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Saturday, August 13, 2011

Tata Steel net triples on non-core income

13 Aug, 2011, ET Bureau

KOLKATA: Tata Steel on Friday said its consolidated first quarter net profit grew three-fold aided mainly by one-time gains from sale of stakes in subsidiaries and in an Australian mining company.

The Jamshedpur-based steelmaker, which is ranked seventh largest in the world by capacity, posted a net profit of 5,346.6 crore, compared to 1,825.3 crore last year, according to a filing with the Bombay Stock Exchange.

Tata Steel's earnings announcement, which came during market hours, did nothing for the company shares, with the stock falling to its 52-week low on a day when the trading sentiment was weak. Tata Steel's stock fell 1.7% to 476.40 as investors worried about pressure on margins because of rising price of inputs and slow demand in key European markets.

On a standalone basis, the Indian unit of Tata Steel posted a net profit of 2,219.43 crore during the April-June quarter registering a 40.5% growth, compared with 1,579.4 crore in the same period last year. Net sales in the June quarter for the entire company rose 22% to 32,839.9 crore, which was in line with analyst expectations.

"The performance is stable and not unexpected, but going forward, there might be pressure on margins both in India and abroad due to high costs and unutilised capacity," said Ravindra Deshpande, an analyst with Elara Capital.

"For Tata Steel Europe, rising prices of iron ore and coking coal will affect margins, while for the Indian unit, coal will be a drawback."

Although Tata Steel owns iron ore mines, it buys half of its coking coal requirements. Tata Steel Europe, which accounts for 65% of the consolidated business buys iron ore and coking coal from the open market.

The one-time gains included sale of Tata Steel's investment in Riversdale Mining and in Tata Refractories, while a settlement of claims at Teesside Cast Products unit in the UK also helped the company post higher profits.

In its filing with BSE, Tata Steel said that during the April-June quarter it realised 4,942 crore by selling its 26.27% stake in the Australian mining firm Riversdale to Rio Tinto, a global mining giant.

Of this, it included 2,879.29 crore as one-time profit in the first quarter, the statement added. The company also made a profit of 511 crore by selling a 51% stake in Tata Refractories to Krosaki Harima Corporation, an associate of Japan's Nippon Steel, in May this year.

SAfrica union, Implats talks go on to avoid strike

Sat Aug 13, 2011
By Agnieszka Flak, Reuters

* If talks fail, union to take dispute to arbitration
* Municipal workers ready for strike on Monday

JOHANNESBURG, Aug 13 (Reuters) - South Africa's mine workers union will again meet negotiators at Impala Platinum on Saturday in a bid to avert a wage strike that could hurt the
world's second-largest producer and curb growth in an already stagnant economy.
The talks add to a wave of disputes that have already disrupted operations in the mining and fuel sectors. South Africa's "strike season" is already expected to intensify when at least 145,000 municipal workers walk off the job on Monday, disrupting rubbish collection and other services in major cities.

"There was no progress in the Implats talks at all last night. We will meet again today and if that fails as well, we will take the dispute to arbitration on Monday," said Lesiba Seshoka, spokesman for the National Union of Mineworkers (NUM). The talks started at 0800 GMT and are likely to last all day, he said.

The NUM, seeking a 14 percent raise for its 26,000 workers at Implats, has been discussing a revised but as yet undisclosed offer from Implats. It has rejected the company's previous offer
of between 7.5 and 8 percent.

Implats and its bigger rival Anglo American Platinum account for two-thirds of global platinum supply and any prolonged strike could push prices higher. Wage talks with
Amplats are scheduled for next week.

The NUM has also reached wage raise deals of 7.5 to 10 percent for its workers in the gold and coal sectors, with the figures expected to be benchmarks in the platinum talks. The union said on Friday it had reached a three-year wage deal with junior platinum producer Royal Bafokeng Platinum , with pay increases ranging from 7 to 10 percent.

Unions say employers should pass along the benefits of high precious metal prices to workers, who often have several dependents, facing higher food and fuel bills. mployers have responded to increasing wage bills by shedding jobs and with a sluggish economic recovery, the outlook for a labour market suffering from 25 percent unemployment is not encouraging.

Economists have cautioned that wage settlements well above the current 5 percent inflation rate erode South Africa's global competitiveness by driving up the cost of a labour force already
more expensive and less efficient than those in rival emerging economies.

The ruling African National Congress, in a governing alliance with labour, does not want to antagonise a group that has supplied it with millions of votes by putting pressure on unions to seek more modest deals.

Strained labour relations in South Africa have lengthened the list of investors' concerns that include nationalisation talk in ruling party circles and high rates of violent crime linked to glaring income disparities and high unemployment.

Anglo Pacific looks to second half

By Martin Li, Investors chronicle

Disruption from flooding in the first quarter and a planned realignment of mining in the second quarter resulted in coking coal production from the Kestrel mine in Australia, which is Anglo Pacific's key royalty earner, falling by 39 per cent. However, coking coal prices in the six months increased from $220 (£135) per tonne last year to over $310, which offset the lower output.

After a solid performance in a challenging first half, the group is well placed to make progress in the second half, which will be boosted by the first royalties from the El Valle gold-copper mine in Spain. This entered production in June and increases the number of producing royalties in the group's portfolio to five. Reflecting its preference for steelmaking projects, Anglo Pacific has acquired a royalty over chromite deposits in Ontario, Canada, and one over the Isua iron ore project in Greenland being developed by London Mining.

Gains on the sale of investments totalled £7.5m in the six-month period, compared with £17.4m in the first half of last year. Investments are held primarily as a source of future royalties and are sold when the prospect of such royalties appears unlikely. Prior to these results, Liberum Capital was forecasting full-year EPS of 26.5p.

Indonesia becomes Second Largest Coking Coal Exporter

August02, 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. (sourced coalspot)

ArcelorMittal Ukraine unit in July cuts steel output by 14pct YoY

Saturday, 13 Aug 2011

Bloomberg reported that ArcelorMittal Ukrainian unit steel production declined 13.6%YoY in July from the same month a year ago.

Mr Alexander Ioskov who heads the production department at ArcelorMittal Kryvyi Rih said output fell to 425,100 tonnes from 492,100 tonnes.

Steel production declined to 3.08 million tonnes in the first seven months of the year from 3.56 million tonnes in the same period a year ago after a blast furnace malfunctioned in June.

(Sourced from Bloomberg)

NTPC wants coal assets in South Africa - Mining Weekly

Saturday, 13 Aug 2011

Mining Weekly citing an unnamed NTPC official reported that NTPC Ltd wants to acquire coal assets in South Africa and conclude long term supply agreements with local miners.

Mining Weekly without saying where it got the information reported that NTPC is considering entering into supply contracts that would start at levels of 4 million tonnes a year, ramping up to 16 million tonnes.

(sourced Bloomberg)

Life after the U.S. rating downgrade

Aug 12, 2011

By Nipun Mehta, Reuters

The unthinkable (for some) happened last week when the U.S. economy was downgraded from ‘AAA’ to ‘AA+’ with a negative outlook by Standard & Poor’s, one of the three large global rating agencies.

That led to an interesting situation where European economies like France and the UK are rated higher than the U.S., despite huge concerns about their financial condition. The event would undoubtedly have hurt the American ego, particularly since S&P announced that there could be more downgrades in the offing.

That this was an event that was imminent is accepted by many, but what is in store for the global economy and the Indian economy going forward?

There are several concerns that will keep haunting the central banks, the equity markets and governments around the world. These include:

- What if the UK and France are downgraded too?

- Will the other two rating agencies also downgrade U.S. in a few weeks’ time?

- How long before some U.S. companies and state and local governments get downgraded?

- Why is Spain still rated AA, Italy A+ and Ireland BBB+, when India and Brazil are rated ‘BBB-‘, by Standard & Poor’s? Will these European economies be downgraded soon?

- At ‘BBB-‘, why are India and Brazil rated the same as Portugal which has serious economic issues?

While a downgrade of one or more of the European economies is waiting to happen, one can rest assured that any such event can and will have a severe contagion effect on the other EU economies due to their linkage. Several European banks would undergo a rating change too under such circumstances.

The fact remains that even as far as the EU is concerned, the situation is delicate and we continue to tread on thin ice. Amidst all this is the bigger question of how long the U.S., being the world’s largest economy, will take to come out of the recessionary condition. One could just see another round of QE3 in the U.S. or a round of bank funding that we witnessed by France and the UK in 2008.

The other issue is of fiscal discipline by these countries which are facing a deep financial crisis. The easiest thing to reduce deficits is to raise taxes. What is always difficult for governments is to reduce expenditure as this could further lead to potentially slowing down the economy. It’s always a fine balance that needs to be created between inflationary pressures (that events like quantitative easing measures create) and recessionary conditions (which reduced expenditure can potentially create).

Given the global concerns, world equity and commodity markets will be affected even if they may not be directly impacted by the downgrade. Global currency and bond markets have already seen considerable volatile movements due to movement of large funds into and out of them.

