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Saturday, August 6, 2011

Essar Group to invest up to $4 billion in iron ore project in Zimbabwe

Zimbabwean Industry Minister Welshman Ncube has announced that India-based conglomerate Essar Group plans to invest $2-4 billion to build an iron ore dressing plant in Mwenezi in the south of Zimbabwe.

Minister Ncube said Essar's investment would be the biggest witnessed in the local mining industry in the past 10 years.

Last month Essar acquired local Zimbabwean iron ore and steel company Parastatal Ziscosteel. This company was one of the largest iron ore producers in Africa before going bankrupt three years ago. It reopened on August 3 with its new name New Zimbabwe Steel, and its annual steel output is expected to reach 2.5 million mt.

(sourced steeloribs)

S.Africa coal exports fall m/m in July to 4.36 mln T

JOHANNESBURG (Reuters) - South Africa's Richards Bay Coal Terminal (RBCT) exported 4.36 million tonnes of coal in July compared with 4.78 million tonnes the previous month, RBCT data showed on Thursday.

This compares with 5.94 million shipped during the same month last year.

South Africa -- a major exporter of coal to power stations in Europe and Asia -- had 4.23 million tonnes of stock at the terminal at the end of July, RBCT said.

Iron Ore-Shanghai rebar hits 1-month low on slowdown jitters

* Shanghai rebar down 2.3 pct on week, biggest since mid-June
* Other Shanghai commods plunge amid risk aversion
* Fall in rebar price may halt run-up in iron ore prices

By Ruby Lian and Manolo Serapio Jr

Shanghai/Singapore (Reuters) - Shanghai rebar steel futures fell more than 2 percent to their lowest in nearly a month on Friday, joining a rout in other commodities as investors exited riskier assets amid worries about a slowing global economy.

Fears that the U.S. economy could slip back to recession and a recent jump in Italian and Spanish bond yields towards danger levels have pushed investors to seek cover, pulling out of commodities from oil to base metals and grains and driving Asian stocks down around 5 percent after the worst sell-off on Wall Street since the global financial crisis.

Other Shanghai-traded commodities also fell sharply, with aluminium and zinc sliding by the daily trading limit.

The drop in rebar futures raised concern it could snuff out a recent run-up in prices of iron ore, the key steelmaking raw material, which had been spurred by rising steel prices.

"Market sentiment has been hit by worries over a slowing global economy and I am concerned that there will be a temporary end to the current upward trend in iron ore prices next week if steel prices continue to fall," said Zhang Chunzi, a broker with SDIC CGOC Futures in Beijing

The most-active January rebar contract on the Shanghai Futures Exchange fell as low as 4,803 yuan ($746) per tonne, its lowest since July 6, before closing down 2.4 percent at 4,807 yuan.

The contract lost 2.3 percent this week, its biggest drop since mid-June.

Steel mills and traders in China, the world's top steel producer and iron ore consumer, have started to step back amid mounting global market jitters, which may exert downward pressure on steel prices as well as iron ore prices.

Chinese steel mills have been producing at a record daily pace of nearly 2 million tonnes, capitalising on strong demand for long steel products amid a brisk construction sector, largely driven by Beijing's campaign to build more cheap houses.

"Restocking as well as rising steel prices have encouraged Chinese steel mills to accept higher price offers for iron ore," said an iron ore trader in Shenzhen city.

"But we might see the uptrend braking if steel prices fall because that means margins of steel mills would shrink."

Fears over the global economy also triggered declines in prices of iron ore forward swaps <0#SGXIOS:> on Thursday, reflecting concern recent price gains in the physical market may not be sustained.

Offers for Indian ore fines with 63.5 percent iron content climbed to as high as $190 per tonne, including freight, this week, although actual deals were below that, at around $186-188, trading sources said.

However, analysts said continued tightness in iron ore supply from India, the world's No. 3 exporter, should keep losses in spot prices in check.

"The Indian authorities are looking to continue to crack down heavily on illegal mining activities which is starting to affect the domestic market as well as the international market," said Christopher Ellis, analyst with Metal Bulletin Iron Ore Index.

Exports from India's southern Karnataka state, which have been on hold, are unlikely to resume anytime soon despite the appointment of a new chief minister on Wednesday to replace a predecessor who quit over a $3.6 billion illegal iron ore mining scandal.

Karnataka, which accounts for about a quarter of annual iron ore exports from India, banned shipments from July last year. India's top court ordered the state to lift the ban in April but exports have yet to resume.

Key global iron ore indexes, tracking spot deals in China and used by global miners to determine contract prices, extended gains on Thursday to hit their highest since mid-May.

The Steel Index's 62-percent iron ore reference price .IO62-CNI=SI rose 20 cents to $177.90 a tonne, its highest since May 17, and a similar gauge by Metal Bulletin [.IO62-CNO=MB edged up 88 cents to $178.57, its loftiest since May 12.

Platts 62-percent index IODBZ00-PLT was unchanged at $179.50 a tonne. ($1=6.439 yuan)

(sourced Reuters)

Japan steelmakers' price talks with Korea hit stalemate

Tokyo (Reuters) - Japanese steelmakers' talks with South Korean customers on August-October exports have reached stalemate as a slowdown in the global economy and low-priced exports from China weigh on the market and the yen's strength makes price cuts difficult for Japanese exporters.

Japanese steelmakers are aiming for a price of $750 a tonne for hot-rolled coil for shipments during the three months, but South Korean customers insist on a level closer to $600, citing recent Chinese prices sold to South Korea of $600, two industry sources familiar with the matter said.

That level is similar to a year ago when the region's export market collapsed after China boosted exports ahead of tax changes aimed at curbing exports.

Asia's steel market shows no signs of a turnaround, the sources said, with makers in Japan, China and South Korea boosting exports despite signs of a slowdown in demand growth.

Japanese steelmakers' exports in the first six months of this year totalled 21.54 million tonnes, down only 2.3 percent from the same period a year ago when exports hit a record.

Japanese steelmakers were the world's biggest exporters last year, with Nippon Steel Corp , JFE Steel deriving half their revenues from exports.

Taiwan's China Steel Corp said on Friday the company has started to consider whether to bring anti-dumping suits against Chinese, South Korean and Japanese products, saying low-priced imports are disrupting the market.

Imports of Chinese thick-plate that contain boron particularly show steep import gains, the company told Reuters.

(sourced Reuters)

ArcelorMittal to sell China JV stake to Nippon Steel

SHANGHAI (Reuters) - ArcelorMittal , the world's top steelmaker, has agreed to sell its 12 percent stake in an auto sheet joint venture with China's Baosteel and Japan's Nippon Steel to the Japanese firm, a company spokeswoman said on Friday.

The move will give Nippon Steel a 50 percent stake in the joint venture, Baosteel-NSC/Arcelor (BNA) Automotive Co, while Baosteel holds the other half.

The ArcelorMittal spokeswoman said the move is aimed at focusing on another automotive JV project with a middle-sized Chinese steelmaker, the Hunan Valin Group .

On Tuesday, the China Iron & Steel Association (CISA) criticised ArcelorMittal for not fulfilling its commitment to support Valin, saying the steel giant failed to provide the Chinese partner with the technical support needed for their joint venture auto sheet plant.

Chi Jingdong, CISA's deputy secretary general, also said ArcelorMittal did not fulfil promises to help the Chinese firm secure supplies of iron ore.

"China remains an important jurisdiction where ArcelorMittal, through its joint ventures, will continue to develop value-added steel products for the Chinese market," company spokeswoman Lynn Robbroeckx said in an email to Reuters.

Baosteel-NSC/Arcelor (BNA) Automotive Co mainly produces auto sheet for the Chinese market and has an annual production capacity of 1.7 million tonnes, with 900,000 tonnes of cold-rolled sheet and 800,000 tonnes of hot-dipped galvanized sheet.

Friday, August 5, 2011

India's NTPC mulling 25-yr coal import deal-chairman

Fri Aug 5, 2011

* Plans to secure more coal mines in India
* Aims to add 25,000-30,000 MW generation capcity in Apr 2012-March 2017
* To invite price bids for 4 mln T coal imports in next few days

NEW DELHI, Aug 5 (Reuters) - India's NTPC Ltd is looking for 25-year coal import deals to secure supplies and hedge against sharp fluctuations in prices, its chairman said on Friday, days after it abandoned a bid for Australian coal miner Bandanna Energy's assets.

"Our first priority is not to acquire coal mines and make money, our first priority is to secure fuel," Arup Roy Choudhury told a news conference.

NTPC last week did not submit a bid for Bandanna as the price was too high.

Choudhury said tax changes caused uncertainty in international prices and were a deterrent to his firm's overseas coal mine acquisition plans. Australia last month announced it would levy a carbon emission tax that is seen denting miners.

NTPC, which is India's biggest power producer, consumes 164 million tonnes of coal a year to fire over two-thirds of its about 35,000 megawatts (MW) installed capacity. In the five years to March 2017 it aims to add 25,000-30,000 MW capacity.

It plans to import four million tonnes on its own for the first time in the current fiscal year, besides buying 12 million tonnes through state-run trading agencies.

Choudhury said in the next few days, NTPC would invite price bids from six to seven companies that have been qualified to supply imported coal.

It is also in talks for 25-year coal import deals.

"Return on capital and investment, appreciation in coal mine is very difficult to know in advance. We don't know how it will behave. It is very speculative. Long-term deals provide you an assured amount of coal at a predetermined prices," he said.

