 8:32am GMT

JAKARTA, June 17 (Reuters) - Bumi Resources , Asia's biggest thermal coal exporter, said on Friday its first-quarter 2011 net profit rose 16.5 percent as higher coal prices made up for lower output.

Bumi, controlled by the politically-connected Bakrie family and part-owned by Nathaniel Rothschild's mining investment vehicle Vallar , said its first-quarter net profit rose to $113 million from $97 million a year ago, based on Indonesian accounting principles that were meant to end in 2010.

First-quarter revenue grew 21 percent to $1.23 billion, compared with revenue of $1.02 billion in the year-ago period, said Dileep Srivastava, a Bumi director, in an emailed statement.

Analysts forecast Bumi's 2011 net profit to reach $498 million, according to Thomson Reuters I/B/E/S.

Strong demand from Asian economies including India, Japan and China has lifted the price Bumi gets for its coal for power stations, but production fell in the first quarter due to heavy rainfall near its main mines in Kalimantan.

Bumi expects to produce 67 million tonnes of coal this year, up about 10 percent from 2010 .

Shares in Bumi gained more than 11 percent in the first quarter to outperform a Jakarta index up around 3.2 percent in the same period. (Reporting by Janeman Latul; Editing by Lincoln Feast and Neil Chatterjee, sourced Thomson Reuters)

Hundreds of jobs likely at new iron ore mine in SA

Friday, 17 Jun 2011

Perth company is set to construct South Australia largest iron mine on the Eyre Peninsula.

As per report, Iron Road pre feasibity found it would be economical to build the USD 2.5 billion mine near Wudinna with construction starting in 2015.

Mr Andrew Stocks Managing director says the mine will boost employment for locals. He said that "We are just looking at producing a high grade iron ore concentrate and exporting that out of the Peninsula."

He added that "Yes, it's looking like it's going to be a very large project and producing about 12.4 million tonnes per annum. He also said "I would expect that during construction we would probably have about 1000 people on site and once construction is over and we're at a steady stage, there would be about 600 people employed."

(Sourced from ABC)

Dry bulk cargo on US Great Lakes rises 16pct in May

Friday, 17 Jun 2011

The Lake Carriers Association reported that US flag Great Lakes freighters carried 9.5 million net tons of dry-bulk cargo is May up by 15.6% over April but down by 3.4% compared to May 2010.

Iron ore cargos were down 3.7% in May over May 2010 and coal for power generation and steel production remained virtually unchanged. For the first five months of 2011, US flag cargos stand at 23.6 million tons up by 5% over the same point in 2010. Iron ore and coal are up 6% and 10.3%YoY respectively and aggregate and flux stone for the construction and steel industries slipped by 8%.

Total iron ore shipments on the Great Lakes totalled 6.1 million tonnes May up by 6.5% over April but down 2.6%YoY. Shipments from US ports totalled 5,449,808 tonnes down by 2.9% over May 2010 and loadings at Canadian ports were little changed in May. Through May, the iron ore trade stands at 16.8 million tonnes an increase of 6.6%YoY.

(Sourced from SteelOrbis)

CIL assures efforts for extra coal supply to consumers

Friday, 17 Jun 2011

PTI reported that Coal India has assured the government that it will make efforts to increase coal availability to the users by 28 million tonnes in the current financial year to tide over the shortages.

Sources said Mr Sriprakash Jaiswal Coal Minister gave this assurance on behalf of the Maharatna PSU to the Group of Ministers which met last week to take stock of the problems affecting the coal production including those relating to clearances by the Environment Ministry.

An official said “Coal India will try to lift 28 million tonnes of coal from pithead.”

Company sources said besides the problem of environment clearances, the stock piled at the pitheads of the coal mines has reached 70 million tonnes. Coal India Ltd is facing difficulties in transporting the dry fuel from pithead to the consumers like power, steel and cements plants for want of railway rakes.

Mr Jaiswal assured the GoM that the CIL would make efforts to reduce the stockpile from 70 million tonnes to 42 million tonnes by March 2012.

CIL which accounts for over 80% of domestic production has been facing problems of coal evacuation due to the shortage of railway rakes.

(Sourced from PTI)

NWR still interested in buying Poland Bogdanka

Friday, 17 Jun 2011

Reuters citing Mr Marek Jelinek Chief Financial Officer was quoted as saying that Czech miner New World Resources NWR NWRRS.L is interested in making acquisitions in Poland and does not rule out a second go at buying Polish rival Bogdanka.

NWR had in the past offered to buy the Polish coal group but the hostile bid failed. Bogdanka management saw the EUR 3.43 billion price tag as too low.

Daily Hospodarske Noviny quoted Mr Jelinek as saying that "We are interested in Poland of course, (because) there is the future of deep coal mining in the region."

He said that "There is only one company in Poland which is not owned by the state and it is Bogdanka. We tried to take it over but have not been successful so far."

He added that "We may try it again in the future but for now it is not on the agenda. He also said the miner is aiming to shift the ratio of coking and thermal coal which it produces towards the higher margin coking coal.”

He also said there is certain likelihood that there will be a moderate drop in the coking coal prices but in the long term demand for coking coal will be high.(sourced from Reuters)

Shenhua Energy coal sales up by 45pct YoY

Friday, 17 Jun 2011

China Shenhua Energy coal output and sales grew 29.8%YoY and 44.9%YoY to 23.5 million tons and 32.9 million tons in May.

Its coal exports decreased 66%YoY to 200,000 tons in May. Power generation and distribution grew 27.3%YoY and 27.5%YoY to 15.25 terawatt hours and 14.2 tWh in May.

The company acquired 10 companies from its parent group and other subsidiaries of the parent in February. The 10 companies were all consolidated into Shenhua Energy in May.

(sourced from China Securities journal

European coal drops 1pct falls from highest close in six weeks

Friday, 17 Jun 2011

Bloomberg reported that coal for delivery to Amsterdam, Rotterdam or Antwerp with settlement next year fells USD 1.40 or 1.1% to USD 130.50 by 2:26 PM in London. It closed yesterday at its highest level since May 4. Prices have gained 19% in the past year.

Bloomberg data showed Profit from running coal fired power plants for the next month the so-called clean-dark spread is about EUR 6.03 a megawatt-hour compared with EUR 7.11 from burning natural gas. The calculation uses electricity prices in Germany, Europe biggest energy consumer and takes emission costs into account.

December carbon dioxide permits under the European Union cap and trade system were 1.5% lower at EUR 16.26 a ton. Gas for delivery in the six months through September 2012 to the UK, Europe biggest consumer of the fuel declined 0.9% to 67.20 pence a them in London.
(sourced from Bloomberg)

Xanadu Mines acquires Mongolian coking coal assets as part of Noble JV

Friday, 17 Jun 2011

Xanadu Mines has finalized a farm in agreement on the Nuurstei coking coal project in Northern Mongolia as part of its strategic alliance with Noble Group, Asia's largest diversified commodities trading company.

The deal represents the first major coking coal acquisition for the newly formed Xanadu Noble alliance which was created in March 2011. The earn in agreement will be undertaken via Ekhgoviin Chuluu LLC a vehicle established to seek out and develop new coking coal opportunities as part of the strategic alliance.

EC can earn up to 80% of the Nuurstei coking coal licenses by meeting various spending commitments over 4 years, under the terms of the agreement. These include up to USD 1.5 million on drilling to earn the first 60% followed by a commitment to complete a JORC resource to earn a further 20% taking EC interest to 80% of the Project.

Mr Brian Thornton Xanadu chairman said “Nuurstei demonstrates the determination by the alliance to become the principal mid-tier coking coal group operating in Mongolia, now commonly referred to as an emerging energy and metals powerhouse.”

A reconnaissance drill program has already commenced at Nuurstei with one multipurpose drill rig operating on a double shift basis. The company expects the first phase will include 3,500 metres of diamond and mud rotary drilling and will take at least two months to complete. Preliminary coal quality results will be available in early July 2011.

The Nuurstei joint venture underpins the core strategy of EC which aims to identify and develop significant coking coal opportunities, close to existing infrastructure that will meet anticipated current and future demands from China and North Asian markets.

Xanadu recently completed a detailed 74 hole diamond drilling program at its 100% owned Galshar thermal coal project as part of its strategy to convert the resource to JORC code classification.

The company expects this work to be completed in August 2011 by Xanadu technical consultants McElroy Bryan Geological Services. The company other main asset in Mongolia is the Khar Tarvaga coal project which contains a large JORC compliant coal resource of 327 million tonnes.

Itochu to take 20pct stake in Drummond coal operations in Colombia

Friday, 17 Jun 2011

Reuters reported that Japan Itochu Corp would take 20% of Drummond Co Colombia coal operations for USD 1.5 billion seeking to meets growing demand for high quality thermal coal in Asia.

The nation fourth biggest trading house will gain the exclusive right to export the coal used to burn electricity generation, demand for which is expected to rise in Japan after the Fukushima nuclear power disaster in March. It plans to start shipments this year.

Privately held Drummond, the second largest coal exporter in Colombia had run an auction process on the assets at least twice involving Brazilian mining giant Vale SA, Glencore and Xstrata.

Mr Yoichi Kobayashi Itochu director said but Itochu sealed the deal as Drummond wanted a minority partner and to strengthen shipments to Asia.

The companies aim to increase production by 10 million tonnes to 35 million tonnes by 2014 and ship 70% of that 10 million to Asia, especially to China, India and Japan. The rest will be shipped to Europe, Latin America and other places.(sourced from Reuters)

GVK Power finalizing deal with Hancock - Report

Friday, 17 Jun 2011

PTI reported that GVK Power expects to complete a USD 2.4 billion deal to pick up an interest in Queensland coal projects owned by iron ore mining magnate Ms Gina Rinehart before the end of August.

As per reports, the framework of the deal has been reached but details of the deal and the question of GVK securing finance are still to be completed.

Last month, Ms Rinehart confirmed a possible sale of equity by her Hancock Prospecting in the Alpha and Kevin's Corner coal projects in the Galilee Basin in Queensland. But she ruled out selling the lot as has been suggested in Indian reports.

