Sat Aug 27, 2011
MEXICO CITY Aug 26 (Reuters) - Four miners were killed when a coal mine collapsed in the northern Mexican state of Coahuila on Friday, a senior government official said.
Labor Minister Javier Lozano said in a Twitter message the fourth body was recovered late on Friday and an extraordinary inspection of the mine was underway.
About 132 miners were working in the Esmeralda mine run by Minera del Norte, an affiliate of steelmaker Altos Hornos de Mexico, when the accident happened.
"I believe in all honesty that they are presumably dead," Lozano told a Mexican radio station shortly before rescuers began pulling bodies from the mine.
In May, 14 workers were killed in an explosion at another coal mine in the northern Mexican state.
Lozano said officials will investigate to ensure there were no violations at the large-scale mine in San Juan de Sabinas, about 78 miles (127 km) south of the U.S. border.
Altos, among the biggest steelmakers in Mexico, said it sent 66 rescue workers to the collapsed mine.
(sourced Reuters)
Saturday, August 27, 2011
Vale to recover iron ore waste in Brazil
August27, 2011
Brazilian newspaper Folha de San Paulo reported Thursday that Brazilian miner Vale plans to process 80 million tons of iron ore waste from tailings dams in the Minas Gerais state in Brazil. At that current international iron ore price of US$147.30/metric ton, Vale could earn as much as US$4.5 billion from the project.
According the report, the iron ore waste has an average grade of 35 percent Fe, but will rise to 62 percent Fe after processing. Once processed, it can be sold as iron ore dust or converted into iron ore pellets used in blast furnaces for steelmaking.
The project is slated to begin in 2013.
(sourced steelorbis)
Brazilian newspaper Folha de San Paulo reported Thursday that Brazilian miner Vale plans to process 80 million tons of iron ore waste from tailings dams in the Minas Gerais state in Brazil. At that current international iron ore price of US$147.30/metric ton, Vale could earn as much as US$4.5 billion from the project.
According the report, the iron ore waste has an average grade of 35 percent Fe, but will rise to 62 percent Fe after processing. Once processed, it can be sold as iron ore dust or converted into iron ore pellets used in blast furnaces for steelmaking.
The project is slated to begin in 2013.
(sourced steelorbis)
Race for resources - China steps up iron ore project in Africa and elsewhere
Saturday, 27 Aug 2011
Reuters reported that a bold push by China into iron ore projects in Africa and elsewhere will increase its access to supply and may help moderate prices but will only slowly reduce its dependence on the three companies that dominate the market.
About 85% of the imports of the raw material to make steel came from only four countries Australia, Brazil, India and South Africa. Beijing has stepped up its campaign to break that dependence by investing in mining projects in places such as West Africa where it has agreed on a spate of joint ventures and is seeking other deals including a proposal to swallow a whole company. These projects could produce up to nearly 250 million tonnes of ore annually in the medium to long term.
Analysts said but even if China secures and fully develops all these proposed projects and it will struggle to cut its reliance on the Big Three. The new projects will take many years to achieve full production while the majors each have their own ambitious expansion projects which will help reinforce market dominance.
Mr John Meyer a mining analyst at investment bank Fairfax said "These projects have little chance of displacing production from the major producers such as Rio, Vale and BHP who are so far ahead in terms of infrastructure, capital expenditure and quality of resources."
He said that "The Chinese are looking to become involved but they simply don't own the licenses to the world largest iron ore projects. China has had a fraught but symbiotic relationship with the majors and vowing to cut its dependence on them after failing to persuade them to offer big price discounts during the global financial crisis.”
The Chinese government has encouraged steelmakers such as Baoshan Iron and Steel and Wuhan Iron and Steel to gain more control over foreign iron ore. Wuhan and its third largest has vowed to become self sufficient by 2015.
Mr Li Xinchuang deputy secretary general of China Iron Steel Association said "China currently owns less than 10% of imported iron ore. We should seek 50% of ore from Chinese invested overseas resources in the next five to 10 years."
He said China would be able to break the hold of Rio, Vale and BHP on supply and pricing only if it can source half its overseas ore from Chinese-invested mines.
The icy relationship appeared to thaw in 2009 when China state owned Chinalco and Rio Tinto agreed on a USD 19.5 billion tie up but later that year Rio spurned the deal. China was bitter about the break up but later the two agreed a major joint venture to develop Rio massive Simandou iron ore project in Guinea.
Chinese industry officials also have accused the companies of monopolistic practices after Rio, Vale and BHP decided to abandon an annual pricing system in favor of a more flexible index based quarterly system last year.
(sourced from Reuters)
Reuters reported that a bold push by China into iron ore projects in Africa and elsewhere will increase its access to supply and may help moderate prices but will only slowly reduce its dependence on the three companies that dominate the market.
About 85% of the imports of the raw material to make steel came from only four countries Australia, Brazil, India and South Africa. Beijing has stepped up its campaign to break that dependence by investing in mining projects in places such as West Africa where it has agreed on a spate of joint ventures and is seeking other deals including a proposal to swallow a whole company. These projects could produce up to nearly 250 million tonnes of ore annually in the medium to long term.
Analysts said but even if China secures and fully develops all these proposed projects and it will struggle to cut its reliance on the Big Three. The new projects will take many years to achieve full production while the majors each have their own ambitious expansion projects which will help reinforce market dominance.
Mr John Meyer a mining analyst at investment bank Fairfax said "These projects have little chance of displacing production from the major producers such as Rio, Vale and BHP who are so far ahead in terms of infrastructure, capital expenditure and quality of resources."
He said that "The Chinese are looking to become involved but they simply don't own the licenses to the world largest iron ore projects. China has had a fraught but symbiotic relationship with the majors and vowing to cut its dependence on them after failing to persuade them to offer big price discounts during the global financial crisis.”
The Chinese government has encouraged steelmakers such as Baoshan Iron and Steel and Wuhan Iron and Steel to gain more control over foreign iron ore. Wuhan and its third largest has vowed to become self sufficient by 2015.
Mr Li Xinchuang deputy secretary general of China Iron Steel Association said "China currently owns less than 10% of imported iron ore. We should seek 50% of ore from Chinese invested overseas resources in the next five to 10 years."
He said China would be able to break the hold of Rio, Vale and BHP on supply and pricing only if it can source half its overseas ore from Chinese-invested mines.
The icy relationship appeared to thaw in 2009 when China state owned Chinalco and Rio Tinto agreed on a USD 19.5 billion tie up but later that year Rio spurned the deal. China was bitter about the break up but later the two agreed a major joint venture to develop Rio massive Simandou iron ore project in Guinea.
Chinese industry officials also have accused the companies of monopolistic practices after Rio, Vale and BHP decided to abandon an annual pricing system in favor of a more flexible index based quarterly system last year.
(sourced from Reuters)
Steel Warehouse considers new facility near ThyssenKrupp USA Alabama mill
August27, 2011
South Bend, Indiana-based flat-rolled steel coil and steel plate processor Steel Warehouse is considering adding a new coil processing plant in Calvert, Alabama on ThyssenKrupp USA's land near the mill's new flat-rolled steel facility.
According to local news reports, Steel Warehouse would invest $16 million in the project that would have a pickling line to process hot rolled coil for ThyssenKrupp's Calvert mill.
Already, the Mobile County Industrial Development Authority has voted in favor of $1.17 million in sales and non-school property tax abatements to Steel Warehouse for the jobs that the new facility will create.
South Bend, Indiana-based flat-rolled steel coil and steel plate processor Steel Warehouse is considering adding a new coil processing plant in Calvert, Alabama on ThyssenKrupp USA's land near the mill's new flat-rolled steel facility.
According to local news reports, Steel Warehouse would invest $16 million in the project that would have a pickling line to process hot rolled coil for ThyssenKrupp's Calvert mill.
Already, the Mobile County Industrial Development Authority has voted in favor of $1.17 million in sales and non-school property tax abatements to Steel Warehouse for the jobs that the new facility will create.
Indian investment in Hajigak iron ore mine in Afghanistan
Saturday, 27 Aug 2011
Mr Dinsha Patel minister of state for mines informed the Lok Sabha that the government of Afghanistan had invited offers for commercial exploitation of Hajigak Iron Ore Deposit through the process of competitive bidding.
The ministry of mines convened a meeting of Indian mining companies, both private and public sector, on January 6th2011 and requested them to participate in the Expression of Interest.
The ministry of steel thereafter held a series of meetings to address the concerns expressed by the companies. The last date for bidding is September 4th 2011. The final decision of participation in the competitive bidding process, is a commercial decision of the individual companies.
Mr Dinsha Patel minister of state for mines informed the Lok Sabha that the government of Afghanistan had invited offers for commercial exploitation of Hajigak Iron Ore Deposit through the process of competitive bidding.
The ministry of mines convened a meeting of Indian mining companies, both private and public sector, on January 6th2011 and requested them to participate in the Expression of Interest.
The ministry of steel thereafter held a series of meetings to address the concerns expressed by the companies. The last date for bidding is September 4th 2011. The final decision of participation in the competitive bidding process, is a commercial decision of the individual companies.
High temperature in Southwest China backs coal demand
Saturday, 27 Aug 2011
It is reported that China Guizhou, Chongqing, Sichuan, Yunnan and other southern regions incur persistent high temperatures as entering into August. The maximum temperature even beats the record high. As a result, Southwest China eyes tighter power supply which means more serious thermal coal requirement.
Less rainfall drags hydropower output down. The crumble of hydropower adds more strains to power plants. To make things even worse, the coal output declines for the recent integration. The local governments move forward the safety inspection of coal mines which curtails coal production.
Meteorological department forecast torrential rain will take place in the southwest next three days. By then the temperature will come down significantly which not only eases the drought but also the tight power supply. In the later phase, power shortage still exists in Southwest China and the robust thermal coal demand will bolster coal price in the near term.
(sourced from MySteel.net)
It is reported that China Guizhou, Chongqing, Sichuan, Yunnan and other southern regions incur persistent high temperatures as entering into August. The maximum temperature even beats the record high. As a result, Southwest China eyes tighter power supply which means more serious thermal coal requirement.
Less rainfall drags hydropower output down. The crumble of hydropower adds more strains to power plants. To make things even worse, the coal output declines for the recent integration. The local governments move forward the safety inspection of coal mines which curtails coal production.
Meteorological department forecast torrential rain will take place in the southwest next three days. By then the temperature will come down significantly which not only eases the drought but also the tight power supply. In the later phase, power shortage still exists in Southwest China and the robust thermal coal demand will bolster coal price in the near term.
(sourced from MySteel.net)
NMDC to ramp up production in Bellary
Saturday, 27 Aug 2011
Country's top miner NMDC is in the process of ramping up its production from its Karnataka's facility in Bellary to one million tonnes a month, Mr PK Misra steel secretary said that “I think we should be able to stabilise things soon. In a month's time things will stabilise for the steel sector. NMDC will ramp up its production capacity to one million tones.”
Mr Misra on the sidelines of a CII conference on steel told reporters that the steel and allied industries in the South are now reeling under severe shortages of iron ore, a vital raw material for production.
The issue has come up, following a July 29 ban by the Supreme Court on mining activities in the Bellary district in Karnataka due to environmental degradation of the area.
This led to a severe shortage of iron ore in the South as Bellary accounts for about 80 per cent of Karnataka's total production at about 40 million tonnes annually.
The steel and allied industries had maintained that the partial relief provided by the apex court on August 5, allowing NMDC to mine one million tonnes of ore a month, would not help as the demand was much more.
In a statement here, the Bangalore Chamber of Industry and Commerce said iron ore demand of steel and allied industries in Karnataka alone was 2.9 million tonnes a month, while NMDC had been allowed to mine only one million tonnes.
The chamber also said NMDC had been supplying only in the range of 21,000 to 22,000 tonnes a day against the estimated daily production of 33,500 tonnes, to fulfill the criteria of producing one million tonnes a month, as has been ordered by the apex court. Mr Misra said NMDC had also started supplying from Chhattisgarh to meet the shortfall, while some industries were buying from Goa to run their plants.
(sourced from Hindu)
Country's top miner NMDC is in the process of ramping up its production from its Karnataka's facility in Bellary to one million tonnes a month, Mr PK Misra steel secretary said that “I think we should be able to stabilise things soon. In a month's time things will stabilise for the steel sector. NMDC will ramp up its production capacity to one million tones.”
Mr Misra on the sidelines of a CII conference on steel told reporters that the steel and allied industries in the South are now reeling under severe shortages of iron ore, a vital raw material for production.
The issue has come up, following a July 29 ban by the Supreme Court on mining activities in the Bellary district in Karnataka due to environmental degradation of the area.
This led to a severe shortage of iron ore in the South as Bellary accounts for about 80 per cent of Karnataka's total production at about 40 million tonnes annually.
The steel and allied industries had maintained that the partial relief provided by the apex court on August 5, allowing NMDC to mine one million tonnes of ore a month, would not help as the demand was much more.
In a statement here, the Bangalore Chamber of Industry and Commerce said iron ore demand of steel and allied industries in Karnataka alone was 2.9 million tonnes a month, while NMDC had been allowed to mine only one million tonnes.
The chamber also said NMDC had been supplying only in the range of 21,000 to 22,000 tonnes a day against the estimated daily production of 33,500 tonnes, to fulfill the criteria of producing one million tonnes a month, as has been ordered by the apex court. Mr Misra said NMDC had also started supplying from Chhattisgarh to meet the shortfall, while some industries were buying from Goa to run their plants.
(sourced from Hindu)
ArcelorMittal Temirtau to launch continuous casting billet mill in October Friday, 26 August 2011 The largest metallurgical enterprise in Kazakhsta
Friday, 26 August 2011 |By steelorbis
The largest metallurgical enterprise in Kazakhstan ArcelorMittal Temirtau plans to complete the construction of its new continuous casting billet mill No. 1 in September.
The capacity of the mill will be 1.2 million metric tons of 130 x 130 mm square billets per year. The supplier of the new mill is Italian plantmaker Danieli. ArcelorMittal Temirtau plans to start commissioning in October and to produce the first lot of products in November.
The largest metallurgical enterprise in Kazakhstan ArcelorMittal Temirtau plans to complete the construction of its new continuous casting billet mill No. 1 in September.
The capacity of the mill will be 1.2 million metric tons of 130 x 130 mm square billets per year. The supplier of the new mill is Italian plantmaker Danieli. ArcelorMittal Temirtau plans to start commissioning in October and to produce the first lot of products in November.
South Africa reviews mining laws to strengthen penalties
Saturday, 27 Aug 2011
Reuters reported that South African government is reviewing its mining law to strengthen the penalty provisions for non compliance of the mining charter, which aims to transfer ownership to previously excluded blacks.
Mr Andre Andreas, director of mineral policy development at the Department of Mineral Resources, told parliament that "We are looking at beefing up the penalty provisions that may be imposed on mining companies for non compliance to serve as a deterrent and to ensure there is greater compliance."
Parliament is conducting public hearings on the charter, which aims at transforming the mining industry by transferring 26% of the key sector into black hands by 2014.
(sourced from Reuters)
Reuters reported that South African government is reviewing its mining law to strengthen the penalty provisions for non compliance of the mining charter, which aims to transfer ownership to previously excluded blacks.
Mr Andre Andreas, director of mineral policy development at the Department of Mineral Resources, told parliament that "We are looking at beefing up the penalty provisions that may be imposed on mining companies for non compliance to serve as a deterrent and to ensure there is greater compliance."
Parliament is conducting public hearings on the charter, which aims at transforming the mining industry by transferring 26% of the key sector into black hands by 2014.
(sourced from Reuters)
Update on Indian royalty rates of non prime minerals
Saturday, 27 Aug 2011
Mr Dinsha Patel minister of state for mines informed the Lok Sabha that there is no classification of minerals as non-prime minerals in the Mines and Minerals (Development and Regulation) Act 1957 (MMDR Act) and Rules framed there under.
However, Section 9 of the MMDR Act provides that a mining lease holder shall pay royalty in respect of any mineral removed or consumed from the leased area at the rate for the time being specified in the Second Schedule of the MMDR Act and the royalty rates of minerals may be revised upwards only once in three years. During the last ten years, the royalty rates in respect of major minerals (other than coal, lignite and sand for stowing), have been revised in the years 2000, 2004 and 2009.
Mr Dinsha Patel minister of state for mines informed the Lok Sabha that there is no classification of minerals as non-prime minerals in the Mines and Minerals (Development and Regulation) Act 1957 (MMDR Act) and Rules framed there under.
However, Section 9 of the MMDR Act provides that a mining lease holder shall pay royalty in respect of any mineral removed or consumed from the leased area at the rate for the time being specified in the Second Schedule of the MMDR Act and the royalty rates of minerals may be revised upwards only once in three years. During the last ten years, the royalty rates in respect of major minerals (other than coal, lignite and sand for stowing), have been revised in the years 2000, 2004 and 2009.
Taiwan’s CSC to sell bonds to fund new plant investment in India
August27, 2011
Taiwan-based integrated steelmaker China Steel Corporation (CSC) plans to invest $66.58 million in a new plant to manufacture electrical steel in the Bharuch district of the state of Gujarat in western India.