The company aims to secure more coal mines in India, he said. NTPC aims to meet about 20 percent of its coal needs through captive mines by 2017, according to the company website.

The federal government has allotted seven mines to NTPC, including two blocks to be developed through joint ventures.

Jindal Steel in Pact With Rio Tinto for India Plant


By Saurabh Chaturvedi, Dow Jones Newswires

NEW DELHI – India's Jindal Steel & Power Ltd. said Friday it has signed a pact with Rio Tinto PLC to use and jointly market the U.K.-based group's specialized technology for making steel.

Jindal Steel will use the HIsmelt technology, which produces steel using iron ore fines and non-coking coal, at its upcoming 6.0 million metric tons plant at Angul in Orissa state. This would be the first-ever commercial use of the technology anywhere in the world, the company said in a statement.

Local steel plants mainly depend on iron ore lumps and imported coking coal to produce steel as the country lacks huge reserves of the fossil fuel and the technology to utilize the abundant powdery iron ore fines. Coking coal and iron ore are two key ingredients in making steel.

According to the agreement signed Thursday, Rio Tinto will shift its pilot HIsmelt plant from Australia to Jindal Steel's Angul factory.

"The relocated plant will be fully owned by Jindal Steel, and Jindal Steel and Rio Tinto will jointly develop and market the HIsmelt technology in the future with sharing of royalties," the Indian company said.

Jindal Steel operates a 3.0 million tons a year steel plant in Chhattisgarh state and is setting up a plant of an equal capacity in Jharkhand state.

More market volatility expected

on August 5, 2011

To top off the bad news, Germany today reported worse then expected industrial output: production dipped 1.1% against analysts expectations of a 0.1% gain. Germany, France and Spain are to talk markets today as Japan and China are calling for a global coordination to quell the market turmoil.

Markets have surely summoned the politicians and its is expected that whatever politicians do may bring some relief, perhaps into next week.

Some survey of other news:

Analysts are slashing global oil demand estimates. Perma-bull Barclays Capital says ”Given the general state of the macro-economy, the state of oil demand does not seem particularly healthy”. sees oil demand at 1.34 million bpd versus 1.7 million it saw 2 months ago.

S&P 500 forecasts
Is it time to be contrarian? Wall Street looks united that S&P 500 will rally. “Chief strategists at 13 banks from Barclays Plc (BARC) to UBS AG (UBSN) see the benchmark measure of American equity surging 17 percent through Dec. 31, the average estimate in a Bloomberg survey.”

Too many miner strikes and bad weather may cause copper supplies to stagnate and put a possible pricing floor for the metal. The allowance analysts have set for possible supply losses was 7.5% but Christine Meilton, analyst at CRU Group, says that’s not enough. “Our disruption allowance in January was 7.5 percent for mined copper. That’s not going to be nearly quite enough, it’s looking more like 8 to 9 percent,” Meilton said.

Gayle Berry, analyst at Barclays Capital, says “So far this year we estimate that more than 420,000 tonnes of production has been lost due to disruption,” Berry said. “It’s becoming increasingly evident that we don’t have much left to play with in the allowance. If we carry on like this it’s going to be difficult to see production growing at all this year.”

Meanwhile some see copper demand rising from renewable energy sector. Again Berry: “I see copper demand and copper use in applications increasing in automotives. For your hybrids and electric vehicles you really do need (wiring) to be copper, because you need the most efficient energy transfer mechanism you can get.”

Prompt physical coal prices dipped by around 10 cents on Thursday with few fresh trades reported. “Everything seems to be collapsing apart from bonds, oil fell $3 but coal has ignored it all,” one European trader said.

Even though the underlying mine held up well, just like some gold miners, coal names got hammered yesterday. Walter Energy in particular saw its market capitalization evaporate yesterday: valued at $12 billion just 2 weeks ago in buy out, Walter is now at $4.9 with a forward PE of 4.7. Now that Peabody buyout of Australia’s Macarthur may be in jeopardy, could the mighty BTU turn domestic? Nor has Console made a move to enhance some of its slim met-coal portfolio? Who knows.

Dry Bulk
Dry bulk ship owners are bracing for bankruptcies if global economy tailspins. “If there were to be a double dip recession in both the USA and Europe, then it would feel like the mother of all recessions for the dry bulk market,” said Khalid Hashim, managing director of the Thai-listed group Precious Shipping.

(sourced Marginal Evolution)

Vietnam imposes taxation travel on spark exports

Aug 5th, 2011

(MENAFN) The Vietnam Ministry of Finance (VMF) pronounced that in sequence to quell spark exports, a supervision would lift a spark trade taxation rate to 20 percent from 15 percent, reported Xinhua News.

The method combined that a preference came as Vietnam Coal and Mineral Industries Group (Vinacomin) had to import 9,500 tons of low peculiarity spark from Indonesia to supply energy thermo electric plants in a nation for a initial time, that done Vietnam a spark importer.

It also pronounced that by a subsequent year, Vietnam would have to import around 10 million tons of spark on a yearly basis, that would go adult to 100 million tons annually by 2020.

It is value observant that Vietnam forecasts a yearly exports to strech 2 million tons by a subsequent year, and 20 million tons by a year 2020.

(sourced VN Made)

Ship carrying 60000 tons of coal sinks off Mumbai

August 5, 2011 |The Statesman/ANN

MUMBAI - A Gujarat-bound cargo ship, carrying 60,000 tons of coal, sank off Mumbai today. The vessel's 30 crew members were rescued before the ship went down, but the accident has sparked fears of environmental pollution.

"The Panama-registered MV Rak has sunk 20 nautical miles off the Mumbai coast due to water in the cargo hull. We suspect that there were holes in the ship which led to water seeping in," inspector general of the Coast Guard, Mr SPS Basra, said. The sinking of the 225-metre-long vessel, which in addition to coal was carrying around 290 tons of fuel oil and 50 tons of diesel, has raised fears of an oil spill.

The Directorate General of Shipping (DGS) said it received information from the Mumbai port authorities at 8:00 am, that the vessel had been "adrift" since the early hours of today at the entrance of the Mumbai harbour. The ship, which was on its way from Tutung in Indonesia to Dahej in Gujarat, was built in 1984 and had a crew on board of Indonesian, Jordanian and Romanian citizens, the DGS said in a statement.

All of the relevant agencies were pressed into service after the call was received, and private merchant ships also helped, the DGS said. Eighteen of the crew members were rescued by an Indian Navy helicopter, and the rest were evacuated onto a private merchant ship.

As the ship was located at the entrance of the Mumbai Harbour, one of the busiest in the country, the Mumbai Port and the National Hydrographic Office have been advised to issue a navigational warning so that the mariners are aware in advance of the danger, the DGS statement said.

An emergency towing vessel (ETV), hired by the Shipping Corporation of India for the monsoon season due to its ability to navigate rough seas, was also requistioned and efforts were made to salvage the sinking ship, the DGS said.

The sinking of the vessel comes within five days of the oil tanker M T Pavit drifting from West Asia and running aground near the Juhu Beach. The tanker went unnoticed by all three tiers of coastal security, the Navy, Coast Guard, and Mumbai Police. A much bigger cargo ship, MV Wisdom, beached near Juhu in June.

MV Rak is owned by M/s Delta Shipping Marine Services in Qatar and is classified with the Lloyd's Register of Shipping, the DGS statement said.

The statement, which was updated at 1.30 p.m. when three-quarters of the ship was already submerged, said no pollution has so far been reported from the site. The Coast Guard's oil pollution response vessel, Samudra Prahari, is located close to the ship keeping a tab on it and attempts are being made to mark the ship with a buoy.

Coal India workers cancel strike

August 05, 2011 |Agency Press Trust of India

New Delhi: Workers' union of Coal India today withdrew a proposed three-day strike, called to press early wage revision, after receiving assurance from the management on early settlement of the issue.

Five leading unions at Coal India -- INTUC, BMS, CITU, HMS and AITUC -- had in July threatened to go on a three-day strike from August 8 demanding early revision of wages.

"The strike which was called by the trade unions has been withdrawn. We met representatives of the unions and assured them to look into their demands," Coal India Chairman NC Jha said, after the meeting with the trade union leaders in the national capital during the day.

Among their various demands, the trade union bodies had also asked that there should be no further disinvestment in Coal India, which mines country's 81% production.

"The trade unions had meeting with the senior officials of the Coal Ministry and Coal India. During the meeting, the government assured us that it will look into our demands on policy matters," SQ Zama, General Secretary, Indian National Mineworkers Federation, said.

During the meeting, the trade unions had also requested the government to stop allocation of coal blocks to private firms or captive use and demanded allocation of coal mines through competitive bidding mode, henceforth.

"Among our various demands, we also asked the government to take back unused captive coal blocks. We also asked for recruitment of departmental workers," Zama added. (sourced BS)

Wescoal to sue over R15m claim

Swart unable to comment because of interdict that prevents him from talking about various aspects of Wescoal matter
Aug05, 2011
By Allan Seccombe

WESCOAL Holdings has had legal papers drawn up to sue Sutha Civils for damages the coal mining company suffered during a battle between the two groups stemming from a dispute over a payment of R15m, Wescoal CEO Andre Bojé said yesterday.

JSE-listed Wescoal won an application in court to overturn a liquidation application brought against its subsidiary Wescoal Mining by Sutha and the listed coal producer was awarded a "punitive costs order" against Sutha, he said.