While crude and commodity prices have eased post the event, how long they continue to fall, or sustain at lower levels will determine the inflation levels in several economies, as well as profitability of several companies in the manufacturing sector.

Select Asian economies on the other hand presently face the opposite task of inflationary pressures due to fast paced growth. It is due to this that equity markets in select Asian economies will possibly stabilise faster than the European or U.S. markets.

Risk aversion has ensured that funds move to safer asset classes like gold. One should not be surprised if part of these funds move to emerging economies once there are signs of stability in the global markets.

As far as Indian markets are concerned, once the global negative news subsides, it will be a choice between fundamentals, liquidity and valuations. While interest rate concerns, domestic scams and lack of decision making by the government continue to pull down sentiment, fundamentals remain strong and valuations are becoming increasingly attractive.

What is missing is the FII liquidity which can drive the markets upwards. In a situation where both the U.S. and EU face deep concerns over their fiscal policies, it may not be too long before emerging markets and India start attracting flows. We do need to closely watch policy action by the RBI.

Nibble into the equity markets if you have the risk taking ability to see some more volatility arising out of possible announcements from the U.S./ EU economies. If not, wait till there is greater stability in the global markets.

Afferro Mining is cheapest entry to West African iron ore - Edison

Saturday, 13 Aug 2011

According to Edison Investment Research, Afferro Mining represents the cheapest entry to West African iron ore for investors, based on its resources.

The research house has initiated coverage of the AIM quoted iron ore developer, valuing it at up to 346 pence compared to the stock’s current share price of 71.5 pence.

Mr Charles Gibson analyst at Edison said that based on just Afferro's 38.5% in the Putu iron ore project in Liberia, the company is worth 167 pence per share. Afferro's other world class iron ore project, Nkout in Cameroon, adds another 182 pence to the valuation.

Mr Gibson said that "On this comparison basis, Afferro represents the cheapest entry to West African iron ore and a good buy, even when taking into account the current worldwide market turmoil."

The report also noted that Afferro's recent fundraising effort, which raised it GBP 14.9 million.

Edison Investment said that this should carry the company through the next nine months of its aggressive exploration campaign, which is currently costing USD 11 million per quarter. As of August 5th 2011, the company had USD 30 million in the bank.

At Putu, Afferro and partner Severstal of Russia are currently advancing Putu towards a pre feasibility study. The project currently has a resource of 2.4 billion tonnes, a 200% increase since the first resource estimate, prepared in accordance with the globally recognized NI43-101 standard, was announced in July 2009.

According to estimates backed by consultancy SRK, there is potential for a resource of up to 4.2 billion tonnes.

Afferro believes that the resource at its wholly owned Nkout also has the potential to reach 4 billion tonnes. The project currently accounts for 1.42 billion tonnes of the total 14 billion tonne potential of the Mekambo iron ore orbit of West Africa.

Mr Gibson noted that infrastructure remains a key issue at both Nkout and Putu. He added that Putu represents the least infrastructure risk as it requires less capital expenditure on part of Afferro. In addition to that, the project is located just 120 kilometers from existing infrastructure and there may be the option to use existing port facilities.

As for Nkout, Fairfax analyst Mr John Meyer has previously said that the project could potentially use infrastructure planned by Sundance Resources, which has the latest stage assets in the region.

An infrastructure scoping study for Nkout is expected in September or October 2011.

(sourced Proactiveinvestors)

Euro zone crisis reaches France, turns existential

Aug12, 2011 |By Paul Taylor, Reuters

PARIS (Reuters) - It was the week the euro zone debt crisis reached France, one of the twin pillars of the European currency alongside Germany.

As jitters over Paris' prized top-notch AAA credit rating took hold, President Nicolas Sarkozy returned from the beach to order up new austerity measures. Then panic selling of French bank shares and an abrupt halt to economic growth added to France's plight.

The sight of the euro zone's number two economy buffeted by rumours and investor anxiety in the midst of the holiday season raised existential questions about European monetary union that will confront Sarkozy and German Chancellor Angela Merkel when they meet in Paris next Tuesday.

The fragile edifice of support for weaker European states would start to crumble if France, the second contributor to the euro zone's rescue fund, were to face a debt downgrade.

All three major ratings agencies reaffirmed this week that no such downgrade was in the works, but that didn't suffice to calm markets.

Up to now, Sarkozy has projected himself as an energetic statesman orchestrating the rescue of the euro zone. Suddenly he had to turn to crisis management at home.

This week's perfect summer storm wiped 10 billion euros off French banks' market value and left France looking at times like the country in need of help itself.

The disclosure that the economy failed to grow at all in the second quarter, after a healthy 0.9 percent spurt in Q1, amplified concerns about the government's ability to meet its target of cutting the deficit to 5.7 percent of GDP this year.

Worryingly, household consumption fell by the biggest amount in a decade, suggesting consumers are reining in spending because they fear hard times and higher taxes ahead.


Just eight months before the first round of a presidential election, Sarkozy faces unpalatable choices between removing more tax breaks to increase revenue and cutting public spending, both of which could further depress anaemic growth.

The centre-right president has tried to upstage his Socialist opposition by proposing to introduce a German-style fiscal rule on deficit reduction in the constitution. Socialist votes would be needed to achieve the required super-majority.

Socialist leaders have refused so far to cooperate with what they call Sarkozy's "trap" and sought instead to blame him for increasing the deficit with tax give-aways for the rich.

The issue is bound to be one of the major battlegrounds of the campaign for the presidential election next April and May.

Sarkozy's approval ratings have improved since Socialist front-runner and former IMF head Dominique Strauss-Kahn was forced out the race after his arrest in New York on sexual assault charges.

But both main contenders for the Socialist nomination, Francois Hollande and Martine Aubry, are still ahead of the president in the polls at the moment.


French authorities are still not entirely sure what hit them this week. There were both rational and irrational reasons for the market attack.

When Standard & Poor's knocked the United States off its triple-A perch last Friday, markets started looking for who else might be in line, turning a spotlight on France, with the biggest debt and deficit ratios among the six AAA-rated euro zone countries.

Economist Jacques Attali, a former top aide to President Francois Mitterrand, noted that S&P had specifically compared France with the United States, saying it was the only other AAA country that would have a similar debt ratio in 2015.

"Contrary to what everyone says, we are explicitly singled out," Attali told the daily Le Monde in an interview.

"Hence we must a bring our debt down below 85 percent of GDP by the end of 2013, and get back to 70 percent in this decade. That won't be easy."

The cost of insuring French public debt against default reached a new peak during the week yet by Friday, France's 10-year bond yield had fallen back below 3 percent for the first time since November 2010, hardly a sign of imminent meltdown.

The country does have an Achilles' heel: stress tests have shown that its banks are among the most heavily exposed to debt in the euro zone periphery, particularly Greece and Italy.

The sight of the European Central Bank buying Italian bonds on the secondary market to prevent Rome's borrowing costs rising to unsustainable levels, and reports that Greece's debt swap would be extended to bonds maturing up to 2024, combined with wild market rumours to hit French lenders.

Shares in Societe Generale plunged as much as 23 percent on Wednesday before closing 15 percent lower. BNP Paribas and Credit Agricole suffered lesser hits.

A senior SocGen executive told Reuters the bank was worried that heightened market tensions culd lead to a 2008-type credit crunch in which banks stop lending to one another.

French regulators, joined by their Italian, Spanish and Belgian counterparts, banned short-selling of financial shares on Thursday in a temporary response to try to halt rumour-driven herd behaviour. Bank shares rose modestly on Friday.

A senior risk manager at a large European bank, speaking on condition of anonymity, said one reason for the losses on French and European bank shares was that short sellers were targeting banks instead of government bonds.

"Because it's increasingly difficult to trade CDS on sovereign debt, short sellers take bank shares as proxy for sovereign bonds of the respective countries. If you bet on losses of French sovereign bonds for instance, short selling of French banks is very promising," he told Reuters.

Under cover of anonymity, several traders and government officials suggest hedge funds had shorted French debt in anticipation of a downgrade and turned on the banks when it became clear this was not going to happen.

A French fund manager said he clearly witnessed a "France bashing session" on Wednesday.

He said a U.S. bank had sent a market-wide message citing six reasons to sell shares of a French investment firm. The reasons invoked were "because it is French", six times.

Coal India Q1 profit up 64 pct, faces competition for resources

Aug12, 2011 | By Reuters

MUMBAI (Reuters) - Coal India, the world's largest coal miner, on Friday said its fiscal first quarter profit surged 64 percent, beating street estimates, as stronger sales and a price increase effected in February boosted margins.

India holds 10 percent of the world's coal reserves but local supplies are falling short of demand as the country builds more power plants, and as domestic coal projects run into environmental and land acquisition delays.

Power-hungry India, where frequent black-outs are common, aims to halve its peak-hour power deficit of nearly 14 percent in two years.

Asia's third largest economy is likely to import 135 million tonnes of coal in the financial year that began April 1, spurred by demand that is forecast to grow 11 percent a year.

Earlier this week, state-run Coal India said it was in talks for one acquisition each in Indonesia, Australia and the United States, but was awaiting the government's nod to go ahead with the deals.