CSC will have a 37.4 percent stake in the project in which total investment amounts to $178 million along with the funds coming from other investors. CSC plans to sell as much as NTD 20 billion (US$689.9 million) in bonds in Taiwan this year to help finance the investment.
According to CSC's statement, the investment will allow the company to meet the high demand for electrical steel sheets in India and will help it to enter other markets such as the Middle East, Europe and North Africa.
The production line will annually produce 200,000 mt of non-grain oriented electrical steel. Construction work on the project will start in September this year and test runs are scheduled in October 2013.
(sourced steelorbis)
Taiwan-based integrated steelmaker China Steel Corporation (CSC) plans to invest $66.58 million in a new plant to manufacture electrical steel in the Bharuch district of the state of Gujarat in western India.
CSC will have a 37.4 percent stake in the project in which total investment amounts to $178 million along with the funds coming from other investors. CSC plans to sell as much as NTD 20 billion (US$689.9 million) in bonds in Taiwan this year to help finance the investment.
According to CSC's statement, the investment will allow the company to meet the high demand for electrical steel sheets in India and will help it to enter other markets such as the Middle East, Europe and North Africa.
The production line will annually produce 200,000 mt of non-grain oriented electrical steel. Construction work on the project will start in September this year and test runs are scheduled in October 2013.
(sourced steelorbis)
Assmang Khumani iron ore mine expands training simulator use
Saturday, 27 Aug 2011
Mineweb.com reported that Assmang Khumani Iron Ore surface mining operation will be significantly improving their capability to enhance operator competency with the acquisition of two CYBERMINE4 mining simulators from South African mining simulator specialist, ThoroughTec Simulation. The Khumani mine has also purchased interchangeable cabs simulating Komatsu's 860E AC Haul Truck and PC5500 Hydraulic Face Shovel. The two Thoroughtec simulators will join the company's existing single unit purchased a few years back from Australia's Immersive Technologies.
The new units will not only enable Khumani's HR, Engineering and Mining management to train on loading, hauling and digging, but also on more advanced equipment like drill rigs in the near future. ThoroughTec's attentiveness in supporting customers, along with their flexible approach to their development schedule and low cost of ownership model and value for money service plans were accredited as key differentiators with their competitors.
Mr Mark Walker ThoroughTec Simulation's executive director of mining & construction said that "Assmang Khumani's Iron Ore operation selection of ThoroughTec Simulation is a significant validation of our new 4th generation CYBERMINE4 mining simulators leadership in the market, with the recognition that military level simulators in the mining industry is the future and it further emphasizes our dominance in the Northern Cape area in South Africa."
ThoroughTec Simulation's CYBERMINE4 is the industry's new fourth generation mining and only dual role (interchangeable between surface and underground) simulator. It is upgraded with many new features including a full 360 panoramic display, enhanced reporting software, and two HD instructor screens in an enlarged classroom environment.
(sourced Mineweb)
Mineweb.com reported that Assmang Khumani Iron Ore surface mining operation will be significantly improving their capability to enhance operator competency with the acquisition of two CYBERMINE4 mining simulators from South African mining simulator specialist, ThoroughTec Simulation. The Khumani mine has also purchased interchangeable cabs simulating Komatsu's 860E AC Haul Truck and PC5500 Hydraulic Face Shovel. The two Thoroughtec simulators will join the company's existing single unit purchased a few years back from Australia's Immersive Technologies.
The new units will not only enable Khumani's HR, Engineering and Mining management to train on loading, hauling and digging, but also on more advanced equipment like drill rigs in the near future. ThoroughTec's attentiveness in supporting customers, along with their flexible approach to their development schedule and low cost of ownership model and value for money service plans were accredited as key differentiators with their competitors.
Mr Mark Walker ThoroughTec Simulation's executive director of mining & construction said that "Assmang Khumani's Iron Ore operation selection of ThoroughTec Simulation is a significant validation of our new 4th generation CYBERMINE4 mining simulators leadership in the market, with the recognition that military level simulators in the mining industry is the future and it further emphasizes our dominance in the Northern Cape area in South Africa."
ThoroughTec Simulation's CYBERMINE4 is the industry's new fourth generation mining and only dual role (interchangeable between surface and underground) simulator. It is upgraded with many new features including a full 360 panoramic display, enhanced reporting software, and two HD instructor screens in an enlarged classroom environment.
(sourced Mineweb)
Rio Tinto increases its stake in Ivanhoe Mines to 45pct
Saturday, 27 Aug 2011
Rio Tinto exercised its right to subscribe for and acquire common shares in Ivanhoe Mines Limited under its Subscription Right. As a result, Ivanhoe Mines will issue 27,896,570 million new shares to a wholly owned subsidiary of Rio Tinto, Rio Tinto International Holdings Limited increasing Rio Tinto's ownership in Ivanhoe Mines by 2.0% to a total of 358,158,442 common shares or 48.5%.
The price paid per share was CAD 18.98 and the total consideration for the exercise of this Subscription Right was CAD 529.5 million. The subscription was made in accordance with existing contractual arrangements between Rio Tinto and Ivanhoe Mines that permits share purchases in certain circumstances and subject to certain limits. Under the terms of these agreements and subject to certain exceptions, Rio Tinto's current maximum permitted shareholding in Ivanhoe Mines is 49%.
The subscription was made in order to increase Rio Tinto's ownership of Ivanhoe in accordance with its contractual rights. Depending upon its assessment of Ivanhoe's business, prospects and financial condition, the market for Ivanhoe's securities, general economic and tax conditions and other factors, Rio Tinto will consider availing itself of its rights to acquire additional securities of Ivanhoe.
Today's subscription reinforces Rio Tinto's commitment to the Oyu Tolgoi project, which is a natural fit with its strategy of focusing on cost competitive, long life assets with significant growth potential. Together with Ivanhoe and the Government of Mongolia, Rio Tinto is determined to develop Oyu Tolgoi in a sustainable, mutually beneficial manner for the people of Mongolia.
Rio Tinto exercised its right to subscribe for and acquire common shares in Ivanhoe Mines Limited under its Subscription Right. As a result, Ivanhoe Mines will issue 27,896,570 million new shares to a wholly owned subsidiary of Rio Tinto, Rio Tinto International Holdings Limited increasing Rio Tinto's ownership in Ivanhoe Mines by 2.0% to a total of 358,158,442 common shares or 48.5%.
The price paid per share was CAD 18.98 and the total consideration for the exercise of this Subscription Right was CAD 529.5 million. The subscription was made in accordance with existing contractual arrangements between Rio Tinto and Ivanhoe Mines that permits share purchases in certain circumstances and subject to certain limits. Under the terms of these agreements and subject to certain exceptions, Rio Tinto's current maximum permitted shareholding in Ivanhoe Mines is 49%.
The subscription was made in order to increase Rio Tinto's ownership of Ivanhoe in accordance with its contractual rights. Depending upon its assessment of Ivanhoe's business, prospects and financial condition, the market for Ivanhoe's securities, general economic and tax conditions and other factors, Rio Tinto will consider availing itself of its rights to acquire additional securities of Ivanhoe.
Today's subscription reinforces Rio Tinto's commitment to the Oyu Tolgoi project, which is a natural fit with its strategy of focusing on cost competitive, long life assets with significant growth potential. Together with Ivanhoe and the Government of Mongolia, Rio Tinto is determined to develop Oyu Tolgoi in a sustainable, mutually beneficial manner for the people of Mongolia.
Alpha Natural Resources to buy back USD 600 million in stock
Aug27, 2011
Alpha Natural Resources, Inc a leading US coal producer announced that Alpha's board of directors has approved a share repurchase authorization permitting Alpha to repurchase up to USD 600 million of its outstanding common stock. The authorization, which remains in effect through December 31st 2014, enables Alpha to repurchase shares from time to time as market conditions warrant, subject to applicable securities law and other requirements.
The new USD 600 million authorization is in addition to the existing USD 125 million repurchase authorization announced in May of 2010, under which approximately USD 108 million has been used to repurchase approximately 3.2 million shares at an average price of USD 33.74 per share through August 19th 2011. Approximately USD 17 million remains available for repurchases under the existing USD 125 million authorization.
Mr Kevin Crutchfield CEO of Alpha said that "This new repurchase authorization affirms Alpha's long-standing commitment to maximizing shareholder value. Throughout its history, Alpha has been focused on operational excellence, thoughtful growth, and the maintenance of a strong balance sheet and an appropriate capital structure. Executing on our strategic plan, Alpha has emerged from the recent acquisition of Massey with a premier reserve base that positions us as a leading global supplier of metallurgical coal, a sound balance sheet and ample liquidity. With today's announcement, Alpha will continue to be able to deploy a portion of its capital and expected future free cash flows to fine tune our capital structure and return cash to shareholders while at the same time continuing to focus on successful integration and operational execution following the acquisition."
Alpha Natural Resources, Inc a leading US coal producer announced that Alpha's board of directors has approved a share repurchase authorization permitting Alpha to repurchase up to USD 600 million of its outstanding common stock. The authorization, which remains in effect through December 31st 2014, enables Alpha to repurchase shares from time to time as market conditions warrant, subject to applicable securities law and other requirements.
The new USD 600 million authorization is in addition to the existing USD 125 million repurchase authorization announced in May of 2010, under which approximately USD 108 million has been used to repurchase approximately 3.2 million shares at an average price of USD 33.74 per share through August 19th 2011. Approximately USD 17 million remains available for repurchases under the existing USD 125 million authorization.
Mr Kevin Crutchfield CEO of Alpha said that "This new repurchase authorization affirms Alpha's long-standing commitment to maximizing shareholder value. Throughout its history, Alpha has been focused on operational excellence, thoughtful growth, and the maintenance of a strong balance sheet and an appropriate capital structure. Executing on our strategic plan, Alpha has emerged from the recent acquisition of Massey with a premier reserve base that positions us as a leading global supplier of metallurgical coal, a sound balance sheet and ample liquidity. With today's announcement, Alpha will continue to be able to deploy a portion of its capital and expected future free cash flows to fine tune our capital structure and return cash to shareholders while at the same time continuing to focus on successful integration and operational execution following the acquisition."
SC extends mining ban in Karnataka
Saturday, 27 Aug 2011
Following a report of the centrally empowered committee of the court, India’s Supreme Court on Friday has finally suspended iron ore mining in the Tumkur and Chitradurga districts of Karnataka.
The forest bench headed by Chief Justice SH Kapadia said the fundamental right to life, which includes a clean environment, was above the right to trade in the Constitution. CJ stressed that economic development should be balanced by environmental considerations. He asked the industries to work out a rehabilitation plan and a scientific method to excavate the mines.
However, it asked for suggestions from the Attorney General and others to submit a formula to release 25 million tonnes of iron ore available for immediate use by the steel industry.
The court further directed a joint team to carry out a survey and demarcate the boundaries of the leases, as was ordered in the case of Bellary district earlier. The empowered committee will name the agency in charge of keeping the accounts of sales and royalty payable at the rate of 10 per cent of the market price.
Friday’s order followed the August 19 report of the empowered committee, which stated reckless mining in an unsustainable manner for short-term gains had affected the region’s ecology.
(sourced from BS)
Following a report of the centrally empowered committee of the court, India’s Supreme Court on Friday has finally suspended iron ore mining in the Tumkur and Chitradurga districts of Karnataka.
The forest bench headed by Chief Justice SH Kapadia said the fundamental right to life, which includes a clean environment, was above the right to trade in the Constitution. CJ stressed that economic development should be balanced by environmental considerations. He asked the industries to work out a rehabilitation plan and a scientific method to excavate the mines.
However, it asked for suggestions from the Attorney General and others to submit a formula to release 25 million tonnes of iron ore available for immediate use by the steel industry.
The court further directed a joint team to carry out a survey and demarcate the boundaries of the leases, as was ordered in the case of Bellary district earlier. The empowered committee will name the agency in charge of keeping the accounts of sales and royalty payable at the rate of 10 per cent of the market price.
Friday’s order followed the August 19 report of the empowered committee, which stated reckless mining in an unsustainable manner for short-term gains had affected the region’s ecology.
(sourced from BS)
Friday, August 26, 2011
China's Shaanxi Coal Industry plans $2.7 billion IPO
Fri Aug 26, 2011
SHANGHAI (Reuters) - Shaanxi Coal Industry plans an initial public offering in Shanghai to raise up to 17.3 billion yuan ($2.7 billion) in what could be China's biggest IPO this year.
The China Securities Regulatory Commission (CSRC) said late on Thursday that it would review Shaanxi Coal's IPO application on August 29.
Shaanxi Coal would issue up to 2 billion shares in the offering, according to a draft prospectus posted on the CSRC website.
A successful IPO would make the company the country's third-largest publicly traded coal miner by output after China Shenhua Energy Co Ltd (1088.HK)(601088.SS) and China Coal Energy Co Ltd (1898.HK)(601898.SS), Shaanxi Coal said, adding that the proceeds would fund mining activity and replenish working capital.
It would also be the biggest IPO in the mainland market this year, surpassing Sinohydro Group Ltd's planned $2.5 billion offering.
China's IPO market slowed by a fifth in the first half, lacking the big deals of the year before, with fundraising dominated by smaller companies.
In the first six months, only about a tenth of the companies seeking listings chose to do so on the Shanghai Stock Exchange, with the rest going to the smaller Shenzhen bourse, which houses the Nasdaq-style ChiNext market, Thomson Reuters data showed.
State-owned Shaanxi Coal and Chemical Industry Group Co Ltd SHAANB.UL owns 71 percent of Shaanxi Coal.
China is the world's biggest coal-producing country, with output at 3 billion tonnes in 2009, accounting for about 46 percent of total global production that year.
Shaanxi Coal is headquartered in Xi'an, in the northern Chinese province of Shaanxi, which had known coal reserves of about 170 billion tonnes, the company said.
CICC, BOC International (China) Ltd and Citic Securities are joint underwriters of the IPO.
($1 = 6.390 yuan) (sourced Reuters)
SHANGHAI (Reuters) - Shaanxi Coal Industry plans an initial public offering in Shanghai to raise up to 17.3 billion yuan ($2.7 billion) in what could be China's biggest IPO this year.
The China Securities Regulatory Commission (CSRC) said late on Thursday that it would review Shaanxi Coal's IPO application on August 29.
Shaanxi Coal would issue up to 2 billion shares in the offering, according to a draft prospectus posted on the CSRC website.
A successful IPO would make the company the country's third-largest publicly traded coal miner by output after China Shenhua Energy Co Ltd (1088.HK)(601088.SS) and China Coal Energy Co Ltd (1898.HK)(601898.SS), Shaanxi Coal said, adding that the proceeds would fund mining activity and replenish working capital.
It would also be the biggest IPO in the mainland market this year, surpassing Sinohydro Group Ltd's planned $2.5 billion offering.
China's IPO market slowed by a fifth in the first half, lacking the big deals of the year before, with fundraising dominated by smaller companies.
In the first six months, only about a tenth of the companies seeking listings chose to do so on the Shanghai Stock Exchange, with the rest going to the smaller Shenzhen bourse, which houses the Nasdaq-style ChiNext market, Thomson Reuters data showed.
State-owned Shaanxi Coal and Chemical Industry Group Co Ltd SHAANB.UL owns 71 percent of Shaanxi Coal.
China is the world's biggest coal-producing country, with output at 3 billion tonnes in 2009, accounting for about 46 percent of total global production that year.
Shaanxi Coal is headquartered in Xi'an, in the northern Chinese province of Shaanxi, which had known coal reserves of about 170 billion tonnes, the company said.
CICC, BOC International (China) Ltd and Citic Securities are joint underwriters of the IPO.
($1 = 6.390 yuan) (sourced Reuters)
Rio, Mitsubishi Raise Coal & Allied Bid to A$1.53 Billion
August26, 2011
Aug. 26 (Bloomberg) -- Rio Tinto Group, the world's second- biggest mining company, and Mitsubishi Corp. raised their offer for the rest of the shares of Coal & Allied Industries Ltd. by 2.5 percent to take the company private.
Coal & Allied accepted the offer of A$1.53 billion ($1.6 billion), or A$125 a share, 6.1 percent more than its close yesterday, the Brisbane-based-company said today in a statement. Rio and Mitsubishi, which own stakes of 75.7 percent and 10.2 percent respectively in Coal & Allied, made an initial offer of A$122 a share on Aug. 8.
"This indicates that they weren't going to get the level of acceptances that they were looking for," Michael McCarthy, chief market strategist at CMC Markets in Sydney, said by phone. "Once they get to 90 percent within one entity they can compulsorily acquire the remaining 10 percent and effectively they can take it private."
Buying Coal & Allied gives London-based Rio and Tokyo-based Mitsubishi full control of three coal mines in the Hunter Valley in Australia's New South Wales state as prices surge. The move comes as global mining companies take advantage of a four-week market equity rout that wiped about $8 trillion off the value of global equities.
Coal & Allied shares gained 3.6 percent to A$122.02 at the 4:10 p.m. close of the Australian stock exchange in Sydney. The revised offer, made after Coal & Allied dropped 30 percent from its peak this year, values the company at A$10.8 billion.
Power Houses
"The offer is obviously well within the investment matrix for these two powerhouses," said McCarthy. "They both have far greater financial resources."
