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Friday, September 2, 2011

India's NALCO issues tender to buy 225,000 T coal-source

Fri Sep 2, 2011

BHUBANESWAR, India, Sept 2 (Reuters) - India's state-run National Aluminium Company (NALCO) has issued a global tender to buy 225,000 tonnes of non-coking coal, a senior company official said on Friday.

The last date for submission of bids is Sept. 12, said the official, who is close to the tendering process but could not be named due to company policy.

NALCO imports about 1 million tonnes of coal every year to meet the requirement of its captive power plant located at Angul, in eastern Indian Orissa state, which powers its aluminium smelter.

Coal Shortages speed up China clean power plans

Friday, 02 Sep 2011

Bloomberg reported that the Chinese government continues to expand its clean energy production plans to replace increasingly expensive coal power that is shutting down coal plants and causing power shortages of at least 16 GW. China twelfth five year plan unveiled this week plans for 70 GW for wind and 5 GW of solar by 2015.

Unlike Europe which is using Feed-in Tariffs to incentivize the addition of more green power to the nation grid, China is using competitive bidding to drive down the costs of the new renewable energy generation. This might be a mistake FITs are a safer bet in the long run for newer more untried energy sources as generators are paid only for actual production.

China first CSP tender generated an average solar power price of CNY0.96 per kWh. The price being offered for CSP solar is about double the price of its conventional coal power. Wind is also more expensive but now increasingly competitive.

A new development, peak coal has shaken up the plan. Coal prices have risen 75% since 2007 while electricity prices have only been allowed to rise 15%. Shortages of Chinese coal as local mines are depleted are driving up prices for imports and China coal power plants are now under real financial stress.

Mr Li Chaolin a coal and energy industry analyst at Anbound Group said "Many coal plants have shut down their generators because the more they produce, the bigger the losses they will suffer."

As a result, as much as 30 GW of power shortages are forecast as struggling coal power plants in China are unable to stay in business. China intends to build at least 75 GW of new clean energy to help supply new energy demands as its economy grows. But the dramatic loss of coal power was not factored in several years ago.

(Sourced from Bloomberg)

Cliffs Natural Resources enters term sheet for potential sale Of Cockatoo Island iron ore assets

Friday, 02 Sep 2011

Cliffs Natural Resources Inc announced that a subsidiary of the Company and its joint venture partner, HWE Cockatoo and Cockatoo Mining have entered a term sheet with Pluton Resources Limited to sell its beneficial interest in the mining tenements and certain infrastructure of its Cockatoo Island joint venture.

The potential transaction is expected to occur at the end of the current stage mining of Cockatoo Island, known as Stage III, which is anticipated to be complete in late 2012.

Pluton has expressed interest in the assets for potential synergies that the Cockatoo Island operations could have with Pluton's Irvine Island assets in the Kimberly Iron Ore Hub of northern Western Australia. The proposed transaction is subject to completion of due diligence, definitive agreements between all parties, and conditional on regulatory and third party consents.

In consideration, Pluton will assume the liabilities for the environmental rehabilitation of Cockatoo Island when Pluton's mining operations are completed.

Cliffs' 50% interest in the Cockatoo Island joint venture is currently reported within the Company's Asia Pacific Iron Ore business segment. Cliffs' currently receives equity production of approximately 700,000 tons of high grade fines annually from its share of the joint venture. Cliffs and HWE Cockatoo have previously indicated a plan for operations to cease at Cockatoo Island in late 2012.

Centre accords prior approval to Utkal E coal block in favour of NALCO

Friday, 02 Sep 2011

BS reported that ministry of coal has granted its prior approval for mining lease of Utkal-E Coal Block at Angul, in favour of National Aluminium Company Limited a Navratna PSU. The block has an estimated reserve of 70 million tonnes of coal and covers an area of around 212 hectares.

The allocation was made to meet the coal requirement of new units of Nalco’s Captive Power Plant at Angul, which supplies power to the company’s aluminium smelter located nearby.

Mr BL Bagra CMD of Nalco said that “The two new units of 120 MW each, commissioned in 2009 and 2010 respectively, have been operating from coal procured by us through e-auction and imports.”

The linkage with Mahanadi Coalfields granted to Nalco was valid up to the scheduled commencement of production from Utkal-E Coal Block, which has been delayed in the process of securing environmental clearance and further delayed due to land acquisition.

Mr Bagra said that “For last one year, there is no linkage coal available to the company, which is fully dependant on expensive e-auction and imported coal for operating these two units.”

The mining lease deed shall be signed between the state government and Nalco soon. Mining will be carried out in the allocated area after obtaining permission from the forest department under the Forest Conservation Act and meeting other stipulations.

(Sourced from BS)

Iron Ore-Spot prices firm on healthy outlook

Fri Sep 2, 2011

* Major indexes hit nearly four-month high
* Chinese buying interest picks up, lack of large purchases
* Shanghai rebar falls marginally, outlook healthy

SHANGHAI, Sept 2 (Reuters) - Spot iron ore prices were steady on Friday, as miners held offers firm amid an anticipated pick-up in Chinese steel demand as well as the continued tightness in supply from India, pushing up global indexes to nearly four-month highs.

The persistent shortage of iron ore exports from India's southern Karnataka state as well as the approaching peak consumption season in China have sustained the strength in iron ore offers.

"Although after 2-3 weeks the monsoon will finish in Goa, Indian supplies are likely to remain affected by high court rulings and investigations causing mine suspensions," The Steel Index .IO62-CNI=SI (TSI) said in a daily note on Friday.

Karnataka introduced a ban on exports in July 2010 which it said aimed to curb illegal mining. The Supreme Court ordered the export ban lifted in April although the southern state has yet to issue export permits.

Several tender cargoes from Australia, the world's largest iron ore exporter, were sold at firm levels, TSI added.

Chinese steel mills have been producing more than 1.9 million tonnes of crude steel per day since February, from an average 1.7 million tonnes last year, in expectation that steel demand will pick up in September and October.

"The spot market is firm this week amid growing buying interest from Chinese steel mills, but the market is still lacking active purchases in large volumes at the moment," said an iron ore trader in Shenzhen.

Global iron ore miners are likely to keep iron ore contract prices steady in the fourth quarter, with spot prices stabilising on solid Chinese demand and tight supplies, based on global indexes which are used by suppliers to fix quarterly pricing.

Platts Iron Ore Index for 62-percent grade IODBZ00-PLT surged $2 to $182.25 a tonne on Thursday, its highest since May 11.

TSI's similar gauge rose half a dollar to $180.4 a tonne, its highest since May 6, and Metal Bulletin Iron Ore Index .IO62-CNO=MB gained 49 cents to $179.98 a tonne, a level never seen since May 9.

Australian 62 percent Newman fines stood steady at $183-$185 a tonne, including freight, on Friday, and Indian 63.5/63 fines climbed to $187-$190, from $187-189, according to Chinese industry consultancy Umetal.

The most active January rebar contract on the Shanghai Futures Exchange fell marginally by 0.27 percent to 4,816 yuan ($755) per tonne on Friday.

Iron ore swaps cleared by the Singapore Exchange <0#SGXIOS:> gained for all contracts on Thursday. ($1 = 6.381 Chinese Yuan)

Beadell Resources inks maiden iron resource in Brazil

Friday, 02 Sep 2011

Beadell Resources has achieved a better than expected maiden JORC itabirite iron ore resource estimate of 209.1 million tonnes at 36.1% iron from the Tap Norte Banded Iron Formation in Brazil. The estimate was conducted by independent consultant SRK and includes Measured and Indicated Resources of 75.4 million tonnes at 37.3% Fe.

Potential extensions from Tap Sul and Tap Leste areas alone are estimated to contain an additional 120 million tonnes to 180 million tonnes of itabirite iron ore, which are currently being aggressively drilled. This maiden iron ore resource is the culmination of a major drilling and resampling program completed over the last 15 months.

Mr Peter Bowler MD of Beadell said that “This is an outstanding maiden iron ore resource which will grow significantly over the coming months. We are in discussions with Anglo Ferrous in relation to these iron ore resources on our Mining Concession to either continue on with negotiations centred around a Joint Operating Agreement whereby Anglo pay for iron ore extracted out of our gold pits or, our preferred outcome, to go it alone if the parties are unable to reach agreement on the terms of such a Joint Operating Agreement in respect of Beadell’s Mining Concession."

The company will now commence a detailed Scoping Study which will include a beneficiation plant and all associated logistics.

