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Saturday, December 17, 2011

Ukraine Jan to November coking coal imports increased

Saturday, 17 Dec 2011

According to Mr Vasyl Kharakhulakh director general of the Metallurgprom association of metallurgical enterprises, Ukrainian cokeries in January to November 2011 imported about 9.3 million tonnes of ordinary coking coal and coal concentrate for coking which is 9% more than in January to November 2010.

In November, 870,000 tonnes of coal for coking was imported.

According to Mr Kharakhulakh, the import of coking coal by Ukrainian metallurgical mills in the current year will be about 10 million tonnes, whereas the previous forecast provided for 9.5 million tonnes. The influx of Ukrainian coal to cokeries for 11 months was around 16 million tonnes, or 98% of deliveries during the same period last year. Particularly, 1.255 million tonnes were delivered in November.

In November 2011, Ukrainian cokeries supplied to metallurgical mills 1.2 million tonnes of coke, and generally for 11 months 13.6 million tonnes. 32,000 tonnes of coke was imported in November and 137,000 tons for 11 months against 232,000 tonnes in the first 11 months of last year.

In 2010, Ukrainian cokeries imported about 9.4 million tonnes of raw coal and coal concentrate for coking, which is about 24% more than in 2009. The supply of Ukrainian coal to coking plants was about 18 million tonnes, which corresponds to the previous year's volume. In 2010, the supply of coke to metallurgical mills was 14.556 million tonnes. The imports of coke in 2010 totalled 266,000 tonnes against 176,000 tonnes in 2009.

(Sourced from www.nrcu.gov.ua)

China Coal Corporation down nearly 30pct on the back Of China data showing slowing coal demand

Saturday, 17 Dec 2011

According to the National Energy Administration, China Coal Corporation is down nearly 30%, after it was reported that China's power consumption rose 9.91% to 383.6 kWh in November from a year earlier, the slowest growth in three months.

According o the Bohai-Rim Steam-Coal Price Index China's benchmark power coal price averaged CNY 830 per tonne in December 7 to 13 down by CNY 10 per tonne or 1.2% from previous week. China's benchmark power coal price has sustained WoW declines for five weeks running as of November 8. The cumulative decline amounted to CNY 23 per tonne or 2.7% in the past five weeks. The Bohai-Rim Steam-Coal Price Index covers spot prices at six major coal shipping ports in northern China.

China Coal Corp announced yesterday that it has, subject to TSXV final approval, closed a non-brokered private placement of 4,195,996 units at five cents per unit, each unit to consist of one China Coal common share and one non-transferable share purchase warrant with each warrant to entitle the holder to purchase one additional China Coal common share at a price of 30 cents for a period of two years from closing. The gross proceeds of the financing are CAD 209,799.80

Aquila in talks with two bidders for Australian coal asset

Saturday, 17 Dec 2011

Bloomberg reported that Aquila Resources Ltd selling assets to help fund a AUD 5.2 billion iron ore project in Australia is in talks with two bidders for the sale of a coal asset.

Mr Martin Alciaturi general manager finance and corporate of the Perth based company said that “We remain in active dialog with two bidders and expect to announce a transaction in the near future.”

Aquila plans to develop the West Pilbara Iron Ore port, rail and mine project with joint venture partner AMCI Inc as demand for steel in China grows. The company is selling three assets, including the Washpool coking coal project in Australia and the Avontuur manganese project in South Africa.

Mr Alciaturi said that “We remain in active dialog with two bidders and expect to announce a transaction in the near future.”

Washpool is valued at AUD 263 million and Avontuur at AUD 120 million.

(Sourced from Bloomberg)

Newcastle thermal coal declines to AUD 110 a tonne

Saturday, 17 Dec 2011

Bloomberg reported that power-station coal prices at Australia’s Newcastle port, an Asian benchmark, fell 1.1% in the week ended December 16th 2011.

According to the globalCOAL NEWC Index, coal prices at the New South Wales port declined to AUD 110.28 a metric ton from AUD 111.53 the previous week.

(Sourced from Bloomberg)

Friday, December 16, 2011

POSCO E&C to sign $4.3 bln deal for steel mill in Brazil

Friday December16, 2011

SEOUL Dec 16 (Reuters) - POSCO Engineering & Construction said on Friday it had won an order to build a $4.3 billion integrated steel mill in Brazil from a joint venture that includes Brazilian miner Vale.
The deal will be signed in Brazil on Friday, the South Korean builder said in a statement.

The unlisted affiliate of POSCO said it planned to build the plant with an annual production capcity of 3 million tonnes, in Pecem in Brazil's northeastern state of Ceara.The joint venture, Companhia Siderurgica do Pecem (CSP), also includes South Korean steelmakers Dongkuk Steel and POSCO, which hold a combined 50 percent stake.