Rio generated $18 billion in cash from its operations in the year to Dec. 31, compared with a cash flow of $9.6 billion a year earlier, according to data compiled by Bloomberg. Rio has worked to repair its balance sheet, with the help of surging commodity prices as well as more than $11 billion in asset sales, after debt ballooned 19-fold with the purchase of aluminum producer Alcan Inc. in 2007.
Rio, which paid A$3.4 billion to acquire Riversdale Mining Ltd. this year, raised its bid two days after Glencore International Plc offered A$270 million for the shares in Australian nickel producer Minara Resources Ltd. it doesn't already own.
"The revised proposal has been unanimously recommended by the proposal response committee members subject to the independent expert concluding that the scheme is in the best interests of Coal & Allied's minority shareholders and there being no superior proposal," Coal & Allied said in the statement.
Perpetual Ltd., Coal & Allied's third-largest shareholder, has supported the bid in the absence of a higher offer.
sourced sfgate
Aug. 26 (Bloomberg) -- Rio Tinto Group, the world's second- biggest mining company, and Mitsubishi Corp. raised their offer for the rest of the shares of Coal & Allied Industries Ltd. by 2.5 percent to take the company private.
Coal & Allied accepted the offer of A$1.53 billion ($1.6 billion), or A$125 a share, 6.1 percent more than its close yesterday, the Brisbane-based-company said today in a statement. Rio and Mitsubishi, which own stakes of 75.7 percent and 10.2 percent respectively in Coal & Allied, made an initial offer of A$122 a share on Aug. 8.
"This indicates that they weren't going to get the level of acceptances that they were looking for," Michael McCarthy, chief market strategist at CMC Markets in Sydney, said by phone. "Once they get to 90 percent within one entity they can compulsorily acquire the remaining 10 percent and effectively they can take it private."
Buying Coal & Allied gives London-based Rio and Tokyo-based Mitsubishi full control of three coal mines in the Hunter Valley in Australia's New South Wales state as prices surge. The move comes as global mining companies take advantage of a four-week market equity rout that wiped about $8 trillion off the value of global equities.
Coal & Allied shares gained 3.6 percent to A$122.02 at the 4:10 p.m. close of the Australian stock exchange in Sydney. The revised offer, made after Coal & Allied dropped 30 percent from its peak this year, values the company at A$10.8 billion.
Power Houses
"The offer is obviously well within the investment matrix for these two powerhouses," said McCarthy. "They both have far greater financial resources."
Rio generated $18 billion in cash from its operations in the year to Dec. 31, compared with a cash flow of $9.6 billion a year earlier, according to data compiled by Bloomberg. Rio has worked to repair its balance sheet, with the help of surging commodity prices as well as more than $11 billion in asset sales, after debt ballooned 19-fold with the purchase of aluminum producer Alcan Inc. in 2007.
Rio, which paid A$3.4 billion to acquire Riversdale Mining Ltd. this year, raised its bid two days after Glencore International Plc offered A$270 million for the shares in Australian nickel producer Minara Resources Ltd. it doesn't already own.
"The revised proposal has been unanimously recommended by the proposal response committee members subject to the independent expert concluding that the scheme is in the best interests of Coal & Allied's minority shareholders and there being no superior proposal," Coal & Allied said in the statement.
Perpetual Ltd., Coal & Allied's third-largest shareholder, has supported the bid in the absence of a higher offer.
sourced sfgate
India's GVK reaches $2.2 bln Hancock mines deal-report
Fri Aug 26, 2011
* Board expected to meet within 10 days to approve deal
* GVK to pay $1.3 bln for mines, $900mln for infrastructure
MUMBAI/SYDNEY Aug 26 (Reuters) - India's GVK Power & Infra is close to finalising a deal to buy two Australian coal mines owned by Hancock Prospecting, said two sources with knowledge of the deal, which a newspaper report said has been agreed for $2.2 billion.
The GVK board, which constructs power plants and airports, will meet within 10 days to approve the deal, the Economic Times reported on Friday, citing lenders and company officials who are part of the negotiations.
GVK Power Chief Financial Officer Issac George declined to comment on the report, when reached by Reuters. Hancock was not immediately available for comment.
Hancock and GVK Power last month extended the deadline for exclusive talks until end August, sources had told Reuters. The two companies, which have been in talks since February this year, had extended the deadline twice before.
Standard Chartered , India's second-largest lender ICICI Bank and Axis Bank will fund the GVK transaction, the report said, adding Ernst & Young was advising the Indian company.
Shares in GVK were trading up 0.6 percent at 16.60 rupees at 0446 GMT in a Mumbai market that was up 0.3 percent. The GVK stock is down more than half this year compared with a 21 percent fall in the main market.
Some analysts and bankers have expressed doubts whether GVK, which the market values at about $567 million, would be able to pull off such a large acquisition.
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.
Indian energy firms have been scouting for coal assets overseas to feed power plants at home, and have been raising funds for potential overseas acquisitions and expanding facilities.
HC orders status quo on closure of BCCL mines
Fri,Aug 26, 2011
Manohar LalManohar Lal, TNN
RANCHI: Giving an immediate relief to the Bharat Coking Coal Limited (BCCL), the Jharkhand high court on Thursday ordered a status quo on the closure of as many as 14 operational mines as ordered by the state pollution control board till August 30.
BCCL had moved the high court challenging the order of state pollution control board issued last week. The coal mining giant has said in its petition that the order of the state pollution board was too harsh and it could affect the companies run on the coal mined from this area.
The hearing on the petition was taken up in the court of Justice Poonam Srivastava. The counsel for BCCL said though the mines are not closed as the copy of the order has not been received by the company, the order of pollution control board does not comply with the pollution law of the state.
Contesting the arguments, advocate-general Anil Kumar Sinha said the order was very much in accordance with the law and these mines were run without prior permission from the state government.
Sinha said the company despite several notices slapped by the state pollution control board was neither replying nor abiding by the norms laid by the pollution control board. After hearing the arguments, the court asked the state government to file a counter affidavit on the petition of BCCL.
The court also ordered maintaining a status quo on as many as 22 operational mines of the company and adjourned the hearing till Tuesday.
The state pollution control board has ordered closure of mines of the company for not following green norms last week.
The underground and open cast mines which were ordered for closure are Phularitarh, Muraidih, Shatabdi, Govindpur, Gajlitarh, Mudidih, Tetulmari, Senara, Bansjora, Gondudih Khas, Khushanda, Ena, Kujama, Ginagarha, Bahra South, Gopalichak, Murlidih, Dahibari and Bahra North.
BCCL, a Coal India Ltd subsidiary, has as many as 69 coal mines in the state and made major technological changes to enhance production, which according to the state pollution control board had violated green norms.
(sourced TOI)
Manohar LalManohar Lal, TNN
RANCHI: Giving an immediate relief to the Bharat Coking Coal Limited (BCCL), the Jharkhand high court on Thursday ordered a status quo on the closure of as many as 14 operational mines as ordered by the state pollution control board till August 30.
BCCL had moved the high court challenging the order of state pollution control board issued last week. The coal mining giant has said in its petition that the order of the state pollution board was too harsh and it could affect the companies run on the coal mined from this area.
The hearing on the petition was taken up in the court of Justice Poonam Srivastava. The counsel for BCCL said though the mines are not closed as the copy of the order has not been received by the company, the order of pollution control board does not comply with the pollution law of the state.
Contesting the arguments, advocate-general Anil Kumar Sinha said the order was very much in accordance with the law and these mines were run without prior permission from the state government.
Sinha said the company despite several notices slapped by the state pollution control board was neither replying nor abiding by the norms laid by the pollution control board. After hearing the arguments, the court asked the state government to file a counter affidavit on the petition of BCCL.
The court also ordered maintaining a status quo on as many as 22 operational mines of the company and adjourned the hearing till Tuesday.
The state pollution control board has ordered closure of mines of the company for not following green norms last week.
The underground and open cast mines which were ordered for closure are Phularitarh, Muraidih, Shatabdi, Govindpur, Gajlitarh, Mudidih, Tetulmari, Senara, Bansjora, Gondudih Khas, Khushanda, Ena, Kujama, Ginagarha, Bahra South, Gopalichak, Murlidih, Dahibari and Bahra North.
BCCL, a Coal India Ltd subsidiary, has as many as 69 coal mines in the state and made major technological changes to enhance production, which according to the state pollution control board had violated green norms.
(sourced TOI)
Steel Buyers are Waiting to Buy – Mills May Push the Envelope
Friday, 26 August 2011
An east coast service center told us earlier this week, “The mills have announced a $60 per ton increase, which brings the pricing to $41.00 cwt fob the producing mill [galvanized].
I am hearing that most of them are holding their price, but as you know, they have not collected any of it. The mills gave everyone the opportunity to purchase additional tons at the “old” price and most everyone did that. The true issue is that no one is carrying large amounts of inventory, so we need to purchase steel every week, the price becomes secondary for we cannot sell from an empty shelf.
As I previously stated, there is no weakness for no one has issued orders at the most recent published price. Lead times are into October, but there is no real backlog.”
A Midwest service center executive voiced what is probably true at many companies this week, “Not really hearing much-all is quite on the western front Seems like everyone is just watching….? I haven’t been searching yet either.”
So the market sits back and waits. Most buyers have made their September and perhaps October buys and now are waiting to see what happens next. We continue to hear comments from steel executives referring to their memories of 2009 and not wanting to get sucked into buying more steel than they can sell over a short period of time.
Demand is still an open question which will take a few weeks to become clearer. The companies with whom Steel Market Update has spoken late last week and earlier this week have not seen demand destruction and are speaking of demand as remaining stable.
The domestic mills are apparently trying to get a piece, if not all of the announced $60 per ton increase.
One of the steel mills told us in an email, “It looks like everyone is trying to get $60. Lead times are normal, which means they have improved over the last 4 weeks. Order size has increased a bit but still not back to historic levels. [There is] Lots of talk about another increase so it wouldn't surprise me.”
While a manufacturing company told us, “Still too early to tell, but we are being offered $660/ton without asking. We don’t see lead times moving out more than a few days. The rumor may get more people to buy what they need immediately, but no one is building any inventory.
The real news that hasn’t sunk in with the mills is the economy, the melt down on Wall Street, and the level of industrial activity, construction, and consumer spending in the next six months. I don’t think the mills have it figured out yet.”
This came from a Midwest service center executive, “Hi John. Interesting times. We're a buyer at less than the $60. Even in the few days after we were paying zero more for orders placed then. Your question is a good one on whether or not the mills will go for a second increase. I think it depends on how full they get and how much of the first increase they collect and also how demand holds up in the next month. We have not seen, knock on wood, any decrease in demand following the stock market turmoil of recent days.”
Source: SteelMarketUpdate
An east coast service center told us earlier this week, “The mills have announced a $60 per ton increase, which brings the pricing to $41.00 cwt fob the producing mill [galvanized].
I am hearing that most of them are holding their price, but as you know, they have not collected any of it. The mills gave everyone the opportunity to purchase additional tons at the “old” price and most everyone did that. The true issue is that no one is carrying large amounts of inventory, so we need to purchase steel every week, the price becomes secondary for we cannot sell from an empty shelf.
As I previously stated, there is no weakness for no one has issued orders at the most recent published price. Lead times are into October, but there is no real backlog.”
A Midwest service center executive voiced what is probably true at many companies this week, “Not really hearing much-all is quite on the western front Seems like everyone is just watching….? I haven’t been searching yet either.”
So the market sits back and waits. Most buyers have made their September and perhaps October buys and now are waiting to see what happens next. We continue to hear comments from steel executives referring to their memories of 2009 and not wanting to get sucked into buying more steel than they can sell over a short period of time.
Demand is still an open question which will take a few weeks to become clearer. The companies with whom Steel Market Update has spoken late last week and earlier this week have not seen demand destruction and are speaking of demand as remaining stable.
The domestic mills are apparently trying to get a piece, if not all of the announced $60 per ton increase.
One of the steel mills told us in an email, “It looks like everyone is trying to get $60. Lead times are normal, which means they have improved over the last 4 weeks. Order size has increased a bit but still not back to historic levels. [There is] Lots of talk about another increase so it wouldn't surprise me.”
While a manufacturing company told us, “Still too early to tell, but we are being offered $660/ton without asking. We don’t see lead times moving out more than a few days. The rumor may get more people to buy what they need immediately, but no one is building any inventory.
The real news that hasn’t sunk in with the mills is the economy, the melt down on Wall Street, and the level of industrial activity, construction, and consumer spending in the next six months. I don’t think the mills have it figured out yet.”
This came from a Midwest service center executive, “Hi John. Interesting times. We're a buyer at less than the $60. Even in the few days after we were paying zero more for orders placed then. Your question is a good one on whether or not the mills will go for a second increase. I think it depends on how full they get and how much of the first increase they collect and also how demand holds up in the next month. We have not seen, knock on wood, any decrease in demand following the stock market turmoil of recent days.”
Source: SteelMarketUpdate
Iron Ore-Spot prices at 3-month high, Shanghai rebar slips
Fri Aug 26, 2011 | By Reuters
* China steel price dip may sap iron ore upturn
* Shanghai rebar falls for the first time in 3 weeks
By Manolo Serapio Jr
SINGAPORE, Aug 26 (Reuters) - Spot iron ore prices rose to fresh three-month highs on hopes China's steel production pace will remain high as mills keep up with firm construction demand.
But a drop in China's steel futures for a second day on Friday could sap the upward momentum in prices of the steelmaking raw material.
"There are still buyers out there, but it's becoming difficult to push prices higher," said a shipping manager for an iron ore trading firm in Shanghai.
Two index-based spot prices hit their highest levels since mid-May on Thursday.
Iron ore with 62-percent iron content rose 0.1 percent to $178.50 a tonne, according to The Steel Index .IO62-CNI=SI, the highest since May 16.
Metal Bulletin's iron ore index .IO62-CNO=MB gained 0.4 percent to $178.94 a tonne, its loftiest since May 12. The Platts index IODBZ00-PLT was steady at $180.25.
Indian exporter Essel Mining sold 63.5/63 grade iron ore at $189 a tonne, cost and freight, this week, the highest so far for the grade in recent months, traders said.
"That grade is still unable to cross $190, which means not all the Chinese mills are willing to pay this kind of price," said the shipping manager.
Global miner BHP Billiton also sold three cargoes comprising 62-grade Newman iron ore fines and 58-grade Yandi fines at $183 and $159 a tonne, respectively, this week.
China's daily steel production has averaged more than 1.9 million tonnes since late February, up from last year's 1.7 million tonnes, spurring recent gains in both iron ore and steel prices.
But Shanghai steel futures eased for a second day on Friday, with the most-traded January contract slipping 0.3 percent to close at 4,800 yuan a tonne, in line with cautious trading in other commodities ahead of a speech by Federal Reserve Chairman Ben Bernanke later on Friday.
Shanghai rebar, which fell 0.3 percent on week, its first loss in three weeks, is down more than 2 percent so far in August.
Bernanke is expected to unveil a plan for the struggling U.S. economy at an annual central bankers conference in Jackson Hole, Wyoming, although market participants are not expecting him to announce aggressive measures like another round of bond buying.
"We still expect iron ore prices to be supported by tight supplies from India. There still aren't much new offers from both Indian traders and miners," said an iron ore trader in Shanghai.
"But mills might be cautious in buying more iron ore if prices continue higher."
Weaker prices for iron ore swaps <0#SGXIOS:> on Thursday suggested investors are unsure whether recent price gains in the physical market can be sustained.
S.Africa's Optimum Coal confirms bid interest
Fri Aug 26, 2011 | By Reuters
JOHANNESBURG (Reuters) - South Africa's Optimum Coal Holdings confirmed on Friday it had received expressions of interest from unnamed third parties, a day after sources close to the deal said commodities trader Glencore was eyeing the miner.
Optimum, South Africa's sixth-largest coal producer, said in a statement it had received "unsolicited, non-binding expressions of interest from third parties to acquire a controlling interest in Optimum".
At current prices, Optimum has a market capitalisation of around $1 billion.
"Shareholders are advised that there is currently no certainty that Optimum will receive a firm intention to make an offer from any party," it added, giving no further details.
Optimum had already issued a cautionary statement earlier this month, alerting investors to circumstances which could affect its share price, but had denied having been approached by any prospective buyer.
The sources close to the deal had told Reuters on Thursday that Glencore and South African partner Cyril Ramaphosa were talking to Optimum shareholders and were preparing to make an announcement.
Shareholders in Optimum confirmed they had received an offer from the commodities giant and Ramaphosa, whose unlisted Shanduka Resources owns 30 percent of Shanduka Coal, a venture with Glencore.
Shanduka Coal, 70 percent owned by Glencore, has until recently been Glencore's vehicle for investment in coal mining in South Africa.
OCH, formerly owned by miner BHP Billiton, will produce 13.7 million tonnes of coal in 2011, up from 13.6 million in 2010.
JOHANNESBURG (Reuters) - South Africa's Optimum Coal Holdings confirmed on Friday it had received expressions of interest from unnamed third parties, a day after sources close to the deal said commodities trader Glencore was eyeing the miner.
Optimum, South Africa's sixth-largest coal producer, said in a statement it had received "unsolicited, non-binding expressions of interest from third parties to acquire a controlling interest in Optimum".
At current prices, Optimum has a market capitalisation of around $1 billion.