Beadell is bullish that the outcome of negotiations will either materially improve the economics of the gold project or, alternatively, enable the company to proceed with a substantial iron ore business on a standalone basis.

(sourced Proactiveinvestors)

CISA to publish iron ore Index from October 1

Friday, 02 Sep 2011

Bloomberg reported that the China Iron and Steel Association will start publishing a weekly iron ore index on October 1 as commodity pricing services compete to have a bigger say over pricing of the raw material used in steelmaking.

Mr Luo Bingsheng the deputy party secretary of the association said “We are able to collect data from all domestic mines and 35 ports nationwide. The group, known as CISA represents China 77 biggest mills.”

He said that “It isn’t mandatory for steelmakers to replace other price indicators. But an index launched by the steel association will be well received by its members.”

Mr Zhang Changfu Vice Chairman said the association index which will consist of domestic and import prices and will more truthfully reflect China market reality and guide orderly imports.

Quarterly iron ore prices are typically based on figures derived by deducting freight costs from the three month average of daily iron ore indexes compiled by Platts, the Steel Index Ltd and Metal Bulletin with a one month lag period.

(Sourced from Bloomberg)

Thursday, September 1, 2011

Optimum Coal says Glencore interested in acquiring it

Thu Sep 1, 2011

* Glencore's biggest target since its listing
* Asian giants hungry for S.African coal

JOHANNESBURG, SEPT 1 - South Africa's Optimum Coal confirmed on Thursday a consortium including a unit of commodity trading giant Glencore , and prominent local politician-turned tycoon Cyril Ramaphosa was interested in buying it for about $1 billion.

The move on Optimum, South Africa's sixth-largest coal producer, is seen as showing Glencore's appetite for deals in volatile equity and commodity markets, which it has said will produce bargains.

"The proposed transaction would include a general offer to the shareholders of Optimum for a cash consideration of 34 rand per share," Optimum said in a statement.

That would value it at around $1 billion and be a premium of 1.25 rand per share on the 32.75 rand its stock price was fetching in early Thursday trading.

Optimum said the consortium includes Piruto B.V., a wholly owned subsidiary of Glencore, and Lexshell 849 Investments Limited, a company owned by Ramaphosa.

Sources last week said Glencore and Ramaphosa were stalking Optimum, and on Monday, the South African company said Piruto B.V. had taken a 14.1 percent stake in it.

This would be Glencore's most significant purchase since its record listing, when it sacrificed its fiercely protected privacy to gain the balance sheet firepower for acquisitions.

Glencore's deep pockets and Ramaphosa's influence would make for a formidable bid that could nullify any opposition arising from shareholders, some of whom may be reluctant to see the trader extend its reach in South Africa.

Optimum, a mid-size producer has export capacity and reserves that make it attractive prey for big foreign companies hoping to capitalise on Indian and Chinese demand.

WISCO and Century Iron Ore ink mining agreement

Thursday, 01 September 2011

On August 30, Chinese steel producer Wuhan Iron and Steel Co. (WISCO) and Canadian mining company Century Iron Ore Holdings Inc. inked a cooperation agreement to jointly develop iron ore mines in Canada.

Century Iron Ore Holdings owns three iron ore projects in Quebec, Canada. On January 13 this year, the two parties had reached a binding framework agreement on mine development.

Century Iron's three iron ore projects in Quebec will help support Wuhan's strategy of self-sufficiency when it comes to iron ore supplies, reducing its dependence on overseas suppliers. As previously reported by SteelOrbis, Wuhan plans to increase its steel production capacity to 60 million metric tons in the next four years, compared to current levels of 40 million tons.

Tags: iron ore , China , Far East , North America , investments , mining , East Asia and Pacific

BHP Billiton invests $367 million in Australian coal development

Thursday, 01 September 2011

Australian mining giant BHP Billiton announced Wednesday that it has approved an investment of US$367 million for the third stage of the development of its Newcastle Coal Infrastructure Group's (NCIG) coal handling facility in Newcastle, Australia. BHP Billiton's wholly-owned subsidiary, Hunter Valley Energy Coal Pty Ltd, is a 35.5 percent shareholder in the holding company of the NCIG.

The port expansion project will increase total capacity at the coal terminal from 53 million metric tons (mt) per year to 66 mt per year.

The first coal on the new ship loader is scheduled to occur in the 2014 financial year, with the terminal expected to operate at full capacity within the following 12 months.

Tags: Australia , Oceania , BHP , investments , mining

Cliffs and Kobe Steel consider iron ore joint venture

Thursday, 01 September 2011

Japan's Kobe Steel Ltd. and Cleveland, Ohio-based mining company Cliffs Natural Resources are in talks to build an iron nugget plant in the US, possibly in the state of Michigan, according to a report in the Japanese Nikkei newspaper.

The plant would cost $200 million and would utilize Kobe Steel's ITmk3 technology to produce iron nuggets from a low-grade iron ore, providing the feedstock in EAF operations instead of steel scrap. If plans for the facility go through, the plant could begin operations in 2014.

Tags: iron ore , USA , Japan , Far East , North America , investments , M&A , mining , Cliffs Natural , Kobe Steel , East Asia and Pacific

ArcelorMittal to shut down Fontaine-L’Eveque Plant

Sept01, 2011

ArcelorMittal SA plans to close a steel-wire plant at Fontaine-L'Eveque, Belgium, at the end of this year, Belga news agency reported, citing a company announcement to the plant's workers.

ArcelorMittal intends to limit production at several sites and may offer other posts or early retirement to some of the around 60 workers employed at the plant, which makes steel wires and cables used in construction, Belga said.

Tags: wire, longs, Belgium, Europe, ArcelorMittal, production,

(sourced steelorbis)

CME to launch two new thermal coal swap futures contracts

Thu Sep 1, 2011

SINGAPORE, Sept 1 (Reuters) - The CME Group will launch two new over the counter thermal coal swap futures contracts, it said on Thursday, in a move seen aimed at tapping a market keen to hedge price volatility, with key buyer China likely to adopt a more flexible pricing mechanism.

The two contracts, China coal swap futures and Coal Newcastle FOB, will have a lot size of 1,000 tonnes each and will start trading on Sept. 12. Both will be financially settled, CME said in statement.

China, the world's second biggest importer of both thermal and coking coal after Japan, bought 81.6 million tonnes of thermal, or power-station coal, in 2010, accounting for 11.4 percent of the global market.

China imported 44 million tonnes of metallurgical, or steelmaking coal, or 17.7 percent of the world market, last year.

Market participants believe China will move towards index pricing and the new swap contract could be used as a tool to hedge price volatility, a coal broker based in Hong Kong said.

"Index pricing is a natural progression - obviously there is a lot of resistance to it, as there was in iron ore. Right now, the coal buyers can never see them buying on an index but it is the way forward.

"More and more Indonesians are proposing moving towards floating prices. The Chinese may get there - it isn't going to be easy. Index pricing started in Europe five years ago. Two years ago no Indians would buy South African coal on the index but now 90 percent are doing so," the broker said.

Contract pricing of iron ore, a key raw material in making steel, moved to a quarterly system last year after global miners abandoned a 40-year custom of negotiating annual contracts with steel mills.

The contract rates are based on average index prices which are provided by industry players including Platts, Metal Bulletin and the Steel Index.

Australia's thermal coal prices, a benchmark for Asia, have fluctuated since the March 11 earthquake in Japan as Japanese demand eased.

Thermal coal on the globalCOAL Newcastle index stood at just over $120 per tonne last week, much lower than the $140 a tonne seen in January, when prices were pushed up by flooding in Australia's eastern Queensland state.

Prices of hard coking coal are around $300 a tonne from about $200 a tonne a year ago, because of logistical bottlenecks and tighter supply due to the flooding that hit top producer Australia earlier this year.

The new contracts would bring to 16 the coal swap contracts cleared by CME. On Monday, Credit Suisse said it had completed the first ever coking coal swap transaction via a new contract, settled against the Platts Australian coking coal index, cleared by CME.

Indian Iron ore export policy, iron ore of Fe content upto 64% is freely allowed

Update on export of iron ore

Thursday, 01 Sep 2011

Mr Beni Prasad Verma minister of steel has said that as per the present export policy of government of India, export of all iron ore of Fe content upto 64% is freely allowed.

In a written reply in the Lok Sabha today he said that ministry of steel has not received any complaint regarding difference between the quantity of the iron ore that was exported and the quantity for which mines department of the state government had granted permission.