Hancock Prospecting has been doing trial mining in the Galilee Basin.(sourced from PTI)

MacArthur Coal cuts PCI coal prices on weak Japan demand

Friday, 17 Jun 2011

Reuters reported that Australia MacArthur Coal has accepted a big price cut on its pulverized coal injection which values its chief product at a deep discount compared to hard coking coal due to weak Japanese demand.

Macarthur third quarter PCI coal prices were settled at USD 230 a tonne down from USD 275 a tonne while hard coking coal prices, supported by Chinese demand were reduced to USD315 a tonne from USD 330 a tonne

Metallurgical coal prices surged earlier this year after extensive floods in eastern Australia shut mines and reduced production but prices have inched down as mines come back to full production and the Japanese earthquake reduced demand.

Australia is by far the world biggest coking coal producer accounting for nearly two thirds of the global trade. PCI coal is crushed into a fine powder and injected into blast furnaces as a replacement for coke in the production of pig iron.

Last month Macarthur, the world biggest supplier of PCI coal for the sea borne market said it was closely monitoring market conditions in Japan which has been hurt by the tsunami and earthquake in March.

Macarthur officials could not be reached immediately for comment by Reuters.
(sourced from Reuters)

BPSL to make open offer for Nova Iron

Friday, 17 Jun 2011

Bhushan Power & Steel has announced that it plans to acquire 20% stake in Nova Iron & Steel through an open offer at cost of up to INR 421.6 million.

The offer opens on August 13 and closes August 29.

Bhushan Power, which is backed by private equity investment firm Baring Equity Asia, wants to acquire 30 million shares of Nova Iron at a price of 14 rupees.

BPSL holds 61.94% stake in NISL. Of this, the company had acquired about 14.77% stake through open market transaction early this month and on 10 June, it entered into a share purchase agreement with NISL’s promoters to acquire additional 11.33% stake.

Master Capital Service is managing the offer on behalf of BPSL.

Nova Iron and Steel has a 150,000 tonne sponge iron unit in Bilaspur district, Chhattisgarh. It also provides product separation, screening, and storage facilities. However, it does not have any iron ore mine and buys the raw material from the market, mainly from Orissa. (sourced PTI)

TATA Steel divests its holding in Riversdale Mining

Friday, 17 Jun 2011

As a part of the ongoing review of the strategic investments of the company TATA Steel Limited Board have considered the recent announcement of Rio Tinto Jersey Holdings 2010 Limited to de list Riversdale Mining Limited following its increased shareholding to 73.20% in Riversdale Mining Limited

TATA Steel has decided that it would not want to hold its equity investment in Riversdale Mining Limited which is proposed to be delisted, without any joint venture agreement with the majority shareholder in unlisted Riversdale Mining Limited.

In view of the above, the Board of TATA Steel Limited has decided to divest its entire 26.27% stake in Riversdale Mining Limited to Rio Tinto in its current takeover offer for Riverdale Mining Limited, following which the company has initiated steps to undertake the transaction. The sale consideration of approximately AUD 1,060 Million represents around 100% appreciation of value in less than four years since the first investment.

The investment is currently held by TATA Steel Global Minerals Holding Pte Limited an indirect wholly owned subsidiary of TATA Steel Limited.

TATA Steel has always welcomed Rio Tinto as the controlling shareholder of Riversdale Mining Limited and continues to focus on its current holding of 35% in Riversdale Energy (Mauritius) Limited, a subsidiary of Riversdale Mining Limited, which owns coal assets in Mozambique. TATA Steel will continue in the Joint Venture with Riversdale Mining Limited in Mozambique. TATA Steel would look forward to work with Rio Tinto and discuss in good faith ways to enhance its participation in the Benga Joint Venture based on the framework captured in the Joint Venture Agreement between TATA Steel and Riversdale Mining Limited.

Thursday, June 16, 2011

20 million mt coal reserve storage facility to be built in Chongqing

Thursday, 16 June 2011

20 million mt capacity coal reserve storage facilities are to be built at Lidu port, in Poulin, Chongqing, China, according to the local newspaper Chongqing Daily.

Local power supply company Chongqing Jiulong Electric Power Co., Ltd. has an installed power generation capacity of 2,143,500 kilowatts, including thermal power generation of 1.67 million kilowatts. In the January-May period of the current year, the company purchased 2.74 million mt of coal. It is predicted the coal stocks of the company will total 720,000 mt by the end of June, accounting for over four percent of coal inventory in Chongqing. (By steelorbis)

Tags: coking coal , China , raw mat , Far East , East Asia and Pacific , mining , investments

China’s coal deliveries by railway total 186 million mt in May

Thursday, 16 June 2011

On June 15, China's National Development and Reform Commission (NDRC) announced that coal deliveries by railway in China in May this year amounted to 186.13 million mt, up 18.47 million mt or 11 percent year on year, including 129.22 million mt of coal for power generation, up 14.22 million mt or 12.4 percent year on year.

Meanwhile, in January-May this year, coal deliveries by railway in China totaled 922.63 million mt, up 109.19 million mt or 13.4 percent year on year. Of this volume, coal for power generation totaled 656.04 million mt, up 94.13 million mt or 16.8 percent year on year.

Tags: coking coal , China , raw mat , Far East , East Asia and Pacific , Southeast Asia , trading
(By steelorbis)

South African coal miner Lontoh Coal seeks Chinese partners

Thursday, 16 June 2011

At a press conference in Beijing, South African coal miner Lontoh Coal has announced that it expects to form partnerships with Chinese companies, adding that it aims to provide China with significant coal supplies.

According to the South African Mineral Resources Commission, Lontoh Coal's total resources of anthracite coal, coking coal and steam coal exceed seven billion mt.

Lontoh Coal's current investments include its Hlbobane, Lephalale, Kwasa and Lubimbi projects.

Tags: S. Africa , raw mat , Africa , South Africa , mining , M&A (sourced steelorbis)

Cheaper gas forcing US coal retirements

Thursday, 16 Jun 2011

Reuters citing Mr John Rowe Exelon Corp Chairman as saying that low natural gas prices from plentiful new sources will allow utilities in the United States to solve several thorny problems while keeping electricity affordable.

Mr Rowe said Ample gas from shale formations will allow utilities to quickly build more gas-fired plants to replace polluting coal plants, making it possible to have a much cleaner supply while still being economical.

He said that "For the next decade, natural gas will dominate the new supply of electricity."

Utilities are weighing the costs of pending federal regulations to reduce air pollution from coal-fired power plants, but Mr Rowe said cheaper gas, not stricter regulation, is prompting companies to shut older, smaller coal units.

Mr Rowe said warnings that the tougher regulations could result in huge price increases or threaten grid reliability are a bit of a red herring.

He said that "Building new natural gas plants and using more gas at existing plants is half the price of new nuclear, much cheaper than wind, much cheaper than solar, much cheaper than experimental forms of coal and cheap enough to be a primary driver of the announcements that companies are shutting down coal units."

Earlier this week, American Electric Power Co said unrealistic timelines to comply with US Environmental Protection Agency rules would force it to shut nearly one quarter of its coal fleet and to spend about USD 8 billion. (sourced from Reuters)

Asciano bags BHP haulage contract in Queensland

Thursday, 16 Jun 2011

It is reported that Asciano Ltd has secured a long term contract with BHP Mitsui Coal Pty Ltd to haul 4.2 million tonnes of coal per year in Queensland.

Asciano says it will haul the coal from next January via the northern missing link which will connect the Newlands and Goonyella coal systems when the project is completed in early 2012.

Mr John Mullen Chief executive said the contract win supported Asciano plans for growth into the expansion of the Port of Abbot Point, near Bowen in north Queensland.

He said that "A key objective was to maximize the opportunity for tonnage through the newly expanded port of Abbot Point. He added that the result is an innovative operational solution and contract that drives the efficient behavior of both rail and coal operator."

(sourced from SMH)

Monsoon arrival ends iron ore mining season in Goa

Thursday, 16 Jun 2011

With the onset of monsoons in Goa, the nine month long mining season in the state came to a closure with trucks seen transporting the last extracted iron ore consignments during the week end.

Goa, which is the highest exporter of iron ore, will now see only lumpy ore being sent abroad through its port located in Vasco town. The monsoons arrived in Goa signaling the winding up of the mining season, which was marked with several protests and environmental issues this time.

The Goa Mineral Ore Exporters’ Association a body representing ore exporters, have said that the exports would be down by almost 80 to 90% during monsoon as the ore in the form of fines cannot be transported in wet weather.

The association secretary, Mr Glenn Kalavampara said that only lumpy ore would be exported during monsoon with few exceptions. He said that “There are few mines which export fines by taking abundant precautions like extra covering on the trucks.”

Mr Kalavampara said few mines, which have lumpy ore, will continue their operations during monsoon. He said that “There are several smaller mines which also have lumpy ore, but they cannot export it because the quantity is minimal.”

The mining business has to be shut down largely because port operations at Panaji minor port and also major operations at Mormugao Port Trust comes to an end during monsoon. He said that “The transhipper can only be loaded at mooring dolphins, a facility at the breakwater offered by MPT.”

Goa has around 100 active mining leases which extracts and exports around 40 million tonnes of ore annually. Against the general turnover of six million tonnes of iron ore exported every month, only one million tonnes of iron ore can be exported during rainy days.

(Sourced from PTI)

Lanco Infratech drops bid plan for Premier Coal

Thursday, 16 Jun 2011

ET cited Mr L Madhusudhan Rao Executive Chairman as saying that construction and energy conglomerate Lanco Infratech Ltd has dropped plans to bid for assets of Australia's Premier Coal.

The company had earlier said it was considering a bid for the Australian firm, owned by Wesfarmers

Mr Madhusudhan said however, Lanco is looking at foraying into power plant equipment manufacturing.

(Sourced from Economic Times)

Russian firms eying coal projects with China Shenhua

Thursday, 16 Jun 2011

Interfax quoted a Russian Energy Ministry official said Russia Inter RAO UES and China Shenhua could jointly develop the Mencherepskoye coal field in the Kuznetsk basins.

Mr Konstantin Alexeyev head of the ministry's coal department said "There are plans to create energy and technology complexes, to enable the comprehensive development of coal fields. They include setting up clusters at the Karakanskoye and Mencherepskoye fields."