"Shareholders are advised that there is currently no certainty that Optimum will receive a firm intention to make an offer from any party," it added, giving no further details.
Optimum had already issued a cautionary statement earlier this month, alerting investors to circumstances which could affect its share price, but had denied having been approached by any prospective buyer.
The sources close to the deal had told Reuters on Thursday that Glencore and South African partner Cyril Ramaphosa were talking to Optimum shareholders and were preparing to make an announcement.
Shareholders in Optimum confirmed they had received an offer from the commodities giant and Ramaphosa, whose unlisted Shanduka Resources owns 30 percent of Shanduka Coal, a venture with Glencore.
Shanduka Coal, 70 percent owned by Glencore, has until recently been Glencore's vehicle for investment in coal mining in South Africa.
OCH, formerly owned by miner BHP Billiton, will produce 13.7 million tonnes of coal in 2011, up from 13.6 million in 2010.
Optimum Coal shares rise 6 percent on bid talk
Fri Aug 26, 2011
JOHANNESBURG (Reuters) - Shares in South African miner Optimum Coal soared six percent higher in early trading on Friday after the company confirmed reports that unnamed third parties were interested in buying out the firm.
Its share price at 0705 GMT was 31.80 rand, its highest in about four months, according to Thomson Reuters' data. On Thursday, sources close to the deal said commodities trader Glencore was eyeing the miner.
Approaching hurricane forces North Carolina ports closure
Friday, 26 August 2011
On Thursday, the North Carolina Port Authority, which includes the Ports of Morehead City and Wilmington, reported that it closed the gates to commercial traffic at 5:00 p.m. Thursday in anticipation of Hurricane Irene, which hit the Bahamas on Wednesday and Thursday and is now rapidly approaching the East Coast.
The ports were originally scheduled to be closed at noon on Friday, August 26, but the closure was hastened as the severity of storm accelerated.
Primary imports at North Carolina ports include scrap metal, metal products, machinery parts and ores.
(sourced steelorbis)
On Thursday, the North Carolina Port Authority, which includes the Ports of Morehead City and Wilmington, reported that it closed the gates to commercial traffic at 5:00 p.m. Thursday in anticipation of Hurricane Irene, which hit the Bahamas on Wednesday and Thursday and is now rapidly approaching the East Coast.
The ports were originally scheduled to be closed at noon on Friday, August 26, but the closure was hastened as the severity of storm accelerated.
Primary imports at North Carolina ports include scrap metal, metal products, machinery parts and ores.
(sourced steelorbis)
Northland inks lease agreement with Swedish port
August26,2011
By Matthew Hill
TORONTO – Northland Resources, developing an iron-ore mine in Sweden, said on Thursday it signed a lease agreement with the Scandanavian nation’s Narvik Port, and that it is on track to produce the steelmaking ingredient at the Kaunisvaara by the end of next year.
“We are very pleased that the Narvik authorities have provided the final approval which will allow us to start construction of the new terminal and ancillary infrastructure so that it will be ready for the first shipment of high-grade, high quality iron concentrate from our mines in Kaunisvaara at the beginning of 2013,” Northland CEO Karl-Axel Waplan said.
Work will now begin on a temporary shipping facility, including a quay, a depot, a conveyor belt, a de-icing facility, and an unloading facility for the railcars and railway lines.
The TSX-listed company aims to truck the iron-ore concentrate 150 km from the mine to a railway line that will rail it to the port, but is considering building a rail conection that would cost in the region of $1-billion, Waplan said earlier this year.
Northland has entered into industrial off-take contracts which will last for seven to eight years for Kaunisvaara’s entire five-million ton a year production.
The mine is located in north-eastern Sweden.
The company also announced the names of the three compnies it previously said would handle the transportation of its ore as Savage Service Corporation, Peab and Grieg Logistics.
Savage will carry the overall responsibility for the coordination, management and cooperation between the three parties and coordinate the work program.
(sourced Mining Weekily)
By Matthew Hill
TORONTO – Northland Resources, developing an iron-ore mine in Sweden, said on Thursday it signed a lease agreement with the Scandanavian nation’s Narvik Port, and that it is on track to produce the steelmaking ingredient at the Kaunisvaara by the end of next year.
“We are very pleased that the Narvik authorities have provided the final approval which will allow us to start construction of the new terminal and ancillary infrastructure so that it will be ready for the first shipment of high-grade, high quality iron concentrate from our mines in Kaunisvaara at the beginning of 2013,” Northland CEO Karl-Axel Waplan said.
Work will now begin on a temporary shipping facility, including a quay, a depot, a conveyor belt, a de-icing facility, and an unloading facility for the railcars and railway lines.
The TSX-listed company aims to truck the iron-ore concentrate 150 km from the mine to a railway line that will rail it to the port, but is considering building a rail conection that would cost in the region of $1-billion, Waplan said earlier this year.
Northland has entered into industrial off-take contracts which will last for seven to eight years for Kaunisvaara’s entire five-million ton a year production.
The mine is located in north-eastern Sweden.
The company also announced the names of the three compnies it previously said would handle the transportation of its ore as Savage Service Corporation, Peab and Grieg Logistics.
Savage will carry the overall responsibility for the coordination, management and cooperation between the three parties and coordinate the work program.
(sourced Mining Weekily)
BHP completes Petrohawk Energy takeover
Fri, 26 August 2011
AFP - Mining giant BHP Billiton said on Friday it had completed its US$12.1 billion takeover of the US-based Petrohawk Energy Corporation.
The company, which posted a record-breaking financial year profit of US$23.6 billion this week, said the deal was sealed through a short-form merger under Delaware law.
This was the final step of the acquisition process and follows the previously announced completion of the tender offer by BHP to acquire all outstanding Petrohawk common stock.
BHP Billiton petroleum chief executive Michael Yeager said the takeover adds high-quality growth to the company.
"With the completion of this transaction, BHP Billiton Petroleum is on track to deliver compound annual growth in production volumes of 10 percent for the remainder of the decade," he said.
"We are excited that Petrohawk's sizeable US workforce is joining our talented group of professionals and we are ready to grow this business over the long-term."
It follows BHP's purchase earlier this year of US-based Chesapeake Energy Corp's shale gas holdings in Arkansas, along with some pipeline assets, for US$4.75 billion, as it seeks to diversify beyond mining and minerals.
(sourced France24)
AFP - Mining giant BHP Billiton said on Friday it had completed its US$12.1 billion takeover of the US-based Petrohawk Energy Corporation.
The company, which posted a record-breaking financial year profit of US$23.6 billion this week, said the deal was sealed through a short-form merger under Delaware law.
This was the final step of the acquisition process and follows the previously announced completion of the tender offer by BHP to acquire all outstanding Petrohawk common stock.
BHP Billiton petroleum chief executive Michael Yeager said the takeover adds high-quality growth to the company.
"With the completion of this transaction, BHP Billiton Petroleum is on track to deliver compound annual growth in production volumes of 10 percent for the remainder of the decade," he said.
"We are excited that Petrohawk's sizeable US workforce is joining our talented group of professionals and we are ready to grow this business over the long-term."
It follows BHP's purchase earlier this year of US-based Chesapeake Energy Corp's shale gas holdings in Arkansas, along with some pipeline assets, for US$4.75 billion, as it seeks to diversify beyond mining and minerals.
(sourced France24)
Coal India unions want 100% hike; co says even 24% tough
Friday,Aug 26,2011
By Debjit Chakraborty, Agency DNA
Mumbai: Workers unions of Coal India Ltd have demanded a 100% wage hike, but if comments by chairman and managing director N C Jha are anything to go by, it is difficult for the company to match even the last hike.
“Last time, we had agreed (to hike salaries) by about 24%. This time, whether even that is a possibility or not will be looked into,” Jha said.
Non-executive employees comprise close to 80% of the company’s staff strength, and wages and salaries make up over 40% of its total costs.
Coal India revises non-executive staff wages every five years, while those of executives are done every 10 years.
The last wage hike for non-executive employees came into effect July 1, 2006, and the National Coal Wage Agreement expired on June 30.
In the wage negotiation committee’s first meeting held over the weekend, the company’s five trade unions have put forth a demand to raise wages by 100-500%.
The demand shook investor sentiment, with shares of Coal India falling 3.5% intraday before recovering and closing at `374.35, marginally higher than the previous close.
The stock has lost nearly 6.5% since Monday, losing its recently-gained top position in market capitalisation. “Such demands are only wish for the moon... It isn’t simply possible to give 100% increase,” said Jha.
“Investors should understand that when negotiation comes, somebody demands very high, and when we negotiate it comes down to a comfortable position where both the parties agree and the company also doesn’t get adversely affected. Investors should not be panicky on this,” he said.
The negotiation committee will again meet on September 22-23. “We have to see how much (of the demands) can be absorbed and does it create any anomaly with the pay structure,” the chairman said. NewsWire18
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Buy Coal India for the long term: Ashwani Gujral
CIL wage costs may rise 19pct this fiscal - JP Morgan
CIL to liquidate 25 million tonne inventory - Mr NC Jha
Coal India overtakes Reliance Industries as most valuable company
Coal India Q1 profit up 64 pct, faces competition for resources
Coal Regulatory Authority proposed in Indian
Ministry of Coal, Status of Coal Blocks
By Debjit Chakraborty, Agency DNA
Mumbai: Workers unions of Coal India Ltd have demanded a 100% wage hike, but if comments by chairman and managing director N C Jha are anything to go by, it is difficult for the company to match even the last hike.
“Last time, we had agreed (to hike salaries) by about 24%. This time, whether even that is a possibility or not will be looked into,” Jha said.
Non-executive employees comprise close to 80% of the company’s staff strength, and wages and salaries make up over 40% of its total costs.
Coal India revises non-executive staff wages every five years, while those of executives are done every 10 years.
The last wage hike for non-executive employees came into effect July 1, 2006, and the National Coal Wage Agreement expired on June 30.
In the wage negotiation committee’s first meeting held over the weekend, the company’s five trade unions have put forth a demand to raise wages by 100-500%.
The demand shook investor sentiment, with shares of Coal India falling 3.5% intraday before recovering and closing at `374.35, marginally higher than the previous close.
The stock has lost nearly 6.5% since Monday, losing its recently-gained top position in market capitalisation. “Such demands are only wish for the moon... It isn’t simply possible to give 100% increase,” said Jha.
“Investors should understand that when negotiation comes, somebody demands very high, and when we negotiate it comes down to a comfortable position where both the parties agree and the company also doesn’t get adversely affected. Investors should not be panicky on this,” he said.
The negotiation committee will again meet on September 22-23. “We have to see how much (of the demands) can be absorbed and does it create any anomaly with the pay structure,” the chairman said. NewsWire18
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CIL wage costs may rise 19pct this fiscal - JP Morgan
CIL to liquidate 25 million tonne inventory - Mr NC Jha
Coal India overtakes Reliance Industries as most valuable company
Coal India Q1 profit up 64 pct, faces competition for resources
Coal Regulatory Authority proposed in Indian
Ministry of Coal, Status of Coal Blocks
Thar coal project to be operational by December 2013
Friday,August 26, 2011
ISLAMABAD (APP) - Thar coal project will be operational by December 2013 that will bring prosperity in the country, said Dr Samar Mubarakmand, member Science and Technology Planning Commission on Thursday.
Talking to a private news channel, he said Pakistan had enough coal reservoirs that could provide electricity to country for more than 500 years. He said work on the projects was in progress and the first 50 megawatts (MW) gasified project has almost been completed.
The project will cost Rs 8.898 billion, with a foreign exchange component of Rs 5.847 billion that has been approved by the Executive Committee of National Economic Council last year. Finance minister had accepted the demand of Rs 900 million for machinery and equipment keeping in view project's importance and financial viability, he added.
Dr Mubarakmand assured success of the Thar coal project would encourage global investment by leading international companies dealing with development of underground coal.
(sourced Nation)
Fresh fears of Greek default as Finns hold out in collateral dispute
August 26, 2011
By Riva Froymovich, The Australian
EURO-ZONE policy makers appeared no nearer to settling a dispute over Finland's collateral demands in exchange for participating in a bailout for Greece, raising concerns that Athens may default.
Markets have grown more worried about the potential for a Greek debt default amid an apparent lack of progress in resolving the collateral issue this week.
Finland, meanwhile, shows no sign of backing down.
German Chancellor Angela Merkel also unexpectedly cancelled a trip to Russia in early September to shepherd through parliament a crucial change to the euro-zone bailout fund.
The cancellation comes at a sensitive time for relations with Russia, and amid growing nervousness about dissent within the ranks of her own party over her handling of the euro-zone debt crisis.
"The date collides with the introduction of the (European Financial Stability Facility) treaty into the Bundestag," a German government official said, adding that the chancellor wants to stay in Berlin due to the significance of the issue.
Yields on Greek two-year bonds rocketed to a record of over 43 per cent, according to Tradeweb, and the cost of insuring Greek government bonds against default also rose sharply.
Greek five-year sovereign credit-default swaps were 1.37 percentage points wider at 22.75 percentage points, according to Markit.
No multi-lateral talks on the collateral issue took place Wednesday or Thursday, a person familiar with the situation said, despite an initial intention to hash out an agreement by the weekend.
However, the person didn't rule out the possibility that bilateral talks are under way.
Euro-zone governments are looking into alternative forms of collateral after a cash deal reached earlier between Greece and Finland was rejected by key member countries, including Germany and the Netherlands.
Under terms of that deal, Greece would pay Finland hundreds of millions of euros from its bailout loans as collateral for those same loans at the expense of other euro-zone countries.
Since Finland is set to contribute just 2 per cent of Greece's total rescue package, guarantees from the richer euro-zone nations would be going directly to Finland.
The collateral dispute, if not resolved soon, could derail a second bailout package for Greece agreed by euro-zone leaders on July 21.
Without support from all 17 euro-zone countries, no funds can be released, while changes to the European Financial Stability Facility, the currency bloc's bailout fund, can't go forward either.
At last month's summit, leaders agreed to expand the fund and make it more flexible, so that it could buy bonds on the secondary market and provide credit lines to countries locked out of markets.
National parliaments across the euro area must approve the changes, however, and the collateral issue must be settled before the final EFSF proposal is written.
The European Commission, the EU's executive branch, has asked that all the details for the EFSF legislation be clarified by the end of August.
German officials have said they expect to approve the new EFSF at a cabinet meeting on Wednesday.
A parliamentary vote is likely to take place September 23.
A commission spokesman said that there is no formal deadline for concluding talks.
Still, "it's good for that to be done toward the end of the month," he said.
Germany insists on a solution acceptable to all euro-zone countries.
The International Monetary Fund, which has been contributing to Greek bailout loans, opposes any deal that would threaten its preferred-creditor status, which ensures the fund is always first to be repaid.
Finland said that it continues discussions with Greece and other euro-zone countries to find a solution. Officials refrained from further comment.
"The issue has become so politicised that no one here at the Finance Ministry wants to talk about it at the moment," said Anita Sihvola, a spokeswoman for the Finnish finance ministry.
On Wednesday, Finnish Finance Minister Jutta Urpilainen reiterated that Finland would not take part in the €110 billion Greek ($150bn) bailout unless it obtained collateral.
Finland's policy is partly the result of April's general election, in which support for the True Finns Party, which opposed the Greek bailout, soared to 19 per cent from 4.1 per cent in 2007.
The True Finns finished third, and the election led to a new government coalition of six parties.
Euro-zone officials have indicated they are exploring other forms of collateral, such as state property or other non-cash assets.
But this option would be anathema in Greece, especially as many of the government's assets are already earmarked for privatisation.
The government has strongly opposed any deals that would involve putting up Greek land or real estate as collateral, viewing the step as a threat to the country's territorial sovereignty.
"It seems that a possible outcome is either collateral for all member states or no country will get it," said a second person familiar with the matter.
By Riva Froymovich, The Australian
EURO-ZONE policy makers appeared no nearer to settling a dispute over Finland's collateral demands in exchange for participating in a bailout for Greece, raising concerns that Athens may default.
Markets have grown more worried about the potential for a Greek debt default amid an apparent lack of progress in resolving the collateral issue this week.
Finland, meanwhile, shows no sign of backing down.
German Chancellor Angela Merkel also unexpectedly cancelled a trip to Russia in early September to shepherd through parliament a crucial change to the euro-zone bailout fund.
The cancellation comes at a sensitive time for relations with Russia, and amid growing nervousness about dissent within the ranks of her own party over her handling of the euro-zone debt crisis.
"The date collides with the introduction of the (European Financial Stability Facility) treaty into the Bundestag," a German government official said, adding that the chancellor wants to stay in Berlin due to the significance of the issue.
Yields on Greek two-year bonds rocketed to a record of over 43 per cent, according to Tradeweb, and the cost of insuring Greek government bonds against default also rose sharply.
Greek five-year sovereign credit-default swaps were 1.37 percentage points wider at 22.75 percentage points, according to Markit.
No multi-lateral talks on the collateral issue took place Wednesday or Thursday, a person familiar with the situation said, despite an initial intention to hash out an agreement by the weekend.
However, the person didn't rule out the possibility that bilateral talks are under way.
Euro-zone governments are looking into alternative forms of collateral after a cash deal reached earlier between Greece and Finland was rejected by key member countries, including Germany and the Netherlands.