Jharkhand chief minister wants ban on export of iron ore

Thursday, 01 Sep 2011

Jharkhand chief minister Arjun Munda suggested a ban on iron ore export to other countries keeping the country's future per capita requirement of steel.

Mr Munda, echoing similar demands voiced by iron ore producing states of Orissa and Chhattisgarh, asked “Why didn’t parties supporting the Centre raise the issue in Parliament demanding a total ban on the export of iron ore from the state?”

Mr Munda told reporters that "Now 5.6 million tonne iron ore is being exported, and the National Mining Development Corporation should stop export of iron ore for the benefit of the country.”

Mr Munda recalled a meeting in Delhi some time ago when he had suggested the Centre to keep future requirement of per capita iron ore in the country and should not export iron ore.

In all, there are 39 mining leases issued by the Centre in Jharkhand. Of them, 28 have been producing and exporting iron ore.

(Sourced from Telegraph & ET)

Chattisgarh based steel maker in coal scam - Report

Thursday, 01 Sep 2011

CNN-IBN unraveled a Bellary like coal scam in Chattisgarh, where a heavyweight in the mining and steel sector, forged documents to get coal mines allocated in both the states and diverted nearly 50% of coal to the black market.

As per report “An ongoing investigation by CBI shows that this company was allotted coal blocks in Chattisgarh and Madhya Pradesh in connivance with officials from coal and steel ministries after submitting forged and fabricated documents.”

The report added that “In Korba district, the company emptied out the entire Chotia coal block, ostensibly for expanding their sponge iron plant. But CBI investigation shows that the expansion never happened, and the company diverted nearly 50% of the entire coal mined to the black market, making thousands of crores.”

It also said “The excise department enquiry clearly showed that the company has suppressed their production figures and clandestinely removed coal into the black market. It pointed at connivance between officials.”

(sourced from IBNLive)

SAIL to begin iron ore production from Chiria by 2014

Thursday, 01 Sep 2011

BS reported that Steel Authority of India Limited would start producing iron ore from the Chiria mines in the West Singhbhum district of Jharkhand by 2014.

As per report, SAIL is set to finalize an investment roadmap for the project following completion of the detailed project report next month.

SAIL had appointed Hatch Associates of Australia as consultant for preparing Chiria’s project report, which would be submitted soon. It plans to develop the mine with an initial capacity of 7 million tonnes per annum to be subsequently expanded to 15 million tonnes per annum in the coming years

Mr CS Verma chairman of SAIL told Business Standard that “We are fully dependent on Chiria for all our future expansions. The mine will be a lifeline for SAIL as reserves in other mines we have been operating deplete. The mine will become operational in the next three years with likely investment of INR 3,500 crore.”

Mr Verma said that “More than 40% of the iron ore requirement of 100 million tonne would be met from Chiria.”

Chiria, with proven reserves of over 1.8 billion tonne is one of the largest iron ore mines in Asia. While environment clearance for the mine was already in place, the environment ministry accorded the forest clearance to the BSE listed company earlier this year.

SAIL produces 14.5 million tonne steel annually now but it’s iron ore requirement is set to grow from 25 million tonne at present to 100 million tonne by 2020 as production capacity expands to 60 million tonne over this period.

sourced BS

Chettinad coal terminal may handle 5 million tonne this year

Thursday, 01 Sep 2011

Chettinad International Coal Terminal the private terminal at the Ennore port, is targeting to handle nearly five million tonnes of coal/coke by current financial year ending March 31, 2012.

According to sources, the buoyancy in handling is in the backdrop of the expected shifting of coal from Chennai port to Ennore from October on the directions of the Madras High Court. Commencing operations in January this year, the terminal has already handled 1 million tonnes of coal. It is possible to handle another 4 to 5 million tonnes by the year end with more number of customers approaching the company to handle coal and coke.

The terminal has so far berthed and discharged 21 vessels including Panamax ships for importers from various industries such as cement, steel, power, coke and coal traders. Some of the customers who have used the terminal so far are Coal and Oil, Kyori, Adani Coal, OPG Power, India Coke, India Cements and Kalyani steel.

The list of customers is getting bigger every month. The facility enables importers to save freight cost as Panamax vessels' freight on per tonne basis is less than smaller vessels for the same origin and destination.

The facility of CICTL has been used by large scale importers; in coming months CICTL is looking forward to berth many more Panamax vessels. For instance, an importer saves USD 4 to USD 5 a tonne on freight by bringing larger vessels to Ennore port, which has a draft of 13.5 meter compared to 12 meter at Chennai port.

(Sourced from Hindu)

Chinese firms take 15-pct stake in niobium producer CBMM

Thu Sep 1, 2011

SHANGHAI, Sept 1 (Reuters) - China's Citic Group has teamed up with stainless steel producers Taiyuan Iron and Steel and Baosteel to acquire a 15-percent stake in a Brazilian niobium producer for $1.95 billion, the official Xinhua news agency reported on Thursday.

Companhia Brasileira de Metalurgia e Mineracao (CBMM) is the world's largest niobium producer. The metal is mainly used to produce superalloys for high-tech sectors as well as to make stainless steel.

The deal will be completed on Thursday, Xinhua reported, without citing sources.

A consortium of four Japanese companies -- JFE Holdings , Nippon Steel , Sojitz Corp and government-funded Japan Oil, Gas & Metals National Corp -- as well as South Korea's National Pension Service and Posco , bought a combined 15 percent stake in CBMM for about $1.8 billion in March.

CIL to hike output by 5pct

Thursday, 01 Sep 2011

BL reported that Coal India is trying to achieve 5% growth in output for the current fiscal. This is despite hurdles such as the delay in regulatory clearances and issues relating to land acquisition.

Mr Sriprakash Jaiswal coal minister told the Rajya Sabha that “CIL production has been hit due delays in environment and forest clearances, land acquisition and problems like extremism and law and order. Efforts are being made to raise production by 5% this fiscal.”

He further said that the Group of Ministers was active to sort out the issues such as delays in environmental clearances among others.

Coal India's output over the past couple of years has been largely stagnant. Last fiscal, Coal India's production stood at 431.32 million tonnes.

In the April to July period of current fiscal, dispatches by Coal India to Nalco's captive power plant and aluminium plant were 1.828 million tonne as against the pro rata annual contract quantity of 1.91 million tonne.

sourced from BL

Mongolia seeks coking coal IPO in three cities

Thursday, 01 Sep 2011

According to the people familiar with the matter that Mongolia aims to list simultaneously in three cities the company that controls one of the world's largest coking-coal deposits.

The people said the multibillion-dollar initial public offering of a government owned stake in Erdenes-Tavan Tolgoi Co may take place in Ulan Bator, Hong Kong and London if Mongolia can overcome technical and logistical hurdles remaining.

Goldman Sachs Group Inc., Deutsche Bank AG, BNP Paribas SA and Macquarie Group Ltd are handling the sale of a stake in state-owned Erdenes-TT as it is known. The company controls the coal deposit in the South Gobi desert near China's northern border.

sourced from online.wsj

Ukraine seeks Chinese investment of USD 1 billion for coal mines

Thursday, 01 Sep 2011

Bloomberg cited Mr Viktor Yanukovych President of Ukraine as saying that Ukraine seeks to get USD 1 billion of Chinese investments to develop its coal-mining sector.

He said that agreements have been made with the Asian country to start a joint pilot project to upgrade the Melnykova mine in the Luhansk region.

Mr Yanukovych said Ukraine is actively looking for investments in coal mining as it seeks to increase safety. Coal production should rise by at least 10% a year.

He said that the eastern European country has about 12 trillion cubic meters of coal-bed methane. Coal-bed methane is a type of so-called unconventional natural gas that originates in coal seams and is drained from surface boreholes before mining starts.

sourced Bloomberg

Anglo American could lose out on Macarthur Coal

Thursday, 01 Sep 2011

The Telegraph reported that Anglo American is poised to lose out in the AUD 4.9 billion takeover tussle for Macarthur Coal after the Australian company recommended a sweetened offer from a consortium of US based Peabody Energy and European steelmaker ArcelorMittal.

Anglo American had gained access to the Australian group's data room and had been weighing up whether to make a formal offer for Macarthur, which mines low cost coal.