Wescoal yesterday ended 3c lower at 72c on the JSE.

The matter flared up in a public brawl in March when Sutha levelled allegations against Wescoal that were strongly denied by Mr Bojé.

Sutha claimed that it was owed R15m by Wescoal. It was these allegations that drove down Wescoal’s share price and it is on this basis that Wescoal is preparing legal action against Sutha, its CEO Nico Swart and Sutha consultant Wimpie Badenhorst.

"These court orders bring to an end the madness of the Sutha matter and Wescoal will be pursuing a substantial damages claim against Sutha, Mr Swart and Mr Badenhorst for their destruction of value and the harm they have brought on Wescoal and its shareholders," Mr Bojé said.

During the process to obtain an interdict against Sutha to prevent it from making further public pronouncements against Wescoal the court suggested the listed company seek damages against Sutha, he said.

"The punitive costs order is a clear indication that the court has a dim view of their approach and reinforces the judgment handed down in the South Gauteng High Court last week that the Sutha actions were malicious, groundless, unsubstantiated and devoid of truth," said Mr Bojé.

Mr Swart said he was unable to comment because of an interdict granted to Wescoal to prevent him from talking about various aspects of Wescoal.

(sourced Business Day)

Ukraine mining accident possibly caused by poor engineering: government

KIEV, August 5 (Xinhua) -- A mining accident that killed one worker and injured at least 25 others in eastern Ukraine was possibly caused by poor engineering and a lack of discipline, the Ministry of Energy and Coal Industry said Friday.

A poor engineering design caused an unstable pattern of ventilation inside the Krasnokutska mine in Lugansk region, which led to Thursday's methane gas explosion, the ministry said in a statement.

Discipline at the mine was disordered, and an emergency evacuation of workers could not be properly conducted, it added.

The director of the mine was suspended by Fuel and Energy Minister Yury Boiko until the end of the investigation. The deputy chief safety engineer was dismissed.

Thursday's blast was the third mining accident in Ukraine in less than a week. Last Friday, a blast at a mine in Lugansk region killed 27 people. On the same day, 11 miners were killed in another accident in the Donetsk region.

(sourced Xinhua)

JSE falls to lowest level in almost a year

JSE falls amid fears over the US economy after Wall Street suffered its worst selloff in two years

Friday,Aug05, 2011

South African stocks slumped over 3% in early morning trade to its lowest level since September last year, following global stocks lower as investors worry about prospects for the global economy and talks grow of the US entering another recession.

"Investors are pricing in a slowdown in growth and sovereign debt problems as equities drop across the board," Manoj Ladwa, senior trader at London-based ETX Capital, said today.

Globally, shares dropped for an eighth day, the longest losing streak since January 2010 and commodities fell. More than $4.5 trillion has been wiped off equity market values worldwide since July 26, according to Bloomberg.

Locally, the sell-off was wide spread with only seven stocks in the 164-member JSE All Share Index in positive territory. The index reversed early losses to trade 1,8% weaker at 10:10 a.m. local time. Diversified miners, BHP Billiton was 3,8% weaker to its lowest level in close to 11 months. Smaller rival, Anglo American was 2,4% weaker to levels last seen in October.

After dropping as much as 3,3% yesterday, the rand was relatively stable at R6,93/$1.

The most anticipated economic data today is the release of the US payroll and employment numbers, with markets expecting them to come in weak.

The data is undoubtedly the most important statistical release in the world, Rand Merchant Bank foreign exchange analysts, John Cairns and Nema Ramkhelawan-Bhana, said in research note. "Its importance increases under current circumstances; if US employment growth holds up, then this could prove to be only a "soft patch" in global economic activity. If not … then our fears will start playing out."

More jobs at Randolph County as new coal mine opens

Friday, 05 Aug 2011 |Agency West Virginia Media

Mr Michael Zervos president & CEO of United Coal Company said that "Certainly I think it's a great day for the community, and I hope you're proud of what we do."

The third generation coal miner said metallurgical coal is in high demand, and his company is expanding to meet that demand.

He said that "We have a lot of it right here in West Virginia. In this part of the country and this part of West Virginia, there is some of the best quality in the world."

Mr Earl Ray Tomblin acting governor of West Virginia said that "Coal has been the backbone of our economy for the last 100 years. Obviously there are good paying jobs that are associated with it, not only with the direct coal mining jobs, but with the ansulary businesses."

Roaring Creek Coal Company will bring 250 new jobs to the area and United Coal said it must hire these people locally. Plus, it said for every new employee, three to four indirect jobs are created, like in local gas stations and restaurants. That means 1,000 total new jobs for the area.

Mr Tomblin said that "Whether it's West Virginia coal or produced abroad or in other states, the demand will still be there. So I would prefer to have those jobs located in West Virginia and have our people working."

Mr Zervos said that "It's a stamp of approval for new projects to help the state and the state's economy. I think he views this as one of the things we need to do as a state and even nationally to get our economy revved up."

Iron ore swaps rise to record 4 million tonne in July - TSI

Friday, 05 Aug 2011

Reference price provider the Steel Index said that the volume of iron ore swaps cleared globally rose to an all time high of more than 4 million tonnes in July, reflecting growing interest in the steelmaking material's hedging tool.

The bulk of the swaps, which totaled 4.09 million tonnes valued at more than USD 700 million, were cleared by the Singapore Exchange.

The Singapore Exchange said separately that volumes reached a record of 7,845 lots, equivalent to 3.92 million tonnes, beating the previous record of 6,905 lots, or 3.45 million tonnes, reached in May.

Other swap contracts are cleared by LCH. Clearnet in London, the CME Group, Norway's NOS Clearing and the Indian Commodity Exchange. All the bourses use TSI as the reference price index.

Iron ore swaps, launched in May 2008, are cash-settled contracts that allow steelmakers and traders to hedge their cost after the industry abandoned a system of pricing contracts once a year in favor of a more flexible quarterly scheme.

(sourced from Reuters)

Cash rich miners could turn more hostile on acquisition deals

Friday, 05 Aug 2011

Reuters reported that deal advisers warn to expect more hostile deals in resources as cashed up miners turn desperate to snare targets, following Peabody Energy and ArcelorMittal's change of tack this week on their USD 5.3 billion bid for Macarthur Coal.

The pace of resources deals has picked up in recent weeks, putting the sector on track to top a record USD 120 billion in transactions this year, Ernst & Young predicts.

Deals are being fuelled by miners anxious to deploy the spoils from booming commodity markets, with some being forced to move into new sectors or regions, as the number of top tier assets available grows thin.

Mr Tim Day, head of UBS's Perth office, told Reuters that "There are fewer and fewer world class assets out there, so as people get more and more desperate, they may have no choice but to go hostile."

Knowing that suitors are hungry, takeover targets with bullish expectations are holding out for strong offers, while weak equity markets have depressed their shares, making it harder for deals to be sealed.

To help close that valuation gap and get deals done, suitors may have to go hostile, like Peabody and top steel maker ArcelorMittal in their chase for Australian coal miner Macarthur.

Mr Paul Murphy, Asia Pacific mining and metals transactions leader at Ernst & Young, told reporters that "With all the takeovers announced, pretty much all of them have been friendly. That could change."

Mr Day said Australia may still be attractive for Chinese gold investors, like Zijin Mining, China's top gold producer, which has bought just under 17% of Norton Gold Fields, potentially as a beachhead for further offshore expansion.

He said that "Australia makes a lot of sense for Chinese investors from a time zone perspective and offshore investment in gold assets aligns with their strategic diversification away from US dollars."

He predicted there would be more cross border deals in the gold sector, in contrast to the past year, dominated by deals done within Australia and Canada, like Kinross Gold's USD 7 billion takeover of Red Back Mining.

(Sourced from

SAfrica court orders release of Eskom-BHP price deal

Fri Aug 5, 2011

JOHANNESBURG (Reuters) - A South African judge on Friday ordered state utility Eskom to release details of an undisclosed pricing deal with mining giant BHP Billiton, which could prove embarrassing to both parties.

A local publishing group had requested the information, saying it showed a cosy relationship kept secret from the public in which Eskom provided electricity at cut-rate prices.

Judge Frans Kgomo said the release was in the public interest, radio broadcaster Eyewitness News reported.

Eskom spokeswoman Hilary Joffe said the company would not appeal the ruling.

BHP could not immediately comment.

Iron ore swaps rise to record 4 million tonne in July - TSI

Friday, 05 Aug 2011

Reference price provider the Steel Index said that the volume of iron ore swaps cleared globally rose to an all time high of more than 4 million tonnes in July, reflecting growing interest in the steelmaking material's hedging tool.

The bulk of the swaps, which totaled 4.09 million tonnes valued at more than USD 700 million, were cleared by the Singapore Exchange.

The Singapore Exchange said separately that volumes reached a record of 7,845 lots, equivalent to 3.92 million tonnes, beating the previous record of 6,905 lots, or 3.45 million tonnes, reached in May.

Other swap contracts are cleared by LCH. Clearnet in London, the CME Group, Norway's NOS Clearing and the Indian Commodity Exchange. All the bourses use TSI as the reference price index.

Iron ore swaps, launched in May 2008, are cash-settled contracts that allow steelmakers and traders to hedge their cost after the industry abandoned a system of pricing contracts once a year in favor of a more flexible quarterly scheme.