Under terms of that deal, Greece would pay Finland hundreds of millions of euros from its bailout loans as collateral for those same loans at the expense of other euro-zone countries.
Since Finland is set to contribute just 2 per cent of Greece's total rescue package, guarantees from the richer euro-zone nations would be going directly to Finland.
The collateral dispute, if not resolved soon, could derail a second bailout package for Greece agreed by euro-zone leaders on July 21.
Without support from all 17 euro-zone countries, no funds can be released, while changes to the European Financial Stability Facility, the currency bloc's bailout fund, can't go forward either.
At last month's summit, leaders agreed to expand the fund and make it more flexible, so that it could buy bonds on the secondary market and provide credit lines to countries locked out of markets.
National parliaments across the euro area must approve the changes, however, and the collateral issue must be settled before the final EFSF proposal is written.
The European Commission, the EU's executive branch, has asked that all the details for the EFSF legislation be clarified by the end of August.
German officials have said they expect to approve the new EFSF at a cabinet meeting on Wednesday.
A parliamentary vote is likely to take place September 23.
A commission spokesman said that there is no formal deadline for concluding talks.
Still, "it's good for that to be done toward the end of the month," he said.
Germany insists on a solution acceptable to all euro-zone countries.
The International Monetary Fund, which has been contributing to Greek bailout loans, opposes any deal that would threaten its preferred-creditor status, which ensures the fund is always first to be repaid.
Finland said that it continues discussions with Greece and other euro-zone countries to find a solution. Officials refrained from further comment.
"The issue has become so politicised that no one here at the Finance Ministry wants to talk about it at the moment," said Anita Sihvola, a spokeswoman for the Finnish finance ministry.
On Wednesday, Finnish Finance Minister Jutta Urpilainen reiterated that Finland would not take part in the €110 billion Greek ($150bn) bailout unless it obtained collateral.
Finland's policy is partly the result of April's general election, in which support for the True Finns Party, which opposed the Greek bailout, soared to 19 per cent from 4.1 per cent in 2007.
The True Finns finished third, and the election led to a new government coalition of six parties.
Euro-zone officials have indicated they are exploring other forms of collateral, such as state property or other non-cash assets.
But this option would be anathema in Greece, especially as many of the government's assets are already earmarked for privatisation.
The government has strongly opposed any deals that would involve putting up Greek land or real estate as collateral, viewing the step as a threat to the country's territorial sovereignty.
"It seems that a possible outcome is either collateral for all member states or no country will get it," said a second person familiar with the matter.
Peru gov't, miners reach deal to increase royalties
Aug26, 2011
* Miners, gov't negotiate new royalty scheme
* Humala campaigned for higher taxes to help the poor
* Mine society sees rates defined in next couple weeks
By Caroline Stauffer and Patricia Velez
LIMA, (Reuters) - Peru has reached an agreement with mining companies that will raise the vital industry's annual payments to the government to about $1 billion, the government
said on Thursday, fulfilling a campaign promise by leftist President Ollanta Humala.
Humala took office in late July, vowing to tax mining companies' windfall profits to bolster social programs in a country where one of every three people is poor. Mining accounts for 60 percent of Peru's export revenue.
The new royalty rates have not been set yet but a sliding scale will be devised to take individual company profits into account, Pedro Martinez, the head of Peru's mining company
association, told Reuters.
The royalty rates should be defined "in the next couple of weeks," the sector's lead negotiator added. Companies now pay royalties of between 1 percent and 3 percent, charged on sales in the world's No. 2 copper producer and No. 6 gold producer. Mines Minister Carlos Herrera said the
new levy will be applied to operating profits instead of sales, a change that mining companies supported.
"We want to announce today that we have ensured mining companies will make tax payments of approximately 3 billion soles a year," Prime Minister Salomon Lerner told Congress, where he was presenting Humala's government plan.
"This tax will not affect investment or companies' competitiveness," he said. Last year, miners contributed $646 million in royalties and paid corporate income taxes at a rate of 30 percent. It was unclear whether Lerner was referring to revenue from royalties alone or overall tax contributions.
Mining profits have surged on the back of record high gold, silver and copper prices this year.
"It is healthy to have reached a successful conclusion, that we can contribute something more," Roque Benavides, head of Peru's biggest precious metals producer Buenaventura , told local radio.
Asked how the contribution would be paid, Benavides said: "This is a more complex issue because this is based on profits, which do not have a set value and which depend on metals prices
(and) the cost of each company's operations." He said the government's revenue calculation of approximately $1 billion was based on metals prices and company profits from the first half of 2011.
GREATER CERTAINTY
Humala's government has been under pressure from his leftist backers to act on campaign promises to improve the lot of the poor, after he pleased investors by appointing a pro-market economic team. In his speech, Lerner reaffirmed Humala's commitment to gradually improving social programs. "We will not have an economic policy that is divorced from our social policies," he said. "Our model of economic growth with social inclusion implies a profound, gradual reform of the state and its ties to society."
Lerner also said the government would aim for economic growth of at least 6 percent a year.
Large international mining firms including Xstrata , BHP Billiton , Anglo American , Barrick Gold , and Grupo Mexico's Southern Copper operate in Peru. Peru collects a mere 15 percent of GDP in taxes, well below the nearly 35 percent of GDP in Brazil and less than the 18.2
percent in Chile.
"The announcement of a negotiated agreement between the government and mining companies eliminates one of the remaining sources of uncertainty about the overall direction of policies in Peru," Goldman Sachs analyst Eduardo Cavallo wrote in a research note.
A stocks trader in Lima said shares in mining companies were unaffected by the news. Lima's benchmark exchange , which is heavily weighted by miners, closed down 0.14 percent. "Lerner has given the framework that the government seeks but investors want to know what the (royalty) rates are and if they will be competitive for each company," the trader said.
* Miners, gov't negotiate new royalty scheme
* Humala campaigned for higher taxes to help the poor
* Mine society sees rates defined in next couple weeks
By Caroline Stauffer and Patricia Velez
LIMA, (Reuters) - Peru has reached an agreement with mining companies that will raise the vital industry's annual payments to the government to about $1 billion, the government
said on Thursday, fulfilling a campaign promise by leftist President Ollanta Humala.
Humala took office in late July, vowing to tax mining companies' windfall profits to bolster social programs in a country where one of every three people is poor. Mining accounts for 60 percent of Peru's export revenue.
The new royalty rates have not been set yet but a sliding scale will be devised to take individual company profits into account, Pedro Martinez, the head of Peru's mining company
association, told Reuters.
The royalty rates should be defined "in the next couple of weeks," the sector's lead negotiator added. Companies now pay royalties of between 1 percent and 3 percent, charged on sales in the world's No. 2 copper producer and No. 6 gold producer. Mines Minister Carlos Herrera said the
new levy will be applied to operating profits instead of sales, a change that mining companies supported.
"We want to announce today that we have ensured mining companies will make tax payments of approximately 3 billion soles a year," Prime Minister Salomon Lerner told Congress, where he was presenting Humala's government plan.
"This tax will not affect investment or companies' competitiveness," he said. Last year, miners contributed $646 million in royalties and paid corporate income taxes at a rate of 30 percent. It was unclear whether Lerner was referring to revenue from royalties alone or overall tax contributions.
Mining profits have surged on the back of record high gold, silver and copper prices this year.
"It is healthy to have reached a successful conclusion, that we can contribute something more," Roque Benavides, head of Peru's biggest precious metals producer Buenaventura , told local radio.
Asked how the contribution would be paid, Benavides said: "This is a more complex issue because this is based on profits, which do not have a set value and which depend on metals prices
(and) the cost of each company's operations." He said the government's revenue calculation of approximately $1 billion was based on metals prices and company profits from the first half of 2011.
GREATER CERTAINTY
Humala's government has been under pressure from his leftist backers to act on campaign promises to improve the lot of the poor, after he pleased investors by appointing a pro-market economic team. In his speech, Lerner reaffirmed Humala's commitment to gradually improving social programs. "We will not have an economic policy that is divorced from our social policies," he said. "Our model of economic growth with social inclusion implies a profound, gradual reform of the state and its ties to society."
Lerner also said the government would aim for economic growth of at least 6 percent a year.
Large international mining firms including Xstrata , BHP Billiton , Anglo American , Barrick Gold , and Grupo Mexico's Southern Copper operate in Peru. Peru collects a mere 15 percent of GDP in taxes, well below the nearly 35 percent of GDP in Brazil and less than the 18.2
percent in Chile.
"The announcement of a negotiated agreement between the government and mining companies eliminates one of the remaining sources of uncertainty about the overall direction of policies in Peru," Goldman Sachs analyst Eduardo Cavallo wrote in a research note.
A stocks trader in Lima said shares in mining companies were unaffected by the news. Lima's benchmark exchange , which is heavily weighted by miners, closed down 0.14 percent. "Lerner has given the framework that the government seeks but investors want to know what the (royalty) rates are and if they will be competitive for each company," the trader said.
Glencore, S. Africa partner eye Optimum Coal
Aug26, 2011
LONDON (Reuters) - Commodities trading giant Glencore (GLEN.L) and South African partner Cyril Ramaphosa are interested in buying miner Optimum Coal Holdings (OPTJ.J) and are preparing a formal announcement, sources close to the deal said on Thursday.
Shareholders in South Africa's sixth-largest coal producer confirmed they had received an offer from the commodities giant and partner Ramaphosa, whose unlisted Shanduka Resources owns 30 percent of Shanduka Coal, a venture with Glencore.
OCH last week issued a cautionary statement, alerting investors to circumstances which could affect its share price, but has denied having been approached by any prospective buyer.
OCH, formerly owned by mining giant BHP Billiton (BLT.L), will produce 13.7 million tonnes of coal in 2011, up from 13.6 million in 2010.
"Glencore is committed to long-term investment in South Africa," one of the sources close to the deal said.
"Glencore and its partner fully recognise that Optimum has a broad-based Black Economic Empowerment ownership and is a benchmark for transformation and would not seek to prejudice Optimum's BEE credentials," the source added.
Glencore, which has $10.4 billion of cash it could spend, is considering acquisitions more aggressively because the current market turmoil has caused the price of listed assets to drop while private companies were less optimistic about their outlook.
"Is this the bottom? I don't know, but it is definitely a better time to look at acquisitions," Glencore Chief Executive Officer Ivan Glasenberg told reporters earlier on Thursday when the company's second quarter results were announced.
Shanduka Coal, 70 percent owned by Glencore, has until recently been Glencore's vehicle for investment in coal mining in South Africa.
Shanduka Coal owns 100 percent of the Graspan, Townlands, Bankfontein, Leeuwfontein and Lakeside coal mines, which were acquired between 2006-2007.
According to Glencore's website, their total run of mine production capacity is around 9 million tonnes a year.
"We have been made an offer but we haven't decided yet, our board meets on Saturday to decide one way or another," said Mandla Tshabalala of Mobu Resources Pty Limited, a minority shareholder in OCH.
"We don't want to just cash out and retire to the Bahamas, we have expertise in mining and it's not our government'a policy for junior miners to be purely silent cash investors, we want to be involved in any new entity," he added.
Asked to comment on Glencore's move to buy OCH by buying from the various entities who own stakes in it, a senior mining industry source with connections to OCH said: "the structure may not turn out to be quite as you describe it."
Earlier on Thursday OCH Chief Executive Officer Mike Teke said, when asked if he saw OCH as a target for consolidation: "We are acquisitive about being a target, I'm not sure. We see ourselves as an operating asset, as being acquisitive and looking at others as targets." [
Asked if OCH had been approached by anybody, Teke said "no."
Later in the day, asked about a Glencore bid, Teke declined to comment when asked if OCH had been approached.
"Last week we issued a cautionary and I prefer not to comment," he told Reuters.
Optimum was avidly pursued by several majority black-owned junior miners when BHP put it up for sale and some of these players remain determined to derail Glencore's bid for what was one of BHP's most prized assets.
Aside from producing export grade coal, Optimum is the key supplier of fuel to state power utility Eskom's Hendrina power plant, which is next door to the mine.
(sourced Reuters)
LONDON (Reuters) - Commodities trading giant Glencore (GLEN.L) and South African partner Cyril Ramaphosa are interested in buying miner Optimum Coal Holdings (OPTJ.J) and are preparing a formal announcement, sources close to the deal said on Thursday.
Shareholders in South Africa's sixth-largest coal producer confirmed they had received an offer from the commodities giant and partner Ramaphosa, whose unlisted Shanduka Resources owns 30 percent of Shanduka Coal, a venture with Glencore.
OCH last week issued a cautionary statement, alerting investors to circumstances which could affect its share price, but has denied having been approached by any prospective buyer.
OCH, formerly owned by mining giant BHP Billiton (BLT.L), will produce 13.7 million tonnes of coal in 2011, up from 13.6 million in 2010.
"Glencore is committed to long-term investment in South Africa," one of the sources close to the deal said.
"Glencore and its partner fully recognise that Optimum has a broad-based Black Economic Empowerment ownership and is a benchmark for transformation and would not seek to prejudice Optimum's BEE credentials," the source added.
Glencore, which has $10.4 billion of cash it could spend, is considering acquisitions more aggressively because the current market turmoil has caused the price of listed assets to drop while private companies were less optimistic about their outlook.
"Is this the bottom? I don't know, but it is definitely a better time to look at acquisitions," Glencore Chief Executive Officer Ivan Glasenberg told reporters earlier on Thursday when the company's second quarter results were announced.
Shanduka Coal, 70 percent owned by Glencore, has until recently been Glencore's vehicle for investment in coal mining in South Africa.
Shanduka Coal owns 100 percent of the Graspan, Townlands, Bankfontein, Leeuwfontein and Lakeside coal mines, which were acquired between 2006-2007.
According to Glencore's website, their total run of mine production capacity is around 9 million tonnes a year.
"We have been made an offer but we haven't decided yet, our board meets on Saturday to decide one way or another," said Mandla Tshabalala of Mobu Resources Pty Limited, a minority shareholder in OCH.
"We don't want to just cash out and retire to the Bahamas, we have expertise in mining and it's not our government'a policy for junior miners to be purely silent cash investors, we want to be involved in any new entity," he added.
Asked to comment on Glencore's move to buy OCH by buying from the various entities who own stakes in it, a senior mining industry source with connections to OCH said: "the structure may not turn out to be quite as you describe it."
Earlier on Thursday OCH Chief Executive Officer Mike Teke said, when asked if he saw OCH as a target for consolidation: "We are acquisitive about being a target, I'm not sure. We see ourselves as an operating asset, as being acquisitive and looking at others as targets." [
Asked if OCH had been approached by anybody, Teke said "no."
Later in the day, asked about a Glencore bid, Teke declined to comment when asked if OCH had been approached.
"Last week we issued a cautionary and I prefer not to comment," he told Reuters.
Optimum was avidly pursued by several majority black-owned junior miners when BHP put it up for sale and some of these players remain determined to derail Glencore's bid for what was one of BHP's most prized assets.
Aside from producing export grade coal, Optimum is the key supplier of fuel to state power utility Eskom's Hendrina power plant, which is next door to the mine.
(sourced Reuters)
US coal giant says taxes make Australian investment less attractive
Fri, August 26, 2011
By Matt Chambers, The Australian
Peabody Energy says the government is making it less attractive to invest in Australia because of proposed taxes.
The US coal giant, jointly bidding $4.7 billion for Macarthur Coal with the world's biggest steel company ArcelorMittal, also says there is a heightened sovereign risk.
Speaking in Sydney yesterday, senior vice-president of investor relations, Vic Svec, said despite Peabody's continued investment in Australia, there was no question that the nation's relative advantage in attracting foreign investment was shrinking under the current government.
"It's really only in the last year you've heard sovereign risk being associated with Australia, and we don't like that," he said.
Peabody is Australia's fifth-biggest coal producer, but it will jump to the third-biggest if it is successful in the joint $15.50-a-share cash bid for Macarthur.
"We want Australia to be more welcoming to capital, as opposed to less welcoming, to ensure we don't take a meat cleaver to the milk cow," Mr Svec said.
He said Australia was "absolutely" becoming less welcoming to capital through the proposed mining and carbon taxes.
Peabody, the world's biggest non-government coal company, sold 246 million tonnes of coal last year - all from the US, apart from 27 million tonnes in Australia.
Despite this, its Australian operations accounted for 60 per cent of the company's earnings because most of the US coal is contracted domestically for much lower prices than are fetched on export markets.
Mr Svec said he had not planned for any formal meetings with Macarthur during his visit, but the company continued to engage with its target and hoped that an agreement could be reached.
"Their mantra of taking no action seems to be going on for a pretty long time," he said.
When Macarthur released its full-year profit on Wednesday, the company said it remained in conversations with other potential suitors but that nothing had eventuated and that shareholders should take no action on the Peabody bid.
A recommendation from the Macarthur board is expected before the end of the month.
Mr Svec said Macarthur's inability to hit production targets in four of the past five years was indicative of either poor forecasting, poor operations, or both.
Peabody had begun to receive some acceptances for its offer, Mr Svec said.
But it is only a trickle at this stage and has not strengthened the Peabody/Arcelor stake in Macarthur more than one percentage point beyond the 16 per cent it was at when the bid was lobbed a month ago.