However, Macarthur has recommend an increased AUD 16 a share offer from the Peabody ArcelorMittal combine after the pair lifted the offer price from AUD 15.50. Macarthur shareholders are also entitled to a recently declared dividend, making the total offer AUD 16.16 a share. Macarthur shares rose 0.06 cents to AUD 15.86.

ArcelorMittal already owns 16.1% of Macarthur's shares and the offer from the PEAMCoal bid vehicle is conditional on securing 50.01% acceptances from the coal mining company's shareholders. The acceptances threshold was put in place to get around China's Citic Resources, which has a 24.5% stake in Macarthur and could move to block a full scale takeover.

In 2010, the Chinese group made it clear it would not endorse a change of control when Peabody, which was then acting alone, made a failed an AUD 15 a share bid for Macarthur. Some analysts reckon the protracted takeover battle for Macarthur is over. This is because it has already agreed an AUD 48.3 million break fee, and also no shop and no talk provisions that restrict any future negotiations with rival bidders.

PEAMCoal also has the right to provide a matching offer in the event of any competing proposal that Macarthur's board considers superior.

Mr Jamie Spiteri, head dealer at Shaw Stockbroking in Sydney, told Bloomberg that "There's probably not a lot more that can be extracted for Macarthur shareholders unless there's a challenge from another party."

Mr Andrew Harrington, an analyst with Patersons Securities, said that "It's a fair value price. Any counter bid is becoming increasingly difficult."

In its statement to the Australian stock exchange, Macarthur said a number of parties have conducted due diligence.

The Macarthur deal comes amid a revival of takeovers of mining companies following a sell off of natural resource company share prices. They include last week's AUD 268 million bid by Glencore International for Minara Resources.

sourced Telegraph

Rio Tinto: world needs 800 mln more tonnes of iron ore in next 8 yrs

Thu Sep 1, 2011

* Rio Tinto sees near doubling of iron ore demand in 8 years
* Says sees "staggering" rise in demand
* Urbanisation in developing economies driving need for more steel

PERTH, Sept 1 (Reuters) - The world needs at least 100 million tonnes of additional iron ore supply each year for the next eight years to meet demand growth projections in steel making, miner Rio Tinto said on Thursday.

At that rate, global iron ore production would almost double over the period, based on industry trade data -- largely covered in the early years at least by expansions underway among the major miners, including Rio Tinto.

"This represents a staggering increase in demand as markets like, China, India, Indonesia, Vietnam and countries in Africa and South America continue to industrialize and urbanise," David Joyce, head of expansion projects for Rio Tinto's iron ore group, told an industry conference in Australia on mining in Africa.

Emerging markets comprise 75 percent of global iron ore demand and 90 percent of that is Chinese demand.

Rio Tinto, the world's second-largest producer behind Brazil's Vale , also said its Simandou iron ore joint venture with China's Chinalco in Guinea was on track to make its first shipment by mid-2015.

"We remain committed to ambitious timeframes of shipping our first tonnes of iron ore by mid-2015," Joyce said, adding that the company has invested $1.5 billion in the project to date.

The joint venture targets initial production from the Simandou mine of 70 million tonnes per year, with estimates for potential future output reaching up to 170 million tonnes.

Joyce also said Rio Tinto was on track to expand its iron ore production capacity in Western Australia to 333 million tonnes a year from about 225 million now..

Rio Tinto last month moved up its the target date to reach the higher figure by six months to the first half of 2015.

Rio Tinto isn't the only miner that sees gold in mining more iron ore

AngloAmerican expects to nearly double iron ore production to around 80 million tonnes by 2014 as it digs new mines in Brazil and South Africa.

But that's still well below current production figures for others, including Vale , BHP Billiton and Fortescue Metals Group each of which has massive expansion plans in the works.

BHP Billiton is proceeding with a $7.4 billion expansion of its Western Australia iron ore operations with its own share of the investment totalling $6.6 billion.

That expansion will raise capacity to over 220 million tonnes per year, with first production expected from its new Jimblebar mine in early calendar year 2014.

World trade in iron ore was 1.036 billion tonnes last year, according to the Australian Bureau of Agricultural and Resource Economics and Sciences.

Advanced Explorations update on Tuktu iron ore project

Thu, Sep01,2011

Advanced Explorations Inc announced further drill results from its Tuktu Iron Ore Project located in Nunavut, Canada. Drill-hole 11TT011 intercepted 8 metres of high quality banded iron formation grading 50.27% Fe within a broader 165.25 meter interval of BIF grading 33.61% Fe. The same broad interval also included 14 metres of 46.34% iron.

Drill-hole 11TT011 was collared approximately 125 metres ahead of drill-hole 11TT010 and drilled on the same section at the same azimuth and dip. Together the holes have intersected the footwall and hanging wall contacts of the BIF and results indicate that the width of the section is just over 300 metres wide carrying a grade of over 33% iron. The depth of the section has not been established.

Mr John Gingerich president and CEO said that "We are excited by the consistent high grade, plus 50% Fe, banded iron formation being intersected at Tuktu 1. The broad intervals of greater than 33% Fe define an exceptional magnetite rich BIF deposit. Tuktu is emerging as an important asset adding value to the business development scenarios of the region."

AEI expects the remaining Tuktu 1 drilling assays to be received in the near future which will allow us to initiate the NI 43-101 compliant resource estimate. The Company also plans to initiate metallurgical studies to better understand the Project's development options.

New mining licenses to be granted with attached conditions in SA

Thursday, 01 Sep 2011

It is reported that mining licenses will in future be granted with attached conditions, to ensure a supply of raw material for local industries seeking to further refine, or beneficiate, the extracted minerals.

Briefing members of Parliament's economic development select committee on government's beneficiation strategy, mineral resources chief director Mr Siyabonga Ndabezitha said there was a need to do things differently.

He added that "In the past, when we issued mining rights and licenses, we did not attach certain conditions, like saying a certain percentage of your production must be available for local beneficiation. We just issued rights, and mining companies would mine and sign agreements with their customers because we did not put any restrictions. But now we have realized that maybe we need to do things differently, and make sure that in all the new licenses that we'll be issuing, there would be certain conditions, which would make it possible for new entrants to have access to the required raw materials."

Cabinet approved the draft beneficiation strategy in June this year. The department is now developing plans for two of five so called pilot commodity value chains, which will go back to Cabinet in October 2011.

The first of these, which focuses on the iron and steel industry, has been drafted; the second, which looks at energy commodities such as coal, uranium and thorium, is still being worked out.

The other three pilots involve the production of catalytic converters; jewellery fabrication, including gold, platinum and diamonds; and, titanium metal and pigment production.

The development of a beneficiation strategy for South Africa comes almost 17 years after the 1994 RDP white paper that called for increased levels of beneficiation, and pointed out at the time that this would increase employment.

According to the document, employment] could be much higher if our raw materials were processed into intermediate and finished products before export.

Mr Ndabezitha noted that in 1994, the mining and mineral sector contributed three quarters of the country's exports, and employed 750,000 people. He added that "Now, in 2011, the situation hasn't changed much; the sector now accounts for 60% of exports, and employs 500,000 people."

He told the committee there were certain constraints hampering beneficiation of minerals in South Africa.

Among these was limited access to raw materials by new entrants to the market. However, the Mineral and Petroleum Resources Development Act was currently being amended to strengthen beneficiation provision and allow new entrants to operate.

Another constraint was a shortage of critical infrastructure, affecting access to water, power and rail links, among others. Further constraints included a skills shortage, and access to international markets.

Mr Ndabezitha said the beneficiation strategy sought to address these constraints by providing a framework to allow specific interventions in the different value chains identified by his department.

sourced Miningmx

European steam coal prices climb to USD 129 a tonne

Thursday, 01 Sep 2011 |By Bloomberg

Benchmark European coal prices advanced for a third consecutive session. According to broker prices compiled by Bloomberg, thermal coal for delivery to Amsterdam, Rotterdam or Antwerp with settlement next year rose 50 cents, or 0.4% to USD 129.50 a metric tonne as of 11:14 AM in London on August 31st 2011. That’s the highest intraday price since August 1.

Japanese coking coal imports in July down by 24pct

Thu, Sep01, 2011 |By SSYOnline

According to data released by Japan’s Ministry of Finance, the country imported 5.2 million tonne of coking coal in July, down 6%MoM and 24%YoY.

Imports in January to July totaled almost 40 million tonne, 13% lower than the corresponding period last year.

This year’s overall decline in Japanese coking coal imports has mainly been fell by Australia (-5.0 million tonne to 20.8 million tonne).