Sesa Goa first iron ore mining company to certify for SA 8000

Friday, 16 Dec 2011

Sesa Goa Limited has been certified to the stringent standards of Social Accountability 8000. This is a unique achievement as this is the first time that an iron ore company has been given the certification internationally.

Bureau Veritas, the international certifying agency for the Social Accountability 8000 Standard, has certified the 4 major divisions of Sesa Goa Ltd, which are

Iron Ore Division - All Mines: Exploration, Mining, Processing, Blending & Dispatch of Iron Ore

Pig Iron Division - Manufacture of Pir Iron

Met-Coke Division - Manufacturing of Metallurgical Coke

Ship Building Division - Design, Construction & Repair of Self Propelled & Dumb floating crafts/vessels of steel construction

The certifications issued on November 23rd 2011 for a period of 3 years have been given for complying with the best management practices in the work place, especially in the areas of understanding of global issues and social impact in the workplace. The parameters of the Standard include practices regarding child labour and the young worker, forced labour, health & safety, discrimination, remuneration, working hours etc.

(Sourced from Equity Bulls)

NMDC not to buy stake in Greystone iron ore mine in Brazil

Fri, December16, 2011

The Indian Express reported that India’s state run mineral giant National Mineral Development Corp is all set to drop its proposal to pick up 50% equity of Greystone Iron ore Limited’s mine in Brazil, as the firm’s holding company Zamin Resources is listed in the British Virgin Islands, a known tax haven.NMDC was planning to pick 50% equity in Greystone for USD 40 million to take the project to Bankable Feasibility Study stage and initiate exploration, drilling and allied activities after the equity transfer.

As per report, NMDC is exercising caution, given that the government is under pressure to unearth black money stashed in tax havens by both individuals and companies.The move comes barely a month after the company shelved a proposal to acquire the Vinci coal project in Russia as one its owners were listed in North Korea.
(sourced:Indianexpress.com)

Iron Ore-Shanghai rebar falls for 5th day in six

Fri, December16, 2011

Chinese steel futures fell for a fifth time in six sessions to hit two-week troughs on Thursday, mirroring lethargic demand in the world's biggest consumer and dragging down iron ore prices. The most-traded May rebar contract on the Shanghai Futures Exchange dropped 0.7 percent to close at 4,124 yuan a tonne, after falling as low as 4,100 yuan, a level not seen since Nov. 30.

Rebar is also tracking losses in other commodities as investors sold riskier assets with no end in sight to Europe's debt troubles and after fresh data showed China's factory output shrank again in December.
The HSBC flash manufacturing purchasing managers' index, the earliest indicator of China's industrial activity, stood at 49 in December, a modest rise from November's 47.7 but pointing to a monthly contraction in activity nonetheless.Slower steel demand has curbed production of the building material and cut China's appetite for iron ore, with prices falling for a third straight day on Wednesday.

Growth in China's steel output and iron ore imports will slow next year as the world's top steel market keeps a tight grip on its property sector, putting pressure on iron ore prices, a Reuters poll showed.
Iron ore with 62 percent iron content declined 1.8 percent to $134.80 a tonne, cost and freight delivered to China, its lowest since Dec. 1, according to Steel Index .IO62-CNI=SI. That marked its steepest percentage drop since Nov. 28. "At present there are no buyers in the market. But it is difficult to say whether demand has dried up," said Dhruv Goel, managing director at iron ore trading firm SteelMint in India's eastern Orissa state.
Goel said while exports from India have been tight and will remain tight, there are ample cargoes in the spot market from Brazil and Australia.

Australia, Brazil and India are the world's biggest iron ore exporters.Brazil's Vale, the No. 1 iron ore miner, has been selling material into the spot market "at a significant discount to prevailing market levels," said Steel Index, noting that 240,000 tonnes of Brazilian 63.35-grade iron ore fines were sold at $135.7 a tonne, C&F, this week. Goel said a large Indian exporter had slashed an offer for 63.5/63-grade iron ore fines to $140 per tonne, but failed to conclude a deal.Sellers of Australian iron ore fines in China have cut prices by another dollar, with Pilbara fines at $134-$136 a tonne and Newman fines at $138-$140, said Chinese consultancy Umetal.
(sourced Reuters)

Australia trade surplus narrows as iron prices cut exports

Friday, 16 Dec 2011

Australia's trade surplus was narrower than expected in October as the mining boom continued to suck in more imports while weaker iron-ore prices held exports back.