The company, which faces stiff competition for resources, was in advanced talks with Indonesia's Golden Energy Mines to buy up to 40 percent of its assets, sources had told Reuters in May.

But local private rival GMR Infrastructure said on Friday it had reached a deal to buy a 30-percent stake in Golden Energy for $450 million to $550 million in cash.

Coal India has also reportedly been in talks with U.S. miners Massey Energy and Peabody Energy for coal assets in the United States and Australia.

Kolkata-based Coal India, in which the Indian government sold a 10 percent stake last year for $3.4 billion in the country's largest IPO ever, has set aside $1.3 billion for acquisitions this fiscal year.


Coal India said net profit rose to 41.44 billion rupees in its fiscal first quarter , from 25.26 billion rupees a year ago. Net sales grew 27 percent to 144.99 billion rupees.

A Reuters poll of seven brokerages had forecast net profit of 36.1 billion rupees for the quarter on net sales of 142.6 billion rupees.

The company said sales for the April-June period rose 5.2 percent to 106.3 million tonnes, while coal production rose 1.2 percent to 96.3 million tonnes.

The profit was boosted by a 30-percent price increase that the company effected in February for some of its customers.

Coal India prices coal about two-thirds lower than global prices, in part because of comparatively low quality coal. Despite the price increase, itscoal prices remain 30 to 60 percent lower than international rates.

The company has said it will effect the next round of price increases after it works out the cost increase from the ongoing wage negotiations with its unions.

Shares in Coal India, the country's second-most valuable firm at about $54 billion, closed down 0.3 percent ahead of the results in a Mumbai market that fell 1.3 percent.

The stock, which was included in India's main stock index earlier this week, is the best performer among the components of the index. It has risen more than 22 percent so far this year, outperforming a nearly 18-percent decline in the main index.

Chinese raw iron ore output totals 116.96 million mt in July


According to the National Bureau of Statistics of China, in July this year raw iron ore production in China totaled 116.96 million mt, indicating a month-on-month decrease of 5.7 percent and a year-on-year increase of 21.7 percent. Meanwhile, in the January-July period of this year raw iron ore production in China totaled 691.918 million mt, a year-on-year increase of 21.9 percent.

In July of the current year, coking coal production in China totaled 37.207 million mt, with a month-on-month decrease of two percent and a year-on-year increase of 19.8 percent. In the January-July period of this year, domestic coking coal production totaled 24.7564 million mt, showing a year-on-year increase of 12.8 percent.

Taiwan iron and steel export value in July up by 12pct

Saturday, 13 Aug 2011

According to the statistics released by the Taiwan ministry of finance, Taiwan's iron and steel exports value in July this year amounted to USD 1.76 billion, increasing by 12.2% compared to June and up 31% compared to the same month of 2010, while its metal product exports value totaled USD 1 billion, up 14.75% compared to the previous month and up 21.4% compared to the same month of 2010.

Meanwhile, in July Taiwan's iron and steel imports value increased by 3.3% compared to the previous month and 8.4% YoY to USD 1.15 billion and its metal product imports value came to USD 1.03 billion down by 9.6% MoM and up by 9.4% YoY.

(sourced steelorbis)

ArcelorMittal S.Africa furnace repair needs 3 months

Aug12, 2011 |By Thomson Reuters

JOHANNESBURG (Reuters) - ArcelorMittal South Africa, a unit of the world's top steelmaker, said on Friday the failure of the furnace at its Newcastle plant would result in a loss of 400,000 tonnes in output and the financial impact would be "substantial".

It also said in a statement that the blast furnace would take about three months to repair.

"ArcelorMittal South Africa management is in the process of exploring options to augment the supply to meet the domestic customer requirements for the next three months," it said.

"The financial impact is estimated to be substantial considering the potential sales volume loss. Insurers were notified of the incident and a claim will be submitted once the actual repair costs and consequential losses are finalised," it added.

The company had said on Wednesday that the furnace at its gas cleaning plant had failed and the dust catcher had partially collapsed.

The company's outlook is already subdued.

Higher input costs and a strong rand led to a 63 percent drop in the company's first-half profit and the steelmaker forecast a difficult third-quarter, partially due to a recent strike over wages and a planned maintenance shutdown at one of its plants.

Xstrata increases coal price for Japanese buyer

Saturday, 13 Aug 2011

Daily Chinese Herald reported that Australian coal producer Xstrata will sell steam coal to Japan based Tokyo Electric Power Company at USD 127.5 per tonne FOB from October. This price is up 24% over the price in 2010.

Australia, one of the most important coal producers and exporters in the world, exports about 200 million tonne to 250 million tonne of high quality coal to the international market per year.

(sourced steelorbis)

Sesa Goa and Elenilto to jointly invest in Western Cluster Ltd

Saturday, 13 Aug 2011 | By Bloomberg

Bloomberg reported that Sesa Goa Limited and Elenilto Minerals & Mining LLC will jointly invest more than USD 2.6 billion in Liberia's Western Cluster Limited as rising demand for the steelmaking ingredient boosts prices.

Elenilto's share of investment in the iron ore company will be USD 77 million. The Liberian government will receive USD 41 million from the partnership after ratifying the Mineral Development Agreement.

Liberia, the West African nation rebuilding its economy after civil wars between 1989 and 2003, is expanding its iron ore industry after an increase in Asian demand pushed prices up 43% in 2010. OAO Severstal is developing the Putu ore project in the country, while Sable Mining Africa Limited said in June it acquired a stake in the Kpo Range exploration permit.

Sesa Goa, a unit of London listed Vedanta Resources Plc, said on August 7th 2011 that it would buy 51% of Western Cluster for USD 90 million. Western Cluster plans to develop a project that includes iron ore deposits and transport infrastructure to export the material.

According to The Steel Index, iron ore with 62% iron content arriving at China's Tianjin Port is trading at USD 177.80 a tonne. Prices have gained 4.5% in 2011.

Dry-bulk cargo up 10.9 percent on US Great Lakes

Monday, 15 August 2011 |By steelorbis

The Lake Carriers' Association reported Friday that US-flag Great Lakes freighters carried 11.1 million tons of dry-bulk cargo in July, a 10.9 percent increase from June, and a 5.2 percent jump from July of last year.

Iron ore cargos for the steel industry were up 17 percent year-over-year, however coal shipments were down 11.4 percent. Aggregate and fluxstone for the construction and steel industries slipped 3.8 percent.

Through July US-flag cargos stand at 44.8 million tons, an increase of 3 percent compared to the same point in 2010. Iron ore has increased 9.6 percent, but coal and limestone are down by 5.1 percent and 4.6 percent respectively. Compared to the 5-year average for the first seven months of the year, US-flag cargos are down 2.1 percent.

Chile approves controversial Copec coal mine

Sat Aug 13, 2011

SANTIAGO Aug 12 (Reuters) - Chile's embattled government on Friday approved a controversial coal mine project in the country's southern Patagonia region, despite strong opposition from environmental groups and local residents.

Environment Minister Maria Ignacia Benitez said the government had given the greenlight for the $530 million Mina Invierno project being developed by Minera Isla Riesco, a joint venture between industrial conglomerate Copec's (COP.SN: Quote) and shipping company Ultramar.

The approval comes as conservative President Sebastian Pinera is grappling with growing protests against his policies by students, environmentalists and miners.

COPEC said in April it would start shipments from Isla Riesco, which will supply electricity generators, in the first half of 2013. (sourced Reuters)

ING Polish pension fund acquires 8pct in Coal Energy with Ukrainian assets

Saturday, 13 Aug 2011

Interfax reported that ING Polish pension fund has acquired 8.5% of the shares in Luxembourg based Coal Energy SA which has consolidated assets of Ukrainian coal enterprise NPO Mekhanik. The fund did not own shares in the company prior to this acquisition.

Coal Energy plans to boost coal production by 81.25% for this financial year to 2.9 million tonnes in comparison with the last financial year that ended on June 31, 2011.

During the company's initial public offering on the WSE raised PLN 225 million. The funds raised will likely be earmarked for the first stage of the company five year development program the total value of which comes to USD 287 million as well as the purchase of new licenses and mines.

Coal Energy unites ten Ukrainian coal mines and facilities for working stock heaps and enrichment. The company sells coal to thermal energy companies, coking chemicals outfits, cement plants and municipalities. It also exports product to Bulgaria, Slovakia, Moldova and Turkey.

(Sourced from Interfax)

US coal use off 3pct from previous week - Genscape


Genscape said that US coal consumption was off 3% in the past week, as widespread easing of summer heat and fuel-switching by power providers cut coal demand.

The power industry data monitor said that use of coal for the week ended Thursday fell 2% from the same week in 2010.

WSI Corp weather service said that "A series of cold fronts marching across the northern tier of the nation finally brought some relief from the heat across the north central and Northeasteren sectors of the nation.”

(Sourced from Reuters)

Union plans more work stops at BHP Australia coal mines

Aug12, 2011

SYDNEY (Reuters) - Two coal mines in Australia operated by BHP Billiton will be hit by more industrial action by union workers this weekend ahead of meetings next week over a new labour agreement, a union official said on Friday.