By contrast, imports from the US, on the first seven months of 2011 saw a 2 million tonne increase on last year to 3.6 million tonne.

Sedgman wins order for Daunia coal mine CHPP

Thursday, 01 Sep 2011

Sedgman has been awarded a AUD 123 million Coal Handling and Preparation Plant design and construct contract at Queensland’s Daunia mine. The contract is the second, and larger, contract Sedgman has been awarded for CHPP work at the mine, located in the Bowen Basin.

In 2008, Sedgman announced its first contract for the CHPP, a AUD 80 million design and supply agreement. This follows Sedgman’s on from the agreement of a four-year preferred supplier agreement for a pipeline of coal projects managed through BHP Billiton’s Project Hub in Brisbane.

Mr Nick Jukes MD and CEO of Sedgman said that Sedgman was extremely pleased to further strengthen its relationship with BMA. He said that “The Daunia project is a very significant project for Sedgman and is an excellent example of the strong and extensive working relationships we have with leading coal producers. This will be another contract to be managed through the Hub which supports our view that the four-year Hub agreement is an important milestone for Sedgman, giving us new opportunities to strengthen our position as a leading coal plant service provider.”

Sedgman will provide design and procurement services in connection with the Mine’s revised site layout and will construct and commission the entire CHPP.

The Daunia CHPP comprises an 800 t/h ROM receival and sizing facility, an 800 t/h CPP, reject handling and bin, tailings filter station, product conveyors, radial product stacking conveyors and a product reclaim and train loadout system.

Sedgman also recently announced the supply of services to two coal projects in Queensland’s Bowen Basin - Caval Ridge mine and South Walker Creek mine. Jukes said Sedgman would release further details of these orders as they become available. He said the preferred supplier agreement was an important milestone for Sedgman.

Under the four-year agreement, in place until June 2015, Sedgman is the preferred supplier for Definition, Engineering, Construction & Commissioning Support and Testing services for projects that involve the processing of metallurgical coal. Sedgman will be paid based on compensation principles that will include technology fees.

(Sourced from

Iron Ore-Spot prices up; global miners seen keeping Q4 prices steady

Thu Sep 1, 2011

* Global miners likely to keep prices steady for Q4
* Spot iron ore prices up $1
* Mills show growing buying interest
* Concerns over U.S. and Europe economy may weigh
By Ruby Lian and David Stanway

SHANGHAI, Sept 1 (Reuters) - Spot iron ore prices gained more ground on Thursday ahead of an anticipated rise in demand during the upcoming peak season, while indexes suggest global miners like Rio Tinto and Vale will keep prices almost steady in the fourth quarter.

Steel mills in China, the world's largest steel producer and consumer, expect seasonal steel demand to pick up in September and October, with spot prices gaining $1 on Thursday.

"They seem now to be restocking, there is interest and buying, and the industry is on the up again," said a Hong Kong-based commodities broker.

Australian 62 percent Newman fines rose $1 to $183-$185 a tonne, including freight, and Indian 63.5/63 fines climbed to $187-$190, from $187-189, according to Chinese consultancy Umetal

China's biggest listed steelmaker Baoshan Iron & Steel , also known as Baosteel, expected iron ore prices to remain at relatively high levels in the fourth quarter and next year, but said it also anticipated significant growth in net profits next year as demand strengthens.

Rio Tinto also said on Wednesday that the world will need at least 100 million tonnes of additional iron ore supply each year over the next eight years. It said its Simandou iron ore joint venture with China's Chinalco in Guinea was on track to make its first shipment by mid-2015.

However, steel mills and traders remain cautious about buying, amid worries about the U.S. and European economies.

"There are still concerns about double-dip recessions in Europe and the United States," said the broker.

"Right now there is buying sentiment in China, but with recent changes (in banks' required reserve ratio base) it may lead to cash restrictions and may limit iron ore buying."

The most active January rebar futures on the Shanghai Futures Exchange closed the morning session 0.08 percent lower at 4,827 yuan ($757) per tonne on Thursday. It hit a one-week high at 4,842 yuan per tonne earlier.


Global miners will likely keep iron ore contract prices mostly steady in the fourth quarter, with spot prices stabilising on firm Chinese demand and tight supplies, Reuters calculations showed.

Based on Platts index prices IODBZ00-PLT for June to August, which top iron ore miners such as Vale and Rio Tinto use to set fourth-quarter contract prices, the 62-percent grade averaged $175.63 a tonne, cost and freight, down marginally from $176.96 in March-May, on which third-quarter pricing was based.

Platts competes with the other two major global indexes the Steel Index .IO62-CNI=SI and Metal Bulletin Iron Ore Index .IO62-CNO=MB.

Prices for quarterly contracts are largely based on the average index prices over a three-month period ending a month before the start of each quarter.

Vale, the world's largest iron ore miner, would set 66-percent-Fe Carajas fines prices at $200.16 per dry metric tonne, delivered to Qingdao, one of China's major ports, for the December quarter, given that its customers have agreed not to adjust prices if quarterly changes are below 5 percent, Platts' said in its daily note.

"Those that do not have such a clause in contracts will see prices fall for the second straight quarter in Q4," Platts said.

Rio Tinto, the world's second-biggest iron ore miner, could lower prices by 1.2 percent for the October-December period, with iron ore fines likely to fall to $2.6896 per dry metric tonne unit FOB, from $2.7234 for the September quarter, also marking the second straight quarterly decline, the Platts' report said.

Metal Bulletin index rose 21 cents to $179.49 a tonne on Wednesday, and the Steel Index also gained $1 to $179.9 a tonne, the highest level since May 6. ($1 = 6.378 yuan)

Tuesday, August 30, 2011

Manufacturing not an economic maybe

August 31, 2011 By Ian Porter, SMH

MANUFACTURING is not a take it or leave it option for Australia.

It has to be a central part of the economy in coming decades if the Australian population is not to get dragged into a race to the bottom in terms of living standards.

The exact split between primary, secondary and tertiary industries in a healthy economy cannot be defined by any formula, but the potential for a sharp shrinking of the Australian manufacturing sector threatens to seriously unbalance the economy and lead to social disruption in coming decades.

The minerals boom and the resultant very high value of the Australian dollar pose a threat to manufacturing of a scale never seen before.

Sixty years ago, when the wool boom sent the currency soaring, the local manufacturing sector - just getting started under an umbrella of federal government industrialisation policies - was protected by tariffs and a relative lack of goods to import from Europe and Asia.

Fast-forward to the present and those elements that "saved" manufacturing back then are absent. There are no tariffs any more and there are many sources of cheap imports.

It has been suggested that the minerals boom could last 20 years - or as long as it takes China to lift 1.4 billion people out of poverty. If the Australian dollar stays where it is now for that long, the consequences for manufacturing, and the people dependent on it, would be dire.

As BlueScope and the carmakers have found, it is impossible to export when the Australian dollar is above parity with the US dollar. And that sort of valuation also makes imports abnormally cheap.

It is not just manufacturing workers and their families who will suffer. Even if they do find other work - and there are not one million jobs out there in the market waiting to be filled - it is unlikely to pay as well, leading to an adverse impact on their own standard of living, but also on that of almost every other Australian.

The drop in living standards caused by a decline in manufacturing will flow into the economy. There will be reduced demand for goods. Even if those goods are imported, the retailers - who comprise one of the largest employment sectors in the economy - will sell fewer of them.

Rushing into tertiary industry - services - will not help. With fewer people employed, there will be less demand for everything, whether it's haircuts or legal services, IT services or shoe-shining. Australia has been lucky and lazy in the past. Instead of processing many of its own primary products like wool, foodstuffs and minerals, it has simply shipped them offshore and let someone else earn the manufacturer's margin.

The wealth foregone is almost unimaginable. It's the manufacturing margin where the wealth is created. A $50 strip of steel can be converted into a $700 refrigerator, 10¢ worth of wool into a $2 pair of socks.

Australia has a chronic trade deficit problem and it's no wonder. We sell iron ore at $180 a tonne and import it back in the form of cars at a rate of $20,000 a tonne.

If Australian manufacturing is to survive in the long term, we need to pull back a lot of this processing onshore and create the wealth here. And we should start with the sector that is visiting the mayhem on manufacturing - minerals.

This is what the federal government had in mind when it first granted export licences to BHP and Rio Tinto (then CRA) when they proposed giant ore mines in Western Australia. One condition was that they beneficiate (process) a proportion of the ore into a value-added product.