Australian Bureau of Statistics said that the trade surplus of AUD 1.6 billion in October compared with AUD 2.25 billion in September. It said that economists had expected AUD 2 billion surplus. Imports rose 2% over the month, while exports were flat.

Economists said the trade surplus would eventually improve as a boom in mining investment lifts the output of iron ore, coal and natural gas, the country's biggest exports. But for now there are headwinds, as the capital equipment needed to build the many projects springing up across the country must be imported from overseas.

Kieran Davis chief economist at RBS Australia said that "The outlook for the trade balance remains positive given the massive expansion of capacity under way in the mining sector, although in the short term the surplus may shrink further, reflecting lower commodity prices and strength in imports.”

Australia terms of trade remain near record levels, prompting miners and energy providers to roll out AUD 450 billion (more than 30% of national output) in new investment projects, many of which are already under way.

Business investment data for the third quarter indicated that the full force of the investment boom is beginning to be felt across the economy.

(sourced TheAustralian.com)


India's iron ore exports plunge in Jan-Nov period

Fri, December16, 2011

Iron ore exports from the country have plunged sharply so far this year.In the first 11 months of 2011, export volumes totalled an estimated 80 million tonnes. This represents a year-on-year fall of as much as 22 million tonnes.

First it was Karnataka from where iron ore exports were prohibited; but subsequently the ban was lifted. It is now Orissa's turn. In November, preliminary export data suggest shipment of 5.1 million tonnes, down more than a third year on year. A major reason for decline in export volume is said to be Orissa. The State Government has stopped issuing iron ore export permits for cargoes shipped via two ports in Andhra Pradesh, namely Gangavaram and Kakinada.
Non-submission data is said to be the reason for the embargo.

Orissa ban
While Paradip port accounted for about 14 million tonnes shipment so far this year, the two ports in Andhra Pradesh handled 4 million tonnes. The Orissa Government has already enforced a ban on transport by trucks and has reportedly not been issuing export permits for the past 2-3 weeks, according to industry insiders.

The State Government is under pressure in the wake of investigation following allegations of illegal mining in Orissa. India's peak export of iron ore was during fiscal 2009-10 with estimated shipments aggregating 117 million tonnes which declined to 97 million tonnes in fiscal 2010-11.
Interestingly, it was only earlier this month, the OECD Steel Committee (of which India is a part) talked about rising concerns over availability of raw material (notably, iron ore) supply to meet the global demand of the steel industry. A related workshop emphasised the growing role of China and India, in addition to other emerging economies, in global demand for raw materials such as iron ore.

Export curbs

On the policy side, the workshop noted that export curbs applied to minerals and metal products have become more frequent, causing concern in countries that rely on imports of raw materials for steelmaking. At the same time, it is absolutely essential that finite raw material sources like iron ore are conserved in the country for future requirement.But the real issue at hand is not domestic availability for the future, but suspicion of ongoing illegal mining for the lucrative export market.

(sourced Business Line)

CIL board approves proposal to acquire stakes in overseas firms

Friday, 16 Dec 2011

The Hindu reported that seeking to venture into Australia, Indonesia and United States to scout for mineral resources, Coal India Limited board has approved the proposal to acquire stakes in unlisted firms overseas for valid offers.

The CIL board gave its approval to the issue in wake of the finance ministry having granted approval last month to CIL to go ahead with a buyout of overseas firms that are unlisted.

The board, while granting approval, said CIL could evaluate the offers if only they are valid.

In the first phase of the program, the company will take up three offers in Australia, Indonesia and the US.

CIL has put together a war chest of INR 6,000 crore for acquisition of mines.

(Sourced from thehindu.com)

Orissa to list coal mining plans on website

Friday, 16 Dec 2011

Orissa has asked all its mining lessees to post the details of their latest mining plans on the government website. The move comes after the government faced criticism from various quarters for allegedly not making all mining information public.

A steel and mines department official told IANS that "Steel and mines department secretary Manoj Ahuja issued a written instruction to the director of the state mines department Tuesday to ensure that the exercise gets completed by the end of this month.”

Orissa has been in the limelight since 2009 after a probe found several irregularities in its mining sector, leading the opposition parties to accuse the government of encouraging the scam that allegedly runs into INR 300,000 crore.

(Sourced from IANS)

JK Paper may buy coal from open market -Mr Kumarswamy CFO

Friday, 16 Dec 2011

Mr V Kumarswamy CFO of JK Paper spoke to CNBC-TV18 about his outlook for the business and the way ahead for his company. He says that after the terrible past quarter, this quarter seems to be much better. Mr Kumaraswamy said that that JK Paper will go ahead and buy coal from the European markets if need be since the plants cannot be kept shut.