Mr Alexeyev said Russian Fuel Company planned to sign a deal with Shenhua during the economic forum in St Petersburg June 16 to 18 to create a joint venture to develop a coal field in the Amur region.

He said that "The papers are ready and we expect these sort of documents will be signed during Chinese leader Hu Jintao's visit to the St Petersburg forum."

According to a protocol which was signed at an August 30 2010 meeting of the Russian-Chinese energy cooperation sub-commission in Amur's administrative centre, Blagoveschensk China could provide USD 6 billion in loans to aid the development of coal production and export infrastructure in Russia.

China hopes to boost its annual imports of Russian coal to 15 million tonnes in the next five years and to at least 20 million tonnes thereafter. Russia energy minister and chairman of the meeting, Mr Sergei Shmatko, noted that this would make China one of the most attractive and strategic markets for the Russian coal industry.

The protocol also stated that Shenhua Group, one of China's major coal producers intends to form a joint venture in order to develop the Amur region Ogodzhinskoye coal deposit.

(sourced from Interfax)

Penn Virginia Resource buys coal reserves for USD 13 million

Thursday, 16 Jun 2011

Reuters reported that Penn Virginia Resource Partners LP bought 26.8 million tons of coal reserves in the Illinois basin from Indianapolis Power and Light Co for USD 13.5 million.

As per report, Penn Virginia Resource manages coal and natural resource properties as well as natural gas gathering and processing businesses.

The company said in a statement that the acquired Oatsville Reserve properties are located on about 5,875 acres in Gibson and Pike counties in Indiana and are in close proximity to 16 coal-fired power plants.

Radnor, Pennsylvania-based Penn Virginia said it was in discussions with operators to lease the reserves.

(Sourced from Reuters)

India buys above 1 million tonne of South African coal in May

Thursday, 16 Jun 2011

Exporter sources said that India took 1.3 million tonnes or 36% of South Africa's thermal coal exports in May, little changed from 1.2 million imported in April.

India's percentage share of South Africa's exports rose from 25% the previous month but this reflected the fall in total exports rather than any significant rise in South Africa shipped 3.6 million tonnes from Richards Bay Coal Terminal in May, a sharp fall from 4.8 million the previous month a drop which raises doubts about the country's ability to increase exports.

China took 330,000 tonnes from South Africa in May, down from 500,000 tonnes in April. China has mopped up a string of Indonesian low energy content, low-priced, sub-bituminous coal and discounted Australian cargoes as the country struggles to cope with acute power shortages.

But as yet, it is still unclear what measures the Chinese government will take to ease the power crunch or whether these will involve making coal imports more feasible. Currently, South African and Colombian coal are at the bottom of Chinese buyers' shopping lists for imports because the delivered costs are significantly higher than for Pacific region coal.

China may start buying South African coal again if imports of higher-grade material for blending rise so much that Australia cannot meet the need but this may not happen for months, if at all.

Indian buyers have largely halted spot purchases of South African coal, also preferring instead to take cheaper Indonesian and low-grade Australian cargoes.

(Sourced from Reuters)

Indika aims to produce 31 million tonnes of coal in 2011

Thursday, 16 Jun 2011

The Jakarta Post reported that PT Indika Energy Tbk, an integrated energy company, is targeting to increase its coal production up to 31 million tons this year from 29.1 million tonnes in 2010.

Mr Arsjad Rasjid Indika president director said by looking at the first quarter production of 7.6 million tonnes worth USD 62.5 per tonne, he was upbeat that the company could reach the target by year end.

Mr Arsjad said “In the first quarter we can reach around 24.6% of this year’s target, so we are very optimistic we can achieve the target. He said that 80% of the 31 million tonnes was already ordered under contracts while the remaining 20% would be sold on the spot.”

Mr Arsjad added that 70% of the total production would be exported to various countries such as India, China and Korea, while the remaining 30% would be sold in the domestic market.

The Indonesian Coal Mining Association said Indonesian coal miners expected to produce 340 million tons this year an increase of 23% from 275 million tons in 2009. 20% of that amount around 70 million tons will be allocated to fulfill domestic demand while the remaining 80% will be exported.

Mr Azis Armand Indika Energy director said the company had 651 million tonnes of proven coal reserves and 1.4 billion tonnes of potential coal reserves.

Mr Arsjad said “The proven reserves have been recognized in four or five areas and we will acquire more areas to increase the proven reserves, adding Indika planned to increase its production capacity up to 50 million tonnes in 2012.”

Indika Energy puts its strategic investments in the areas of energy resources, energy services, energy infrastructure, contract mining, coal transport and logistics and power generation.

(sourced from The Jakarta Post)

Mechel halts Sibirginskaya Mine at Southern Kuzbass Coal Company

Thursday, 16 Jun 2011

Mechel OAO one of the leading Russian mining and metals companies reports the temporary halt of the Sibirginskaya mine owned by Southern Kuzbass Coal Company OAO which is part of Mechel Mining OAO.

At the Sibirginskaya mine, a heightened level of fire gases was detected in the mined out area of the long wall 3-1-9, which indicates self heating of coal. Due to that, mining works at the site were halted and all miners returned to the surface.

No carbon monoxide was detected in the long wall 3-1-9’s active mine-working.

Southern Kuzbass Coal Company experts mapped out measures to prevent this incident’s possible negative consequences, which included temporarily isolating the long wall 3-1-9. Experts use remote probing to monitor the content of gases in the long wall’s mined-out area.

Mining at the Sibirginskaya mine is currently halted, with the mine experts working on the way to liquidate the source of self-heating. The mine’s entire production infrastructure, including transport, ventilation, pumps, power facilities, tunneling faces and active mine-working areas are operational and safe.

The date when mining is resumed will be determined once the project of liquidating the source of self-heating is complete.

The mine’s storages hold enough coal for the company to meet all its contractual obligations.

Halting the mine work will not impact the construction project for Sibirginskaya second line, which, when completed is due to increase the enterprise’s production capacity to 2.4 million tonnes a year.(By steelguru)

Iron ore junior FerrAus warms to HK takeover offer

Thursday, 16 Jun 2011

It is reported that West Australian iron ore junior FerrAus is set to accept Hong Kong limousine and investment company Wah Nam USD 170 million scrip takeover offer.

Wah Nam recently gained a controlling stake in Brockman Resources, a move the FerrAus board said last month made it inclined to reverse its rejection of Wah Nam separate bid for FerrAus because of the logic of developing the pair's neighboring deposits together.

Mr Christopher Hunt FerrAus company secretary said that Wah Nam controlling stake in Brockman had boosted the underlying value and quality of the predator's scrip significantly beyond where it was in November when Wah Nam made separate offers for the two Perth juniors.

He said that "FerrAus directors consider that an improved offer, together with a deeper understanding of a combined strategy, may warrant a change of recommendation."

It is believed FerrAus directors consider the offer has already improved and are looking at recommending the deal at its current price. (sourced from TheAustralian)

Japanese iron ore demand to rebound in Q4 - Vale

Thursday, 16 Jun 2011

According to executive at Brazilian miner Vale Iron ore demand in Japan is expected to reach 90% of pre-financial crisis levels in the fourth quarter and all markets are recovering well.

Mr Pedro Gutemberg global marketing director said demand in Europe is back at around 85% of pre crisis levels.

He said that “Japan iron ore demand was at almost 90% of pre crisis levels before the earthquake and potentially after it recovers from the earthquake it will go back to that in the fourth quarter. All the markets are recovering well from the crisis. We see China very strong.”

He said “Vale is not worried about the impact of monetary tightening in China on iron ore demand.”

He added that “It is a natural accommodation. They have been running at an almost 700 million tonnes rate per year of steel production. We were expecting at the beginning of the year 670 million tonnes to 680 million tonnes for this year.”

China imports about 60% of the iron ore it needs to make steel. (sourced from Reuters)

Rio Tinto accelerates Pilbara iron ore expansion

Thursday, 16 Jun 2011

Rio Tinto is accelerating its iron ore expansion program in the Pilbara region of Western Australia with USD 676 million of funding for early works and procurement. As a result, capacity expansion to 333 million tonnes a year will now be reached in the first half of 2015, six months earlier than planned1. This is part of a five-year program started in 2010 to increase capacity in the Pilbara by 50%.

The USD 676 million will be used to bring forward engineering work for the longest lead-time components of port and rail infrastructure, without increasing the overall cost of the expansion program.

Mr Sam Walsh Rio Tinto chief executive, Iron Ore and Australia said "Thanks to this faster pace of expansion we will be bringing extra tonnes to market earlier. The demand outlook continues to be strong with supply lagging elsewhere in the industry and we are seeing new supplies proving slower to materialize than predicted. We are taking the opportunity to bring forward the next phase of our major capacity expansion to reap the benefits early and at no additional cost."

The early port works principally comprise the assembly of additional construction accommodation, the continuation of dredging, marine works and stockyard earth works contractors and the procurement of key equipment. The rail-related funding will enable early engineering and accelerated procurement of long-lead items such as rail plant.

Studies will continue through this year to determine the best mine development path to meet this schedule, as will studies for supporting infrastructure such as utilities, fuel and accommodation.

Rio Tinto's integrated operations expansion to 333 million tonne per annum is being achieved through this sequence
1. 225 million tonne t per annum by end of Q1 2011 Dampier port systems efficiencies
2. 230 million tonne per annum by end of Q1 2012 - Dampier port incremental
3. 283 million tonne per annum by end of H2 2013 - Cape Lambert B 1st 53 million tonne per annum increment
4. 333 million tonne per annum in H1 2015 - Cape Lambert B 2nd 50 million tonne per annum increment (By steelguru)

PM assures support to Rajasthan in setting up refinery at Barmer Oilfields

Thursday, 16 Jun 2011

Prime Minister Manmohan Singh assured support to the Rajasthan government in setting up a refinery at Cairn-operated Barmer oilfields raising speculation that the cabinet may include it as an additional condition for approving the USD 9.6 billion Cairn-Vedanta deal.

Rajasthan chief minister Mr Ashok Gehlot who met the Prime Minister confirmed that that Singh had assured his support to the refinery project. He said that "I have told him that the state has agreed to give all fiscal concessions besides making a 26% equity contribution.”