Forty years on and there is still nothing concrete to show. BHP lost billions when its hot briquetted iron plant blew up - although its pellet plants in Brazil work fine - and RTZ is still fiddling with a smelting system that is supposed to produce pig iron more efficiently.

Does the parlous state of manufacturing mean that all the protection and assistance over the past six decades and more has been wasted? Far from it.

The industry assistance plans have helped manufacturing overcome a crucial shortcoming in Australia, a small domestic market. Purists would say a country with a small domestic market should not aspire to make cars, refrigerators or even steel if the market can't support them with no assistance.

But that ignores the stimulus manufacturing provides in many areas, whether it's education and the trades or management or innovation, quite apart from employment and general economic activity.

Manufacturing itself is a multiplier of value, turning basic materials - steel, aluminium, plastic, glass, rubber - and components like electronics into products worth much more than the core ingredients.

Yes, other countries may be able to do it cheaper, especially when the Australian dollar is ridiculously overvalued, but importing products creates few jobs in Australia, and low-paid ones at that.

Coal Energy increases coal output by 181pct in FY11

Tuesday, 30 Aug 2011 |

It is reported that Coal Energy boosted its total coal production by 181%YoY to 1.63 million tonnes in FY11 ended June 30. Thermal coal output rose by 78%YoY to 794,000 tonnes. Coking coal production reached 267,000 tonnes rising from small volumes in FY10 after CLE gained control of a subsidiary, Novodzerzhynskaya Mine.

Coal output from waste dump processing surged 325%YoY to 568,000 tonnes accounting for 35% of total coal production. Coal Energy reported a 2%MoM increase to 129,000 tonnes in July in owns underground mining and a 10%MoM growth in total sales to 147,000 tonnes.

(Sourced from

Midwest meets rigorous BNSF coal dust mitigation standards

Tuesday, 30 Aug 2011

After rigorous testing of Midwest's Soil Sement Engineered Formula® by the BNSF Railroad for its ability to mitigate in transit coal dust, the Powder River Basin based railroad has named Midwest an approved vendor.
The announcement, effective October 1st 2011, came as the railroad introduced new coal dust mitigation requirements for coal shippers put in place to prevent damage and contamination of rail ballasts caused by fugitive coal dust. It requires that shippers use a BNSF approved dust mitigation product that reduces in transit coal dust by at least 85% as compared to loss in transit of coal dust from coal cars where no remedial measures have been taken.

It also mandates that shippers provide a written notice of their compliance efforts 30 days before intended use, giving coal shippers who do not currently treat coal to BNSF standards approximately 60 more days to put a dust abatement plan together and get it approved.

Mr Bob Vitale CEO and founder of Midwest said that "Right now Soil Sement is the only approved product being used in the Powder River Basin to top coal cars to prevent coal dust from escaping during transit. We were proponents of environmental protection long before being so was vogue or required, which is why Midwest was well positioned to meet all BNSF requirements."

For safe, controlled and easy application of Soil Sement, Midwest developed a year round containerized, operator friendly Coal CarTopping System®, which installs permanently. The application bar adjusts to match the profile of coal in a railcar; product is protected against freezing with a heated container, and in adverse weather conditions, operators remain warm in a heated, raised booth from which there is a clear view of the coal cars being sealed.

Formulated with million molecule nanotechnology to penetrate and seal coal to prevent dust from escaping, Soil-Sement has been tested and verified by Simpson Weather Associates Laboratory (for weather ability) and Southern Company (for burn ability). It was also tested and certified by the California Air Resources Board, the US EPA, and the Canada Environmental Technology Verification programs. BNSF’s tests were for corrosion, safety and performance. Only two other products were approved by BNSF to date.

WPG Resources completes initial test work on coal from Penrhyn project

Tuesday, 30 Aug 2011

WPG Resources Limited announced that Evergreen Energy Inc has completed its initial test work on coal from the Penrhyn project that were sent to Evergreen's test facility in Wyoming in May 2011.

Penrhyn is owned by Southern Coal Holdings Pty Limited, the JV vehicle with Evergreen that has the exclusive rights to use Evergreen's coal upgrading technology in Australia for the first 15 million tonnes per annum of product coal from any project, not just from tenements that it currently holds. As previously disclosed, the total coal resource estimate for the Penrhyn deposit is 352.4 million tonnes.

Note in particular that Evergreen has reported that the heating value of the coal after it had been upgraded exceeded 5,500 kilocalorie per kilogram prior to rehydration required for product shipping and storage. Additional tests that will allow us to confirm the heating value after the coal has returned to stabilized moisture level are expected to be completed prior to the end of September. We anticipate that the likely heating values for the final product may be lower than 5,500 kilocalorie per kilogram, but will be ideal for export markets, and could utilize the infrastructure available in WPG's Port Pirie terminal.

WPG announced on August 22nd 2011 that it had agreed to sell its iron ore assets to OneSteel Limited. WPG's coal interests and its land in Port Pirie and its right to construct an export port there were not included as part of that sale. If development of Penrhyn or SCH's other coal deposits including Lochiel North prove to be technically feasible and economically viable then Port Pirie could be used for coal exports.

Ibram says that no accord yet on new mining code in Brazil

Tuesday, 30 Aug 2011

Dow Jones reported that Brazil's Mining Institute Ibram, which groups the country's mining companies, said that no accord has yet been reached on the texts of the country's new mining sector bills, despite widespread reports that the final texts are close to be sent to congress for consideration.

Mr Paulo Camillo president of Ibram said in a statement posted on Ibram's website that “There are still points that the government and the mining sector haven't agreed on yet. Federal government authorities have guaranteed that before the government sends the final texts to parliament, it will again allow producing companies to have the opportunity to look over the texts and, possibly, contribute to their wording.”

Ibram said that there are three distinct bills under consideration. One will establish which royalties will be charged in the sector, another will deal with regulations governing mine deposits and concessions, and a third will set up a new regulatory agency to replace the DNPM.

According to Ibram “It is still unclear when the texts will be ready to send to congress for approval as mining companies still wish to be consulted on the matter, which has so far been under discussion in government ministries.”

Brazilian newspapers including Estado de Sao Paulo, Folha de S.Paulo and Valor Economico have over the past few days carried reports indicating that the final texts of the bills to be sent to congress for approval propose doubling royalties on iron ore sales, taxing export products including iron ore, bauxite and niobium more heavily than mineral products that are processed in Brazil and that mineral deposits may be put up for auction rather than their concessions being approved by state owned mining department DNPM.

(Sourced from Dow Jones Newswires)

BHPB shortening coal contracts - Report

Tuesday, 30 Aug 2011

According to the The Australian Financial Review, BHP Billiton Ltd has moved half its coking coal customers from quarterly to monthly contracts in the space of six months as its looks to reduce pricing terms, as it has done in the iron ore market.

The news gives more evidence that BHP chief executive officer Marius Kloppers is determined to move to increasingly shorter contracts.

Mr Kloppers is pushing harder in this direction than rival giants Anglo American and Rio Tinto, which use quarterly contracts.

As the world's largest coking coal exporter, BHP has more leverage on contracts. Contracts are based on an index price which means less difficult negotiations with customers.

(sourced Businessspectator)

Coal Action Network condemns opencast mine decision at Denniston

Tuesday, 30 Aug 2011

Voxy News Engine reported that Coal Action Network Aotearoa has condemned the consent for a Denniston opencast coal mine on conservation land and instead called for people to demand we keep the coal in the hole.

Ms Frances Mountier spokesperson for the Coal Action Network Aotearoa said that "Burning coal is the dirtiest fossil fuel activity on the planet and there are huge reserves of coal left worldwide. If we allow them to be burnt, we have no chance of avoiding a climate catastrophe. We need to keep the coal in the hole."

The first step is to stop any new or expanded coal mines in New Zealand, and that means the Denniston opencast coal mine, while consented today, must not go ahead.

Ms Mountier said that "To be opening a new coal mine in this day and age is unbelievable. Bathurst's proposed mine would increase New Zealand's coal exports by up to 62%. We call on people across the country to join the campaign to keep the Coal in the Hole. This mine would destroy 200 hectares of a nationally significant ecosystem, when just last year, people across the country clearly said NO to mining on conservation land."

Coal Action Network Aotearoa is a group of climate justice campaigners committed to fighting the continuation of coal mining in Aotearoa New Zealand. They submitted against the proposed mine at Denniston.