Q - Your profitability declined by about 78% last quarter and margins fell from 28% to 17%. Has Q3 been better for you all?

A - Well, the last quarter’s disturbance was created largely by coal supply disturbances which you are reading in the paper almost daily now, and also some kind of dumping of coated paper from China consequent to US and EU putting some very high dumping duties there. A lot of quantities were thus diverted here.

The coated paper scenario has been largely taken care of by the currency depreciation in India, almost going from INR 45 to INR 53 per dollar levels that has made imports of coated paper that much costlier. Coal supplies are improving but no where near normal. So that’s how the current quarter is panning out to be.

Q - This gap that you have between what was your supply of about 1.5 tonne of coal required for every tonne of paper and what you get now, are you looking at buying in the open market? How are you looking at resolving this issue?

A - We have to buy it from the European markets, there is no other alternative. I can't keep the plant shut for this reason. After all, there is a positive contribution and EBITDA margins even at the bought-out coal. We always buy coal from European markets because there is no way that we will not buy from the open market.
(sourced:CNBC-TV18)

China Coal Energy coal output in Nov up by 14pct YoY

Friday, 16 Dec 2011

China Knowledge quoted according to a statement filed with the Shanghai Stock Exchange that China Coal Energy Co Ltd the country second-largest coal miner by revenue, produced 8.32 million tonnes of commercial coal in November this year reflecting a YoY increase of 13.8%.

Last month, China Coal Energy coke output amounted to 120,000 tonnes, down by 18.8%YoY. The company sold 10.09 million tonnes of coal in November representing a robust YoY increase of 10.2%.

In the first eleven months of this year, China Coal Energy produced 94.41 million tonnes of commercial coal up by 8.7%YoY.

During the period from January to November this year, the company coal sales reached 120.99 million tonnes increasing 11.5%YoY.

(Sourced from China Knowledge)

China's Coal Supply Sufficient - China Coal Association

Friday, 16 December 2011

China will see increased efforts in coal supply across the country, with the total coal production this year grew 300 million tonnes to over 3.5 billion tonnes as compared to 2010, the China Coal Industry Association was cited as saying.

The country's net imports of the fuel in 2011 are expected to reach around 150 million tonnes.
China has seen rapid growth in energy supply and demand in the first ten months as compared to the same period last year, propping up the national economy, said officials with the National Energy Committee.

Coal production and consumption each in January-October amounted to 3 billion tonnes, up 9.5% and 13.1% respectively; railways transported 1.88 billion tonnes of coal, an increment of 13.4%; power generation and consumption each totaled 4 billion kwh, up 12.3% and 11.9%; crude oil imports increased 8.6% to 210 million tonnes and refined oil consumption increased 5.6% to 200 million tonnes; natural gas supply was 100 billion cubic meters, up 20%.
In an effort to secure coal supply with the coming of year-end, China's Ministry of Railway improved its transportation plan as early as November and struggled to meet the nation's demand for the fuel. Currently, coal inventories at the country's 363 direct-supply power plants were sufficient for around 20 days of consumption.

However, the National Development and Reform Commission (NDRC), China's top economic planner, also warned that coal short supply would occur in some regions and considered it a tough task to ensure stable coal supply during the winter and coming spring.
The NDRC announced on November 30 adjustments for the prices of non-residential power and thermal coal in order to ease power shortages and reduce financial pressure on power companies.
The NDRC also said that it will allow the contract price of major thermal coal to float by no more than 5 percent next year, but the spot price of 5,500-kilocalorie coal should be capped within 800 yuan per tonne at major shipping ports.

The prices will stay in place until thermal coal prices stabilize on a national level, it said.
"The important thing is to control energy demand at a reasonable level and strengthen efforts in energy saving and emission reduction. We also need to spare no efforts to promote industrial structural adjustment in line with the 12th Five-year Plan and curb overcapacity and the excessive development of energy-intensive industries," said Zhang Guobao, an official with the National Energy Committee.
Industry experts expected a slowdown in energy-demand growth next year due to sluggish global economy, slower pace in national economic growth and increased efforts in energy saving and industrial structural adjustment.

China's coal capacity will grow year by year and its railway transportation capability will see marked increase, while the growth in power demand is expected to recede to around 10%, said a researcher with the NDRC.

The China Energy Research Society appealed, in a report about China's energy development in 2011, released recently, that China should focus on improving energy pricing mechanism during the 12th Five-year Plan Period and accelerate energy marketization.

Source: Steel Home

PT Berau Coal output may up by 15pct next year

Fri, Dec16, 2011

PT Berau Coal Energy expects coal production next year to rise to 23 million tonnes from an estimated 20 million tonnes this year.