(Sourced from Reuters)

Hebei likely to witness a small hike in coking coal prices

Friday, 05 Aug 2011

coking coal market in Hebei Province operates stably recently and is slated to increase at a later stage.

In late July, domestic steel market eyed an uptrend. MySpic on August 2 was seen at 177.4 up by 0.27% DoD, 0.7%WoW or 2.12%MoM. In line with the ongoing improvements of steel market, steel mills and coking plants are more willing to replenish coking coal stocks.

The government is planning to shut down 130 small coal mines in Hebei Province in the near term with 6.6 million tonnes of outdated capacity involved. Yet most of the crucial coking coal supply relies on local small mines. Thus the shutdown may affect the normal production of some small coking and steel companies.

The coking coal from Inner Mongolia to Hebei remains tight, leaving an impending upward price hike of CNY 10 per tonne to CNY 20 per tonne this month. Simultaneously, due to the consolidation of coal mines in Shanxi, raw coking coal supply limitation has sharply slowed down the supply of coal to Hebei. In addition, more small and medium coal washeries in Hebei, being subjected to thin profits have to curtail or stop production. The overall strain of coking coal supply thus makes imports a favorable option.

(sourced from

Mongolia Tavan Tolgoi mine begins shipments to China Chalco

Friday, 05 Aug 2011

Reuters reported that Mongolia massive Tavan Tolgoi project began shipping 4,000 tonnes of coal south to its new partner, the Aluminum Corp of China Ltd recently following a ceremony at the mine site.

The mine state owned operator, Erdenes Tavan Tolgoi agreed last week to sell USD 250 million worth of coal to the Chinese company from its east Tsankhi block a move designed to fund the deposit overseas listing scheduled for next year.

Erdenes confirmed that a total of 40 trucks each loaded with 100 tonnes of Tavan Tolgoi coking coal has already set off south to China. The mine, which could contain as much as 7.5 billion tonnes of high quality coking coal, is expected to help transform Mongolia tiny economy over the next decade and it has attracted the attention of scores of overseas investment banks and mining firms.

But it remains unclear when large-scale development of the property will begin with the results of a bidding process for the western section of the mine still in dispute.

(Sourced from Reuters)

Another coal mine blast in Ukraine injures 26

Friday, 05 Aug 2011 | By KYIV Post

A methane explosion injured 26 coal miners at the Krasnokutska mine operated by state run Donbas Antratsyt in the town of Krasny Luch in Luhansk region in eastern Ukraine, a week after accidents killed 38 workers at two other mines in that region.

Emergency Situations Ministry based in the Kiev said the blast occurred at 11:40 AM local time on August 4th 2011at a depth of f 155 meters after the miners switched on an electric cable hoist. At that moment, there were 224 people there.

5 miners received burns of moderate severity and 21 received minor burns.

Thursday's blast was the third mining accident in Ukraine in less than a week. On July 29 an explosion in a mine in the Luhansk region killed at least 26 people and injured two. Also early on Friday, 11 miners died and four were injured at a state owned mine in the neighboring Donetsk region when a piece of heavy machinery collapsed.

Read more

20 dead, 17 missing in Ukraine twin mine tragedies

The World's largest Coal Miner to invest in Indo mines

Friday, 05 August 11

Golden Energy Mines (GEMS) might go for initial public offering (IPO) by the end of September 2011. The company is planning to off load 15-20 percent of its share to the public by next month.

However, PT Dian Swastatika Sentosa Tbk (DSSA), a holding company for GEMS, is also planning to accommodate "the strategic investors" by offering 30 percent share prior to IPO or simultaneously with IPO.

According to industry, the world's largest coal producer, coal India limited, one of the Indian largest power producer, Tata power and Indian based largest infrastructure company GMR Infrastructure Limited are among the other potential investors who are currently negotiating with Golden Energy Mines.

Tata power and GMR are already had invested coal mines in Indonesia. Tata brought 30 percent share in Bumi Resources, Indonesia’s largest coal producer, which is controlling Kaltim Prima Coal and Arutmin. Meantime, GMR has brought a coal mine in Sumatra Island.

When we contacted PT Dian Swastatika Sentosa for confirmation about their potential investors, they refused to disclose the identity of the companies those are, negotiating with them. "We can’t to disclose the identity of companies that have been discussing with us to buy 30% share" said corporate Secretary of PT Dian Swastatika Sentosa Tbk (DSSA) Hermawan Tarjono.

“We will announce once we finalize the deal most probably by next month" Hermawan Tarjono said. "We are targeting to issue 15-20 percent shares to issue to public via IPO by the end of next month”, he added.

Coal India is the India's state owned coal miner was looking for government approval to invest in GEM.

According to a media, India's federal secretary C Balakrishnan was quoted by news wires as saying that the government may clear Coal India's proposal to invest in overseas assets by the end of August.The matter has been forwarded to the finance ministry for approval.

If coal India obtains the approval from government of India to invest in GEM, then the competition will be high as Coal India is keen on invest in overseas to secure coal for Indian market. According to a media, the deal would be around $ 750 million to $ 1 billion for 30 percent share of GEM mines, which is holding around 10 coal concession.

Dian Swastatika has extended the deadline for submitting bids to August 2011, from June possibly to accommodate coal India's bid.

However, an another Indian paper quoted that, Sinar Mas has extended its deadline because one of the short listed bidders, Tata Power Co, decided to withdraw from the race because of increasingly competitive bidding.

Golden Energy is targeting to produce 6-8 million tons of coal this year jumped around 3 - 5 million compared to last year production. GEMS is mainly producing coal with calorific value 4200 kcal/kg (GAR), 4800 kcal/kg (GAR), and 5300 kcal/kg (GAR) from its mines from Sumatra and South Kalimantan. GEMS coal supplies used to be done through Bunati Sungai Danau in South Kalimantan and Teluk Bayur Padang in Sumatra. South Kalimantan mine is producing around 5 million and 3 million tons come from its Sumatra mine.

According the company's website, production is expected to be ramped up to 15 million tons by 2014.

If you believe an article violates your rights or the rights of others, please contact us.

(By coalspot)

Thursday, August 4, 2011

China Dagong agency downgrades US credit rating from A+ to A with negative outlook

Aug3,2011 - |sourced UTC

Chinese rating agency Dagong Global Credit Rating Co. said Wednesday it has cut the credit rating of the United States from A+ to A with a negative outlook after the U.S. federal government announced that the country's debt limit would be increased.

“The decision to lift the debt ceiling will not change the fact that the US national debt growth has outpaced that of its overall economy and fiscal revenue, which will lead to a decline in its debt-paying ability”, said Dagong Global in a statement.

The downgrade is a result of fights between U.S. political parties over debt issues, which reflects the government's inability to completely solve the debt problem, said Dagong Global.

“The interests of the country's creditors are short of systematic protection both politically and economically” underlined Dagong.

China is by far the largest foreign holder of US debt, with holdings amounting to 1.15 trillion U.S. dollars as of the end of April.

Dagong announced last month that it had put the U.S. credit rating on negative watch for a possible downgrade on expectations of a long-term economic recession in the world's largest economy, partially caused by its economic governance and policies.

Dagong downgraded the U.S. rating from AA to A+ in November of last year after the US government announced a second round of quantitative easing.

The agency said the approval to raise the debt ceiling indicated that there will not be any positive changes in factors that will influence the country's debt-paying ability in the long run.

The growth of the US new debts has so far outpaced the rate at which it reduces its fiscal deficit, as there are not reliable or feasible policies put in place to support the country's plan to cut federal spending, it said.

Dagong estimated that the United States has to reduce no less than 4 trillion dollars in its fiscal deficit in the coming five years to sustain its liability scale.

The federal government's 2.4 trillion dollars reduction plan reflects its unwillingness and inability to cut its deficit and reduce debt, which in turn leads to the country's current credit rating, it said.

“The decline in the federal government's debt-paying ability is irreversible,” said the company, adding that the US Congress has not found a constructive way to increase the country's economic growth.

The agency forecast last month that the US economic expansion will slow to 2.5% annually for 2011 and 2012, with monetary and fiscal policies being forced to tighten and drivers of inner growth remaining weak.

Credit rating agency Moody's also put the U.S. AAA credit rating under review for a potential downgrade last month on rising tensions over the country's borrowing limit.

Iron ore project threatened by politicking

Thu,Aug04, 2011 | sourced UPI

Political controversy over an iron ore mine development in central Uruguay threatens to scuttle the project amid signs the Indian mining company and investment partner may be losing patience over the politicking by opposition and environmentalist groups, officials indicated.

The Minera Aratiri project's early development is seen by the government of President Jose Mujica as the key likely to open up an underdeveloped part of the country to new business opportunities.

The opposition, local residents and environmentalist groups disagree. They argue the mine's large-scale exploitation will ruin vast tracts of pristine environment and not benefit Uruguayan economy or the region to the extent originally claimed in feasibility reports.

Alarm bells sounded when the Indian iron-ore mining group Zamin Ferrous Resources downgraded the project on its international priority list from the first to the fourth position. Zamin Ferrous planned to invest about $1 billion in the project but now says it will put the funds in its other projects.

Zamin told Uruguayan officials it was surprised by the rising controversy over the project. The Uruguayans in turn told the investors of their disappointment but admitted there had been too much politicking over the project. Mujica condemned it as "political cackling."

Aratiri Project General Manager Fernando Puntigliano said the project was put on the back burner mainly because of the political controversy over its feasibility and delays already affecting a completion schedule.