Ms Mountier said that "The commissioners stated in their report we are of the view that legislative restrictions provide us with no jurisdiction to consider climate change in the general sense. We believe that climate change should be at the forefront of all discussions around coal mining. We have a responsibility to future generations to leave them a planet with a stable climate, and with conservation areas intact. We will support the groups taking ongoing legal and protest action against this mine, and we will be encouraging the 1000 people receiving our monthly digest on coal to do so too."

(sourced from VOXY News)

Peabody ArcelorMittal and Macarthur board agree for takeover

Tuesday, 30 Aug 2011

Peabody Energy and ArcelorMittal announced that PEAMCoal has agreed to terms with the Macarthur board for a cash takeover of all outstanding shares of Macarthur Coal for AUD 16 per share, valuing the equity in Macarthur at approximately AUD 4.8 billion and all participating members of the Macarthur Board recommend that Macarthur shareholders accept the new PEAMCoal offer.

Mr Gregory H Boyce chairman & CEO of Peabody Energy said “This is a major step forward in our acquisition process. We are pleased to have Macarthur, Peabody and ArcelorMittal moving forward together to urge shareholders to accept this attractive premium. We now look forward to completing this transaction in a timely manner.”

Mr Aditya Mittal CFO and Member of the Group Management Board at ArcelorMittal said "Our offer is the only offer before Macarthur shareholders, and we urge them to accept without delay and receive a substantial premium for their investment."

PEAMCoal and Macarthur have entered into an implementation deed, which is available on The improved offer is subject to limited conditions as set out in section 11.7 of PEAMCoal's replacement bidder's statement dated 15 August 2011, including minimum 50.01% acceptances and final regulatory clearance or expiry of the relevant waiting period.

The price to be received by Macarthur shareholders of AUD16 per share represents a substantial premium of
1. 44% to AUD 11.08 per share, the closing price on July 11, the day Peabody and ArcelorMittal's initial approach was disclosed to the market
2. 48% to AUD 10.82 per share, the one-month volume-weighted average price (VWAP) to July 11
3. 41% to AUD 11.32 per share, the three month VWAP to July 11
4. 33% to AUD 12.02 per share, the twelve-month VWAP to July 11

Macarthur Coal is a leading producer of low volatile PCI metallurgical coal with production and development assets in the Bowen Basin, Australia, including the Coppabella and Moorvale Joint Venture, Middlemount and Codrilla. It holds total coal reserves of 270 million tonnes and total resources of approximately 2.3 billion tonnes.

Monday, August 29, 2011

Coal India offers 447 MT of coal to power utilities

Mon, August29, 2011

The major constraints being faced by the allocatees are
i) delay in setting up end use projects and
ii) time taken for obtaining various clearances for mining and land acquisition.

Coal India Limited has offered to supply 447 million tonnes of coal to Power Utilities in 2011-12 subject to availability of wagons by the Railways at an average of 190.4 rakes per day during the year. This information was given by Minister of State in the ministry of Coal,Shri Pratik Prakashbapu Patil in a written reply to a question in Rajya Sabha today.

The minister informed the house that 216 coal blocks with geological reserves of about 50 billion tonnes have been allocated to eligible public and private companies under the Coal Mines (Nationalisation) Act, 1973. Out of that, 24 coal blocks have been de-allocated. Out of de-allocated coal blocks, two coal blocks were re-allocated to eligible companies under the said Act. In view of the above, the net allocated blocks are 194 coal blocks with geological reserves of about 44.44 billion tonnes. Out of these 28 coal blocks have come into production. The rest of the blocks are in various stages of development. Development of coal blocks involves gestation period of 3 to 7 years for reaching the production stage and another two to three years for reaching the optimal production capacity. The major constraints being faced by the allocatees are i) delay in setting up end use projects and ii) time taken for obtaining various clearances for mining and land acquisition.

Patil said that Coal India has reported that during April-July 2011,dispatches to NALCO’s Captive Power Plant (CPP) and Aluminium plant were 1.828 million tonnes against the pro-rata Annual Contract Quantity (ACQ) of 1.91 million tonnes with 96% materialization. Dispatches to NTPC power stations were 36.622 million tonnes as against he pro-rata ACQ of 40.126 million tonnes with 90% materialization.

sourced India Infoline

Venus waits on Oakajee port to deliver iron-ore project

Mon,August29, 2011
By Esmarie Swanepoel

PERTH - ASX-listed minerals explorer Venus Metals has estimated a net present value of some A$2.14-billion for its Yalgoo iron-ore project, in Western Australia, with an internal rate of return of some 37%, based on a 7.5-million-ton-a-year production capacity.

A feasibility study on the Yalgoo project has estimated a capital development cost of around A$1.2-billion, with the project dependent on the development of the Oakajee port.

The Yalgoo iron-ore project consists of seven exploration licences totaling 208 km2 over the Yilgarn Craton Archaean banded iron formation.

The prefeasibility study, which was recently completed, was based on a production of 7.5-million tons a year of high-grade magnetite concentrate, grading more than 68% iron, specifically aimed for the export market.

The concentrate production rate was based on a mineable ore resource to give the mine a life expectancy of around 15 years. The project has a total magnetite mineral resource of 698-million tons, grading 29.3% iron.

Venus said that the mining report into the Yalgoo project had estimated a total economic magnetite concentrate production of some 129.4-million tons, based on 385-million tons of plant feed, at 30.1% iron. Based on the projected concentrate production, this equated to a mine life in excess of 17 years.

The explorer told shareholders that it was likely that the Yalgoo project could exceed this life expectancy, given that only a small part of the company’s tenement area has been explored.

Venus, in conjunction with its joint venture partner Shandong Provincial Bureau of Geology and Minerals, now planned to advance the development of the Yalgoo iron-ore project, and would undertake further drilling and mineralogy assessments, as well as continue investigations into water supply, and undertake activities to support the approvals process.

The partners would also look to develop offtake agreements for the Yalgoo products.

(sourced MiningWeekly)

May hike export duties on iron ore exports: Steel minister

Mon,Aug29, 2011 | Source PTI

Government today said it may further increase duties on iron ore to discourage its export in order to keep it for meeting domestic demands.

"We have increased export duty from five per cent to 20%. We may increase it further," Steel Minister Beni Prasad Verma told the Lok Sabha during Question Hour.

Verma said government was discouraging export of iron ore and trying to keep it for domestic consumption.

Nearly 50% of the iron ore produced in the country has been exported over the last three years, he said.

In 2008-09 212.96 million tonnes (MT) of iron ore was produced of which 105.86 MT (49.7%) was exported and in 2009-10 218.64 MT ore was produced and 117.37 MT (53.7%) was exported, Verma said.

He said in 2010-11 the estimated production was 208.11 MT of which 97.66 MT (46.9%) was marked for export.

"The production of iron ore in the country is about to double the consumption of iron ore by the domestic iron and steel industry and therefore is sufficient to meet the present requirement of iron ore by the steel sector in the country,"
he said.

As regards iron ore supply to PSUs, Steel Authority of India Limited (SAIL) has is own captive mines which cater to its full requirement of iron ore, he said.

Verma said the requirement of iron ore of other PSUs - Rashtriya Ispat Nigam Limited and KIOCL Ltd - is fulfilled by National Mineral Development Corporation.

China province wise pig iron output in Jan to Jul 2011

Monday, 29 Aug 2011

It is reported that China province wise pig iron output during January to July 2011 total 379.33 million tonnes which Hebei topping the table.
Inner Mongolia1.

In million tonnes

(sourced from

China shuts over 1000 illegal coal mines

Monday, 29 Aug 2011

It is reported that China has shut down over 1,000 illegal coal mines in a countrywide crackdown

Mr Zhao Tiechui an official said that till the end of July, authorities had closed 1,289 coal mines for illegal production.

China Daily quoted the official as saying that as many as 86 people had been arrested on charges related to mine safety.

The toll from coal mine accidents fell 31% to 1,083 in China in the first seven months of this year from a year ago.


Usiminas may bid for port facilities in Rio de Janeiro

Monday, 29 Aug 2011

Usinas Siderurgicas de Minas Gerais SA the Brazilian steelmaker aiming to quadruple its iron ore production, stands to gain the most from an auction for a USD 1 billion port terminal to be built in Rio de Janeiro state.

The state government will take bids later this year for a lease on the so-called Area do Meio, an area equal to about 30 soccer fields, from companies that want to ship the ore, Brazil’s top export.