Mr Rosan Perkasa Roeslani president director said that the Indonesian company’s 2012 average coal selling price may be slightly below this year average of USD 81 per tonne.

Mr Roeslani said that so far there’s no talks about a possible merger between Berau and PT Bumi Resources.

sourced:Bloomberg

Steam coal prices remain stable

Friday, 16 Dec 2011

Reuters reported that physical prompt coal prices held steady on Thursday as the market ignored choppy oil trade but prices are likely to come under more pressure in the next few weeks due to poor demand.

A January delivery DES ARA cargo was bid at USD 109.50, unchanged.

A February multi origin DES ARA cargo was bid at USD 108.50 and offered at USD 110.00, unchanged.

A January South African cargo was bid at USD 102.25 and offered at USD 103.00.

(Sourced from Reuters)

Thursday, December 15, 2011

S.Africa judge revokes rights awarded in Kumba case

Thu Dec 15, 2011

PRETORIA (Reuters) - A South African judge ruled on Thursday that a company with no mining experience and business links with President Jacob Zuma's son could not keep mineral prospecting rights it was awarded.

South Africa previously awarded Imperial Crown Trading the right to prospect for minerals at the Sishen mine operated by Kumba Iron Ore, a unit of global miner Anglo American.

The stakes went far beyond one commercial dispute.

ArcelorMittal South Africa had allowed the right to lapse in 2009, putting in jeopardy a lucrative multi-billion rand supply deal it had with Sishen that allowed it to source iron ore at a discount.

Judge Raymond Zondo also said he agreed with ArcelorMittal's contention that Sishen held 100 percent of the right to the operation and it was not open for anyone to apply for the lapsed right.

ArcelorMittal says this means its supply agreement remains in force.

"The judgement of the High Court serves to confirm our view that Sishen remains obliged to supply 6.25 metric million tonnes of iron ore to us at cost plus three percent in terms of our agreement," ArcelorMittal said in statement.

The group's share price rose more than 5 percent after the verdict.

Kumba disagreed that the decision had any bearing on the supply dispute, which is being fought out in a separate arbitration process.

"Kumba remains convinced that the contract lapsed and this judgment does not change that," a spokesperson for Kumba said.

Thursday's judgement was the latest twist in a long and complex saga, and ICT immediately signalled it would appeal.

"Certainly we will appeal. We do not agree with the judgement. It is contrary to what we have been contending all along," ICT lawyer Ronnie Mendelow told journalists after the ruling.

One of ICT's owners has business connections to Zuma's son, Duduzane, and the awarding of the right had rattled investor confidence in Africa's largest economy as it focused unflattering attention on the issue of crony capitalism and political favouritism.

"One of the uncertainties of the mining industry has been the security of tenure, and investment has pulled back, so if anything this judgement may encourage investment," said Chris Hart, economic strategist at Investment Solutions.

"My instinct is that policy and procedures need to follow best practice. My sense is that we are moving back to best practice and a defendable process of awarding mineral rights," he said.

The full judgement with the reasons for the decision will be given on Tuesday, and South Africa's department of mineral resources said in a statement it would not comment before then.

(sourced Reuters)

Acciona to build iron ore transport system for Cerro Negro Norte

Thursday, 15 December 2011

Spanish water treatment firm Acciona Agua has announced that it will develop solutions for transporting iron concentrate for Chilean miner CMP, which is 75 percent owned by Santiago, Chile-based iron and steel company CAP Group, to carry out water conduits and iron ore concentrate project works related to the Minero Cerro Negro Norte Project located in the CopiapĆ³ Valley, in Chile's Atacama Region III.

According to the release, the contract involves the development of an integrated solution for the pumping of iron ore concentrate from the mining operation to the Punta Totoralillo port. It will also use a steel pipeline and a pumping in series system from the desalination plant, located on the coast, to provide water for the mining operations.

The budget for the project comes to US$143 million and the plant is expected to come into service in 2013. CMP is currently advancing Cerro Negro Norte's detailed engineering works. When completed, the mine will produce four million mt of iron ore concentrate annually over a period of 19 years.

Tags: iron ore , raw mat , Spain , Chile , Europe , South America , production , mining , European Union , Mediterranean
Sourced: SteelOrbis

IEA: Chinese coal prices to impact global market in next five years

Thursday, 15 December 2011

The International Energy Agency (IEA) has stated that in the next five years coal prices in the Chinese market will impact the global coal market.

In its statement, the IEA said, "Coal is the most important source for generation of electricity. The Chinese market is the biggest consumer of coal, with its demand accounting for over half of global coal demand." The IEA went on to say that in the coming five years (2012-16) any major development or decision in the Chinese market would be expected to have a significant influence on the global coal market and on electricity charges.