Rolling 12-hour work stoppages are scheduled for the Gregory and Blackwater collieries in the Bowen Basin coalfields of Queensland state jointly-owned by BHP Billiton and Mitsubishi

China port iron ore stocks fall in week ending Aug 12

Aug12, 2011

Beijing (Reuters) - Stockpiles of imported iron ore at major Chinese ports slipped 0.6 percent this week to end at 94.74 million tonnes, according to data from industry consultancy Mysteel on Friday. Volumes from Brazil increased over the week, but were offset by a fall in deliveries from Australia and India.
    Following is a table showing iron ore port stock movements

in the last seven days.
Country of origin Stockpiles Change
(mln T) (%)
Total 94.74 -2.6
Australia 38.01 -0.7
Brazil 23.21 +3.9
India 13.60 -1.2

Source: Mysteel

India iron ore production down by 4pct in FY 2011 - Mr Dinsha Patel

Saturday, 13 Aug 2011

India’s mines minister Mr Dinsha Patel said that production of iron ore, a vital steel-making raw material, in the country fell by 4.81% in 2010-11 to 208.11 million tones.

Mr Patel quoting provisional figures from the Indian Bureau of Mines informed the parliament that of this, the private sector accounted for over 70% of iron ore production. He added that India produced 218.64 million tonne of iron ore in 2009-10.

Among the states, Orissa accounted for over 36% of India's total iron ore production, at 74.96 million tonne. Karnataka's output of 37.66 million tonne accounted for another 18.09% and Goa's 36.48 million tonne output was 17.52% of total production.

The data shows that all three states witnessed a decline in iron ore production last fiscal vis-a-vis their respective production figures for 2009-10.

Speaking on consumption, Patel said that steel and allied industries consumed over 118 million tonne of ore in 2009-10, while the cement industry accounted for total consumption of 11.66 million tonne during the year. However, the Mines Minister's reply did not give any reasons for the decline in FY'11.

(Sourced from ET)

Noble Buys five iron ore cargoes from Brazil Ferrous Resources

Saturday, 13 Aug 2011

Bloomberg reported that Hong Kong based supplier of energy, food and mining commodities Noble Group Ltd bought five iron ore shipments from Ferrous Resources Ltd as China boosts its imports of the steelmaking material.

As per report Noble bought 750,000 tonnes to be delivered between next month and January, Mr Andre Simao CFO of Ferrous said that four trading companies bid for the cargoes, with Noble offering the best conditions.

China, the world’s biggest consumer of iron ore, boosted ore imports by 6.8% in July to 54.55 million tonnes as steelmakers replenished stockpiles. Belo Horizonte, Brazil based Ferrous is competing with miners including Vale SA and MMX Mineracao & Metalicos SA in boosting iron ore sales and output.

(Sourced from Bloomberg)

FMG welcomes federal court decision

Saturday, 13 Aug 2011

Fortescue Metals Group Limited advises that the Full Bench of the Federal Court of Australia has handed down its decision in relation to an appeal by the Yindjibarndi # 1 native title claim group against previous decisions of the National Native Title Tribunal and a single Judge of the Federal Court to grant mining leases to Fortescue for its Solomon Hub mining operation.

The Full Bench of the Federal Court has unanimously dismissed the Yindjibarndi # 1 native title claim group’s appeal against the previous grant of these mining leases to Fortescue. Fortescue welcomes the decision that affirms that the State of Western Australia validly granted the three mining leases. Today’s decision should dispose of the majority, if not all, of the Yindjibarndi # 1 native title claim group’s legal arguments in this matter.

Mr Nev Power CEO of FMG said that "We are pleased this judgment confirms previous decisions granting these mining leases for our Solomon Hub mine. This verdict vindicates Fortescue's philosophy to support an entire community to become independent and move on from welfare. We look forward to continuing with Fortescue's expansion and delivering outcomes to the Yindjibarndi community as promised.”

Under these leases, work at the Solomon Hub has been underway for some time now and is running both to schedule and budget. It's important to note that Fortescue has an agreement which the majority of the Yindjibarndi community overwhelmingly supports and that agreement is expected to be registered. Mr Power said that "Fortescue now looks forward to completing construction of the Solomon Hub and continuing its close co operation with the Yindjibarndi and Roebourne communities.”

Friday, August 12, 2011

Zimbabwe considers dumping US Dollar for Chinese Yuan

August11, 2011

Zimbabwe is considering adopting the Chinese Yuan or the South African rand in the wake of the United State’s debt problems. The southern African country adopted the use of multiple currencies in 2009 after its dollar was rendered unusable by hyperinflation. However, the US dollar has been the biggest circulating currency in the country followed by the rand.

Following the downgrading of the debt of the US last week by the Standard & Poor (S&P) rating agency, Zimbabwean officials have been calling for a rethink on the use of the dollar.

S&P dropped the US’s rating to AA+ from the top rating, AAA, based on a lack of confidence that Congress and President Barack Obama will resolve their stalemate on how to address America’s worsening debt situation. Zimbabwean officials say this will have an effect on the US dollar which will in turn negatively impact the country’s economy. Killer Zivhu, president of the Zimbabwe Cross Border Association, said if the Yaun was adopted it will come as a big relief to members of his association who buy most of their merchandise from China. “We would rather officially adopt the Yuan or South African rand. The
 dollar is exposing us to unfair business practices,” Zivhu said.

Last September, Vice President Joice Mujuru said Zimbabwe should
 consider adopting the Chinese Yuan, in line with the country’s policy
 of using multiple currencies to tackle hyperinflation.

 Mujuru said adopting the Yuan would be a "natural progression and
 offshoot of the Look East policy,”

China has already called for a new global reserve currency to avert a catastrophe caused by any single country.

 China is the U.S. government’s largest single creditor, with over $1
trillion locked in treasury bonds as well as more than a trillion in other
 dollar-denominated assets.

But Tony Hawkins, a professor of economics at the graduate School of Management at the University of Zimbabwe said “there is no 
obvious alternative to the US dollar.” “There is no such thing as a stable currency in the markets,” Hawkins said. “At present the Euro, British Pound and Chinese Yuan are also shaky.

“Unfortunately for Zimbabwe we are caught up in the financial mess and
 we have to live with it”.

(sourced TheAfricaReport)

Tata Steel Q1 net more than triples

Fri Aug 12, 2011

MUMBAI (Reuters) - Tata Steel on Friday said first-quarter net profit more than tripled, beating estimates, helped by stronger volumes at its Indian operations, better prices in Europe and a one-time gain from a stake sale.

Excluding a one-time gain of 28.8 billion rupees ($634 million) from the company's sale of its stake in Australian coal miner Riversdale to Rio Tinto, Tata Steel reported a profit of 24.7 billion rupees.

Shares in Tata Steel, valued at about $10 billion, have fallen nearly 29 percent so far in 2011, compared with a nearly 17-percent fall in the BSE Sensex.

Japanese Power resumes coal fired unit operations after problem

Friday, 12 Aug 2011

Japanese power wholesaler Electric Power Development said it resumed operations at the 1,050 MW coal fired No.2 unit in its Tachibana wan plant in western Japan at 11:36AM on Wednesday after an unplanned shutdown last month.

The unit was closed on July 30 after a problem. The company said at the time that it was expected to restart in mid August.

(Sourced from Reuters)

GMR Infra to buy 30 pct stake in Indonesian coal asset

Fri Aug 12, 2011 10:16am IST

MUMBAI (Reuters) - GMR Infrastructure said on Friday its unit GMR Energy Ltd has entered into a pact to acquire a 30 percent stake in Indonesia's PT Golden Energy Mines Tbk or GEMS, for $450-$550 million in cash, joining the line of Indian firms buying coal assets across the globe to seek fuel security.

Shares of GMR Infrastructure rose as much as 3.5 percent during early trades.

GEMS is a Sinar Mas Group company, GMR Infrastructure said in a statement to the stock exchange.

As part of the deal, which is expected to close in calendar year 2011, GMR Energy Ltd has entered into an off-take agreement with Golden Energy, a unit of Dian Swastatika Sentosa, to buy coal over the next 25 years starting Jan 1, 2012.

The annual off take will steadily increase to 10 million tonnes per annum over the coming years, it said.

GMR, with interests in airports, energy and highways, will fund the buy via a combination of debt and internal accruals, it said.

The buy will "significantly enhance the fuel security of the power plants under construction and development by GMR Energy Ltd. as also provide a coal portfolio for trading activity," the company said.

Indian firms have rushed to find coal mine assets in Indonesia, South Africa and Australia to fill the growing gulf between domestic coal output and demand.

In May, three sources told Reuters that Coal India, the world's largest coal miner, was in advanced talks to buy up to 40 percent stake in Golden Energy Mines for up to $1 billion.

GVK Power and Infrastructure, which has been scouting for coal mines for the past two years to fuel its power plants, was also in advanced talks to buy a coal mine owned by Australia's Hancock Prospecting.

At 10:00 a.m. (0430 GMT) shares of GMR Infrastructure were trading at 30.60 rupees, up 2.51 percent in a firm Mumbai market.