A cabinet minister said that "If Vedanta agrees for an equity participation in the proposed refinery it would certainly make the deal more acceptable, especially to the people of Rajasthan.” He, however, said that technically, approval to the Cairn-Vedanta deal and construction of refinery in Rajasthan were two different things but it could be discussed at the Cabinet Committee in Economic Affairs meeting.

Oil minister Jaipal Reddy had told reporters that the CCEA was soon expected to take a final view on Cairn-Vedanta deal based on a group of ministers' recommendations.

The ministerial panel chaired by finance minister Pranab Mukherjee has suggested CCEA to approve the multi-billion dollar deal only if Vedanta and Cairn agree certain conditions such as sharing $4 billion royalty burden in the Rajasthan block with partner ONGC as per a disputed contract. London-based Cairn Energy is awaiting the government's approval to sell a controlling stake in its Indian arm to Anil Agarwal promoted Vedanta Resources since August last year.

The Rajasthan government is in talks with the central government and ONGC for the refinery project. State chief minister said that staterun Engineers India Ltd had also pledged to pick up a 5% equity stake in the proposed Greenfield refinery.

The CM wanted the Prime Minister to persuade state-run ONGC to join the project as lead promoter with 69% equity stake. Mr Gehlot said that "Every major state has a refinery but Rajasthan has none despite producing crude oil in huge quantity. The western Rajasthan is extremely backward in terms of economic development so the (local) people must get the benefit of natural resources.”

An oil ministry official said that "ONGC's stand on the proposed refinery is consistent that economic viability of the project will depend on fiscal and other incentives by governments at the centre and state."

The official said that "Certainly, equity participation by Vedanta or Cairn would minimize risks (for ONGC).”

Spokesmen of Cairn and Vedanta declined comments on the refinery project. Gehlot said that the state government had accepted to grant all fiscal incentives to promoters of the proposed refinery as per the SC Tripathi committee recommendations. He said that "We are willing for further concessions after discussions with the promoters.” (sourced from ET)

Indian iron ore mining mess - Gowda family involved in iron ore exports - BJP

Thursday, 16 Jun 2011

Bharatiya Janata Party government asserted that former prime minister and Janata Dal Secular leader Mr HD Deve Gowda's family exported over 150,000 tonnes of iron ore soon after his son became chief minister of Karnataka in 2006.

Mr BJ Puttaswamy political secretary to chief minister Mr BS Yeddyurappa told reporters that “Companies owned by Gowda's family members had exported over 150,000 tonnes of iron ore to China and Singapore within a few months of Gowda's son Mr HD Kumaraswamy becoming chief minister in 2006.”

He said that 'The companies had shown business transaction of Rs.167 crore in six months from March 1, 2006 releasing documents to disprove Kumaraswamy's claim that none from Gowda's family was involved in iron ore mining or exports.”

Mr Kumaraswamy took over as chief minister of the JD-S-BJP coalition government on Feb 4, 2006. The coalition collapsed in November 2007.

Mr Puttaswamy said the companies were owned by Mr Kumaraswamy's brother and sister in law. They do not own mines, but exported such a huge quantity of iron ore soon after Mr Kumaraswamy became chief minister. Mr Kumaraswamy should explain to the people from whom they secured the ore for export. If he does not, I will make public the documents in two or three days.”

On Monday, Yeddyurappa said in north Karnataka town of Hubli that 'we have got documents to prove that Gowda's family was involved in illegal iron ore exports and will make it public.'

Mr Puttaswamy said he would submit the documents to state Lokayukta (ombudsman) Mr N Santosh Hegde and seek a probe into involvement of Gowda's family in the iron export business.
(sourced from IANS)

Indian steel maker to pay more for coking coal imports

Thursday, 16 Jun 2011

BL reported that the Indian steel makers may have to pay more for the imported coking coal in the next quarter beginning July 1.

Steel industry insiders told Business Line that the forthcoming quarterly contracts, which would be finalized by the third week of this month, could see upward price revision. The last revision saw 47% jump.

Indian steel companies largely source coking coal from Australia, where the strikes by the BHP Billiton coal miners from Tuesday provided a fresh trigger for a potential coking coal supply disruption and hardening of prices.

Industry sources said about 3,500 mine workers were participating in a rolling six hour work stoppage on Tuesday and Thursday as also on June 18 at different sites of BHP Billiton Misubishi Alliance in Bowen Basin of Queensland, known for its prime hard coking coal.

The current quarterly contracts price of USD 330 a tonne has been overtaken by the spot price around USD 334 a tonne. Some Indian importers will have to fall back upon the spot market for want of supplies of contracted deliveries.

BHP, Rio Tinto and Xstrata have already told their customers, including those in India, that they might miss deliveries because of disruption in operations owing to the floods. (sourced from BL)

Mundra Port boosts coal imports

Mundra Port boosts coal imports
Thursday, 16 Jun 2011

The country's largest private port Mundra Port expects to import 40% more coal this year and open a liquefied natural gas terminal by 2015 to meet the growing power demands of India.

A Mundra port executive that Mundra will handle more than 20 million tonne of coal imports, up from 14 million tonne last year, to supply new power plants operated by its sister company Adani Power and utility firm TATA Power.

Mr Unmesh Abhyankar COO of Mundra told reporters on the sidelines of an industry conference that "Over 9,000 megawatts of power will be coming onstream over the next two years in Mundra and the only way to get coal to them is through our port.”

The company, a unit of Adani Enterprises, expects to handle more than 70 million tonne of cargo this year, up from 52 million in FY12.

Mundra imports mainly containers, coal and crude, with each constituting about 25% of all cargo at the port.

(sourced from BS)

GLOBAL MARKETS-Euro drops on Greece contagion fears, stocks fall

Thu Jun 16, 2011 6:10am GMT

* Euro drops below 100-day moving average to around $1.4090
* ECB official: Europe aid fund may have to be doubled-paper
* Asia ex-Japan stocks fall 2 pct on Greece, US recovery worries
* Samsonite tumbles 11 pct on debut day in Hong Kong (Recasts, adds byline and bullets, updates prices)

By Kevin Plumberg

SINGAPORE, June 16 (Reuters) - The euro fell sharply on Thursday after a European central banker said the bail-out fund for the region's debt crisis should be doubled to 1.5 trillion euros, accelerating a pullback from riskier assets that knocked Asian stocks to near three-month lows.

Nout Wellink, governing council director of the European Central Bank, told Dutch newspaper Het Financieele Dagblad that a new Greek aid package would carry so many uncertainties and risks that a doubling in the bail-out fund would be necessary to take into account the contagion risk for both Ireland and Portugal.

The comments knocked the euro below $1.4100 and cut to the heart of fears that problems Greece faces with its black hole of debt could spread to other countries at a time when the U.S. economy may be slowing, the Federal Reserve's $600 billion bond purchase programme is ending and some investors are second guessing emerging market assets in countries such as China.

The euro was down 0.5 percent to $1.4094 by early afternoon in Asia, having fallen almost 3 cents so far this week.

The U.S. dollar index , which tracks its performance against six other major currencies, rose 0.5 percent to the highest since May 26.

Oil prices staged a weak rebound after dropping sharply overnight, though volatile markets suggested crude could resume a decline before long.

Investors have been re-positioning their portfolios with an eye on the litany of risks ahead of U.S. data later in the day that included May housing starts, weekly jobless claims and the Federal Reserve Bank of Philadelphia business outlook survey. .

"There is very clearly an environment now in which risk is off and to that investors shy away from obvious risk on assets such as equities and high beta currencies," said John Woods, managing director and chief investment strategist with Citi Private Bank.

Woods told Reuters Television that he has been advising that his clients look at local currency bond markets in Asia that have been resilient to pressures coming from the euro zone and still offer relatively high yield.

Greek Prime Minister George Papandreou said he will form a new cabinet on Thursday and seek a vote of confidence from his fractious Socialist party to push through a harsh austerity bill, as riot police battled tens of thousands of protesters in the heart of Athens.


Greece must pass a new campaign of tax rises and spending cuts to receive a new EU/IMF bailout and a 12 billion euro aid tranche that Athens needs to pay back debt that matures in August. But many analysts and economists believe it is bound to default on its debt sooner or later.

"Greece is like a Lehman Brothers situation, except a country version," said Tanrich Securities' Vice-President Jackson Wong in Hong Kong. "It's magnifying uncertainty right now, even though most banks don't have much exposure to the euro debt situation."

In Japan, the Nikkei fell 1.7 percent, with growth-sensitive shares such Canon and Mazda Motor underperforming.

Other Asian markets also retreated, with the MSCI Asia Pacific ex-Japan index sliding 2.4 percent. Shares of materials and technology companies were among the weakest performers on fears of faltering global growth.

Hong Kong's Hang Seng Index slumped 1.9 percent to its lowest level this year, with shares of HSBC , Europe's top lender, falling 1.5 percent and weighing on the broader market.

Samsonite International SA , the world's biggest luggage maker, dropped 11 percent in its Hong Kong trading debut on Thursday, reflecting weak investor appetite for initial public offerings.

Foreign bearishness about Chinese equities, partly over corporate governance issues, have made investors increasingly cagey about the outlook for the Hang Seng with short-selling seeing a pick-up to levels last seen eight months ago.

In commodities markets, oil prices CLc1 LCOc1 recovered in Asian trade after a more than 4 percent slide in the U.S. session as the rising dollar and signs of further economic weakness fed demand worries.

August Brent crude futures jumped more than a dollar, topping $114 a barrel, in the wake of a larger-than-expected draw in U.S. crude stocks.

(Additional reporting by Clement Tan in Hong Kong; editing by Kim Coghill, sourced Thomson Reuters)

Arch Coal and International Coal Group complete merger

Thursday, 16 June 2011

St. Louis, Missouri-based Arch Coal announced Wednesday that it has completed the acquisition of International Coal Group, Inc. (ICG), through a merger, with ICG becoming a wholly-owned subsidiary of Arch Coal.

Arch Coal announced May 2 plans to acquire ICG.

"We are pleased with the swift and successful completion of the ICG transaction, which will add tremendous value for Arch's stakeholders in the coming years," said Steven F. Leer, Arch's chairman and chief executive officer. "This acquisition extends Arch's reach into every major US coal supply basin, enhances our low-cost and leadership position in core operating regions and creates a world-class global thermal and metallurgical coal franchise poised for growth."