Critics of the project oppose the plan to exploit the open pit magnetite iron ore deposit, which they see as potentially destructive to the surrounding area. Large deposits of magnetite, a mineral with high iron ore content, have been found on the border of Durazno and Treinta y Tres departments.

Studies have established about 250 million tons of the ore deposits but further projections say the final recoverable quantity may exceed 1 billion tons.

A 130-mile slurry pipeline for transporting the ore to a planned new port on the Atlantic coast has also triggered the wrath of environmentalist groups, local farmers and residents, who challenged the plans for its potential damage to the environment.

Meanwhile, Mujica is exploring the feasibility of turning the mine's development into an equal partnership joint venture.

Puntigliano said Zamin will continue work on the project but welcomed ideas for a state partnership.

All private companies in Uruguay like to have the state as a partner, he said.

Zamin Ferrous is an international group registered in Jersey, Channel Islands, with offices in London, Sao Paulo and Switzerland.

The company has ongoing iron ore and coal projects in Brazil, Chile, Bolivia, Malawi and Mozambique and exports to China, India and the Middle East.

Shandong Steel acquires 25 percent stake in African Minerals' Tonkolili project

Thu, Aug04, 2011

Chinese steel producer Shandong Steel Corporation has lately completed the acquisition of a 25 percent stake in the Sierra Leone-based Tonkolili iron ore project which is owned by London-listed Africa-focused mining giant African Minerals Ltd.

Shandong Steel has paid $1.5 billion in total for the deal. In addition to the shares, it has also obtained the option to purchase 25 percent of iron ore produced by the project as well as obtaining up to 15 percent discounts if its annual purchased tonnages exceed a certain level. However, the deal is still subject to the approval of the Chinese government.

African Minerals said it will invest the proceeds of the deal to expand the Tonkolili project, which is the world's largest magnetite iron ore mine with total iron ore reserves of 12.8 billion mt. The project is scheduled to be carried out in three stages. All of the iron ore produced by the project will be supplied to the Chinese market. The first shipment of iron ore is expected to be delivered to China in the fourth quarter of this year.

(By steelorbis)

Xinjiang port upgrades facility to transport Mongolian coal

Thu,Aug04, 2011 |By Xinhua

A six-kilometer path specially built for coal transport has been completed in northwest Takeshiken, the second largest port at the China-Mongolia border, as the import of coal from Mongolia picks up, local officials said Wednesday.

The project was first proposed by Mongolia in April over fears that increased truck hauling of coal might damage trade routes. Mongolia Energy Corporation Limited undertook the project and finished it at the end of July, officials said.

The Takeshiken port, located in the town of Takeshiken in Xinjiang Uygur autonomous region, imported 5,000 tons of raw coal from Mongolia in the first three months this year, official statistics show. Xinjiang, one of China's key energy and heavy industry bases, is estimated to be short of 1.6 million tons of charred coal for industrial use every year.

China has a huge demand for energy sources. The latest statistics available show that the demand for coal reached 3 billion tons in 2009. In 2010, 146 million tons of coal were imported, a 40.9-percent increase, according to the National Energy Bureau.

China to soon cut coal import VAT and port charges

Thu, Aug04, 2011 |By China Mining

China, the world's largest coal producer and consumer, may soon lower value-added tax and port charges on imported coal to encourage the country's coal imports to ensure an effective supply of the fuel, said Hao Xiangbin, a senior official with the China Coal Industry Association, sources reported.

Hao said that the Chinese government has been studying the adjustments of VAT and port charges on coal imports.

Currently, the Chinese government imposes a 17% VAT on coal imports, which was adjusted up from 13% on Jan. 1, 2009. Port charges for coal imported at Chinese ports range from RMB 30 to RMB 40 per metric ton, with Guangzhou port at RMB 38.5 per metric ton, and Shanghai port at RMB 32.5 per metric ton.

Hao added that China's net coal imports will remain high this year, likely hitting 150 million metric tons, and are expected to increase in 2012 and 2013.

In the first six months, China's coal imports amounted to 70.49 million metric tons, down 11.8% year on year, and its coal exports fell 13.7% year on year to 8.75 million metric tons. China saw its net coal imports decrease by 8.04 million metric tons or 11.5% year on year to 61.74 million metric tons.

Hao estimated that the country's coal demand in the second half will be higher than that in the first half, and that its total coal demand for 2011 will reach 3.73 billion metric tons, up 9.7% year on year.

China's raw coal output reached 1.77 billion metric tons in the first half of this year, representing a year-on-year increase of 13%, and its coal sales volume reached 1.71 billion metric tons during the period, 14% more than a year ago.

Macarthur Coal asks shareholders take no action on Peabody, Arcelor Mittal bid

Thu Aug 4, 2011

SYDNEY Aug 4 (Reuters) - The board of Australian miner Macarthur Coal has not decided on a A$4.7 billion ($5,01 billion) takeover offer received from Peabody Energy and ArcelorMittal and continued to ask shareholders to take no action on the bid.

Macarthur said in a statement on Thursday that it was still in talks with other parties to elicit a rival bid.

Peabody, the largest U.S. coal company, and ArcelorMittal, the world's top steel-maker, have failed to seal an agreed takeover with Macarthur, which is coveted for its supply of pulverized coal, a key steel-making ingredient.

Instead, the pair of bidders has gone direct to Macarthur shareholders with an offer of A$15.50 a share in cash, plus a 16 cent dividend. Macarthur shares last traded at A$15.78. ($1 = 0.935 Australian Dollars)

Rio Tinto sees tight mining input prices

Thu Aug 4, 2011

SYDNEY Aug 4 (Reuters) - Global miner Rio Tinto is seeing surprising resilient strength in iron ore prices but mining input prices are also very tight, Chief Financial Officer Guy Elliott told a conference call on Thursday.

His comments come after Rio reported a 35 percent jump in first-half profit, missing market expectations, but sweetened the result with a $2 billion expansion of its existing share buyback programme.

Indian steelmakers eying exports as domestic demand dips

Thursday, 04 Aug 2011 | sourced BS

Steelmakers are exploring the world market following a dip in domestic demand. According to the Joint Plant Committee data, steel exports in the Q1 ended June 30, jumped by 71.8%, at 1.074 million tonnes against a mere 0.62 million tonnes during the same period last year.

It said that that rising output, however, managed to curtail imports, which fell by 52% in the period under consideration. However, India still remains the net importer at 1.32 million tonnes at the end of the first quarter.

During the 17th Annual General Meeting on July 25, Mr Sajjan Jindal vice chairman and MD of JSW Steel had said the company is planning to increase its exports by 15% to 20% this fiscal.

TATA Steel, despite the surge in domestic demand, is looking at increasing exports. The company said that “In view of the robust domestic demand during the year, the opportunity for exports has been limited for flat and long products. However, there is a growth of 76% in wires and 43% in FAM business over the last year.”

Russia supplies 1.268 million mt of steel products to EU countries in January-July


In January-July this year, Russian metallurgical companies supplied European Union (EU) countries with around 1.268 million mt of steel products, using 38.9 percent of the quotas established by the European Commission for the year.

For 2011, the EU has extended its agreement with Russia for the trade of certain steel products and has increased the volume quota for Russian steelmakers by 2.5 percent compared to 2010

Centre may plead against mining ban

Thursday 04 Aug, 2011

The Indian central government is likely to appeal against the blanket ban on iron ore mining in Bellary in Karnataka before the Supreme Court.

An inter ministerial meeting attended by secretaries in the environment and steel ministries on Tuesday felt that instead of a blanket ban, only the erring companies should be dealt with.

The Centre will present its interim report this week. The report was to be prepared in consultation with other concerned ministries like mines, steel and commerce. While imposing blanket ban on iron ore mining in Bellary last week, the apex court had asked the environment ministry to come out with an interim report by Friday on requirement of the iron ore for the domestic steel industry.

A mines ministry official said that the government will present a fact sheet at the next hearing on Friday, where-in it would argue that a blanket ban would lead to closure of several steel mills, including those in the SME sectors, in the area.

The official said that “Cost of transporting iron ore will be too much for the smaller players Kalyani Steel, Mukund Steel and Kirloskar Ferrous. Karnataka has 16 steel companies of different scales and minus JSW Steel, no one can survive if the ban continues for more than 15 days. Moreover, there will be a question mark on JSW sustaining the regular production levels, if the bans continues beyond Friday.”

(sourced Deccanherald)

Italian plantmaker Danieli to boost its investment in China

August04, 2011

Italy-based Danieli & C Officine Meccaniche SpA (Danieli), one of the world's leading equipment plant suppliers for the metals industry, said it will significantly increase its investment in China to cash in on the growth in demand coming from the government's efforts to adjust the industry's structure.

The Italian company's total investment in China will reach €130 million ($188 million) by 2012, up from the current €80 million, Matteo Bavaresco, CEO of Danieli China, has told China Daily.

Mr. Bavaresco said the increase is due to the booming demand coming from increased steel production and China's steps to upgrade the industry to meet goals in energy conservation and emission reduction. He continued, "Now there is a trend of more and more small and medium-sized Chinese steelmakers coming to us because they also want efficient equipment to reach energy-saving and emission targets." He added, "For example, our direct reduction iron technology can cut about 50 percent of emissions, compared with traditional technologies."