Tags: coking coal , raw mat , China , Far East , steel futures , steelmaking , mining , East Asia and Pacific
Sourced:steelorbis

Steam coal prices slip

Thursday, 15 Dec 2011

Reuters reported that physical prompt coal prices slipped again by around 50 cents to 75 cents on Wednesday in line with weaker oil, the euro and equities and in the absence of fresh spot trade.

A January delivery DES ARA cargo was bid at USD 112 a tonne for Russian coal only, delivered to Rotterdam only.

A February multi origin DES ARA cargo was bid at USD 109.50 and offered at USD 110.00, slightly lower than Monday.

A February Russian cargo was also bid at USD 112.00.

A December loading South African cargo was bid at USD 99.50 a tonne FOB Richards Bay.

A January South African cargo was bid at USD 101.20 and offered at USD 103.

No fixed price trades had taken place and most bids and offers had been withdrawn, a sign that the market has already largely wound down before the end of year holidays.

(Sourced from Reuters)

Government update on cargo handling at major ports in India

Thursday, 15 Dec 2011

A reduction in iron ore traffic driven by a mix of ban on iron ore exports and slower demand from China continued to pull down the total load handled at major ports in November.

During the month, the two key commodity groups that registered a decline in traffic handled at major ports were iron ore and coking coal. Major ports handled 45.67 million tonnes cargo, a 0.51% drop against the same period last year.

The reduction in iron ore export cargo of 2.6 million tonnes was more than the increased handling of finished fertiliser, container traffic and thermal coal during the month. These were the three commodity segments that got the maximum incremental traffic of 2.18 million tonnes to the ports during the period.

Cargo handling by major ports
 Nov 11Change %(YoY)
POL14.721.87
Iron ore4.79-35.4
Fertliser finished2.0169.52
Fertilizer raw0.7712.4
Coal thermal3.8914.88
Coal coking2.03-12.5
Container tonnage10.019.3
Other cargo7.411.9
Total4.56-0.5

(In million tonne)

On a cumulative basis, the major ports handled 370.68 million tonnes between April to November, registering a 1.33% growth. This was on the back of lower handling of iron ore, fertilizer and coking coal.

The slower growth at major ports is also due to higher cargo handled by non major ports administered by the state governments. The non major ports account for about 35% of total traffic.

(Sourced from BL)

Anglo American and ArcelorMittal SA await ruling on iron ore permit

Thursday, 15 Dec 2011

It is reported that a South African court will rule tomorrow on whether the state was correct to award a prospecting right over the country's largest iron ore mine to a company whose owners include a business partner of President Mr Jacob Zuma's son.

ArcelorMittal South Africa Limited in June 2011 joined Anglo American Plc unit Kumba Iron Ore in asking the North Gauteng High Court in Pretoria to overturn the award of a 21.4% right at the Sishen iron ore mine, previously held by ArcelorMittal South Africa, to closely held Imperial Crown Trading 289 (Pty) Limited. ICT's owners include Mr Jagdish Parekh, a business partner of Mr Zuma's son, Mr Duduzane. Kumba holds the rest of the Sishen right through Sishen Iron Ore Co, which is partly owned by Exxaro Resources Limited.

Mr Mohamed Kharva, an analyst at Nedgroup Securities Limited, said that "It will go against anyone’s logic if ICT gets the right."

ArcelorMittal South Africa's Sishen right lapsed after the Vanderbijlpark based steelmaker failed to apply for a license by April 30th 2009 to satisfy a change in legislation. Its failure to convert the permit led Pretoria based Kumba to cancel a nine year agreement to supply iron ore from Sishen at below-market prices to the steelmaker, saying it was linked to the mining right. That agreement is under a separate arbitration process.

Ownership of South Africa's mineral resources, previously held by mining companies or private landowners, reverted to the state when the new mining legislation was enacted in 2004 and is now allocated to companies by government officials on a first come, first serve basis.

(Sourced from www.bloomberg.net)

Mozambique Ports expand with Rio Tinto

Thursday, 15 Dec 2011

Roads were little more than rubble and there was barely enough working equipment to load cargo at Maputo port in 2003. Then Mozambique brought in Grindrod Ltd and DP World Ltd to operate the harbor.

Since then, a coal mining boom has fueled expansion at the southern African nation’s harbors. Rio Tinto Plc bought Sydney based Riversdale Mining Ltd for AUD 3.4 billion in July to add 25 million tonnes of Mozambican coal to its annual output.

Clinton Duncan resource analyst at Avior Research Ltd in Johannesburg said that “Rio Tinto has been buying up a lot of assets in Mozambique, and they stand to be one of the significant beneficiaries there.”