(sourced Reuters)

Beacon Hill prepares logistics for first coal export from Moatize mine

Friday, 12 Aug 2011

Beacon Hill Resources said that it is confident of making progress in its talks to secure crucial rail infrastructure so that it can export larger volumes of coal from the Minas Moatize mine in Mozambique.

In June Beacon Hill began producing coal from the open pit at the Minas Moatize mine in Mozambique’s Tete province. It is now preparing to make its first export shipment later this year by trucking produced coal to the port of Beira.

The company is continuing its negotiations regarding the Sena Rail Line. Meanwhile the consistency of the 574 kilometres of track between Minas Moatize and the port of Beira is currently being tested, and final corrections of weaker areas of track are being made ahead of full commissioning.

In the meantime Beacon Hill is moving the produced coal by truck. A successful trial of this trucking operation has now been completed and the company has hired a Mozambique-based contractor, called Transportes Lalgy, Lda. This trucking solution will be capable of transporting 500,000 tonnes of coal to the port each year.

Importantly Beacon Hill said that this arrangement provides an economically viable logistics solution which is not reliant on third party infrastructure.

Mr Justin Lewis chairman said that "We are pleased to announce the successful completion of our trial trucking operation to the port of Beira, which marks another step forward in the development of the Minas Moatize mine.”

He added that “This is a transport solution that is in our control and that is not dependent on the provision of third party infrastructure. It is a significant milestone for the group as it will allow us to start stockpiling coal at the port in readiness for our first export shipment."

Beacon Hill anticipates that the Sena railway will be able to carry 6 million tonnes of coal each year. As such the company recognises that this is the most suitable long term logistics solution.

(Sourced from Proactive Investors)

European coal advances USD 126 a tonne on second day

Friday, 12 Aug 2011

Thermal coal burned to generate electricity climbed 40 cents to USD 126.25 a tonne by 11:07 AM in London. Prices gained 0.6% on August 10th 2011.

(Sourced from Bloomberg)

Shanxi monthly coal output breaks new high in June

Friday, 12 Aug 2011

According to Shanxi Bureau of Statistics that, in June the leading coal producing province in China churned out an all time high 78.15 million tonnes of raw coal, increasing by 26.2%YoY and 4.82 million tonnes over May. The cumulative output in January to June totals 411 million tonnes rising by 21.5%.

The volume of Shanxi coal exiting the province has also set a new record by 53.56 million tonnes up by 1.82 million tonnes MoM and 15.4%YoY. The total amount in January to June touches 284.75 million tonnes up by 9.3%YoY.

Analysts say coal industry dominates Shanxi industrial economic development while PPI fluctuation greatly affects industrial economic benefits. Global oil price especially imported coal price volatility largely determines domestic coal rates. Macro-control policies and market demand shifts remain major influences in Shanxi’s economic quality. Based on those, analysts estimate a steady and fast growth for Shanxi’s industrial economy in the second half of 2011.


Coal Regulatory Authority proposed in Indian

Friday, 12 Aug 2011

The Coal Regulatory Authority is proposed to be set up to regulate and conserve resources in the coal sector; protect the interests of consumers and producers of coal and for matters connected therewith or incidental thereto. The proposed Regulator is expected to create a more level playing field for all the players in the coal sector and to facilitate faster resolution of issues relating to economic pricing of coal, bench marking of standards of performance, etc.

Mr Sriprakash Jaiswal minister of state in the ministry of coal and statistics and program implementations informed the Lok Sabha that the comments of concerned Ministries/Departments in this regard have been received. However, it was noticed that some major changes/suggestions have been made by various Ministries/Departments. At present, suitable incorporation of these changes/suggestions is being examined in consultation with the Ministry of Law. Once finalized the draft Bill would be submitted for the approval of the competent authority. However, it may not be possible to indicate the exact time frame by which the proposed Authority is likely to be set up.

Mr Jaiswal said that as stated above, the likely benefits of the Coal Regulatory Authority would be more optimal development of coal resources of the country, which would ensure that the Indian coal companies raise their level of competence to be at par with international competitors. As it would also deal with the issues like mining authorization, production and supply of coal, specify & determine the grades/quality of coal, price of coal, and adjudicate disputes amongst producers and consumers, it is expected to protect the interests of consumers and producers of coal and would effectively deal with the matters connected therewith or incidental thereto.

The Minister said that the proposed Coal Regulatory Authority would facilitate more standardized operational norms, establishment of bench marks in safety standards and performance, productivity etc through adoption of best mining practices, which would entail effective resolution of problems confronted by all the stakeholders including coal producing States and coal miners.

Mongolia picks Macmahon, BBM as contract miners for major deposit

Fri Aug 12, 2011

* Selection could mean India's Mesco Steel out of running
* Macmahon, BBM likely to start operations later this year -Erdenes Exec

ULAN BATOR Aug 12 (Reuters) - Mongolian state-owned miner Erdenes Tavan Tolgoi LLC has selected Australia's Macmahon Holdings Ltd and Germany's BBM Operta as mining contractors for the major East Tsankhi coal deposit, a top company executive told Reuters on Friday.

The government has split the massive Tavan Tolgoi coal field into two sections for development. The east Tsankhi area is owned by Erdenes TT, which is planning an initial public offering worth at least $10 billion to help fund the development of the deposit, while the west Tsankhi block is being auctioned to miners via an international tender.

The tender to pick mining contractors for east Tsankhi had also included India's privately-owned Mesco Steel. Its not clear how much the contract mining agreement is worth.

"Macmahon and BBM Operta have been chosen as contract miners for east Tsankhi," Erdenes MGL Executive Director B.Enebish told Reuters.

"They should be able to start mining operations this year."

Erdenes has said that it plans to produce 15 million tonnes of coal from the east Tsankhi field by around 2015.

To help bankroll the operations, it signed its first-ever term contract from the field with the Aluminium Corp of China Ltd , which will sell some of the coal to Chinese, Japanese and South Korean companies.

Cockatoo Coal puts Taabinga project in Queensland up for sale

Friday, 12 Aug 2011

It is reported that Australian miner Cockatoo Coal has put its Taabinga project in Queensland up for sale, in the latest sign deal flow in the coal sector is accelerating.

Sydney based Cockatoo, one of a handful of listed Australian companies with producing coal mines, has appointed advisory firm RFC Corporate Finance to handle the sale of the thermal coal project, which has an estimated 252 million tonnes of undeveloped resources.

Miners with Australian coal deposits are seeking to cash in on high asset valuations and rising interest from overseas buyers, particularly emerging economies such as China and India that need to ramp up coal imports to cover a growing supply gap at home.

Thermal coal is used to generate electricity, while coking coal is used in steel production and is sought after by rapidly industrializing nations.

In August 2011, China's Yanzhou Coal Mining agreed to buy Syntech Resources, which operates a thermal coal mine in Queensland's Surat Basin. It also acquired some exploration licenses for AUD 202.5 million.

In earlier signs of industry consolidation, Rio Tinto and Mitsubishi launched a joint offer to take full control of Coal & Allied Industries, valuing the coal miner at AUD 10.6 billion. The deal echoed Peabody Energy and ArcelorMittal's recent AUD 4.7bn bid for Macarthur Coal.

Cockatoo Coal aims to attract bidders for the Taabinga project by highlighting its potential to produce thermal coal for export. The deposit is close to an existing rail line that runs to Gladstone, where a consortium of miners proposes to build the Wiggins Island coal terminal.

Taabinga coal could be exported from 2016.

(sourced TheAustralian)

Baosteel raises main product prices for September

Fri Aug 12, 2011

* Hot-rolled coil prices for structural use up 60 yuan/T
* Cold-rolled coil prices to rise 120 yuan/T
* Demand for flat products set to pick up after summer

By Ruby Lian and Jacqueline Wong

SHANGHAI, Aug 12 (Reuters) - Baoshan Iron & Steel Co Ltd , China's top listed steelmaker, said on Friday that it will raise prices of its main products for September bookings, in anticipation that demand will pick up in the peak consumption season.

Traders and analysts have forecast steel demand to warm up in September after flat steel producers, mainly state-owned majors, faced shrinking margins on high iron ore costs and weak downstream demand from automakers to producers of home appliances.

"The traditional peak consumption season is approaching, and demand for flat steel products will improve in September," said Hu Zhengwu, researcher with consultancy

In an announcement on its website (, Baosteel said prices of hot-rolled products for structural use would rise by 60 yuan ($9) per tonne, and other grades would remain steady.

Prices for cold-rolled steel would rise by 120 yuan per tonne, it said, after keeping prices for its main products mostly unchanged for August.

Domestic car sales in July rose 6.7 percent from a year earlier to 1.01 million units, picking up momentum from the previous month, the China Association of Automobile Manufacturers (CAAM) said on Wednesday.

Daily steel output has stood at more than 1.9 million tonnes since February as steel mills raised production to meet strong demand from the construction sector.

"Flat product demand hasn't picked up substantially yet, but I expect the market will improve in the fourth quarter and steel mills will see higher margins," said a trader in Beijing. "Uncertainty in the global economy will weigh on the steel market."