Usiminas, as the company is known, has confirmed it will participate and has the most ambitious plans to boost ore output of any publicly traded company that doesn’t have a dedicated iron-ore port built or under construction.

Other bidders may include Cia Siderurgica Nacional SA, the third biggest Brazilian steelmaker by output and MMX Mineracao & Metalicos SA, the iron ore producer controlled by Brazilian billionaire Eike Batista.

(sourced from Bloomberg)

Japan's Kyushu delays coal unit restart by a day

Mon Aug 29, 2011

TOKYO Aug 29 (Reuters) - Southern Japan utility Kyushu Electric Power Co said on Monday it expects to resume operations of the new 360-megawatt coal-fired No.1 unit at its Karita plant on Tuesday following an unplanned shutdown, a day later than previously scheduled.

The unit has been closed since Aug. 4 due to a boiler problem.

Convergent Minerals to acquire all shares in Blackwood Coal

Monday, 29 Aug 2011

Convergent Minerals is to acquire all of the shares in Blackwood Coal Pty Ltd which holds a portfolio of coal exploration tenements in Queensland.

The Blackwood portfolio of projects includes a pipeline of coal exploration projects and prospects including an advanced thermal coal exploration project called West Bowen Coal Project located 20 kilometers west of Blair Athol in the Bowen Basin.

The lead project has a 27.3 million tonnes JORC Inferred Resource with an additional 15 to 30 million tonnes exploration target. There are drill ready exploration targets in the Bowen, Surat and Clarence Moreton Basins with previous coal intercepts. Blackwood Coal is planning an intensive drill campaign to increase the JORC resource base in calendar year 2011.

Blackwood Coal currently has a portfolio of 7 granted EPCs and 25 applications. The exploration permits range from advanced exploration with drill ready targets to Greenfield lateral opportunities. Drilling at the East Wandoan Project has intersected up to 11.7 meters in cumulative thickness of coal at depths less than 100 meters.

As consideration, convergent will seek shareholder approval to acquire these assets by a capital raising of up to USD 20,000,000, through the issue of shares at a price subject to market conditions, but not less than USD 0.20 per offer share. The transaction is conditional on Convergent shareholder approval and due diligence of all parties. The transaction requires Convergent to comply with the requirements of Chapters 1 and 2 of the Listing Rules.

The board of the company will replaced by the current board members of Blackwood. Convergent will be renamed Convergent Coal Limited.
A consolidation on a 2 for one basis is proposed. Convergent will sell the Bounty Project to AFL Resources Limited.

(sourced proactiveinvestors)

Australia's Tigers Realm Coal slides on debut

Mon Aug 29, 2011

MELBOURNE Aug 29 (Reuters) - Australian coal explorer Tigers Realm Coal had a choppy first day on the Australian bourse on Monday, rising 20 percent then falling as much as 13 percent below its issue price following a poorly timed float.

The company, with stakes in two coking coal projects in Russia and Colombia, raised A$37.5 million ($39.5 million)through its initial public offering.

It launched its offering just as markets plunged in early August, forcing the company to slash its initial target of A$200 million to A$37.5 million.

Tigers Realm Coal shares opened at A$0.505, traded as high as A$0.60 and last traded at A$0.46, 4 cents below its issue price, valuing the group at A$167 million. The broader market was up around 2 percent on Monday.

The funds will be used for drilling work at the Amaam project in far eastern Russia and Landazuri in Colombia.

Drilling to firm up resources at Amaam, the group's biggest project, is expected to run through early 2012, with Tigers Realm Coal aiming to have a feasibility study completed by late 2013.

Chief Executive Martin Grant said the company would look at a wide range of options for future funding, including selling equity stakes to mining companies, steel makers, or trading companies in return for offtake agreements.

Amaam would be well-positioned to supply hard coking coal into China and other Asian markets.

Grant was confident Amaam had an advantage versus coking coal mines being developed in Mongolia and Mozambique which could start producing at the same time.

"Mozambique and Mongolia will continue to be challenged for a long period," he told reporters.

Grant, a geologist, held senior posts in BHP Billiton's coal business, including BHP Billiton Mitsubishi Alliance, the world's top exporter of coking coal, before taking the reins at Tigers Realm Coal. He has also worked as an investment banker at UBS and JBWere.

Tigers Realm is 6.25 percent owned by Tigers Realm Minerals, founded by former chief of Oxiana, Owen Hegarty, after Oxiana merged with Zinifex to form OZ Minerals .

Credit Suisse was lead manager and underwriter for the offering, with co-lead manager Bell Potter Securities.

Goa mining scam pegged at INR 1200 crore

Monday, 29 Aug 2011

ET reported that Goa assembly's Public Accounts Committee Saturday pegged the quantum of illegal mining in the state at INR 1,200 crore, a day after the Bombay High Court issued notice to 48 mining companies for excessive mining in their leases.

A PAC member said that "More than 6 million tonne of ore has already been illegally extracted. It is worth INR 1,200 crore adding the committee was perusing the documents related to the scam.”

The Panaji bench of the Bombay High Court, comprising Justices DG Karnik and FM Reis issued the notice on a public suit by green NGO Goa Foundation.

The NGO argued that the mining companies, which include the Dempo Mining Corporation, and local mining companies like Timblo Irmaos, VM Salgaoncar and Bros, Chowgule Co were extracting ore in violation of environment clearances limit granted to them" by the union ministry of environment and forest.

The court also issued notice to the MoEF.

The petitioner said that "The mining companies make self declarations of the amount of iron ore extracted and the mining department has no mechanism to verify the ore actually extracted.”

(Sourced from ET)

Iron Ore-Shanghai rebar falls for 3rd day on tighter liquidity

Mon Aug 29, 2011

* China daily crude steel output remains high
* Indian court expands mining ban in Karnataka

By Manolo Serapio Jr

MANILA, Aug 29 (Reuters) - China steel futures dropped for a third day running to hit two-week lows on Monday, with sentiment hurt by the country's latest move to tighten liquidity, which could curb steel demand as well as bank funds for steelmakers.

China has ordered banks to include their margin deposits in required reserves at the central bank to siphon off excess liquidity, banking sources said on Friday, part of Beijing's campaign to fight inflation.

The liquidity tightening move countered news that China's crude steel output stood at 1.947 million tonnes a day during the period Aug. 11-20, up 0.3 percent from the first 10 days of the month.

"China's high steel output actually matches the overall solid demand in the country, as we can see that large steel inventories have been used up by downstream sectors," said Xu Xiangchun, analyst with industry consultancy

"But I am still cautious as the further tightening moves may continue to weigh on demand from industrial sectors, investment on property sector may slow down, while other industrial sectors may also see slower growth."

The most-active January rebar contract on the Shanghai Futures Exchange fell as low as 4,768 yuan a tonne, its weakest since Aug. 11. By 0412 GMT, it was down 0.6 percent at 4,773 yuan.

The tightening move could also constrain funding for steelmakers, said an iron ore trader in China's eastern Shandong province.

"This is not a good time to tighten liquidity ahead of the peak steel consumption season in September and October," he said.

Recent rises in China's steel prices, spurred by increased output as producers kept pace with strong construction steel demand, had encouraged mills to restock iron ore, the key raw material.

But iron ore price gains had been tepid as mills didn't want to buy aggressively amid uncertainties facing the global economy.

Spot iron ore with 62-percent iron content rose 70 cents to $179.64 a tonne on Friday, according to Metal Bulletin .IO62-CNO=MB. Two similar reference prices, Platts IODBZ00-PLT and the Steel Index .IO62-CNI=SI, were steady at $180.25 and $178.50, respectively.

Tight Indian supplies had helped support iron ore prices as monsoon rains, logistical problems and policy issues continued to disrupt shipments from the world's No. 3 supplier.

India's Supreme Court on Friday extended a ban on mining to two more districts in the iron-ore rich southern state of Karnataka. The mining ban in Tumkur and Chitradurga districts takes to three the number of districts affected by the ban after a similar imposition was made in Bellary.

Prohibition on mining in the three districts was recommended by a court-appointed panel on Aug. 19, as part of efforts to control illegal mining.

Karnataka introduced a ban on exports in July 2010 which it said aimed to curb illegal mining. The Supreme Court ordered the export ban lifted in April although the southern state has yet to issue export permits.

"The mining ban is supportive of prices but I think the market is already convinced there's still a long road to go before Karnataka can make any exports," said the Shandong-based trader.