Danieli China employs more than 1,000 people at its facilities in Beijing and Changshu, Jiangsu Province. It is a market leader in mini-mills, long-product casting and rolling plants, and among the frontrunners in the flat product and iron ore sectors. (sourced steelorbis)

US electricity generation from coal hits 30 year low - EIA

Thursday 04 Aug, 2011 | By Argusmedia

According to US Energy Information Administration, the share of US electricity generated by coal during the first quarter of 2011 was at the lowest level in more than 30 years as power plants switched to natural gas.

The US electric power sector generated about 440 terawatthours using coal during the first quarter of 2011, down 5.8% from the first quarter of 2010. Coal provided 46% of total generation in the first quarter of 2011 compared with 49% during the same three-month period in 2010 and 52% in the first quarter of 2008.

EIA said that coal's share of electricity generation fell in all regions of the country while total electricity generation increased less than 1%. Natural gas generation in the northeast census region grew nearly 6% from last year in the first quarter on lower marginal gas prices and rising coal prices.

The EIA reported that “Generators in the eastern US will likely continue the trend of substituting natural gas for coal.”

Miner Rio Tinto's H1 profit jumps 35 pct, expands buyback

Thu Aug 4, 2011

* Record first-half profit but below consensus forecast
* Expands share buyback to $7 bln
* Guarded but positive outlook into 2012

SYDNEY, Aug 4 (Reuters) - Global miner Rio Tinto reported a 35 percent jump in first-half profit on Thursday, but it missed market expectations and sweetened the result with a $2 billion expansion of its existing share buyback programme.

Booming iron ore sales to China helped propel underlying profit to $7.8 billion for the six months ended June, a record for the first half but below analysts' consensus forecast of $8.03 billion.

"Their announcement shows they are witnessing quite a lot of cost pressure hit by exchange rates and inflation. But they are also still exuding confidence for strong growth from China," said Peter Chilton, investment analyst at Constellation Capital Management.

Rio Tinto also boosted its interim dividend to 54 U.S. cents per share from 45 cents a year earlier.

Rio Tinto joins major rivals Anglo-American Plc and Xstrata Plc in overcoming spiralling costs and restive labour unions to report profit growth of a third or more over the past week, thanks to surging commodity prices.

But with the global economy on edge, bedevilled by debt crises in Europe and the United States, the outlook remains uncertain, with investors worried about a return to global financial turmoil and a knock-on effect for commodity prices.

"We remain positive for the remainder of 2011 and into 2012, in particular given the context of the industry struggling to bring new production onstream," Chief Executive Tom Albanese said in the results statement.

"However there are important risks to this outlook related to the pace of credit tightening in developing countries and the threat of financial crises arising from sovereign debt problems in Europe and the United States which could destabilise commodity markets."

Iron ore net earnings, which accounted for 78 percent of Rio Tinto's group profit, surged 44 percent in the first half, while aluminum profits edged 3.5 percent higher.

Earnings from the energy division, which includes coal and uranium, tumbled 39 percent, partly reflecting flooding at its Australian collieries and at the operations of its Australian uranium subsidiary, Energy Resources of Australia .

The strong Australian dollar also weighed heavily on Rio Tinto's earnings.

Gladiator Resources installs a blast furnace

Thursday 04 Aug, 2011 |By Larepublica

Gladiator Resources Limited is an Australian mining company that specializes in the exploitation of gold and nickel and allied with US Orosur Mining Inc for Zapucay Project.

Zapucay Project in south central department of Rivera aims to produce pig iron for the foreign market, at a cost 50% less than that of Brazil. Estimates of mine are producing 400,000 tonnes of pig iron annually, generating between AUD 120 and AUD 160 million in exports and about 300 jobs.

Zapucay Project consists of a mine (iron ore mining and processing in a concentration of iron), a pig iron plant and several modules of charcoal production. As for the plant will be composed of a coal plant, a sinter, blast furnace and a small power plant.

In the mine is crushed, milled and separated with magnetic ore separator. Moves to the sinter plant, the process of agglomeration of fine iron to produce a suitable material for the blast furnace, sinter. Finally, we reach the blast furnace produces pig iron foundry. Parallel is made based on small diameter logs extracted from the thinning of plantations nearby, charcoal, at a cost of 20% of traditional methods for coal.

South African coal loadings unaffected by strikes

Thursday 04 Aug, 2011 | By Montel

A week long coal miners strike in key producer South Africa, which was resolved on Monday, had no impact on coal shipments, with exports in fact rising during the action.

New York-based analysts Commodore Research & Consultancy said that “The now concluded strikes have not affected South African coal shipments.”

Mr Jeffery Landsberg MD of Commodore Research & Consultancy in a note said that “Five South African coal fixtures came to the market last week, two more than the previous week and up from the trailing four week average.”

Mr Landsberg said that stockpiles of coal at the main coal loading port of Richards Bay have also remained firm at around 3 million tonnes, while inland stockpiles at domestic power plants are unchanged at about 13 million tones.

Resources super profit tax - Government to credit magnetite royalty

Thursday 04 Aug, 2011 |By Ninemsn

The Australian federal government will credit state royalties on magnetite iron ore to miners profitable enough to be subject to the Mineral Resource Rent Tax.

Mining industry lobby groups expressed disappointment after the West Australian government imposed a royalty on magnetite iron ore, saying it may discourage investment in the fledgling, capital-intensive sector.

A five per cent royalty will be payable on both magnetite iron ore, a low grade form of the steel making commodity that requires processing, and uranium, which is not subject to the MRRT.

Both commodities are not yet produced in WA, but activity in the sectors is heating up.

A spokeswoman for federal Resources Minister Martin Ferguson told AAP that "The government will credit magnetite royalties against any potential Mineral Resource Rent Tax liability.”

WA Premier Colin Barnett said the federal government would not have been surprised the magnetite royalty had been imposed. He told that "The commonwealth government will collect company tax and income tax, so they will be net beneficiaries of the magnetite industry, far more than the state would.”

H added that "The state will always reserve its right to set the price at which we sell minerals. If we didn't have that royalty, we'd be giving away that iron ore to Australian and overseas companies."

Caterpillar inks MoU with FMG for Solomon iron ore development

Thursday 04 Aug, 2011 |Miningmagazine

Caterpillar and its Australian dealer, WesTrac, have signed a memorandum of understanding with Fortescue Metals Group to implement an autonomous mine haulage solution at FMG's new Solomon iron ore development in Pilbara in Western Australia. This will be the first large commercial installation of Caterpillar's autonomous trucks anywhere in the world.

The deal, which is focused on boosting productivity and performance, will comprise several elements, including the full Cat MineStar System technology suite and an initial fleet of 12 Command autonomous 793F haul trucks. These will be installed in the September and December quarters of 2012. The companies anticipate that Solomon will have a total of 45 autonomous trucks by 2015.

Mr Chris Curfman VP of Caterpillar Global Mining said that "By working closely with mining customers, we are able to tailor a solution to their specific business needs using Caterpillar's broad range of products, technology and services. This collaboration will also positively impact sustainability at Solomon mine through reduced environmental footprint and machine efficiencies."

Though still relatively new, FMG has quickly established itself as one of the world’s largest producers and traders of iron ore. The company, which was formed in 2003, owns approximately 87,000 square kilometers of Pilbara tenements.

FMG's first mine site, Cloudbreak, began production in May 2008, and Christmas Creek came on line in April 2009. Since 2006, FMG has expanded its exploration westwards. The Solomon area, which is about 70 kilometers north of Tom Price, has been chosen as the next area for development.

Consultant Coffey Mining prepared a reserve estimate for the project earlier this year, based on FMG's own resource estimate for the deposits of Kings and Firetail.

The probable reserve estimate totaled 716.3 million tonnes at an average grade of 56.3% Fe, 7.66% SiO2, 2.93% Al2O3 and 0.073% P.
Mining was forecast to support iron ore production of 60 million tonnes per annum, comprising 40 million tonnes channel iron deposit fines and 20 million tonnes Brockman fines, for a decade.

Mr Neville Power COO of FMG said that "Innovation is at the heart of Fortescue's values. It is how we started this business through different exploration and mining practices, and it will be critical in how we implement our extensive growth aspirations. One of the key growth challenges we face is around availability of people and the need to best utilize this valuable resource. As such, it is incumbent upon us to look at new ways of doing things. The expected roll out is more than just a trial. It is the unique capabilities that the three parties bring to this agreement that will deliver the world’s leading autonomous mining solution at Solomon."

Caterpillar and WesTrac will work together to provide product and technology implementation, consulting and management services to Solomon mine, as well as operating the complete autonomous system once it is up and running. WesTrac will also be responsible for supporting the Caterpillar mining fleet at Solomon with machine and technology technicians and support personnel.

Mr Jim Walker CEO of WesTrac Group said that "By marrying our Cat product expertise with these ‘building block’ technologies, we are well positioned with Caterpillar to provide Solomon mine with a turnkey autonomous mining solution."

Reliance Steel completes Continental Alloys acquisition

Thursday, 04 August

Los Angeles, California-based service center Reliance Steel & Aluminum Co. announced Wednesday that it has completed its acquisition of Spring, Texas-based Continental Alloys & Services, Inc., a distributor of steel and alloy pipe, valves, fittings and flanges, and certain of its affiliated companies. The transaction was valued at about $415 million.

In a press release, Reliance said that current management will remain in place with Dale Dendtiz serving as CEO and David Sapunjus serving as President of Continental Alloys & Services. David H. Hannah, Chairman and CEO of Reliance also noted that "This acquisition also aligns well with our diversification strategy adding OCTG products, new processing capabilities, and entry into new international markets."