Baosteel's pricing moves usually set the tone for the industry as a whole, and other mills are likely to follow suit in expectation of increased demand after the summer.

The company also said it would raise the price of hot-dipped galvanised coil by 150-200 yuan per tonne and maintain plate prices unchanged for September.($1=6.394 yuan, sourced Reuters)

Peabody Energy and Yanzhou Coal signs technology agreement

Friday, 12 Aug 2011

Peabody Energy announced a new licensing agreement with Yanzhou Coal Mining Company for the installation of its Longwall Top Coal Caving technology to enhance recovery of metallurgical coal at Peabody's North Goonyella Mine in the Bowen Basin, Queensland, Australia. Yanzhou is a subsidiary of Yankuang Group Co Ltd.

Peabody estimates the new technology will allow the recovery of up to 3.9 million tonnes of additional high quality hard coking coal from the mine, with opportunities for future use in other areas. LTCC technology improves the recoverability of coal over traditional longwall mining methods, and will allow the operation to mine the full coal seam thickness of 6.5 meters versus the conventional longwall mining method of 4.2 meters.

According to Mr Eric Ford executive vice president and COO of Peabody Energy said that "Our agreement will lead to greater resource recovery, enhanced productivity and extended mine life. It also advances another avenue in our growing Chinese collaboration."

Peabody is the first company to sign a LTCC licensing agreement with Yanzhou. The equipment is expected to be placed into service in late 2012. Peabody will work with Yanzhou to ensure the mine's workforce is fully trained and equipped to begin LTCC operations in the first quarter of 2013. Peabody's North Goonyella Mine shipped 2.5 million tons of high quality hard coking coal to steel producing customers in 2010.

MMX buying iron ore from neighboring mines

Friday, 12 Aug 2011

Brazilian iron ore miner MMX Mineracao e Metalicos SA is buying iron ore from third party suppliers on the Brazilian domestic market to meet demand from its international customers.

Mr Roger Downey CEO of MMX Mineracao e Metalicos SA said that the company bought 70,000 metric tons of high quality iron ore as well as iron ore fines from neighboring miners in Brazil's Minas Gerais state in the second quarter, to meet tight export shipment schedules.

He said that the purchases from neighboring mines were necessary to supplement MMX's own output of the steelmaking raw material. While the company's second quarter record output at 2.2 million tonnes was on target, the purchases were necessary to make up for lost tonnage in the first quarter, when MMX suffered power supply and weather problems.

Mr Downey added that "We'll continue to buy third party ore as there's money to be made there.”

(Sourced from Dow Jones Newswires)

CCCMC reference prices for coke exports

Friday, 12 Aug 2011

CCCMC released on August 9 2011 the average reference prices for coke export transactions concluded in the previous week USD 495 per tonne to USD 500 per tonne FOB.

Issuance DateHigh PriceLow Price

In USD per tonne

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters is the largest trading association in China. The CCCMC reference prices are average prices for coke export transactions concluded the week prior to issuance date of such reference prices.

(Sourced from

US coal exports on pace to hit 107mn st this year

Aug11, 2011,

Washington, 11 August — June's US coal exports reached their second-highest level of the year despite coking coal volumes falling slightly from May.

Total exports increased 23pc to 9.1mn short tons (8.3mn metric tonnes) from 7.39mn st in June 2010 and marked a slight gain from 9.04mn st in May, according to US Census Bureau data released today. US exports for the first half of the year rose to 53.6mn st, up 35pc from 39.7mn st in the year-ago period to set an annualized pace of 107mn st.

In 2010, US exports totaled 81.7mn st, the Census reports.

While coking coal again accounted for the majority of total coal exports, the segment fell month to month to 5.79mn st in June from 6.43mn st in May. In contrast, shipments of all steam coal types, including anthracite, bituminous, lignite, non-bituminous steam coals and sub-bituminous coals, rose to 3.31mn st in June from 2.61mn st in May.

Among the six major US ports where coal is shipped, the Norfolk Census district saw the largest amount of shipments at 3.25mn st, although coal exports from Norfolk actually declined for the third consecutive month.

June exports from New Orleans, the second-highest exporting port, were at their second-highest level for 2011 at 1.85mn st, jumping from a flood-slowed May when its volumes totaled 1.39mn st.

Europe and Asia again were the two continents importing the most US coal. But while exports to Europe were at their highest monthly level this year, at 4.33mn st, exports to Asia were at their lowest level for 2011, at 2.21mn st.

While US coal exports were at their second-highest level for the year in June, US coal imports were at their second-lowest level as generators relied on ample inventories and as low natural gas prices encouraged fuel-switching.

The US imported 970,196st of coal in June, compared with 1.31mn st in May and 1.77mn st a year ago. Imports of Colombian coal totaled 518,351st, off 58pc from 1.23mn st a year ago and off 41pc from 876,399st in May.

(sourced Argus)

Peabody, ArcelorMittal get approval for Macarthur bid

Friday, 12 Aug 2011

Sydney, 12 August — US coal producer Peabody Energy and steel maker ArcelorMittal today received approval from the Australian government's Foreign Investment Review Board (FIRB) for their joint A$4.7bn ($4.84bn) takeover offer for Australian producer Macarthur Coal. The ruling signals that Peabody and ArcelorMittal have overcome a key regulatory hurdle to succeed in their bid.

The FIRB has the power to block foreign takeovers of domestic companies or set conditions for a transaction to take place. This is the second time Peabody has attempted to buy Macarthur after it last year made a A$16/share bid that was rejected by Macarthur. The Peabody/ArcelorMittal bid is for A$15.50/share.

Macarthur has not welcomed the bid, but the fall in the price of its main pulverised coal injection (PCI) product in recent months has made it challenging to make the case to shareholders that it should remain independent. Macarthur has several major shareholders including ArcelorMittal, Chinese state-controlled investment firm Citic and South Korean steel producer Posco.

Thursday, August 11, 2011

Blood and Iron' in Bellary: A shocking tale

Thu,Aug 11, 2011

New Delhi:
Documentary Film: "Blood and Iron";
Director: Paranjoy Guha Thakurta;

"Scandals like 2G, CWG, etc, lead to a notional loss of money. When you consider illegal mining, there's no comparison because that is the loss of a non-renewable resource that can never be got back," Paranjoy Guha Thakurta thus explains why he made his film, "Blood and Iron", on illegal iron ore mining in Bellary rather than, say, on other scams that have captured the nation's imagination.

Even the conservative statistics are staggering - 500,000 tonnes of iron ore stolen, leading to a loss of Rs.5,000 crore to the nation (a more real estimate is 10 times this sum). Where did the money go? According to the film, into the coffers of the three Galli brothers - Galli Janardhana Reddy, Galli Karunakara Reddy and Galli Somashekara Reddy -, their associates and the two largest political parties in the nation, the BJP and Congress.

Is it any wonder that right at the beginning of this bold 96-minute documentary a person puts the loot into perspective, saying, "It is the biggest scandal of independent India" while another declares, "The way these guys loot the country makes Nader Shah and Ghaznavids look like pickpockets."

And yet the Galli brothers were holding ministerial berths in the state legislature until recently. Adding a sense of irony, the film shows G. Janardhana Reddy claiming innocence and stating all the people merely act out our destiny. Convenient reasoning indeed for a man who has broken almost every law in India and has literally moved state borders to his convenience.

According to Guha Thakurta, the film is about the tripartite confluence of crime, business and politics in southern India. You can add another - religion. For two reasons - one, that it is the BJP that has supported the Galli brothers and, two, that the brothers have 'donated' a 30-kg gold crown studded with a stunning emerald of 816 carats and 35,554 diamonds to Tirupati. The crown of the lord of Tirupati is thus washed in blood and iron.

This looting of the iron is not just the BJP's doing. In adjoining Andhra Pradesh, it is the Congress party that provides them patronage. "Blood and Iron" thus gives ample proof that politicians really have no party and that the only undisputed fact about them is that they are corrupt.

The greatest strength of the film is that inside 90 minutes it manages to dig into all the angles to this greatest pilferage of India's resource, including the environmental one. The visuals of once green mountains now ripped red, an impoverished dog on red soil and a white cow bathing in a brick red river make you feel as if the hills have been skinned alive and mother earth's blood is flowing through its red streams.

Guha Thakurta uses his three and a half decades of journalistic experience to interview a cross section of people - judges, journalists, activist, writers, singers and the common man - and paints a picture of a nation in decline, of mother India being raped by her own sons.

Weaving music and protest songs into the narrative, the film gives a complete ringside view of the truth behind the greatest loot of the nation.

Guha Thakurta says, "Bellary has become a synonym for everything wrong with Indian democracy."

Competition heats up for Pilbara port and rail use

Thu,August 11, 2011
By Minsi Chung

With several key iron ore projects due to come online in the north west of Western Australia, competition for existing port and rail infrastructure is intensifying.

The proposed $4 billion open access port at Anketell Point about 30 km east of Karratha is expected to be one of the solutions, with the port set to ship 350 million tonnes of product a year.