Tags: Met Coke , USA , raw mat , North America , mining , M&A (sourced steelorbis)

Orissa to have two mega CTL projects

Thursday, 16 Jun 2011

ET reported that TATA Steel and Jindal Steel & Power Ltd have taken the lead in the country to utilize this huge inferior coal deposits to produce ultra clean liquid fuels like diesel and naphtha ensuring energy security and foreign exchange outgo from the country. India, not blessed with adequate oil and natural gas reserves, has 4th largest coal reserve in the world.

Jindal Synfuels limited a JSPL group company plans to set up a CTL (Coal to Liquid) plant with a capacity of 80,000 barrels per day equivalent of key oil products such as Diesel, Naphtha, and LPG while TATA Steel in joint venture with South Africa based Sasol Synfuels (Pty) Ltd will set up a 3.6-million-tonne per annum Coal to Liquid plant in Orissa. These two CTL plants, at an estimated cost of INR 90,000 crore, are expected to come up by 2016 are first of its kind in the country.

Both the mega projects envisage adoption of state of the art Clean Coal Technology so that the carbon footprint will be drastically lower. The CTL overall process consists of three main sections namely Coal Gasification, Fischers-Tropsch synthesis (liquefaction), and Product Up-gradation.

President of CTL project of JSPL, Mr Dev Anand Tripathy told The ET that various emissions, effluents and solid wastes of CTL project would be very much below the stipulated statutory limits as per stringent World Bank Norms and Indian Pollution Control & Environment agencies. The process waste water would be suitably treated with full recycle ensuring Zero Liquid Discharge, in the process ensuring minimum water consumption. The project would envisage CO2 Capture/Storage & Sequestration in nearby underground Geological Formations & Aquifers.

'The CTL Diesel is ultra pure and smoke less compared to conventional diesel therefore more eco friendly', Mr Tripathy said adding that CTL project does not envisage to acquire fertile and irrigated Land.

JSFL has undertaken detailed global technology search to select the most appropriate technology suitable for utilization of inferior grade (high Ash) Indian coal with emphasis on minimum Carbon Footprints. The final technology selection would be completed shortly.

The government of India has already allocated Ramchandi coal block in Talcher coal field in favor of to set-up the proposed CTL project. The coal block has a potential reserve of around 1500 million tons of low grade coal.

The proposed CTL Project has recently received the necessary clearances and approval of Orissa government to go ahead with the Project. This project will require 30 million tonne per annum washed coal for 80,000 barrels per day and the middling & rejects will be used for generating 1350 MW power.

Similarly, the coal ministry has allocated coal block at north of Arakhpur coal mines near Talcher to the joint venture company Strategic Energy Technology Systems 50:50 joint venture between TATA Sons and South Africa-based Sasol Synfuels International

Both the projects, targeted to be commissioned in 2018, require about 3,000 to 3500 acre of land for its main plant, additional land would be required for setting up coal mine, beneficiation plant, coal handling plant, water reservoir, power plant and township. (sourced from ET)

Nippon and Sumitomo Metal may retain TATA Steel as ally - Report

Thursday, 16 Jun 2011

ET reported that Nippon Steel and Sumitomo Metal, the two Japanese steelmakers which are merging to create the world's second largest steel company, are likely to retain long standing ally, TATA Steel, as their lone partner in India. They may compensate the second partner, Bhushan Steel to avoid possible project duplication and competition issues.

According to three people familiar with the development, while the four party negotiations are still going on and no conclusion has been reached so far, an established technical collaboration between Nippon Steel and TATA Steel and the slow progress between Sumitomo and Bhushan for a Greenfield project in West Bengal, have been cited as the main factors for a single partner.

Bhushan Steel, a leading manufacturer of high value steel used in consumer goods and cars, has a marketing and technology tie up with Sumitomo Metal which is valid for six years. The two companies are also in talks to jointly build six million tonne steel plant in West Bengal for INR 30,000 crore. While the talks for the West Bengal project have been continuing for about two years, nothing has been agreed so far.

However, TATA Steel and Nippon signed a joint venture agreement in January this year to build a facility for making automotive cold rolled steel at Jamshedpur, where TATA Steel will hold 51% and Nippon 49% stake. The project will be built for INR 2,300 crore and will come on stream in 2013. TATA Steel and Nippon in 2006 had signed partnership for use of Nippon Steel's galvanized steel product Galvaneal. Also, in May, TATA Steel sold 51% equity stake in group company TATA Refractories to Nippon Steel's associate Krosaki Harima Corporation and brought in the Japanese firm as a strategic partner. One person directly involved in the talks said that "The long standing joint venture partnership with Nippon Steel and the large auto grade facilities of TATA Steel will be the main reason for retaining them.”

According to Mr Nitin Johri CFO of Bhushan Steel, We have been talking to Sumitomo for setting up the joint venture project in Bengal. This has not been finalized yet. We are yet to get feedback from Sumitomo on recent developments. We will wait for them to give us a final yes or no. However, it will not have any impact on our technical tie-up with Sumitomo.

Mr Johri also said that if Sumitomo does not participate in the equity of the West Bengal project, Bhushan could explore the option of raising funds through a public issue. (sourced from ET)

Vale aims to spend over $12 bln in Africa

Jun 15, 2011 3:38pm GMT

LUSAKA (Reuters) - Brazilian miner Vale SA plans to spend over $12 billion on investments in Africa over the next five years, a mining conference heard on Wednesday.

Brazilian companies, like their Chinese counterparts, are keen on African resources to fuel their growth and the sum involved underscores the continent's growing importance as an investment destination.

"Our current investment proposal in Africa is to expend more than $12 billion over the next five years, subject to board proposal," Ian Hart, Vale's exploration manager in Zambia, told the conference.

He did not give a breakdown by country but the peak is seen in 2012 when $3.3 billion is seen being invested in the continent.

Some of the company's biggest African projects are in Mozambique, where its Moatize coal mine is seen producing 8 million tonnes of hard cooking coal by 2013/14 and 4 million tonnes of thermal coal. (sourced Thomson Reuters)

Wednesday, June 15, 2011

Australia's Macarthur Coal cuts prices on weak Japan demand

Tue Jun 14, 2011 10:18pm GMT
SYDNEY, June 15 (Reuters) - Australia's Macarthur Coal has accepted a big price cut on its pulverised coal injection (PCI) coal, which values its chief product at a deep discount compared to hard coking coal due to weak Japanese demand, the Australian Financial Review said.
Macarthur's third-quarter PCI coal prices were settled at $230 a tonne, down from $275 a tonne while hard coking coal prices, supported by Chinese demand, were reduced to $315 a tonne from $330 a tonne, the paper said on Wednesday without citing its sources.
Metallurgical coal prices surged earlier this year after extensive floods in eastern Australia shut mines and reduced production but prices have inched down as mines come back to full production and the Japanese earthquake reduced demand.
Australia is by far the world's biggest coking coal producer, accounting for nearly two-thirds of the global trade.
PCI coal is crushed into a fine powder and injected into blast furnaces as a replacement for coke in the production of pig iron.
Last month Macarthur, the world's biggest supplier of PCI coal for the sea borne market, said it was closely monitoring market conditions in Japan, which has been hurt by the tsunami and earthquake in March.
Macarthur officials could not be reached immediately for comment by Reuters. (Reporting by Narayanan Somasundaram; Editing by Balazs Koranyi, sourced Thomson Reuters)

JSW to source iron ore from Goa

Wednesday, 15 Jun 2011
BS reported that JSW Steel Ltd has approached six small mining companies in Goa to procure enough to feed its existing steel plant and the proposed pig iron project in the state.
Mr Haresh Melwani CEO of H L Nathurmal & Co a Goa based iron ore miner and exporter said that “Last week JSW approached us to source iron ore for its Karnataka plant. We will discuss the terms and conditions soon to commence supply.”
An email to JSW last week elicited no response. A company official said that “As a company policy, we would not like to comment on such matters.” (sourced from BS)

Rio Tinto speeds up iron ore expansion to H1 2015

June 14, 2011 11:06pm GMT
MELBOURNE, June 15 (Reuters) - World no.2 iron ore miner Rio Tinto is investing $676 million to speed up its iron ore expansion by six months to capture demand as rival plans to boost production are impeded.
Rio said on Wednesday it expects to increase its capacity by 50 percent to 333 million tonnes a year by the first half of 2015.
"We are taking the opportunity to bring forward the next phase of our major capacity expansion to reap the benefits early and at no additional cost," Rio Tinto iron ore chief executive Sam Walsh said in a statement. (Reporting by Sonali Paul; Editing by Balazs Koranyi, sourced