The number of ships docking at Maputo has almost doubled to 1,030 a year since 2003, while coal exports have climbed from 1.5 million metric tons to more than 4 million tons and chrome shipments are set to reach about 2 million tons, a five-fold increase, said Ricardo Roberts, commercial manager of the port.

Mozambique is attracting exporters, such as Rio Tinto and Sappi Ltd from neighboring South Africa, which is burdened with high port costs and a lack of rail capacity.

Exxaro Resources Ltd and Coal of Africa Ltd are bringing shipments from mines in northern South Africa to Maputo as the miners face restrictions in using South Africa’s Richards Bay port.

A coal-mining boom is fueling development in the southern African nation after a 16-year civil war that ended in 1992 destroyed infrastructure. Durban, South Africa-based Grindrod is spending as much as $800 million to boost capacity by 20 million tons at the coal terminal in the next four years.

Cargo-handling capacity at the Maputo port, 286 miles north of Durban harbor, is set to climb to 50 million tonnes by 2030 from about 13 million tonnes currently, according to David Rennie, Grindrod’s executive director of ports and terminals. Grindrod and DP World of Dubai have a 25% stake each in the port and the government owns the rest.

(Sourced from Bloomberg)

Australia lifts FY 2011-12 iron ore export forecast by 2.4pct

Thursday, 15 Dec 2011

Reuters reported that Australia has lifted its forecast for iron ore exports by 2.4% to a record 460 million tonnes in 2011-12 as producers dig more mines to feed a growing hunger in China for imported ore to make steel.

Iron ore prices have weakened this quarter as questions persist over China's future growth prospects, but that has done little to deter mega producers such as Rio Tinto and BHP Billiton from earmarking billions of dollars to expand in Australia's western iron range.

A forecast for metallurgical coal was revised down, however, with the Bureau of Resources and Energy Economics now predicting exports will drop to 150 million tonnes, versus 156 million in its forecast on Sept.20, after a series of floods and strikes hobbled output.

Australia is the world's biggest supplier of iron ore and metallurgical coal, also known as coking coal and used in smelting, with Asian steel mills, particularly in China, the key buyers of both commodities.

Australia, with a low population and an abundance of mineral wealth, is also a major exporter of thermal coal for power generation along with copper, nickel and gold. Exports of thermal coal are forecast to total 163 million tonnes in 2011-12, a modest upward revision from 155 million tonnes previously.

Mr Quentin Grafton executive director and chief economist at BREE said that "The increase in iron ore and thermal coal export volumes reflects recent expansions to mine and infrastructure capacity."

Australia's AUD 1.3 trillion economy is enjoying a once in a century mining boom powered by Asian demand and has been largely resilient to the last two financial crises in Europe and the United States. Economists and political leaders no longer complain their country is regarded as little more than a quarry supplying the emerging industrial powerhouses of Asia with raw materials.

Mr Grafton said that "Despite the uncertainty surrounding the outlook for some European economies, Australia’s export volumes for most commodities have remained strong in the second half of 2011, while prices for many commodities have remained at historically high levels."

According to BREE's latest quarterly commodities outlook, non farm commodity export earnings are forecast to climb to a record AUD 206 billion in 2011-12. That's down from its September 20th 2011 forecast of AUD 215 billion but still 15% YoY higher.

Rio Tinto, the world's second biggest iron ore producer, late last month raised its iron ore expansion target by 20 million tonnes to 353 million tonnes a year by the first half of 2015, from around 240 million tonnes a year now. There is also an option to increase annual capacity further to 453 million tonnes.

(Sourced from www.reuters.com)

Iron ore inventories dip in China

Thursday, 15 Dec 2011

Xinhua quoted according to the Xinhua-China Iron Ore Price Index released on Tuesday that inventories of iron ore at 25 major Chinese ports dipped 0.75% WoW to 99.6 million tons in the week ending on December 12.

According to the index it was the first time in a month for iron ore supplies to fall below 100 million tonnes with last week inventories down by 750,000 tonnes. The price index for 63.5% grade imported iron ore dropped 1.36% to 145 points in the week while 58% purity iron ore imports remained unchanged at 119 points.

According to Xinhua analysts a decline in crude steel output dampened buying enthusiasm among most steel manufacturers and iron ore traders, who are still waiting to make a move in light of possible price fluctuations in the future.

According to customs data, China steel exports stood at 45.16 million tonnes between January and November up by 13.8%YoY while steel imports fell 4.2%YoY to 14.39 million tonnes.

Currently, China domestic iron ore is cheaper than imports, putting Chinese steelmakers in a position to limit their purchases of raw materials particularly from overseas.