The Environmental Protection Authority has recently given Aquila Resources approval for the $6 billion West Pilbara Iron Ore Project south of Pannawonica, which includes the construction of a 285 km rail line connecting the mine to the Anketell Point Port.

Companies like Aquila are now hoping the next step will be the environmental approval for the port itself.

The Aquila Executive Chairman Tony Poli says Anketell is of paramount importance - not just to the West Pilbara Iron Ore Project - but also to the state.

"With the fullness of time there will be also other industrial uses, agricultural uses going through Anketell Point, so it is an extremely important asset to the state, putting aside the significant royalties the state will win from Aquila and other companies exporting iron ore to China."

He says the open access port is also important for other companies, especially the smaller iron ore players.

"It is very important to the West Pilbara; there is no other open access port in the West Pilbara," he said.

"You have Rio Tinto's Cape Lambert [port] which is only 10 km away from the proposed Anketell Port but unfortunately it is not open to third parties.

"It is a significant project for companies like Atlas Iron and Iron Ore Holdings, who have made it public they would also like to use Anketell and other companies like Flinders, who are very dependent on the on the development of Anketell, it must be high on their list of priorities.

"Indeed it could service one day FMG, Rio Tinto and BHP."

Fortescue Metals Group has also flagged its interest in the port at Anketell.

While FMG currently exports out of Port Hedland Port, a company spokeswoman says Anketell is crucial to its plans to expand its capacity to 155 million tonnes a year.

"The timely development of a new Pilbara port is vital for the future expansion of the Pilbara resources industry," she said.

"Fortescue's priority in the development of the port is that it is built with future expansion in mind."

Anketell is expected to open up new growth opportunities in the region and will be important to ease the pressure off other ports, which are approaching capacity.

The Port Hedland Port, which is the main multi-user port in the region, reported record figures last financial year, shipping more than 199 million tonnes of bulk exports.

The 2010-2011 figure is up more than 20 billion tonnes on the previous year and is a jump of 80 per cent on five years ago.

While Port Hedland is expanding to take its capacity to more than 400 million tonnes in the coming years, it is currently fully allocated.
Who will lead?

Anketell is funded solely by the private sector and once built, will be managed by the Dampier Port Authority.

Aquila Resources is hoping to become the lead proponent as part of the API joint venture with US investment group AMCI, but will have to fight FMG for the rights to be the lead company.

The State Government is expected to decide by the end of the year whether it is Aquila, FMG or even a third party, who will take control of building the port.

And the government will be keen to avoid the problems which have plagued another of the state's key port developments, Oakajee, which has been delayed over funding concerns.

Aquila's Tony Poli believes Anketell will go ahead.

"I think the significant advantage we have is that the feasibility study we have completed on the project clearly shows that our project alone will support the development of the port," he said.

In a report by Bell Potter analysts Fleur Close and David George, Aquila is marked as the lead contender because its West Pilbara Iron Ore Project is the driver of the port project and the approvals process, but it needs to show it can come up with the money.

"From the government's point of view, it will be looking to appoint someone it can count on to deliver," the report stated.

"The other port project the government has supported is the Oakajee Port project which has failed to deliver on time.

"From that perspective, FMG is well credentialed".

And FMG says it is confident it has the sufficient resources to underpin the Anketell Point project.

But Mr Poli also appears optimistic and says Aquila is looking forward to demonstrating it has the financial capabilities to fund the infrastructure of the port.

"We hope to have some positive announcements in terms of funding in the September quarter," he said.

"We are in discussions [with] the China Development Bank as a result of a MOU with Baosteel."

Aquila needs the port by 2014 when it expects to start producing from the West Pilbara Iron Ore Project.

FMG also expects to reach its 155Mtpa production target in 2014.

Meanwhile, the Environmental Protection Agency is due to release its environmental assessment for Anketell by the end of this year, with construction scheduled for the second quarter of next year.

The West Pilbara Iron Ore Project is now waiting for the final greenlight from the Environment Minister Bill Marmion.


Jindal ITF to carry coal for NTPC’s power plant

Thu,Aug11, 2011

New Delhi, Aug 11 (IANS) State-run power major NTPC Thursday signed a tripartite agreement with logistics firm Jindal ITF and the Inland Waterways Authority of India (IWAI) for transportation of coal to one of its power plants in West Bengal.

‘Considering the current constraints of Indian port sector, this project is bound to bring a paradigm shift in the import of dry bulk cargo in Indian shipping sector,’ the company said in a statement.

Under the project coal from ships anchored near Haldia port would be loaded into barges and then transported to NTPC’s Farakka power station using inland waterways, it said.

‘Jindal ITF has been selected as an operator by NTPC and the IWAI through an international competitive bidding process,’ the statement said.

Probal Ghosal, chief executive, Jindal ITF, said: ‘Our partnership with NTPC will be a winning combination and is a step to leverage the opportunities existing in the inland waterways transportation domain.’

Ghosal added that the company has made a capital commitment of $140-170 million to this project, scheduled to commence within 15 months for phase-one operations.

France holds emergency meeting on debt crisis

Thu, August11, 2011 |

BEIJING,Aug 11 (Xinhuanet) – Markets around the world rallied, and we were just starting to relax. But don't get too comfortable. Another curveball has been thrown our way. Our top story tonight - French President Nicolas Sarkozy is now worried about HIS nation's triple A credit rating.

That's right - Sarkozy is worried France may be the next victim of eurozone's debt crisis - or, depending on how you look at it - victim of the rating agencies. He held an emergency meeting earlier Wednesday, with his key ministers and central bank chief Christian Noyer, on the current volatile global economic situation.

Sarkozy says the country is preparing new measures to ensure it meets its deficit-reduction targets, which analysts say is part of France's efforts to retain its top-notch triple-A rating. The French president notes the deficit-reduction targets are imperative and will be met, regardless of the evolution of the economic outlook.

The meeting comes amid new fears that France, Europe's second largest economy, may be the next nation to face contagion from the eurozone's debt crisis.

Meanwhile, French Finance Minister Francois Baroin says the government will meet in August, to examine new measures to cut its public deficit.

(Source CNTV)

China July exports hit record high, surplus swells

By Koh Gui Qing and Zhou Xin
Aug10, 2011

BEIJING (Reuters) - China's exports hit a record high in July as shipments to Europe and the United States proved surprisingly buoyant, allaying concerns that debt problems abroad may hold back the world's No. 2 economy.

But analysts warned it was too soon to declare that Chinese exports can hold up in coming months as debt worries, sluggish consumer spending and now wildly volatile financial markets plague its two biggest customers.

"Both imports and exports are likely to grow at a slower pace in coming months," said Li Xunlei, an economist at Guotai Junan Securities in Shanghai. "The global financial market turbulence may lead to a contraction in external demand."

July exports rose 20.4 percent from a year ago, the strongest gain since April and surpassing economists' median forecast for a 17.4 percent rise, data on Wednesday showed.

Imports were roughly in line with expectations, rising 22.9 percent in July from a year earlier, the General Administration of Customs said. Economists had forecast growth of 22.3 percent.

"China's trade sector is still facing great uncertainties," said Nie Wen, an analyst at Hwabao Trust in Shanghai. "Developed countries are forced to take austerity measures, and emerging markets may tighten (policy) as well to tame inflation."

Indeed, just hours earlier, the U.S. Federal Reserve took the unprecedented step of promising to leave interest rates near zero for at least two more years, painting a gloomy picture for the world's largest economy.

Noting that monetary policy risks are shifting to supporting growth from fighting inflation, China has signaled it may pause its 10-month policy tightening campaign for now.

Wednesday's data suggested sluggishness in the U.S. and European economies has yet to put a big dent in Chinese export growth, as many investors had feared. Instead, robust U.S. and European shipments helped pushed the value of China's monthly exports to a record high of $175.1 billion.

Although annual growth in Chinese exports to the United States in July was marginally weaker than June at 9.5 percent, the total value hit the year's high of $30 billion.

Annual growth of exports to Europe nearly doubled to 22.3 percent, lifting the value of sales to $35.1 billion. Export growth to Japan also picked up sharply.

BHP Billiton (BHP.AX)(BLT.L), the world's biggest miner, said on Wednesday it expected weak growth in Europe and the United States to persist for many years as they deal with their debt crises, heightening the reliance on China's fast-growing economy.


Other data this week showed that China's inflation hit three-year highs of 6.5 percent in July, and some officials have said that it has likely peaked.

But underlining the fine balance that Beijing has to tread between managing growth and inflation, July's brisk exports caused China's trade surplus to balloon to $31.5 billion, its widest since January 2009.

That could fuel price pressures at home and more criticism from its trade partners abroad that Beijing is keeping its yuan currency suppressed to sell more exports at their expense, allegations China has always denied.

As part of Beijing's policy to prevent the yuan from rising too quickly, it buys dollars earned from trade revenues. But Beijing injects more than 6 yuan into China's banking system for every dollar it buys, adding to a surfeit of cash that fans inflation.

So even if Beijing is reluctant to tighten policy now, it may need to step aside nonetheless to let the yuan climb more briskly if it wants to keep a lid on prices, analysts said.