Australia's big dig for foreign workers

Jun 14, 2011 10:52am GMT

September, is already six months behind schedule and about $1 billion over budget. It also has been troubled by design problems and by a few weeks of weather-related delays, but the scarcity of labour, especially skilled workers, has become an industry-wide complaint. Australia has around $200 billion in gas-export projects alone in the investment pipeline, and developers such as Woodside, Chevron Corp , BG Group Plc and Santos Ltd need to move fast to sign up Asian customers or risk seeing one or more of their projects fall over.
The question of guest workers is larger than the debate over labour shortages. It also touches directly on another important issue facing Australia: rapid population growth and its ability to host the more than 100,000 new settlers every year.
Australia's egalitarian ideal means all foreign workers have the right to resettle in the country permanently -- and very many of them do just that, adding to the strain on national infrastructure such as transport, hospitals and schools.
Even those who oppose the idea of guest workers, based on fears that it could create an economic underclass of outback shanty-town dwellers, concede it has some demographic merit.
Currently, foreign workers who come to Australia on temporary employment visas can bring their families with them and can apply to stay on as permanent residents -- and about a third of all such visa-holders are granted residency every year, according to an Immigration Department spokesman.
Every migrant worker who arrives in Australia on temporary work visas, known as 457 visas, brings on average one dependent with them, according to Immigration Department data for 2009-10.
In contrast, guest workers are typically not allowed to bring family with them and have no right to resettle, which would ease the pressure on population growth.
Bob Birrell, economist and sociologist at Melbourne's Monash University, who is sceptical of guest-worker schemes in general, concedes that Gina Rinehart's idea has some demographic merit.
"To that extent, I agree with her," Birrell says. "It surprises me to say that but she does have a point there. It's just that I don't think she's going to succeed here."
It may seem odd that Australia, with 22 million people sharing a continent the size of Western Europe, is concerned about population. But the country is mostly arid, forcing about 90 percent of people to cram into 3 percent of the country. In 40 years, the population is projected to reach 36 million.
In major cities, infrastructure is already failing to keep up with population growth, and new suburbs are emerging without trains or hospitals. In the outback, the situation is far worse.
To walk much beyond the town boundary of Karratha is to enter a barren wilderness. At points, the outback is so flat and empty it is possible to gaze out at a 360-degree horizon and perceive a slight curvature of the Earth.
Inside Karratha, trucks rumble along the main street, ferrying materials and men between the town, nearby ports and the mines, while miners in fluorescent orange overalls are everywhere on foot. A town with an official population of around 18,000 is actually bursting with around 28,000 people.
Accommodation is so tight that big miners such as Rio Tinto and BHP Billiton find it cheaper to fly their workers into Karratha for a few weeks at a time rather than build whole new settlements in the desert.
For long-distance commuters such as Perth-based Lucille Lievaux, their temporary mine accommodation is usually an air-conditioned shipping container with a single bed. But even regular visitors like her will create demand for more labour.
All new miners arriving in the outback, even if only for a few weeks, will need doctors if they get sick and entertainment if they get bored. They will also generate more demand for lowly skilled jobs such as cooks, cleaners and garbage collectors.
That exacerbates labour shortages and drives wages higher -- to the point where scores of foreign backpackers are now being drawn to towns like Karratha, able to earn enough in a few months to fund the rest of their trips around the world.
Some live in tents around the town, and can quit their job and vanish in the time it takes to stuff a rucksack.

This phenomenon is well known in the east of the country, where fruit-growing regions have relied for decades on the fickle flow of young backpackers to provide seasonal labour. But a few years ago the horticultural industry became so fed up, they did something radical: they set up a guest-worker scheme.
The scheme brings in workers from poor island nations of the South Pacific and is backed by the government -- though it is very quietly pursued and faces scepticism even from within the Immigration Department, which helps to administer it.
For Richard Hamley, who employs islanders under the two-year-old scheme to pick tomatoes, there is no good reason why the mining industry should not adopt a similar scheme.
"We were originally a little sceptical about it because we didn't think that islanders would have been a good fit, but we could not have been more wrong," says Hamley, who runs the tomato division of horticultural firm Costa Exchange.

"They are fantastic workers. They have a work ethic that makes Australians look silly ... A lot of Australians don't want to work on weekends and they take time off."
Hamley says his guest workers are actually more expensive overall than local labour, given strict obligations to transport and house them and to pay fair wages, but he stresses that they are much more productive and better value for money.
Right now, such a scheme appears to be a step too far for the mining industry, where unions deny labour shortages are jeopardising some big projects and they point to the record profits being mined out of Australia by global firms such as Rio Tinto, BHP Billiton and Xstrata Plc .
"As far as I can see, all the projects that have been planned to go ahead have gone ahead," Ged Kearney, president of the Australian Council of Trade Unions, told Reuters. "There haven't been any major projects to my knowledge that have been held up critically because of a shortage of labour."
Even the AWU, however, does not appear to completely rule out the introduction of a guest-worker scheme, provided local workers are given first priority and training where required.
"Only after companies have shown they are prepared to invest in training to give Australians the first bite of the cherry should we consider bringing in guest workers," says AWU boss Howes.
Indeed, the ruling Labor party is moving quietly in the direction of guest workers for the mining industry with its "enterprise migration agreement" announced in May.
Tailored for mining, this new arrangement enables developers to fast-track the import of short-term labour for projects worth more than A$2 billion. They can bring in construction workers and set their wages project-wide, giving them more control over costs, though wages would have to accord with "market rates".
Even Rinehart is pleased.
"I believe in short-term guest labour for pre-construction and construction periods and am delighted to see recent developments that major projects over A$2 billion will be able to access guest labour...," she said in the email to Reuters.
The key difference, though, between this new arrangement and a genuine guest-worker programme like the fruit industry's scheme is that workers under the former still have the right to resettle and pursue the great Australian egalitarian dream.
The immigrant's dream is deeply woven into the social fabric of a nation where about a fifth of the population is born abroad, almost double the proportion of Americans born overseas.
Australia still maintains a tough stand.(By Thomson Reuters)

Brazil's Vale to stick to quarterly iron ore pricing

Tue Jun 14, 2011 8:02am GMT
GENEVA, June 14 (Reuters) - Brazilian mining company Vale (VALE5.SA: Quote) will not move away from its quarterly iron ore pricing formula, Vale's global marketing director Pedro Gutemberg said.
But the miner, the world's biggest producer of iron ore, is proposing a new pellet premium pricing formula, Gutemberg told Reuters on the sidelines of a conference in Geneva.
Currently, the iron ore pellet premium is fully negotiated between customers and producers every quarter.
"We are trying to convince the clients to accept that we have an iron ore content price, as we do with fines, and then we have a conversion premium," Gutemberg said.
"It is a dual concept and we want to separate (the two components of the price)."
(Reporting by Silvia Antonioli; editing by Sue Thomas,By Thomson Reuters)

Iron Ore-Spot offers rise $2, sustained gains unlikely

Tue Jun 14, 2011 4:17am GMT
SHANGHAI, June 14 (Reuters) - Spot iron ore prices rose further on Tuesday, as Chinese steel mills continued rebuilding inventories, driving up two major global indexes for a fifth day.
Indian ore with 63.5/63 percent iron content was quoted at $181-$183 per tonne, including freight, on Tuesday, up $2 from Monday, Chinese consultancy Umetal said.
"Steel mills have come back to market to replenish stockpiles since last week, and the continued tightness in Indian ore supply has also backed up prices," said an iron ore trader in China's coastal Shandong province.
Chinese steel mills have continued to raise production ahead of a much anticipated power rationing in the summer season, bringing the nation's total crude steel output to a peak of 60.25 million tonnes in May.
"Iron ore inventories at steel plants have stayed low, and some mills also plan to start restocking next week, extending this round of restocking," said Xu Guangjian, iron ore researcher at Umetal.
Two key iron ore indexes, based on Chinese spot prices, extended gains for a fifth day on Monday after losing around 6 percent last month.
Platts 62 percent index IODBZ00-PLT rose $1.25 to $175.25 per tonne, and Metal Bulletin's similar gauge .IO62-CNO=MB gained $1.16 to $173.87.
The Steel Index's 62 percent benchmark .IO62-CNI=SI lost 80 cents to $172.30 per tonne, but is still up 2 percent so far this month.
Shanghai rebar futures traded almost flat at 4,807 yuan ($741.5) per tonne in morning trade on Tuesday, after slipping 0.6 percent on Monday.
Umetal's Xu expected the fresh purchases, after steel mills had suspended spot buying for months, to extend over the following two weeks, helping offers of seaborne ore edge up further.
Forward swaps mostly extended losses on expectations that looming power shortages in China could depress steel output and therefore prices.
Electricity supplies in a number of regions have already been capped, and some small mills have been affected, but CISA last month cast doubt on the idea that power restrictions would have a significant impact on steel supplies.
The steel market usually weakens in the summer season as high temperature slows construction activities, hampering demand for steel products.
The Singapore Exchange-cleared June contract fell 31 cents to $172.19 a tonne, July dropped $1 to $170.50 and August lost $1.42to $169.25.
China's inflation accelerated in May to a 34-month high of 5.5 percent, slightly above expectations, supporting the case for tighter monetary policy even as economic growth shows signs of slowing down.
Traders and analysts expect inflation to pick up again in June, prompting the central bank to raise interest rates as soon as this month, for the fifth time since October.
"I expect iron ore price rises will not be sustained in July as Beijing might undertakes more tightening policies to curb liquidity and bank loans, and steel mills will face tighter credit conditions that will keep them from buying much," the Shandong trader said. ($1=6.483 yuan) (Reporting by Ruby Lian and Jaqueline Wong; Editing by Clarence Fernandez, By Thomson Reuters)

Tanzania parliament backs mineral "super tax" plan

Tue Jun 14, 2011 7:37pm GMT
DAR ES SALAAM, June 14 (Reuters) - Tanzania's parliament on Tuesday approved a $27.4 billion five-year development plan, backing the proposed introduction of a super-profit tax on mining companies.
Revenue from the east African country's mineral resources will be an important source of financing for the medium-term programme, the plan stated. For more see.
Lawmakers approved the plan in its entirety without making any changes.
"The government's five-year development plan has been approved by majority votes of members of parliament," National Assembly Speaker Anne Makinda said in parliament late on Tuesday after lawmakers voted to endorse the plan.
Tanzania, Africa's fourth-largest gold producer, has remained noncommittal on if and when it might introduce the super-profit tax.
The idea of such a tax has raised eye-brows among foreign investors in Tanzania. On Sunday, the country's mining minister clarified that Tanzania would not impose the new tax on existing companies but would negotiate with the companies to have them pay.
Tanzania cites rising commodity prices as justification for the tax.
Its annual gold exports have tripled to $1.5 billion in the last five years due to the increase in the price of gold but government revenues have remained at around $100 million a year, the plan stated.
Under the five-year plan, Tanzania targets raising 2.7 trillion shillings ($1.73 billion) out of the 8.5 trillion shillings that will be invested annually in development projects.
The rest of the money will come from loans and grants, sovereign bonds and private-public partnerships, the government said.
The plan said the government would continue with the process of accessing external sovereign debt markets as a source of infrastructure financing.
Central Bank of Tanzania Governor Benno Ndulu told Reuters in March the country planned to issue a $500 million Eurobond in the 2011/12 fiscal year, once it had a sovereign rating in the next seven to eight months.
African Barrick Gold (ABGL.L: Quote) has four gold mines in Tanzania while Australia's third-largest gold miner, Resolute Mining (RSG.AX: Quote), and South Africa's AngloGold Ashanti (ANGJ.J: Quote) also have gold operations there.
The move to introduce the new tax follows similar steps in other producer countries such as Australia that have sought to increase fiscal revenue from the mining industry and to take advantage of rising prices. (Reporting by Fumbuka Ng'wanakilala; Editing by Richard Lough and James Dalgleish, sourced Thomson Reuters)