Iron Ore-Prices hold at 2-1/2-month high, upbeat sentiment

Thu Aug 4, 2011

* Karnataka exports unlikely to resume anytime soon
* Shanghai rebar futures stay near three-month highs
By Manolo Serapio Jr, Reuters

SINGAPORE, Aug 4 (Reuters) - Firm Chinese demand and tighter Indian supplies lifted spot iron ore prices to 2-1/2-month highs and traders said on Thursday that gains are likely to be sustained as long as China steel prices do not collapse.

Exports from India's southern Karnataka state, which have been on hold, are unlikely to resume anytime soon despite the appointment of a new chief minister on Wednesday to replace a predecessor who quit over a $3.6 billion illegal iron ore mining scandal.

Karnataka, which accounts for about a quarter of annual iron ore exports from India, the world's No. 3 supplier, banned shipments from July last year. India's top court ordered the state to lift the ban in April but exports have yet to resume.

Adding to the supply woes, India's Supreme Court last week banned mining in the iron ore-rich Bellary district in Karnataka.

"The market is very active right now. Problems in India and good steel demand in China are combining to push prices higher," said a Shanghai-based iron ore trader who sells Indian material to Chinese steel mills.

Some offers for Indian ore with 63.5/63 iron content have topped $190 a tonne, including freight, on Thursday, with the last spot cargo for that grade done at around $188, the trader said.

"We think the price can go up to $195 with the current level of activity and so long as Chinese steel prices don't fall sharply," he said.

Brisk trading pushed up index-based reference prices, based on spot deals in China and which global miners use in determining supply contract rates, to their loftiest levels since mid-May on Wednesday.

The price of 62-percent grade iron ore rose 0.3 percent to $179.50 a tonne, according to the Platts index IODBZ00-PLT.

A similar gauge by The Steel Index .IO62-CNI=SI edged up 0.2 percent to $177.70 and Metal Bulletin's benchmark .IO62-CNO=MB rose 0.6 percent to $177.69.

China's steel demand is getting a boost from its construction sector where a government drive to build more low-cost houses is encouraging steel mills to produce at breakneck speed.

The world's biggest steel producer and consumer, China expects this year's crude steel output to rise to a new record of between 690 million and 700 million tonnes from 627 million tonnes in 2010.

Shanghai rebar futures eased 0.3 percent to 4,929 yuan by the midday break, but still near the three-month top of 4,968 yuan reached on Monday.

"The iron ore market is relying on China and emerging economies and those countries are not so much tied up with what's going on in Europe and the United States," said Troy Flannery, senior mining analyst at DJ Carmichael in Perth.

"So prices should remain strong," he said.

Fears are mounting over a global economic slowdown amid a spate of poor indicators in the United States including weaker manufacturing and services sector numbers along with a deepening debt crisis in the euro zone.

Wednesday, August 3, 2011

Coal miners strike ends

The wage settlement with NUM, United Association of SA (Uasa) and Solidarity, ranges between 8% and 10.5%

Wed, August03, 2011 |I-Net Bridge

Workers in the coal sector are expected to return to their posts on Tuesday after the unions and the Chamber of Mines signed a two-year wage agreement, ending an eight-day strike.

Frans Barker, negotiator on behalf of coal mines, told I-Net Bridge that the wage settlement with Nation Union of Mineworkers, United Association of SA (Uasa) and Solidarity, ranged between 8% and 10.5% in the first year. Unions will receive 7.5% and 10% in the second year.

The NUM, Uasa and Solidarity downed tools in the coal sector a little more than a week ago over salary increases.

NUM, which collectively represents 150,000 workers, and Uasa were demanding a 14% pay rise. Solidarity was demanding a 12% increase.

The coal mining companies involved are Anglo American Thermal Coal, Delmas Coal, Exxaro Coal Mpumalanga, Kangra Coal, Optimum Coal and Xstrata Coal. (Business Day)

CISA ready to launch iron ore price index

Wed, August03, 2011 |By China Daily

BEIJING - The China Iron & Steel Association (CISA), the country's steel lobby, will launch its own iron ore index this month. Analysts said the index would more accurately reflect the domestic market and give the nation a greater say in global pricing.

The "China Iron Ore Prices Index" will include domestic and import ore prices and be released weekly, CISA said at a news conference on Tuesday.

Zhang Changfu, vice-chairman of CISA, said since China is the world's largest iron ore consumer, the country needs a more transparent and fair price index.

The domestic component will be based on dry iron ore concentrate from 32 mines in 14 provinces and regions. The import prices will be based on data from eight ports.

Li Xinchuang, vice-secretary general of CISA, told China Daily earlier that data from the international commodity and energy information provider Platts only reflected a small portion of spot iron ore trade.

Currently, foreign companies such as Platts, the Metal Bulletin (MB) and The Steel Index (TSI) publish iron ore indexes based on the spot market. Platts' index is used by the three major global iron ore producers: Vale SA, Rio Tinto Group and BHP Billiton Ltd.

Chinese industry participants and steelmakers say this indicates that Platts works in the miners' favor.

Platts reported the price for ore with 62 percent content touched $178.50 on Monday.

However, TSI calculated the price at a slightly lower $176.10 and MB put it at $175.75.

All three were spot prices for imported ore.

The three biggest ore miners abandoned a 40-year tradition of setting prices with Chinese steelmakers annually last year, opting to reset contract prices every month or quarter, based on spot prices.

David Hanna, senior director of Asia Business Development at Platts, told China Daily earlier that Platts supports CISA's efforts to develop an iron ore index.

The Chinese domestic market is essential to the global iron ore market, he said, and CISA's participation would make this market even more efficient.

An executive from one of the three miners, who spoke on condition of anonymity, said they chose an index that is more accurate and objective to mirror the market.

Analysts said the question is whether China's iron ore indices will be acknowledged both in the domestic and overseas markets.

State-controlled Xinhua News Agency and Chinese consultancy firm already issue indices based on domestic and import prices, but none of these have been accepted by the global miners.

"CISA, the authoritative steel organization, which has multiple channels to collect data, will deliver more objective and all-inclusive ore prices," said Xu Xiangchun, a senior analyst with consultancy firm

He said the reason for the establishment of the country's own indices is to have a say in the ore market.

"Chinese steel mills prefer to use an index that works in their favor. Apart from the three giant miners, there are also other overseas miners who might consider the index from the Chinese side," said Xu.

China's iron ore imports declined 4 percent in June from May, according to the General Administration of Customs, but were 8 percent higher year-on-year.

Domestic iron ore production climbed 13 percent to a record 102.5 million tons in May from a year earlier, according to Bloomberg data.

Imported ore prices surged 42.4 percent year-on-year in the first half, meaning additional costs of 104 billion yuan ($16 billion) for the Chinese steel industry, according to CISA's statement.

Zhang told the news conference that China's crude steel output was likely to reach 700 million tons in 2011. Chinese steelmakers have the capacity to produce 800 million tons a year, but half of that capacity fails to meet State quality standards.

The Ministry of Industry and Information Technology said on Tuesday that steel output might slow in the second half on lower industrial production growth, power outages and tighter credit curbs.

South Australia wants to invite Indian partners to develop joint mining projects

3 Aug, 2011
By Rakhi MazumdarRakhi Mazumdar, ET Bureau

KOLKATA: South Australia, home of the some of world's richest mineral deposits, is keen to invite Indian partners to develop joint mining projects. Billed as the 'El Dorado of the future', the Australian state home to the world's biggest copper gold and uranium mines, wants more and more Indian companies to invest in the state.

"We have had a number of Chinese companies including, the likes of Sinosteel. In the last few year, more and more Indians companies are looking at sourcing deals with our mines. This has led to a 62% jump in mineral exports from south Australia. We also want joint venture partners and investors from India to develop mining projects in South Australia," Mike Rann premier of South Australia said.

He was speaking at an event organised by the Confederation of Indian Industries on Tuesday.

Apart from 30 new mines expected to come up in the next one year, Olympic Dam, is one of Australia's significant new copper-gold mines. Being developed at an investment of US $ 1.4 trillion , it will also have the largest uranium mine globally.

In addition, the state which built up a reputation as a leading manufacturing base for defence industry, has also received nod from federal government of Australia to make use of the Woomera defence area which was so far prohibited for mining. South Australia also offers opportunities in exploration of iron ore, nickel and heavy mineral sands in downstream processing, refining.

"We have taken a conscious decision to encourage mining and hence decided to create a climate of certainty for long term investors in the mining sector. In step, we invested $30 million in Plan for Accelerating Exploration (PACE) focused on new technology for mineral and energy exploration and development of best practices in mine assessments," the premier added. "For smaller foreign mining companies including those from India who are interested to take part in developing South Australia's resources, we want to serve as honest brokers and try to match their interests with similar sized local companies with exploratory licenses who are also looking for partners, Mr Rann said.

In addition to mining, renewable energy, bio technology, education and manufacturing are other sectors, where South Australia is also inviting prospective Indian investment.

Govt reviewing coal distribution policy, says Jaiswal

Wed,Aug03,2011 Source:PTI

In view of growing demand-supply mismatch, government is reviewing the current coal distribution policy to ensure that priority sectors get adequate fuel.

Replying to a question on whether power companies are facing shortage of coal, Coal Minister Sriprakash Jaiswal said in the Lok Sabha that coal production has not increased in line with the demand.