"China's monetary policy has been kidnapped by foreign capital inflows," said Zhang Lei, an analyst at Minsheng Securities in Shanghai, referring to the widening trade surplus.

"Yuan appreciation is still one important option."


To be sure, all signs suggest that China's economy has taken the steady policy tightening in the past year well in its stride, with its red-hot growth moderating only slightly so far.

Most market watchers continue to predict a soft economic landing, with growth easing to 8-9 percent, rather than a sharp decline.

Many economists agreed that the latest trade data showed China's growth engine is whirring along, with domestic demand solid.

Retail sales climbed 17.2 percent in July from a year earlier, albeit not quite as much as analysts had expected, while car sales rose 6.7 percent, picking up momentum from the previous month.

Imports of raw materials such as copper and iron ore saw strong gains from June, and the recent plunge in global commodity prices is likely to stoke more Chinese buying.

That should comfort investors looking to China to pick up some slack in global demand as other major economies sputter.

And China's relatively low -- albeit rising -- production costs could keep its exports competitive when times are rough, analysts said.

"In the past couple of months, the U.S. economy has been turning down, but China's export growth has held out," said Bank of America-Merrill Lynch's Lu.

"This shows China's economy is okay."

Beijing, which has repeatedly voiced confidence in China's growth in the past year, reiterated the line this week, though it has been clearly rattled by heavy selling in financial markets after the United States lost its top-rated credit rating on Friday.

Premier Wen Jiabao said on Tuesday that China's economy continues to show good growth momentum. But in a sign Beijing would rather err on the side of caution, he signaled China may soften its strike against inflation.

An official Chinese newspaper also said as much on Wednesday by declaring in a front-page editorial that Beijing would refrain from raising interest rates for now due to the rout in global markets.

However, China top economic planner stressed that inflation dangers remained, including the possibility of a new round of monetary easing in the United States which could fuel fresh price pressures.

Please — let’s not call these the ‘BlackBerry riots’

Aug9, 2011

Here we go again: Young people, rioting in the streets, railing against leadership, using their mobile phones to outsmart law enforcement caught off guard by the nimbleness of cool kids in what would be a B-movie script if it wasn’t unfolding in real time.

But this time it isn’t happening in some far off, ambiguously backward Middle Eastern place. No, this is happening in the homeland of Sir Thomas Moore, Winston Churchill and Kate Middleton.

And, for a pleasant change, the technology being blamed/credited for fueling the fire is neither Facebook nor Twitter, but BlackBerry Message Service — one of the oldest means of mobile-to-mobile text communication, better known among aficionados simply as BBM.

It is, of course, a distinction without a difference. Mobile phones don’t start riots. Sometimes, people with mobile phones do. Sadly, we still seem years away from the time when how people communicate is utterly irrelevant to what they are saying and doing. As the Wall Street Journal‘s Ben Rooney puts it:

… (T)he simple fact is that social media can no more take the credit for the “Arab Spring” than the blame for the “London Summer”. They may have played a role but simply because they are the communication tool of the day. Communication technology is morally neutral.

Still, this comes as a curious variation on the theme. The fact that BlackBerrys are the mobile phone of choice among Britain’s youth (well, at least those prone to this onset of violent street demonstrations) might strike the casual observer as a peculiar factoid. U.K. communications regulator Ofcom says some 37% of British teens have a BlackBerry handset.

And there is another thing: BBM messages are largely untraceable. As my colleague Olivia Solon notes, this privacy aspect makes the handset popular in places where there is, shall we say, less reverence to due process than the UK:

BlackBerry automatically encrypts messages sent to another person’s BlackBerry when using their PIN — this means that the messages cannot be intercepted by a government or mobile network. As such the service has become very popular in the Middle East where it is used to criticize authorities, which explains why Saudi Arabia and the UAE tried to block BBM and other functions last year.

Either way, this is lousy news for BlackBerry, which has been beset by bad news for a while now that Apple and Google has made it a marginalized player, even in the enterprise where it once reigned supreme. For Research in Motion, this is already a daunting image challenge: Fairly or not, their brand is being singled out for enabling riots.

In a Tweet in the midst of all this they have tried to walk a careful line, expressing sympathy for “those impacted by the riots in London” but also saying they were “engaged with the authorities to assist in any way we can.”

That last bit may haunt them if still-loyal customers who value the messaging flexibility and peace of mind they enjoy with BlackBerrys is compromised in some kind of backlash. Value propositions turn on a dime, even if wireless contracts take a bit longer.

But we need to start ignoring the smokescreen that is the entire subject of how tech is responsible for bad or undesired behavior. That is the stuff of Fahrenheit 451-esque oppressive regimes. Let’s hope there are no calls for any Parliamentary inquiries into the role of tech, or witch-hunt subpoenas for BlackBerry messages.

Most Americans say U.S. on wrong track: Reuters/Ipsos poll

By Steve Holland
Aug10, 2011

WASHINGTON (Reuters) - Economic fears are weighing heavily on Americans, with a large majority saying the United States is on the wrong track and nearly half believing the worst is yet to come, a Reuters/Ipsos poll said Wednesday.

The poll reflected growing anxiety about the U.S. economy and frustration with Washington after a narrowly averted government default last week, a credit rating downgrade by Standard & Poor's, a stock market dive and a stubbornly high 9.1 percent jobless rate.

President Barack Obama was politically bruised in the brutal, weeks-long debt debate, and negative views on the economy are worrisome signs for his 2012 re-election bid.

His approval rating dropped to 45 percent from 49 percent a month ago, according to the poll conducted from Thursday to Monday. Obama's predecessor, President George W. Bush, never saw his approval rating dip below 46 percent in Gallup polling in his re-election year of 2004.

The Reuters/Ipsos poll found 73 percent of Americans believe the United States is "off on the wrong track," and just one in five, 21 percent, think the country is headed in the right direction.

The survey found that 47 percent believe "the worst is yet to come" in the U.S. economy, an increase of 13 percentage points from a year ago when this question was last raised.

This is the highest measure since March 2009, when concern peaked at 57 percent, at the height of the recession.

Ipsos pollster Julia Clark said the wrong-track measure reflects widespread unhappiness with the economy and frustration at both political parties, but "you can't say it's a predictor of how Obama will fare" in 2012.

The level of discontent was 10 points higher than a July survey and is the highest in an Ipsos poll since it reached 73 percent in October 2008, at the height of the financial crisis. The polling organization found 77 percent felt the country was on the wrong track in July 2008, during Bush's final year in office.

Gallup has found even higher levels of dissatisfaction at various points over the past 30 years, but it is rare.

2012 IMPACT?

Republicans appear to be suffering the most from the last-minute debt deal last week that was reached only after anguished negotiations between Obama and congressional leaders.

The survey found 49 percent of Americans held a negative view of Republicans after the deal was reached, and 42 percent held a negative opinion of the conservative Tea Party movement. Tea Party conservatives stuck closely to their demand that deficit reduction be handled solely through spending cuts and were willing to risk a default to achieve their aims.

By contrast, 40 percent of those polled saw Democrats in a negative light.

"Coming out of this, the Republicans are I think taking the balance of the blame for the debt deal negotiations," Clark said.

Obama was viewed negatively by 42 percent as a result of the debt deal, while House of Representatives Speaker John Boehner, the top U.S. Republican, was viewed negatively by 37 percent.

A new Washington Post poll, shows nearly 75 percent of Americans say they have little or no confidence in Washington to repair the economy. Nearly 80 percent say they are dissatisfied with the way the political system is working and more than seven in 10 say Washington is focused on the "wrong things."

A USA Today/Gallup poll this week suggested possible evidence of an anti-incumbent wave building, saying only 24 percent of Americans believe most members of Congress deserve re-election, the lowest percentage since Gallup began asking the question in 1991.

Clark said Obama's approval is in relatively safe territory, but that his re-election could be threatened if he were to dip into the 30s.

"A difficult economic situation will create a difficult situation for the president when it comes to re-election a year from now," she said. "When the economy is bad, people look for a change."

The debt agreement that consumed weeks of debate and resulted in a two-staged arrangement to cut spending is not getting rave reviews.

More people surveyed, 53 percent, held a negative view of the compromise agreement, compared to 38 percent who think it is a good deal.

Democrats were more balanced in their views, with 47 percent approving it and 45 percent disliking it. A majority of independents, 53 percent, and Republicans, 63 percent, did not like it.

"The process was very damaging to Washington," said Clark.

Americans held mixed views on the best way to stimulate economic growth. Cutting spending, 49 percent, and taxing the wealthy, 46 percent, came highest, followed by investment in infrastructure, 34 percent.

Democrats are urging Obama to move away from the debate over how to reduce America's structural deficits and concentrate solely on creating U.S. jobs. Obama has signaled he plans to do this.

"Shift the focus on job creation," former New Mexico Governor Bill Richardson told MSNBC.

The Reuters/Ipsos poll of 1,055 adults, including 885 registered voters, had a margin of error of 3 percentage points for all respondents and 3.1 points for registered voters.