Rio Tinto to speed up iron ore expansion on strong demand

Wed Jun 15, 2011 5:42am GMT
* Rio Tinto says supply gap exists in iron ore market
* Seen as sign China to remain strong buyer
* Sees opportunity to boost mine output early
* Other suppliers slow to bring on new capacity, it says (Adds details, changes dateline)
By James Regan

SYDNEY, June 15 (Reuters) - Rio Tinto will speed up its $14.8 billion iron ore expansion project in Australia by six months, joining other miners in hurrying production to fill a supply gap for the steel-making commodity.
Big miners are betting China's demand for raw materials to fuel industrial expansion will continue to surge, despite mounting fears of slowing economic growth as Beijing clamps down on bank lending.
Rio expects to expand its iron ore production by 50 percent to 333 million tonnes a year by the first half of 2015, six months ahead of its earlier target.
"The demand outlook continues to be strong with supply lagging elsewhere in the industry and we are seeing new supplies proving slower to materialise than predicted," Rio Tinto iron ore division head Sam Walsh said in a statement.
Rio Tinto is not alone in beefing up in iron ore.
From the Australian outback to West Africa to South and North America, more mining companies are pegging new iron ore mines, many with the help of Chinese seed money.
AngloAmerican expects to nearly double iron ore production to around 80 million tonnes by 2014 as it digs new mines in Brazil and South Africa.
Fortescue Metals Group has said it plans to bring forward its Australian iron ore production target of 155 million tonnes a year by up to 12 months, while Vale of Brazil wants to push output up 50 percent to 450 million tonnes, also by the start of 2015.
It's not hard to see why there's a rush into iron ore.
As of Wednesday, iron ore was selling for around $170 a tonne .IO62-CNI=SI, up to five times the cost of production for most miners.
The bonanza is being fed by Chinese demand. The top steel producer's total imports of iron ore for the first five months of 2011 leapt 8.1 percent to 283.25 million tonnes from a year ago, feeding steel production that hit another record in May.
The threat to iron ore producers comes from China's battle to control inflation, which could lead to a slowing of its breakneck growth.
China's central bank raised bank reserve ratios on Tuesday for the ninth time since October to try to curb inflation, which is running at its fastest pace in almost three years.
Chinese leaders are fearful that rising prices could not only unsettle the world's second-biggest economy but spark social unrest of the sort seen this week in southern China.
Rio Tinto said faster expansion work won't result in extra costs but will require bringing forward $676 million in spending, of which the company will shoulder $350 million. It's joint-venture partners, some in China, will pay the rest.
Rio said it now expects to increase its annualised iron ore mining capacity to 230 million tonnes by the end of the first quarter of 2012 from 225 million tonnes currently, rising to 283 million tonnes a year by the end of 2013.
Even more than most global mining houses, Rio Tinto sees much of its future in supplying iron ore to the swelling number of steel mills in Asia.
Its biggest customers for ore are China and Japan.
Iron ore accounted for 73 percent of Rio Tinto's 2010 earnings, compared to a 40 percent contribution for No. 3 producer BHP Billiton's first-half earnings.
Only Vale mines more iron ore each year than Rio Tinto, which produces the majority of its ore in the Pilbara region of Australia and also in Canada.
Close rival BHP Billiton BLT.L> 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 miners face satisfying rising demand for industrial raw materials vital to steel production as industrialisation in China spreads to India and elsewhere in Asia.
Chinese steel production continues to grow, with estimates approaching 680-700 million tonnes in 2011, according to UBS, from 627 million tones produced in 2010. (Additional reporting by Sonali Paul in Melbourne; Editing by Ed Davies and Michael Urquhart, sourced Thomson Reuters)

Tuesday, June 14, 2011

African Energy Resources continue to unlock coal resource at Sese West

Tuesday, 14 Jun 2011

African Energy Resources continues to unlock the potential for a much bigger coal resource for the company in Botswana with the discovery of a thick coal seam at Sese West.

Drilling at Sese West is part of a regional uranium exploration program, although coal seams were discovered ranging in thickness from seven metres to 30 metres, with the depth to the top of the coal varying from 79 metres to 157 metres.

The new discoveries are located just a few kilometres to the south of the Sese coal project which hosts a JORC 2.73 billion tonne Resource. However, Sese West is currently only valid for radioactive minerals, with African Energy having already applied for amendment to the licence to include the rights for coal.

The requested amendment is currently subject to the recently announced moratorium on coal and coal bed methane licence applications which are due to end this September.

Highlighting how African Energy is looking to boost exploration in the area, the company has submitted six further prospecting licence applications for coal and coal bed methane in the last eight months.

The Sese coal project comprises one wholly owned prospecting licence valid for uranium, coal, coal bed methane, base and precious metals, and is strategically located near infrastructure with a sealed highway between Francistown and Gaborone and is easily accessible.

(sourced from proactiveinvestors)

Shree Minerals high grade iron hits boost DSO potential at Nelson Bay River

Tuesday, 14 Jun 2011

Shree Minerals has intersected high grade iron with low impurities from drilling at the Nelson Bay River iron project in northwest Tasmania extending the presence of goethitic hematite to a greater extent than expected.

Results provide partial resource delineation and extend the goethitic-hematite across the strike. Also, the depth of the proposed Direct Shipping Ore pit has been extended to almost 60 metres.

The high grade intersections range from 60.23% iron (Fe) to 65.14% Fe with less than 1% aluminium oxide (Al2O3).

Highlights include
1. 11 metres at 65.26% CaFe, 61.91% iron, 5.03% silicon dioxide, 0.98% aluminium oxide, 0.0662% phosphorus and 0.02% sulphur from 13 metres
2. 10 metres at 64.95% CaFe, 60.78% iron, 5.3% silicon dioxide, 0.92% aluminium oxide, 0.0719% phosphorus and 0.02% sulphur from 23 metres.

The drill campaign at the project concluded early last month with 32 drill holes covering 1,542 metres that included 23 reverse circulation drill holes covering 1,259 metres for resource delineation and six RC holes covering 210 metres for hydrological studies.

Shree holds two licenses at Nelson Bay River, one covering 50 square kilometres and the other covering 43 square kilometres. Importantly, both tenements have access via surfaced road.

Shree initiated metallurgical test work on the PQ diamond drill cores testing for Beneficiable Feed Ore on 27 May. The company has received assays from the laboratory for 11 holes out of a total of 23 reverse circulation holes and expects to receive the remaining assays over the next few weeks.

Shree Minerals’ recently defined high-grade iron ore hematite DSO resource at Nelson Bay will add a near term and lucrative earnings profile to the company.(sourced proactiveinvestors)

Grindrod plan to expand coal terminals

Tuesday, 14 Jun 2011

Reuters reported that Shipping and logistics group Grindrod plans to expand its Mozambican and South African coal terminals to meet fast-growing demand for export capacity from miners.

South African coal miners have for years been unable to ship all their coal destined for exports due to an inadequate rail infrastructure and frequent derailments on the lines linking South African mines with ports.

Mr Alan Olivier CEO of Grindrod said any expansion would be subject to the availability of rail capacity linking mines in South Africa Witbank and Waterberg regions with ports. He said Grindrod had recently expanded capacity at the Matola coal terminal to between 6 and 7 million tonnes out of which 5 million will be for coal and 2 million for magnetite.

Mr Olivier said "The plan is to add up to an additional 20 million tonnes to that facility. He said that "Our intention would be to have that (expanded) facility up and running by late 2014."

Mr Olivier said the company was already in talks with potential users of that expansion, adding the interest was huge. He said that while the cost of processing coal at Matola terminal may not compare with much bigger facilities such as the Richards Bay Coal Terminal, the Matola facility would be competitive in terms of its shorter distance to the mines.

He added that further investment in rail capacity would be required to meet that expansion, although the capital needed for that was not enormous.

South African logistics group Transnet has been investing heavily to improve its rail infrastructure, but much more is needed to meet demand from miners eager to ship their product to India and China.

Transnet has been in talks with miners for them to help foot the bill to speed up investment in rail infrastructure, although the first such partnership has yet to materialise.

Mr Olivier said "There would be no shortage of private participation in that sector if there is a project that requires and justifies putting additional trains and rolling stock in place."

He said the company expansion of available coal capacity at its Richards Bay dry bulk terminal to 3.2 million tonnes from 1.5 million would be completed within months. He added that our next phase is to significantly grow that Richards Bay facility. We believe we can add 10 million tonnes or more to that facility."

Mr Olivier said the additional expansion could be completed within a year once rail capacity had been secured. He said the Matola and Richards Bay expansions would target junior miners, unable to get export capacity through RBCT.

Mr Olivier said Grindrod had no interest in the proposed Transkalahari line proposed by miners to link up coal mines in South Africa and Botswana with the port at Walvis Bay in Namibia.

He said that "The Transkalahari line is not practical. If you look at the geography, if you look at the costs, the logical outlet is to the east, not to the west." (sourced from Reuters)

Coal accounts for 30pct of energy consumption - BP

Tuesday, 14 Jun 2011

Argus quoted BP said in its latest Statistical Review of World Energy released recently that coal share of global energy consumption rose to 29.6% last year the highest since 1970 and up from 25.6% a decade ago.

BP said coal consumption grew by 7.6% in 2010 the fastest growth rate since 2003. China which overtook the US as the world largest energy consumer saw its consumption grow by 10% and consumed nearly half of the global coal total of 3.55 billion tonnes of oil equivalent.

The next largest consumer was the US with 524.6 million toe or 14.8% of the world consumption followed by India with a 7.8% share of the total. Even Europe showed coal consumption growth of 3.8% within the EU.

BP said global coal production grew by 6.3% with China again leading the way with a 9% increase YoY to 3.24 billion tonnes. The US was the second-largest producer with 984.6 million tonnes followed by India Australia, Russia and Indonesia. But production fell by 1.1% in the EU although the UK production was up by 1.8% to 535.7 million tonnes which helped explain the relative strength of European coal prices.