There are various reasons for this, he said, adding that coal producing states are facing different problems like law and order and naxalism.

The government has been providing linkages to coal blocks for development of power projects.

State owned Coal India Limited (CIL) has not been able to meet the demand and has requested the ministry to review the coal distribution policy, Jaiswal said, adding, "We are looking into it."

He, however, said that CIL has been dispatching coal as per targets fixed in the supply plan finalised as part of the annual plan. During the last three years, dispatches to power utilities have been 102%, 96% and 91% of the targets respectively.

In the current year up to June 2011, dispatch is 94% of the target.

"Dispatches could have been better but for the frequent law and order problems... constraints of wagon availability in comparison to indents in certain coal fields in the 3rd and 4th quarter of the previous year," he said.

Jaiswal, however, said that there was no shortage of coal at the power stations. The coal stock with power stations has increased from 11.63 million tonnes in July 2010 to 13.415 million tonnes in July 2011.

Coal is under Open General License (OGL) and the power utilities import coal themselves to meet their requirements, he said.

CIL likely to invest about Rs 28,000 cr in 68 mining projects

3 Aug, 2011, PTI

New Delhi: Coal India (CIL) is likely to invest about Rs 28,000 crore in 68 mining projects having a production capacity of about 230 million tonnes per annum, Parliament was informed on Wedneday.

"The estimated investment likely to be made in CIL and its subsidiaries for the purpose is Rs 27,946.42 crore and it would be mobilised from internal sources of the company," State Minister for Coal Pratik Prakashbapu Patil said in written reply in Lok Sabha.

Of the 68 projects, 16 are of Western Coalfields Ltd (WCL) in Maharashtra, 13 from Central Coalfields Ltd (CCL) in Jharkhand, and 13 of South Eastern Coalfields Ltd in Chhattisgarh and Madhya Pradesh, the minister said.

Twenty five new coal blocks of public sector firms like CCL, WCL and Singareni collieries Company Ltd (( SCCL)) and eight coal blocks alloted to firms like Karnataka Power Corporation Ltd and SAIL among others for captive use have been opened during the last three years, he said.

At present 560 underground and opencast working coal mines, including 471 on Coal India, are spread across the country.

ArcelorMittal Temirtau in $150 mln furnace upgrade

Wed Aug 3, 2011

* CEO of Kazakh operations sees "new" furnace after upgrade
* ArcelorMittal Temirtau sees 6 mln tonnes output post-2015

ALMATY, Aug 3 (Reuters) - ArcelorMittal , the world's No. 1 steelmaker, said on Wednesday it would invest about $150 million to upgrade a blast furnace at its plant in Temirtau in Kazakhstan as it seeks to boost output.

"The upgrade of blast furnace No. 3 is being conducted within the framework of a modernisation and production expansion programme to achieve output of around 6 million tonnes a year by 2015," the company said in a statement.

It said it plans to complete the upgrade in the second quarter of 2013.

"Taking into account the depth of its modernisation and the level of technological solutions, this will be a completely new blast furnace," the statement quoted ArcelorMittal Temirtau CEO Frank Pannier as saying.

The furnace's capacity will be boosted by 70 percent to 6,300 tonnes of cast iron a day, while its consumption of water will fall by 35 percent, of electricity by 8 percent and coking coal by 2 percent per tonne of cast iron.

ArcelorMittal has repeatedly said that it plans to boost output at its Kazakh plant to 6 million tonnes of crude steel by 2015 from approximately 3.8 million tonnes this year.

Indonesia becomes second largest coking coal exporter

Augt03. 2011

Indonesia, the largest thermal coal exporter in the world now becomes second biggest coking coal exporter to Japan. Indonesian’s coking coal exports to Japan claimed 14.40 percent in June compared to May's exports.

Indonesia has exported 742,215 tones of coking coal to Japan in June 2011, up 14.40 percent from previous month. The exported coking coal price was at US$ 144.83/tonne, slightly below from May's export price of US$ 152.65/tonne, according to data released by Ministry of Finance of Japan.

According to ministry’s data, Indonesia is the second biggest exporter of coking coal to Japan followed by Canada in June 2011. Australia the largest coking coal exporter in the world has shipped the biggest quantity of coking coal to Japan, which has exported 3.14 million tones in the June 2011, up 13.6 percent from the previous month.

The average price of Australian’s coking coal sold at US$ 280.51/tonne, up US$ 31.33 compared to May's price of US$ 249.18/ton.

Canada was the third largest coking coal exporter, which has shipped 732,338 tones slightly lesser than Indonesian export in June. The Canadian coking coal was sold at US$ 304.35/ton in June, up US$ 58.87 compared to May's price of US$ 245.48/ton.

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Morgan Stanley sells JSW Steel shares worth INR 84 crores

Wednesday, 03 Aug 2011 |By PTI

Press Trust of India reported that foreign fund house Morgan Stanley has sold 1.2 million shares of JSW Steel for about INR 84 crore on the bourses through open market.

According to data on the National Stock Exchange, a Mauritius based arm of Morgan Stanley offloaded 1.199 million shares since July 27 at a price of INR 701.09 per share.

As per market regulator SEBI's guideline, it is mandatory for companies to make disclosures to all transactions in a scrip where total quantity of shares bought or sold is more than 0.5% of the number of equity shares of the firm listed on the exchange.

JSW Ispat signs USD 1 billion debt refinancing deal

Wednesday, 03 Aug 2011 | By Reuters

Reuters reported that JSW Ispat Steel Ltd has signed a deal to refinance INR 61.5 billion (USD 1.4 billion) of debt, enabling it to exit from a corporate debt restructuring program

Two sources with direct knowledge of the matter said that the steelmaker was taken over by JSW Steel last year after it ran up big losses. It posted a net loss of INR 7.4 billion for the six months ended last December and held debt of INR 71.57.

One of the two sources told Reuters that "It (JSW Steel) did not go for refinancing the full debt because it posted good operating margins, good results. So, they will make up for the remaining through internal accruals now.”

JSW Steel in which Japan's JFE Holdings owns 14.8% had bought a controlling stake in Ispat for USD 476 million to expand its operations and is poised to become the country's No. 1 steelmaker once its full capacity comes on stream.

TATA Metaliks may close Goa plant

Wednesday, 03 Aug 2011 | By PTI

PTI reported that as a direct fall out of the iron ore mining scam in Karnataka, pig iron manufacturer TATA Metaliks Limited might have to close down its Goa plant in a week.

Mr Harsh Jha MD of TATA Metaliks a subsidiary of TATA Steel told PTI that "The iron ore supplies to the Goa plant are halted due to the Supreme Court ban on mining in Karnataka. We may have to close down the plant in a week.”

Mr Jha said the Goa plant depended on iron ore supplies from the Bellary Hospet belt in Karnataka.

He added that "Closure of the Goa plant will entail a huge revenue loss for the company.”

He said the Goa plant was contributing INR 500 crore out of TATA Metaliks' annual revenue of around INR 1,300 crore.

The Goa plant has a capacity of 200,000 tonne per annum.

The company was also in the process of acquiring 1,900 acre in Karnataka for its 3 million tonne steel plant. Mr Jha said the company was in the process of obtaining consent of the people for acquiring 75% and the balance would be acquired by the Karnataka government.

JSW Steel cuts production by up to 40pct - PTI Report

Wednesday, 03 Aug 2011 | By PTI

PTI reported that JSW Steel today has cut its productions from its Vijayanagar plant in Karnataka's Bellary district by 35% to 40% due to paucity of iron ore.

Mr MVS Seshagiri Rao JMD & CFO told PTI "We have reduced our steel production from Vijayanagar by about 35% to 40% as we don't have much iron ore inventory left."

When asked whether the plant was moving towards shutdown, Mr Rao said "The company has hardly two three days of iron ore left."

But he refused to elaborate.

JSW Steel has 10.3 million tonnes per annum steel making capacity at Vijayanagar in Bellary of Karnataka and it sources about 50% of its iron ore requirements from Bellary, while another 30% is met from Chitradurga district of the state.

NMDC to acquire 2 overseas mining assets soon - Mr Som

Wednesday, 03 Aug 2011 |By BL

Country’s top iron ore miner NMDC said it will clinch deals for two overseas mining assets within 100 days as talks are progressing fast.

The state run giant, which has earmarked USD 500 million for overseas acquisitions this fiscal is targeting four assets, including two coal and two iron ore, in Australia, the US, Russia and some countries in Africa.

Mr Rana Som CMD of NMDC told reporters that “We are confident to acquire two mining properties overseas within next 100 days. We are looking at four five assets in the US, Russia, Australia and Mozambique.”

Sources said that the Navratna firm, which has inked a memorandum of understanding to acquire up to 50% stake in Australian mineral exploration company Legacy Iron Ore is likely to finalise a sales-purchase agreement by September.

Legacy has interests in gold and manganese besides iron ore, and the MoU gives access to NMDC to get into Australia.

The pact, after formal completion, will give Legacy the opportunity to source and secure additional resource projects for development and financing, with the backing of NMDC as the company’s biggest shareholder.

NMDC intends to use Legacy as a vehicle to acquire large scale Australian bulk commodity projects such as coal and iron ore.

While NMDC produces about 30 million tonnes of iron ore, Legacy holds highly prospective iron ore tenements in both the central Yilgarn and Pilbara areas of Western Australia.

Besides the assets in Australia, the state run firm is eyeing a coking coal mine in Mozambique.