By Matt Chambers, The Australian
Peabody Energy says the government is making it less attractive to invest in Australia because of proposed taxes.
The US coal giant, jointly bidding $4.7 billion for Macarthur Coal with the world's biggest steel company ArcelorMittal, also says there is a heightened sovereign risk.
Speaking in Sydney yesterday, senior vice-president of investor relations, Vic Svec, said despite Peabody's continued investment in Australia, there was no question that the nation's relative advantage in attracting foreign investment was shrinking under the current government.
"It's really only in the last year you've heard sovereign risk being associated with Australia, and we don't like that," he said.
Peabody is Australia's fifth-biggest coal producer, but it will jump to the third-biggest if it is successful in the joint $15.50-a-share cash bid for Macarthur.
"We want Australia to be more welcoming to capital, as opposed to less welcoming, to ensure we don't take a meat cleaver to the milk cow," Mr Svec said.
He said Australia was "absolutely" becoming less welcoming to capital through the proposed mining and carbon taxes.
Peabody, the world's biggest non-government coal company, sold 246 million tonnes of coal last year - all from the US, apart from 27 million tonnes in Australia.
Despite this, its Australian operations accounted for 60 per cent of the company's earnings because most of the US coal is contracted domestically for much lower prices than are fetched on export markets.
Mr Svec said he had not planned for any formal meetings with Macarthur during his visit, but the company continued to engage with its target and hoped that an agreement could be reached.
"Their mantra of taking no action seems to be going on for a pretty long time," he said.
When Macarthur released its full-year profit on Wednesday, the company said it remained in conversations with other potential suitors but that nothing had eventuated and that shareholders should take no action on the Peabody bid.
A recommendation from the Macarthur board is expected before the end of the month.
Mr Svec said Macarthur's inability to hit production targets in four of the past five years was indicative of either poor forecasting, poor operations, or both.
Peabody had begun to receive some acceptances for its offer, Mr Svec said.
But it is only a trickle at this stage and has not strengthened the Peabody/Arcelor stake in Macarthur more than one percentage point beyond the 16 per cent it was at when the bid was lobbed a month ago.
Coal and Allied shares on trading halt pending statement on Rio bid
Fri Aug 26, 2011
SYDNEY Aug 26 (Reuters) - For a text of the statement: here (Reporting by Ed Davies)
Thursday, August 25, 2011
Ukraine plan to permit privatization of thermal power plants
Thursday, 25 Aug 2011
Ukrainian cabinet has proposed to permit the privatization of heat generation companies as a part of the realization of a concept for a national heat supply strategy in Ukraine by 2030.
The requirement is stipulated in a draft cabinet resolution on the approval of a concept for a national strategy for heat supply to Ukrainian cities and towns until 2030, which has been posted on the Web site of the Ukrainian Regional Development, Construction and Housing and Utilities Ministry.
Sources of heat generation are thermal power plants, combined heat power plants and cogeneration plants.
According to the document, the lifting of a ban on the privatization of the said companies will permit a structural reorganization and develop competition in the heat supply area. In addition, the cabinet is planning to attract private capital under leasing and concession agreements, introduce principles of competition among heat producers and suppliers and reorganize municipal unitary companies into separate companies.
The approximate cost of the project's realization is estimated at UAH 50 billion to UAH 60 billion including UAH 14.9 billion from the national budget as a part of the realization of state programs on the energy efficiency of buildings and heat supply systems. If the resolution is passed, the Regional Development, Construction and Housing and Utilities Ministry, jointly with other executive power bodies are to draw up the draft strategy by January 1 2012 and submit it to the cabinet.
(sourced from Inerfax)
Ukrainian cabinet has proposed to permit the privatization of heat generation companies as a part of the realization of a concept for a national heat supply strategy in Ukraine by 2030.
The requirement is stipulated in a draft cabinet resolution on the approval of a concept for a national strategy for heat supply to Ukrainian cities and towns until 2030, which has been posted on the Web site of the Ukrainian Regional Development, Construction and Housing and Utilities Ministry.
Sources of heat generation are thermal power plants, combined heat power plants and cogeneration plants.
According to the document, the lifting of a ban on the privatization of the said companies will permit a structural reorganization and develop competition in the heat supply area. In addition, the cabinet is planning to attract private capital under leasing and concession agreements, introduce principles of competition among heat producers and suppliers and reorganize municipal unitary companies into separate companies.
The approximate cost of the project's realization is estimated at UAH 50 billion to UAH 60 billion including UAH 14.9 billion from the national budget as a part of the realization of state programs on the energy efficiency of buildings and heat supply systems. If the resolution is passed, the Regional Development, Construction and Housing and Utilities Ministry, jointly with other executive power bodies are to draw up the draft strategy by January 1 2012 and submit it to the cabinet.
(sourced from Inerfax)
GFI Group launches iron ore swaps trading on EnergyMatch platform
Thursday, 25 Aug 2011
Dow Jones reported that GFI Group Inc has launched iron ore swaps trading on its EnergyMatch platform in Europe amid a broad move to expand its product offerings on the platform.
According the company, it has now successfully traded a number of iron ore swap products on EnergyMatch Europe, GFI's online energy trading platform.
The move follows the July 2011 introduction of fuel oil trading on EnergyMatch Europe amid an increasing push by regulatory authorities to move trade onto electronic screens.
Mr Dorian Benson head of GFI Dry Freight Group said that "Iron Ore Swaps is another example of our focus on adding new products to EnergyMatch. We look forward to making further announcements as we continue expand our offerings."
An iron ore swap involves buying or selling at a fixed price against a floating price, like an index and is a relatively new feature of the iron ore industry. Liquidity is still an issue for the iron ore swaps market, which Credit Suisse and Deutsche Bank AG pioneered a couple of years ago.
(Sourced from Dow Jones Newswires)
Dow Jones reported that GFI Group Inc has launched iron ore swaps trading on its EnergyMatch platform in Europe amid a broad move to expand its product offerings on the platform.
According the company, it has now successfully traded a number of iron ore swap products on EnergyMatch Europe, GFI's online energy trading platform.
The move follows the July 2011 introduction of fuel oil trading on EnergyMatch Europe amid an increasing push by regulatory authorities to move trade onto electronic screens.
Mr Dorian Benson head of GFI Dry Freight Group said that "Iron Ore Swaps is another example of our focus on adding new products to EnergyMatch. We look forward to making further announcements as we continue expand our offerings."
An iron ore swap involves buying or selling at a fixed price against a floating price, like an index and is a relatively new feature of the iron ore industry. Liquidity is still an issue for the iron ore swaps market, which Credit Suisse and Deutsche Bank AG pioneered a couple of years ago.
(Sourced from Dow Jones Newswires)
Ovoot coking coal highly attractive to global - Aspire Mining
Thursday, 25 Aug 2011
Mongolian focused Aspire Mining Limited announced that leading coal market consultants Wood Mackenzie confirmed coking coal from Aspire's Ovoot Project had highly attractive properties and would easily meet the global seaborne market requirements.
In a marketing report prepared by Wood Mackenzie, the international consultancy said that Ovoot coal could be described as a strongly caking, hard coking coal with superior blend carrying capacity and that hard coking coal would be an appropriate price benchmark.
Aspire wholly owns the Ovoot Coking Coal Project, located in northern Mongolia. Ovoot has a 330.7 million tonne JORC Compliant Resource with high washing yields of 80% and 8% ash content, based on recent wash analysis.
The Wood Mackenzie report stated that, based on available quality data, Ovoot coking coal was in an ideal range for mid volatile hard coking coal and fat coal classifications. The consultancy also confirmed that the Ovoot coking coal presented as a value add blend coal, able to be blended with cheaper inert coals due its very high vitrinite content and good fluidity.
Mr David Paull MD of Aspire Mining said that "The Wood Mackenzie Report confirms our view that Ovoot is a quality coking coal by any measure. Confirmation that hard coking coal prices are an appropriate benchmark for Ovoot coking coal provides us with confidence to progress a pre feasibility study into the larger scale development of the Project. Potential markets for our coal include all of the large high growth markets of China, India and Brazil as well as the established markets of Japan, South Korea, Taiwan, Russia and Europe."
Wood Mackenzie has significant experience in assessing and positioning new coking coal supply sources. Its marketing strategy reviewed supply and demand fundamentals of the seaborne coking coal market as well as markets in China. Rail capacities in Mongolia and China were considered as were rail and port capacities through Russia.
Aspire is considering development of the Ovoot project in two stages. The first is a small scale development based on a 0.5 to 1 million tonne per annum starter open pit, providing direct ship ore which will be trucked 550 kilometers to the nearest rail siding at Erdenet, while work continues on developing a rail connection from the Mine to Erdenet.
Mongolian focused Aspire Mining Limited announced that leading coal market consultants Wood Mackenzie confirmed coking coal from Aspire's Ovoot Project had highly attractive properties and would easily meet the global seaborne market requirements.
In a marketing report prepared by Wood Mackenzie, the international consultancy said that Ovoot coal could be described as a strongly caking, hard coking coal with superior blend carrying capacity and that hard coking coal would be an appropriate price benchmark.
Aspire wholly owns the Ovoot Coking Coal Project, located in northern Mongolia. Ovoot has a 330.7 million tonne JORC Compliant Resource with high washing yields of 80% and 8% ash content, based on recent wash analysis.
The Wood Mackenzie report stated that, based on available quality data, Ovoot coking coal was in an ideal range for mid volatile hard coking coal and fat coal classifications. The consultancy also confirmed that the Ovoot coking coal presented as a value add blend coal, able to be blended with cheaper inert coals due its very high vitrinite content and good fluidity.
Mr David Paull MD of Aspire Mining said that "The Wood Mackenzie Report confirms our view that Ovoot is a quality coking coal by any measure. Confirmation that hard coking coal prices are an appropriate benchmark for Ovoot coking coal provides us with confidence to progress a pre feasibility study into the larger scale development of the Project. Potential markets for our coal include all of the large high growth markets of China, India and Brazil as well as the established markets of Japan, South Korea, Taiwan, Russia and Europe."
Wood Mackenzie has significant experience in assessing and positioning new coking coal supply sources. Its marketing strategy reviewed supply and demand fundamentals of the seaborne coking coal market as well as markets in China. Rail capacities in Mongolia and China were considered as were rail and port capacities through Russia.
Aspire is considering development of the Ovoot project in two stages. The first is a small scale development based on a 0.5 to 1 million tonne per annum starter open pit, providing direct ship ore which will be trucked 550 kilometers to the nearest rail siding at Erdenet, while work continues on developing a rail connection from the Mine to Erdenet.
S.Africa Transnet says proposed split needs debate
Thu Aug 25, 2011
JOHANNESBURG Aug 25 (Reuters) - The head of South Africa's logistics group Transnet said on Thursday that it was "inappropriate" to speak about a split of the freight rail unit from the group at this time and that the matter needed more debate before a decision is made.
Quoting proposals by the Department of Transport, a media report suggested this week that the freight rail unit may be split away to open the business to the private sector.
State-owned Transnet has a monopoly over South Africa's rail network. Coal miners have complained that they were unable to export all of their coal due to bottlenecks and derailments on the lines leading to the export terminal at Richards Bay.
Producers have said they were willing to pitch in to improve capacity, but extensive private-public partnerships have yet to materialise.
"There is a role for the private sector to play ... but not as radical as suggested," Chief Executive Brian Molefe told journalists.
"Structural separations need to be treated with caution."
Transnet is investing heavily to boost volumes on the coal export line to 81 million tonnes by 2015. The group is also studying the option of freeing up some 14 million tonnes of capacity on the coal line in two to three years by moving non-coal cargo to a new line via Swaziland.
Molefe said the rail unit was hit by two decades of underinvestment but recent ventures had been paying off.
"Over the next five years we will make a lot of progress and we think that we can restore the functioning of the freight rail business," he said.
Producers have already complimented Transnet on improving efficiencies on the line. Molefe said the line was currently transporting up to 1.6 million tonnes of coal a week.
Minister of Public Enterprises Malusi Gigaba, under whose mandate Transnet falls, said in a separate briefing that there was no discussion of splitting the rail unit away.
"There is no such thing. Neither the minister of transport nor the minister of public enterprises are aware of this. This was just a junior official who made an unmandated statement which has no standing in either of the two departments," he told reporters in Cape Town.
Western Desert Resources push for Gulf iron ore mine
Thursday, 25 Aug 2011
ABC.net reported that Western Desert Resources has taken another step toward developing an iron ore mine in the Gulf country of the Northern Territory.
The company is proposing an open-cut iron ore operation in the Gulf of Carpentaria. It said that the mine could produce up to 200 million tonnes of iron ore over 40 years.
WDR has already applied to the Territory Government for a mining licence.
The plans have also been referred to the Federal Government's environment department.
The company said that the mine will likely have an impact on national heritage areas like the proposed Limmen National Park. The mine will fall entirely within the proposed park, which has been gazetted since 1991.
WDR said that wetlands of national significance will also be affected, including tidal mudflats and estuaries associated with four rivers, the Roper, the Towns, the Limmen Bight and the Phelp.
The company wants to transport the ore to ships through a slurry pipeline.
The pipeline would extend to Maria Island, 30 kilometres from the coast, where the slurry would be loaded on to ships.
(sourced proactiveinvestors)
ABC.net reported that Western Desert Resources has taken another step toward developing an iron ore mine in the Gulf country of the Northern Territory.
The company is proposing an open-cut iron ore operation in the Gulf of Carpentaria. It said that the mine could produce up to 200 million tonnes of iron ore over 40 years.
WDR has already applied to the Territory Government for a mining licence.
The plans have also been referred to the Federal Government's environment department.
The company said that the mine will likely have an impact on national heritage areas like the proposed Limmen National Park. The mine will fall entirely within the proposed park, which has been gazetted since 1991.
WDR said that wetlands of national significance will also be affected, including tidal mudflats and estuaries associated with four rivers, the Roper, the Towns, the Limmen Bight and the Phelp.
The company wants to transport the ore to ships through a slurry pipeline.
The pipeline would extend to Maria Island, 30 kilometres from the coast, where the slurry would be loaded on to ships.
(sourced proactiveinvestors)
SEC suspends trading of Puda Coal Inc
Thursday, 25 Aug 2011
It is reported that the Securities and Exchange Commission suspended trading of China-based Puda Coal Inc citing a lack of current and accurate information on the company.
The move comes amid heightened scrutiny of Chinese companies listed in the US many of which have seen their stock tumble amid auditing problems and stubborn rumors of other improprieties. After an investigation, Puda earlier this year admitted it found evidence that supported allegations that Chairman Mr Ming Zhao had made unauthorized transactions in the shares of a business unit that were inconsistent with company disclosures.
The SEC recently cited the company findings as well as the July resignation of its auditors who said investors should no longer rely on the firm's previously issued audit reports. The agency ordered that trading be suspended through September 1.
The Chinese producer of high grade metallurgical coking coal which is used in steelmaking last month said it submitted a plan to the New York Stock Exchange Amex to regain compliance with its listing standards.
(Sourced from Dow Jones Newswires)
It is reported that the Securities and Exchange Commission suspended trading of China-based Puda Coal Inc citing a lack of current and accurate information on the company.
The move comes amid heightened scrutiny of Chinese companies listed in the US many of which have seen their stock tumble amid auditing problems and stubborn rumors of other improprieties. After an investigation, Puda earlier this year admitted it found evidence that supported allegations that Chairman Mr Ming Zhao had made unauthorized transactions in the shares of a business unit that were inconsistent with company disclosures.
The SEC recently cited the company findings as well as the July resignation of its auditors who said investors should no longer rely on the firm's previously issued audit reports. The agency ordered that trading be suspended through September 1.
The Chinese producer of high grade metallurgical coking coal which is used in steelmaking last month said it submitted a plan to the New York Stock Exchange Amex to regain compliance with its listing standards.
(Sourced from Dow Jones Newswires)
Steelmakers hunting for coking coal
Thu, August25, 2011
By Zhang Qi, China Daily
BEIJING - Chinese steelmakers are scrambling to buy coking coal mines in Mongolia, China's largest supplier of the fuel.
China is the world's biggest steel producer and needs the coke to keep its blast furnaces in operation.
State-owned steel makers, including Baosteel Group Corp and Jinan Iron & Steel Group Corp, are eyeing projects in Mongolia, which has vast quantities of untapped minerals, according to sources familiar with the situation.
Xinjiang Bayi Iron and Steel Co Ltd, a subsidiary of Baosteel, has a 10-year contract for supply of coking coal from Mongolia Energy Corp Ltd (MEC). Baosteel has also expressed an interest in buying a stake in MEC's coking coal project in the Khovd province in western Mongolia, the sources said.
In July, Jinan Iron & Steel and the Aluminum Corporation of China (Chinalco) signed contracts with Mongolia's State-owned operator, Erdenes Tavan Tolgoi LLC for coal supplies worth $250 million from deposits in the East Tsankhi area.
The sources said that both Jinan Iron & Steel and Chinalco are also looking to purchase mines in East Tsankhi.
"Mongolia has rich untapped reserves and the location is very attractive for Chinese companies," said Huang Shengchu, president of the China Coal Information Institute.