(Sourced argusmediagroup)

Xstrata says to start iron ore shipments from Australia

Tue Jun 14, 2011 4:59am GMT

SYDNEY, June 14 (Reuters) - Xstrata Plc will start exporting iron ore concentrate to Asian buyers from Australia on Wednesday as part of a A$589 million redesign of its Ernest Henry copper and gold mine, the company said on Tuesday.

Exports of the magnetite-type material at a rate of 1.2 million tonnes a year are a key component of Xstrata plan to transform the Ernest Henry mine from an open-cut design to an underground one, the company said.

The concentrate is being milled as a by-product of the copper and gold mine's ore, which until now has been discarded among tailings at the mine site.

Magnetite, which accounts for just 1 percent of Australia's total iron ore production, has lower iron content -- around 36 percent versus 61 percent for hematite -- and must be upgraded, typically into pellet form to make it suitable for steel making. (Reporting by James Regan, sourced Thomson Reuters)

HPB BMA coking coal miners in Australia striking

Tuesday, 14 Jun 2011

BHP Billiton Ltd coking coal miners in Australia will down tools today for the first time in a decade, disrupting production from the world’s largest exporter of the steelmaking material.

Mr Stephen Smyth president of the Construction, Forestry, Mining and Energy Union’s mining and energy division in Queensland said that the six hour stoppages are going ahead today as well as June 15 and June 18.

The union has said that as many as 4,000 workers at BHP Billiton Mitsubishi Alliance mines in Queensland’s Bowen Basin will strike.

The union rejected an offer by the BMA venture to hold paid meetings on June 10 during working hours.

(Sourced from Bloomberg)

Xstrata says to start iron ore shipments from Australia

Tue Jun 14, 2011 4:59am GMT

SYDNEY, June 14 (Reuters) - Xstrata Plc will start exporting iron ore concentrate to Asian buyers from Australia on Wednesday as part of a A$589 million redesign of its Ernest Henry copper and gold mine, the company said on Tuesday.

Exports of the magnetite-type material at a rate of 1.2 million tonnes a year are a key component of Xstrata plan to transform the Ernest Henry mine from an open-cut design to an underground one, the company said.

The concentrate is being milled as a by-product of the copper and gold mine's ore, which until now has been discarded among tailings at the mine site.

Magnetite, which accounts for just 1 percent of Australia's total iron ore production, has lower iron content -- around 36 percent versus 61 percent for hematite -- and must be upgraded, typically into pellet form to make it suitable for steel making. (Reporting by James Regan, sourced Thomson Reuters)

Ukraine’s coke output rises by 4.5 percent in January-May

June13, 2011

In the January-May period of the current year, Ukraine saw a 4.5 percent increase year on year in its metallurgical coke output to 7.989 million mt, according to a Ukrainian government source.

Ukraine's coke production in May of this year amounted to 1.624 million mt, up 1.1 percent compared to April.

Tags: coking coal , Ukraine , raw mat , CIS , mining , production (sourced steelorbis)

Posco steel project, Land acquisition suspended

Tuesday, 14 Jun 2011

Even as the Jagatsinghpur district administration has suspended land acquisition for the POSCO project for the next five days (for a local festival and holidays), the POSCO Pratirodh Sangram Samiti the organization spearheading agitation against the mega steel plant of the South Korean firm, says it will intensify its stir.

Saying land was being taken at gun point, their supporters among the land losers of trouble torn Gobindpur, whose betel vines were allegedly demolished without taking their consent, rebuilt the vines and vowed not to receive any cheque from the administration towards compensation.

The administration did not conduct any land acquisition exercise today, but sources said the women and children of Gobindpur, who have been put on the first line of the human barricade blocking the entry of officials and police into the village, continued with their vigil.

The anti POSCO activists, led by PPSS leader Mr Abhya Sahu conducted a preparatory meeting with villagers on strategies to stop forcible demolition of betel vines when the land acquisition process resumes this Friday.

It was decided that state and national leaders from five political parties CPI, CPI (M), Forward Bloc, Rashtriya Janata Dal and Samjawadi Party and other anti land displacement leaders would be invited to participate in the stir.

The villagers of Gobindpur accused the police of attacking land losers and acquiring land at gun point. Mr Satrughan Behera said that “Police officials beat me and my wife, Rebati, when we protested forcible demolition of our betel vines. We have vowed not to give any land to the POSCO project, so there is no question of receiving cheques from the administration”

The administration had demolished 37 betel vines at Gobindpur during the past two days and disbursed INR 0.825 million to six land losers, while 31 land losers refused to receive their cheques.

Additional district magistrate Mr Sarojkant Choudhury said that however, the administration denied reports of forcible land acquisition. The entire exercise is being done peacefully with the cooperation of the villagers.

He, however, warned that police may use force if the agitators interfered in the acquisition process on forest land.

(sourced from BS)

US raw steel production rises again

Tuesday, 14 June 2011 01:39:20 (GMT+2)

US raw steel production rose last week (ended June 11) with output increasing 0.6 percent from the previous week. In the prior week (ended June 4), US raw steel production had increased 1.6 percent compared to the week before.

Total raw steel production in the United States amounted to 1,841,000 net tons (nt) last week. This figure represents a 0.6 percent increase from the 1,830,000 nt produced in the prior week, and is up 1.4 percent from the 1,816,000 nt produced in the same week of last year.

The capacity utilization rate of US raw steelmaking facilities was 75.3 percent in the week ending June 11, compared to 74.8 percent in the prior week and 75.4 percent in the same week of last year.

(sourced steelorbis)
Tags: USA , North America , steelmaking , production , consumption

Monday, June 13, 2011

Indian miners expect 10-15 percent fall in iron ore prices in next two months

Monday, 13 June 2011 11:08:45 (GMT+2)

Indian iron ore miners have predicted that, due to slower demand and the upcoming monsoon season, iron ore prices will probably decline by 10-15 percent in the coming two months.

During the monsoon season, mineral exploration and deliveries in most Asian countries are expected to be negatively hit by heavy rainfall, which may lead to a reduction of 70-80 percent in demand for Indian iron ore.

R K Sharma, secretary general of the Federation of Indian Mineral Industries (FIMI), said that, despite the Indian Supreme Court ordering a lifting of the ban by Karnataka state on iron ore exports, there has been no great increase in iron ore export activities mainly due to the weakening of demand from Chinese buyers.

(sourced steelorbis)
Tags: iron ore , China , India , raw mat , Far East , South Asia , East Asia and Pacific , Southeast Asia , Indian Subcon , steelmaking

Annual production of 8 million tonnes at Bloom Lake Mine in Canada

Monday, 13 Jun 2011

Cliffs Natural Resources Inc announced On June 2nd that 2011 and 2012 outlooks for its Bloom Lake Mine an iron ore operation acquired as part of its recent acquisition of Consolidated Thompson Iron Mines Limited.

As previously disclosed, Cliffs completed its acquisition of Consolidated Thompson on May 12 2011. The production ramp-up at Bloom Lake Mine is progressing as planned and the operation is anticipated to reach an 8 million ton annualized production rate by the end of 2011. For the approximately seven and a half months Cliffs will own Consolidated Thompson during 2011, the Company anticipates selling approximately 4.8 million tons of Bloom Lake iron ore concentrate.

Revenue per ton of Bloom Lake iron ore concentrate for 2011 is expected to be USD 170 to USD 175 based on the assumption that the April 15 2011 Platts iron ore spot price of USD 181 per ton is maintained through the end of 2011. Cost of goods sold excluding approximately USD 10 to USD 15 per ton of non-cash inventory valuation step-up costs are expected to be USD 60 to USD 65 per ton. This is comprised of cash costs per ton of USD 50 to USD 55 and depreciation, depletion and amortization of approximately USD 10 per ton.

Capital expenditures related to the Bloom Lake operation for the remainder of 2011 are expected to be approximately USD 300 million. This amount includes capital earmarked for Bloom Lake capacity expansion to 16 million tons.

For the full year 2012 Cliffs said it anticipates Bloom Lake iron ore concentrate sales and production volume to be approximately 8 million tons with a revenue rate of approximately USD 170 to USD 175 per ton based on current iron ore spot prices. With the additional volume expected and resulting fixed cost leverage, Bloom Lake 2012 cash costs per ton are anticipated to decline to USD 45 to USD 50.

In addition, Cliffs anticipates 2012 capital expenditures related to Bloom Lake to be approximately USD 350 million including sustainable and expansion capital.(sourced steelguru)

Annual production of 8 million tonnes at Bloom Lake Mine in Canada

Monday, 13 Jun 2011

Cliffs Natural Resources Inc announced On June 2nd that 2011 and 2012 outlooks for its Bloom Lake Mine an iron ore operation acquired as part of its recent acquisition of Consolidated Thompson Iron Mines Limited.

As previously disclosed, Cliffs completed its acquisition of Consolidated Thompson on May 12 2011. The production ramp-up at Bloom Lake Mine is progressing as planned and the operation is anticipated to reach an 8 million ton annualized production rate by the end of 2011. For the approximately seven and a half months Cliffs will own Consolidated Thompson during 2011, the Company anticipates selling approximately 4.8 million tons of Bloom Lake iron ore concentrate.

Revenue per ton of Bloom Lake iron ore concentrate for 2011 is expected to be USD 170 to USD 175 based on the assumption that the April 15 2011 Platts iron ore spot price of USD 181 per ton is maintained through the end of 2011. Cost of goods sold excluding approximately USD 10 to USD 15 per ton of non-cash inventory valuation step-up costs are expected to be USD 60 to USD 65 per ton. This is comprised of cash costs per ton of USD 50 to USD 55 and depreciation, depletion and amortization of approximately USD 10 per ton.

Capital expenditures related to the Bloom Lake operation for the remainder of 2011 are expected to be approximately USD 300 million. This amount includes capital earmarked for Bloom Lake capacity expansion to 16 million tons.

For the full year 2012 Cliffs said it anticipates Bloom Lake iron ore concentrate sales and production volume to be approximately 8 million tons with a revenue rate of approximately USD 170 to USD 175 per ton based on current iron ore spot prices. With the additional volume expected and resulting fixed cost leverage, Bloom Lake 2012 cash costs per ton are anticipated to decline to USD 45 to USD 50.

In addition, Cliffs anticipates 2012 capital expenditures related to Bloom Lake to be approximately USD 350 million including sustainable and expansion capital.(sourced steelguru)