The Tavan Tolgoi deposit, which is only 270 kilometers from the Chinese border, is considered the world's largest untapped source of coking coal. Mongolia's National Mining Association expects coal production to increase to 60 million tons by 2015 from 22.5 million tons in 2010.
Tavan Tolgoi (TT) holds an estimated reserve of 6.4 billion tons of coal, including large amounts of coking coal.
While the Mongolian government will control of TT's East Tsankhi block, it announced in July that it had selected a consortium of Chinese, US and Russian companies to develop the West Tsankhi block.
Shenhua Group Corp Ltd, China's largest mining company by output, will have a 40 percent stake in the coalfield with the largest US coal producer Peabody Energy Corp holding 24 percent. The Russian Railway-led consortium will have a stake of 18 percent, and the Mongolians will hold the remainder.
However, the situation has been thrown into uncertainty after Mongolia's President Tsakhia Elbegdorj said on Aug 20 that the country was rethinking development plans for the mine in the light of negative public opinion.
Huang said the uncertainty over the West Tsankhi project will not deter China from seeking coking coal in Mongolia. Although China is currently more than 90 percent self-sufficient in the fuel, it will become increasingly dependent on imported resources, especially from nearby Mongolia, as a result of rising demand and the government's policy of protecting domestic supplies.
By Zhang Qi, China Daily
BEIJING - Chinese steelmakers are scrambling to buy coking coal mines in Mongolia, China's largest supplier of the fuel.
China is the world's biggest steel producer and needs the coke to keep its blast furnaces in operation.
State-owned steel makers, including Baosteel Group Corp and Jinan Iron & Steel Group Corp, are eyeing projects in Mongolia, which has vast quantities of untapped minerals, according to sources familiar with the situation.
Xinjiang Bayi Iron and Steel Co Ltd, a subsidiary of Baosteel, has a 10-year contract for supply of coking coal from Mongolia Energy Corp Ltd (MEC). Baosteel has also expressed an interest in buying a stake in MEC's coking coal project in the Khovd province in western Mongolia, the sources said.
In July, Jinan Iron & Steel and the Aluminum Corporation of China (Chinalco) signed contracts with Mongolia's State-owned operator, Erdenes Tavan Tolgoi LLC for coal supplies worth $250 million from deposits in the East Tsankhi area.
The sources said that both Jinan Iron & Steel and Chinalco are also looking to purchase mines in East Tsankhi.
"Mongolia has rich untapped reserves and the location is very attractive for Chinese companies," said Huang Shengchu, president of the China Coal Information Institute.
The Tavan Tolgoi deposit, which is only 270 kilometers from the Chinese border, is considered the world's largest untapped source of coking coal. Mongolia's National Mining Association expects coal production to increase to 60 million tons by 2015 from 22.5 million tons in 2010.
Tavan Tolgoi (TT) holds an estimated reserve of 6.4 billion tons of coal, including large amounts of coking coal.
While the Mongolian government will control of TT's East Tsankhi block, it announced in July that it had selected a consortium of Chinese, US and Russian companies to develop the West Tsankhi block.
Shenhua Group Corp Ltd, China's largest mining company by output, will have a 40 percent stake in the coalfield with the largest US coal producer Peabody Energy Corp holding 24 percent. The Russian Railway-led consortium will have a stake of 18 percent, and the Mongolians will hold the remainder.
However, the situation has been thrown into uncertainty after Mongolia's President Tsakhia Elbegdorj said on Aug 20 that the country was rethinking development plans for the mine in the light of negative public opinion.
Huang said the uncertainty over the West Tsankhi project will not deter China from seeking coking coal in Mongolia. Although China is currently more than 90 percent self-sufficient in the fuel, it will become increasingly dependent on imported resources, especially from nearby Mongolia, as a result of rising demand and the government's policy of protecting domestic supplies.
High coal prices in Indonesia to hit India’s power projects: Tata
Aug 24 2011 ,
By Vikas Srivastav
Mumbai:Tata group chairman Ratan Tata said the current Indonesian coal pricing
situation is acute and the company has approached the Indian government and the Indonesian government for a solution to keep the cost of power under control and make the upcoming ultra-mega power project in Mundra viable.
Addressing the 92 AGM of Tata Power, Tata said the higher price of coal from Indonesia is bound to impact the profitability of the firm’s projects. “I believe the blending of coal can offset the higher cost to some extent, but the situation is acute and we cannot blame the Indonesian government for being concerned about their country. I think Indian government will have to review the tariff structure. I think, the impact will be more on the power producers.”
“Although we have couple of mines in Indonesia and higher price of coal from these mines, in terms of operations, would mitigate the cost of power from Mundra project, but we need to reiterate to the government on tariff restructuring,” he said. Anil Sardana, MD of Tata Power, elaborated on the issue. He said the company plans to use low grade coal as an alternative to the higher priced Indonesian coal for its upcoming ultra-mega power project in Mundra. The company is already using the lower grade coal for its Trombay power plant. “We will source the low grade coal from Indonesia, Africa and our other existing mines and do the trial runs to find if they would be capable of reducing the cost of power from Mundra too as they have done at Trombay.”
In response to a question if they will be able to maintain the efficiency of their plants, he said, “these mines have sufficient amount of coal at their disposal and are willing to supply to us.”
As per the new formula notified by Indonesia’s directorate general of minerals, coal and geothermal, Indonesian coal producers will have to sell at prices notified by their government benchmarked against the international index. The benchmark price is to be based on a formula that refers to the average coal index price in accordance with international market mechanism.
According to market experts, due to the new pricing formula, price of Indonesian coal will go up by $30 a tonne and lead to a Rs 0.70 per unit increase in cost of electricity generation. Until recently, Indonesian coal producers had the freedom to sell their coal at their own price. All existing coal supply agreements with Indonesian coal mining companies will have to be modified to comply with new coal pricing regulations before September 23, 2011.
(sourced MyDigitalFC)
By Vikas Srivastav
Mumbai:Tata group chairman Ratan Tata said the current Indonesian coal pricing
situation is acute and the company has approached the Indian government and the Indonesian government for a solution to keep the cost of power under control and make the upcoming ultra-mega power project in Mundra viable.
Addressing the 92 AGM of Tata Power, Tata said the higher price of coal from Indonesia is bound to impact the profitability of the firm’s projects. “I believe the blending of coal can offset the higher cost to some extent, but the situation is acute and we cannot blame the Indonesian government for being concerned about their country. I think Indian government will have to review the tariff structure. I think, the impact will be more on the power producers.”
“Although we have couple of mines in Indonesia and higher price of coal from these mines, in terms of operations, would mitigate the cost of power from Mundra project, but we need to reiterate to the government on tariff restructuring,” he said. Anil Sardana, MD of Tata Power, elaborated on the issue. He said the company plans to use low grade coal as an alternative to the higher priced Indonesian coal for its upcoming ultra-mega power project in Mundra. The company is already using the lower grade coal for its Trombay power plant. “We will source the low grade coal from Indonesia, Africa and our other existing mines and do the trial runs to find if they would be capable of reducing the cost of power from Mundra too as they have done at Trombay.”
In response to a question if they will be able to maintain the efficiency of their plants, he said, “these mines have sufficient amount of coal at their disposal and are willing to supply to us.”
As per the new formula notified by Indonesia’s directorate general of minerals, coal and geothermal, Indonesian coal producers will have to sell at prices notified by their government benchmarked against the international index. The benchmark price is to be based on a formula that refers to the average coal index price in accordance with international market mechanism.
According to market experts, due to the new pricing formula, price of Indonesian coal will go up by $30 a tonne and lead to a Rs 0.70 per unit increase in cost of electricity generation. Until recently, Indonesian coal producers had the freedom to sell their coal at their own price. All existing coal supply agreements with Indonesian coal mining companies will have to be modified to comply with new coal pricing regulations before September 23, 2011.
(sourced MyDigitalFC)
Coal India Should Shun Foreign Acquisitions, Investor Says
Thu,Aug 25, 2011
By Rajesh Kumar Singh, Bloomberg
Coal India Ltd. (COAL), the world’s largest producer of the fuel, should refrain from overseas acquisitions because the local market is more lucrative, the second-biggest investor in the state-owned miner said.
“There are abundant reserves in India and returns on investment are far higher here,” Oscar Veldhuijzen, a partner at The Children’s Investment Fund Management UK LLP in London, said by telephone yesterday.
The state-run miner is considering three acquisition proposals, one each in Australia, the U.S. and Indonesia, as demand for the fuel increases in Asia’s second-fastest growing major economy. The rate of return on buying assets abroad will be lower because the cost of purchases could be high, Coal India Chairman N.C. Jha said on July 25.
“A company of Coal India’s size should be looking to expand in different geographies,” said Deven Choksey, managing director at Mumbai-based K.R. Choksey Shares & Securities Pvt. “Fundamentally, I don’t think they are making a mistake. They must do everything that helps them fulfill their supply commitments.”
Coal India, which accounts for more than 80 percent of India’s output of the fuel, needs the government’s permission to acquire stakes in unlisted units of listed foreign companies. It has also asked for relaxation of a requirement that investments yield an annual return of at least 12 percent.
Environmental curbs and delays in land acquisitions have hampered Coal India’s plan to increase production as utilities in India build power plants to help meet a government target of providing electricity for all households by 2012. Coal is used to generate more than half the country’s electricity.
Cheaper, Better
“Indonesia is looking to impose a ban on exports of low- calorific value thermal coal by 2014,” Veldhuijzen said. “It is much more secure, cheaper and much better for Coal India if the Indian government finally gets its act together and accelerates environment and land clearances.”
The Children’s Investment Fund had a 1.04 percent stake in Coal India as of June 30, according to data compiled by Bloomberg. The government held 90 percent, after selling 10 percent in an initial public offering in October.
“Coal India is probably the best investment in Asia,” Veldhuijzen said. “It is an attractive investment even at the current price.” He did not comment on the fund’s other potential investments in India.
Coal India shares have risen 9 percent since they were listed on Nov. 4, compared with a 22 percent fall in the benchmark Sensitive Index during the period. The stock, which is the best performer in the index this year, fell 4.7 percent to 373.90 rupees at the close in Mumbai yesterday.
India’s estimated coal resource is 267.2 billion tons, of which 105.8 billion tons are proved, according to the Coal Ministry’s web site.
By Rajesh Kumar Singh, Bloomberg
Coal India Ltd. (COAL), the world’s largest producer of the fuel, should refrain from overseas acquisitions because the local market is more lucrative, the second-biggest investor in the state-owned miner said.
“There are abundant reserves in India and returns on investment are far higher here,” Oscar Veldhuijzen, a partner at The Children’s Investment Fund Management UK LLP in London, said by telephone yesterday.
The state-run miner is considering three acquisition proposals, one each in Australia, the U.S. and Indonesia, as demand for the fuel increases in Asia’s second-fastest growing major economy. The rate of return on buying assets abroad will be lower because the cost of purchases could be high, Coal India Chairman N.C. Jha said on July 25.
“A company of Coal India’s size should be looking to expand in different geographies,” said Deven Choksey, managing director at Mumbai-based K.R. Choksey Shares & Securities Pvt. “Fundamentally, I don’t think they are making a mistake. They must do everything that helps them fulfill their supply commitments.”
Coal India, which accounts for more than 80 percent of India’s output of the fuel, needs the government’s permission to acquire stakes in unlisted units of listed foreign companies. It has also asked for relaxation of a requirement that investments yield an annual return of at least 12 percent.
Environmental curbs and delays in land acquisitions have hampered Coal India’s plan to increase production as utilities in India build power plants to help meet a government target of providing electricity for all households by 2012. Coal is used to generate more than half the country’s electricity.
Cheaper, Better
“Indonesia is looking to impose a ban on exports of low- calorific value thermal coal by 2014,” Veldhuijzen said. “It is much more secure, cheaper and much better for Coal India if the Indian government finally gets its act together and accelerates environment and land clearances.”
The Children’s Investment Fund had a 1.04 percent stake in Coal India as of June 30, according to data compiled by Bloomberg. The government held 90 percent, after selling 10 percent in an initial public offering in October.
“Coal India is probably the best investment in Asia,” Veldhuijzen said. “It is an attractive investment even at the current price.” He did not comment on the fund’s other potential investments in India.
Coal India shares have risen 9 percent since they were listed on Nov. 4, compared with a 22 percent fall in the benchmark Sensitive Index during the period. The stock, which is the best performer in the index this year, fell 4.7 percent to 373.90 rupees at the close in Mumbai yesterday.
India’s estimated coal resource is 267.2 billion tons, of which 105.8 billion tons are proved, according to the Coal Ministry’s web site.
Buy Coal India for the long term: Ashwani Gujral
25 Aug, 2011, | By ET
Ashwani Gujral, Chief Market Strategist, ashwanigujral.com (Technical Check) in a chat with ET Now gives his views on various stocks.
ET Now: Do you think Coal India is a good classic stock to buy on every decline and the bull market is still on for the stock?
Ashwani Gujral: There are some policy headwinds on mining but anybody who owns real assets over the longer term will be a good buy. So, around 360-365 if one is able to tide over all of these bills and the policies, Coal India is a decent long-term holding for people and around levels of 360, it has fairly good support. For the moment while the market is coming down, it has been strong. Whenever the market turns, chances are that Coal India will get back to new highs. By that time, probably we will solve our mining issues. So, this blip should be used to get into Coal India.
Ashwani Gujral, Chief Market Strategist, ashwanigujral.com (Technical Check) in a chat with ET Now gives his views on various stocks.
ET Now: Do you think Coal India is a good classic stock to buy on every decline and the bull market is still on for the stock?
Ashwani Gujral: There are some policy headwinds on mining but anybody who owns real assets over the longer term will be a good buy. So, around 360-365 if one is able to tide over all of these bills and the policies, Coal India is a decent long-term holding for people and around levels of 360, it has fairly good support. For the moment while the market is coming down, it has been strong. Whenever the market turns, chances are that Coal India will get back to new highs. By that time, probably we will solve our mining issues. So, this blip should be used to get into Coal India.
Optimum Coal FY profit surges on higher output
Thu Aug 25, 2011
JOHANNESBURG (Reuters) - Optimum Coal, South Africa's sixth-largest coal producer, on Thursday reported a surge in full-year earnings, boosted by higher group production and said the outlook for the coal market remained robust.
Optimum reported diluted headline earnings per share of 201.42 cents, up from 25.08 cents the previous year. Headline EPS are the main profit gauge in South Africa and exclude certain one-time items.
"Notwithstanding various production challenges at Optimum Collieries during the year, production at Koornfontein Mines has exceeded our expectations," Chief Executive Mike Teke said in a statement.
Production of coal rose 26 percent to 13.6 million tonnes.
The company said domestic and international demand for thermal coal is expected to remain strong on the back of healthy demand from Asia and from South African power utility Eskom.
The miner said it expects Optimum Collieries to produce around 5.3-5.5 million tonnes of export coal and 5.5 million tonnes of Eskom coal in the current financial year, while Koornfontein Mines is expected to produce 1.7 million tonnes of export coal and 1 million tonnes of Eskom quality coal.
While transport remains a challenge for Optimum and other South African coal miners, logistics group Transnet is investing heavily to boost volumes on the coal line leading to the export terminal at Richards Bay.
South African coal miners exported 63 million tonnes of coal last year from the Richards Bay Coal Terminal, far below its expanded capacity of 91 million tonnes, largely due to bottlenecks on the rail line leading to the port.
Transnet has said it plans to expand capacity on the coal export line to 81 million tonnes by 2015, and is studying the possibility of freeing up some 14 million tonnes of capacity on the coal line in two to three years by moving non-coal cargo to a new line via Swaziland.
Optimum declared a special dividend of 30 cents per share.
Optimum shares are down 4.64 percent so far this year, compared with an 8.9 percent fall in Johannesburg's All-Share index.
Hansteel to export 14,000 mt of cold rolled sheet to India
Wednesday, 24 August 2011
Handan Iron and Steel Group (Hansteel), a subsidiary of giant Chinese steelmaker Hebei Iron and Steel Group, has announced that in the current month it has received an order to export 14,000 mt of cold rolled sheet to India.
As of August 17, Hansteel had produced 2,800 mt of cold rolled sheet for the order in question.
Handan Iron and Steel Group (Hansteel), a subsidiary of giant Chinese steelmaker Hebei Iron and Steel Group, has announced that in the current month it has received an order to export 14,000 mt of cold rolled sheet to India.
As of August 17, Hansteel had produced 2,800 mt of cold rolled sheet for the order in question.
Coal bill signed into law
Thursday, 25 Aug 2011
A southern coalfields state senator believes a bill signed into law Tuesday could be a turning point for coal producing counties.
Sen Ron Stollings, D Boone and others were on hand at the state capitol when acting Gov Earl Ray Tomblin signed the bill that will give the 31 counties that produce coal more of the coal severance tax collected by the state.
Mr Stollings believes many of the counties will use the money to diversify their economies. The senator says if the federal EPA continues to deny permits and drilling for natural gas in the Marcellus shale continues to grow, coal may have a more difficult time keeping up. He said that "This is a way we can soften the blow, be a buffer somehow, so we have something to hang our hat on down the road.”
The new law will send one percent a year of the coal severance tax back to the coal producing counties for up to five years. Mr Stollings believes in a few years it could mean an additional USD 4 or USD 5 million for his county.
The law says the money can only be spent on infrastructure and economic development projects. County commissions will be required to submit annual reports to the legislature.
Sen Stollings said that "Rules will be written so that this money will not be wasted. This money may be very well be the best future investment for West Virginia than you can imagine."
Mr Stollings believes the land around Corridor G in Boone County could be developed with the money. He says infrastructure would include things like broadband, sewer and water lines or a bridge to a certain area.
(sourced WV Metro News)
A southern coalfields state senator believes a bill signed into law Tuesday could be a turning point for coal producing counties.
Sen Ron Stollings, D Boone and others were on hand at the state capitol when acting Gov Earl Ray Tomblin signed the bill that will give the 31 counties that produce coal more of the coal severance tax collected by the state.
Mr Stollings believes many of the counties will use the money to diversify their economies. The senator says if the federal EPA continues to deny permits and drilling for natural gas in the Marcellus shale continues to grow, coal may have a more difficult time keeping up. He said that "This is a way we can soften the blow, be a buffer somehow, so we have something to hang our hat on down the road.”
The new law will send one percent a year of the coal severance tax back to the coal producing counties for up to five years. Mr Stollings believes in a few years it could mean an additional USD 4 or USD 5 million for his county.
The law says the money can only be spent on infrastructure and economic development projects. County commissions will be required to submit annual reports to the legislature.
Sen Stollings said that "Rules will be written so that this money will not be wasted. This money may be very well be the best future investment for West Virginia than you can imagine."
Mr Stollings believes the land around Corridor G in Boone County could be developed with the money. He says infrastructure would include things like broadband, sewer and water lines or a bridge to a certain area.
(sourced WV Metro News)
Shandong Province to shut down small coal mines below 300,000 mt capacity
Wednesday, 24 August 2011
Shandong Coal Industry Administration in China's Shandong Province is proposing to upgrade small coal mines with annual production capacities under 300,000 mt in the province in order to expand their capacities. By the end of 2015, all coal mines in the province with annual capacities lower than 300,000 mt are to be shut down.
To control mining accidents, the local authorities in Shandong are keeping a close eye on local mining activities and have issued very strict requirements for accident reports and accountability. As regards illegal mining activities, the mines and the relevant responsible persons will be faced with sanctions.
(sourced steelorbis)
Shandong Coal Industry Administration in China's Shandong Province is proposing to upgrade small coal mines with annual production capacities under 300,000 mt in the province in order to expand their capacities. By the end of 2015, all coal mines in the province with annual capacities lower than 300,000 mt are to be shut down.
To control mining accidents, the local authorities in Shandong are keeping a close eye on local mining activities and have issued very strict requirements for accident reports and accountability. As regards illegal mining activities, the mines and the relevant responsible persons will be faced with sanctions.
(sourced steelorbis)
Iron Ore-Spot at 3-month top on brisk Chinese buying
Thu Aug 25, 2011
* High China steel output on brisk construction demand
* Chinese buying could wane if ore prices rise further
* Shanghai rebar slips to two-week low
By Manolo Serapio Jr
SINGAPORE, Aug 25 (Reuters) - Spot iron ore prices rose to their highest in more than three months and offers stayed firm on Thursday as Chinese mills restocked amid brisk steel demand.
Strong construction demand has been behind the rapid pace in China's daily steel production, which has averaged more than 1.9 million tonnes since late February, up from last year's 1.7 million tonnes.
But analysts and traders said the upturn in iron ore prices could lose steam if steel prices in China, the world's biggest consumer and producer, fall sharply.
"It looks like Chinese restocking is still underway, they still seem happy to buy iron ore. But they're probably at a point where they could pull out any minute," said Greme Train, commodity analyst at Macquarie in Shanghai.
"So if there's any negative news flow in the next couple of weeks, like weak PMI or another rate hike, then you could see a pullback in buying."
Two index-based spot prices hit their highest levels since mid-May, with 62-percent iron ore rising 0.3 percent to $180.25 a tonne on Wednesday, according to the Platts index IODBZ00-PLT. A similar grade at The Steel Index .IO62-CNI=SI rose 0.2 percent to $178.30.
Metal Bulletin's iron ore index .IO62-CNO=MB gained 0.3 percent to $178.31 a tonne, the highest since Aug. 4.
Offers for Indian 63.5/63 grade ore held at $187-$189 a tonne, cost and freight, on Thursday, said Chinese consultancy Umetal. Australian 62 percent Newman fines were quoted at $182-$184, it said.
Chinese buying appetite could wane if prices continue to rise, traders said.
"This bull run can't continue for too long. I see a price drop in September for sure," said a Shanghai-based iron ore trader.
A drop in Chinese steel futures to two-week lows on Thursday could prompt some mills to step back from buying the steelmaking ingredient.
The most-active January rebar contract on the Shanghai Futures Exchange fell as low as 4,788 yuan a tonne, before cutting losses to 4,806 yuan by 0317 GMT, down 0.3 percent.
But Macquarie's Train expects iron ore buying to intensify towards and into the fourth quarter when supply of domestic concentrates thins out as mining activity slows in winter.
"Risk reward is balanced at the moment in terms of where pricing can go from here, short-term, but at some point before the end of the year I think iron ore will probably be trading $10 higher than it is now."
(sourced Reuters)
* High China steel output on brisk construction demand
* Chinese buying could wane if ore prices rise further
* Shanghai rebar slips to two-week low
By Manolo Serapio Jr
SINGAPORE, Aug 25 (Reuters) - Spot iron ore prices rose to their highest in more than three months and offers stayed firm on Thursday as Chinese mills restocked amid brisk steel demand.
Strong construction demand has been behind the rapid pace in China's daily steel production, which has averaged more than 1.9 million tonnes since late February, up from last year's 1.7 million tonnes.
But analysts and traders said the upturn in iron ore prices could lose steam if steel prices in China, the world's biggest consumer and producer, fall sharply.
"It looks like Chinese restocking is still underway, they still seem happy to buy iron ore. But they're probably at a point where they could pull out any minute," said Greme Train, commodity analyst at Macquarie in Shanghai.
"So if there's any negative news flow in the next couple of weeks, like weak PMI or another rate hike, then you could see a pullback in buying."
Two index-based spot prices hit their highest levels since mid-May, with 62-percent iron ore rising 0.3 percent to $180.25 a tonne on Wednesday, according to the Platts index IODBZ00-PLT. A similar grade at The Steel Index .IO62-CNI=SI rose 0.2 percent to $178.30.
Metal Bulletin's iron ore index .IO62-CNO=MB gained 0.3 percent to $178.31 a tonne, the highest since Aug. 4.
Offers for Indian 63.5/63 grade ore held at $187-$189 a tonne, cost and freight, on Thursday, said Chinese consultancy Umetal. Australian 62 percent Newman fines were quoted at $182-$184, it said.
Chinese buying appetite could wane if prices continue to rise, traders said.
"This bull run can't continue for too long. I see a price drop in September for sure," said a Shanghai-based iron ore trader.
A drop in Chinese steel futures to two-week lows on Thursday could prompt some mills to step back from buying the steelmaking ingredient.
The most-active January rebar contract on the Shanghai Futures Exchange fell as low as 4,788 yuan a tonne, before cutting losses to 4,806 yuan by 0317 GMT, down 0.3 percent.
But Macquarie's Train expects iron ore buying to intensify towards and into the fourth quarter when supply of domestic concentrates thins out as mining activity slows in winter.
"Risk reward is balanced at the moment in terms of where pricing can go from here, short-term, but at some point before the end of the year I think iron ore will probably be trading $10 higher than it is now."
(sourced Reuters)
Macarthur Coal announces year end result
Thursday, 25 Aug 2011
The Board of Macarthur Coal Limited announced a record Net Profit After Tax of AUD 241.4 million for the twelve months ended June 30th 2011. This result was in line with earlier NPAT guidance issued by the Company.
The key financial results for the 2011 financial year include:
Ms Nicole Hollows CEO and MD of Macarthur Coal said that “The past twelve months have been extremely difficult, with our operations being substantially impacted by the record rainfall in the Bowen Basin. Force majeure was declared under coal sales contracts for five months as operations were severely disrupted.”
She said “In spite of the reduced production Macarthur's underlying NPAT was marginally better than last year due to the record prices achieved for metallurgical coal in the final quarter of the year. The profits realized on the sell down of Macarthur's interests in Middlemount, under a pre existing option to Gloucester Coal and Codrilla to our existing Coppabella and Moorvale Joint Venture partners speaks to the quality of Macarthur's asset portfolio."
Ms Hollows said that "Looking forward, the impact of the wet weather will continue to be felt in the upcoming year as Coppabella and Moorvale return to normal operations. Due to the restrictions on permitted water discharge volumes, we have retained water in some pits and our two operating mines ended the year with reduced in-pit inventories and reduced pre-strip. As a result of these conditions it is likely that Macarthur's attributed share of sales produced from Coppabella, Moorvale and Middlemount in the twelve months to June 30th 2012 will be between 5.0 million tonne.”
"As a result of the additional expenditure required to restore the pits to normal operations our FOB costs per tonne are also forecast to be higher in the coming year, rising from around AUD 100 per tonne in FY2011 to around AUD 115 per tonne in FY2012. We expect to return to more typical production cost levels once the mines are restored to normal operating conditions."
"On a more positive note we are now accelerating the activity around the development of Codrilla, our fourth mine. We anticipate that we will obtain the mining lease by July 2012 and our focus in the next twelve months will be to prepare for the commencement of development shortly thereafter, enabling Macarthur to reach its target of 9.2 million tonnes per annum by 2014. We have the coal resource, the long-term port and rail infrastructure and the people necessary to deliver this project. We are on track to deliver sustainable growth."
The Board of Macarthur Coal Limited announced a record Net Profit After Tax of AUD 241.4 million for the twelve months ended June 30th 2011. This result was in line with earlier NPAT guidance issued by the Company.
The key financial results for the 2011 financial year include:
Ms Nicole Hollows CEO and MD of Macarthur Coal said that “The past twelve months have been extremely difficult, with our operations being substantially impacted by the record rainfall in the Bowen Basin. Force majeure was declared under coal sales contracts for five months as operations were severely disrupted.”
She said “In spite of the reduced production Macarthur's underlying NPAT was marginally better than last year due to the record prices achieved for metallurgical coal in the final quarter of the year. The profits realized on the sell down of Macarthur's interests in Middlemount, under a pre existing option to Gloucester Coal and Codrilla to our existing Coppabella and Moorvale Joint Venture partners speaks to the quality of Macarthur's asset portfolio."
Ms Hollows said that "Looking forward, the impact of the wet weather will continue to be felt in the upcoming year as Coppabella and Moorvale return to normal operations. Due to the restrictions on permitted water discharge volumes, we have retained water in some pits and our two operating mines ended the year with reduced in-pit inventories and reduced pre-strip. As a result of these conditions it is likely that Macarthur's attributed share of sales produced from Coppabella, Moorvale and Middlemount in the twelve months to June 30th 2012 will be between 5.0 million tonne.”
"As a result of the additional expenditure required to restore the pits to normal operations our FOB costs per tonne are also forecast to be higher in the coming year, rising from around AUD 100 per tonne in FY2011 to around AUD 115 per tonne in FY2012. We expect to return to more typical production cost levels once the mines are restored to normal operating conditions."
"On a more positive note we are now accelerating the activity around the development of Codrilla, our fourth mine. We anticipate that we will obtain the mining lease by July 2012 and our focus in the next twelve months will be to prepare for the commencement of development shortly thereafter, enabling Macarthur to reach its target of 9.2 million tonnes per annum by 2014. We have the coal resource, the long-term port and rail infrastructure and the people necessary to deliver this project. We are on track to deliver sustainable growth."
Japanese regulator clears Peabody ArcelorMittal bid for Macarthur Coal
Thursday, 25 Aug 2011
Japan's competition regulator has cleared a USD 5 billion hostile bid for Australia's Macarthur Coal by Peabody Energy and ArcelorMittal.
Macarthur is resisting the AUD 15.66 a share offer, which includes Macarthur's final dividend. Macarthur considers the offer too low and is due to respond to it by September 1.
(sourced from Reuters)
Japan's competition regulator has cleared a USD 5 billion hostile bid for Australia's Macarthur Coal by Peabody Energy and ArcelorMittal.
Macarthur is resisting the AUD 15.66 a share offer, which includes Macarthur's final dividend. Macarthur considers the offer too low and is due to respond to it by September 1.
(sourced from Reuters)
US steel imports down 5 percent in July
Thursday, 25 August 2011
The American Iron and Steel Institute (AISI) reported Wednesday that based on preliminary US Census Bureau data the US imported 2,584,000 net tons (nt) of steel in July, including 2.06 million nt of finished steel--down 5 percent and 4 percent, respectively, from June final data.
Despite the overall decline, hot rolled sheet imports were up 43 percent in July compared to June and hot dipped galvanized sheet and strip imports increased 11 percent. Meanwhile, rebar imports were up 40 percent year-to-date in July, hot rolled bar imports rose 35 percent and imports of oil country goods jumped 32 percent.
Annualized total and finished steel imports in 2011 would be 29.5 million nt and 22.5 million nt, respectively, up 23 percent and 20 percent compared to 2010. Finished steel import market share in July was an estimated 23 percent and is also 23 percent year-to-date.
In July, the largest volumes of finished steel imports from offshore were from South Korea (299,000 nt, down 7 percent), China (155,000 nt, down 4 percent), Japan (138,000 nt, up 11 percent), Australia (104,000 nt, up 167 percent) and Germany (86,000 nt, up 39 percent).
For the first seven months of 2011, the largest offshore suppliers have been South Korea (1,809,000 nt, up 67 percent), Japan (895,000 nt, up 20 percent) and China (716,000 nt, up 53 percent).
(sourced steelorbis)
The American Iron and Steel Institute (AISI) reported Wednesday that based on preliminary US Census Bureau data the US imported 2,584,000 net tons (nt) of steel in July, including 2.06 million nt of finished steel--down 5 percent and 4 percent, respectively, from June final data.
Despite the overall decline, hot rolled sheet imports were up 43 percent in July compared to June and hot dipped galvanized sheet and strip imports increased 11 percent. Meanwhile, rebar imports were up 40 percent year-to-date in July, hot rolled bar imports rose 35 percent and imports of oil country goods jumped 32 percent.
Annualized total and finished steel imports in 2011 would be 29.5 million nt and 22.5 million nt, respectively, up 23 percent and 20 percent compared to 2010. Finished steel import market share in July was an estimated 23 percent and is also 23 percent year-to-date.
In July, the largest volumes of finished steel imports from offshore were from South Korea (299,000 nt, down 7 percent), China (155,000 nt, down 4 percent), Japan (138,000 nt, up 11 percent), Australia (104,000 nt, up 167 percent) and Germany (86,000 nt, up 39 percent).
For the first seven months of 2011, the largest offshore suppliers have been South Korea (1,809,000 nt, up 67 percent), Japan (895,000 nt, up 20 percent) and China (716,000 nt, up 53 percent).
(sourced steelorbis)
CIL wage costs may rise 19pct this fiscal - JP Morgan
Thursday, 25 Aug 2011
Investment banking major JP Morgan said that state run mining giant Coal India, which is under pressure from labor unions for a salary hike, could see its wage costs rise by as much as 19% this fiscal.
JP Morgan in a research note said that "The wage cost increase from July 1 would impact the non executive segment, which is 85% of the wage bill. We are building in a total wage cost increase of 19% in FY12E, which includes the inflation impact and the wage agreement hike.”
Four of the five trade unions of Coal India have put up their wage demands to the management, demanding salary hikes ranging from 100% to 500% which is likely to put severe financial pressure on the company.
The current average basic salary of Coal India worker is about INR 8,320 per month.
While the Left-backed All-India Trade Union Congress has asked for a revised salary of INR 16,000 per month, the Hind Khadan Mazdur Federation has asked for a minimum revised basic salary of INR 40,000 per month.
At present, Coal India and its subsidiaries spend about INR 20,000 crore on salaries every year, accounting for over 40% of the cost of production.
The unions have also demanded better parity between workers on its payroll and workers on a contract, as well as between workers and officers.
(sourced from ET)
Investment banking major JP Morgan said that state run mining giant Coal India, which is under pressure from labor unions for a salary hike, could see its wage costs rise by as much as 19% this fiscal.
JP Morgan in a research note said that "The wage cost increase from July 1 would impact the non executive segment, which is 85% of the wage bill. We are building in a total wage cost increase of 19% in FY12E, which includes the inflation impact and the wage agreement hike.”
Four of the five trade unions of Coal India have put up their wage demands to the management, demanding salary hikes ranging from 100% to 500% which is likely to put severe financial pressure on the company.
The current average basic salary of Coal India worker is about INR 8,320 per month.
While the Left-backed All-India Trade Union Congress has asked for a revised salary of INR 16,000 per month, the Hind Khadan Mazdur Federation has asked for a minimum revised basic salary of INR 40,000 per month.
At present, Coal India and its subsidiaries spend about INR 20,000 crore on salaries every year, accounting for over 40% of the cost of production.
The unions have also demanded better parity between workers on its payroll and workers on a contract, as well as between workers and officers.
(sourced from ET)
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