(Sourced from Xinhua)

Brazil iron ore export in November value up by 36%

Thu, 15 Dec 2011

According to the information released by the Brazilian Ministry of Development, Industry and Foreign Trade, Brazil's iron ore export value in November this year rose by 35.8% compared to the same month last year but was down 3.3% compared to October this year, totaling USD 3.7 billion,

As per report Brazil's iron ore export volume amounted to 31.8 million tonne in November, with a rise of 14.2% compared to October this year and increasing by 28.5% compared to the same month last year.

In November, Brazil's iron and steel export volume amounted to 599,114 tonne, with an increase of 43.2% compared to the previous month and up 2% compared to the same month of 2010, while these exports were valued at USD 397.3 million, with an increase of 40% compared to October this year and up 31.2% YoY.
(sourced steelorbis)

To hit Karnataka non tax revenues

Thu, 15 Dec 2011

Dip in mineral royalty due to ban on iron ore mining and land sale being a virtual non starter are leading Karnataka to a shortfall of around INR 2,500 crore in non tax revenue receipts for 2011-12, according to mid year review of state finances.

According to the document tabled in the Assembly by chief minister Mr DV Sadananda Gowda, the realization in non tax revenues at the end of September 2011 (April-September six month period) was INR 1,339.99 crore, which is 36.5% of the budget estimates of INR 3,674.79 crore.

It said that "On account of the ban on mining of iron ore in the state, a shortfall of INR 400 crore is expected in mineral royalty. Due to interest earned from investment of cash balance in Government of India 14 day and 91 day Treasury bills, excess interest realization of INR 125 crore is expected for the full year.”

Non-debt capital receipts are expected to be much lower than the budget estimates of INR 2,061.72 crore. Though the real estate market has improved significantly, it has not yet reached the 2007-08 levels. Only INR 100 crore is likely to be realized from the sale of land during the current year as against the budgeted INR 2,000 crore.

The document said that "Overall, the expected shortfall in (non-tax revenue) receipts is around INR 2,500 crore (for the full year)",

(Sourced from www.dnaindia.com)

Chinese iron ore import prices in November down by 8pct

Thursday, 15 Dec 2011

China Securities Journal quoted the General Administration of Customs said China imported 64.20 million tonnes of iron ore in November an increase of 14.62 million tonnes from October.

The average import price was down by 8% from October to USD 162.1 per ton. For the first 11 months, China recorded an increase of 11%YoY in iron ore imports to 622.01 million tonnes. The average import price rose 30.8%YoY to USD 166.2 per tonne.

According to China iron ore spot price index (CSI), the average price of 62 grades imported fine ore was USD 130 per tonne in November. The highest price reached was USD 144.78 per tonne while the lowest price was USD 121.93 per tonne.

Mr Zhang Jiabin an analyst at umetal.com, an information provider said there is a time lag between the average price of imports calculated by China Customs and the actual price of imports.

He forecasts the average price of iron ore imports in 2011 will not change significantly as a result of the drop in spot prices in the fourth quarter. He added that the average price of iron ore imports in 2011 is expected to hit USD 160 per tonne.

The delay was attributed to the time taken to report to China Customs, and the effect of the quarterly iron ore purchase contracts. It was reported that ships carrying imported iron ore normally apply for approval from China Customs five days before arriving at a local port.

Ships reaching China in November will be carrying iron ore from contracts signed from mid September till mid October when iron ore prices ranged from between USD 160 per tonne and USD 170 per tonne.

(Sourced from China Securities Journal)

Tuesday, December 13, 2011

China shipowners assn raise safety concerns over Vale's mega ships

Tue Dec 13, 2011

SHANGHAI Dec 13 (Reuters) - Chinese shipowners association urged its government to carefully review the safety of Vale's new mega iron ore carriers before allowing them access to domestic ports, the gateway to the Brazilian firm's main market.

China Shipowners' Association said the 400,000-tonne Valemaxes, the world's largest dry bulk ships, have not been thoroughly tested and could pose a safety threat.

The industry group's comments come a week after a leak was found on the Vale Beijing while it was preparing to set sail on its maiden voyage.

"Such mega ships have been newly built ... and it is not yet certain whether they can withstand various sea conditions," the group said in an email to Reuters.

"If there is any leaking of fuel oil, the pollution will be catastrophic."

The Vale Beijing is one of the first of 35 huge bulk carriers commissioned by Vale, which is betting on the ships to slash shipping costs so it can better compete with Australian rivals BHP Billiton and Rio Tinto.

China, however, hasn't opened up its ports to the ships.

Influential Chinese shipowners are lobbying the government to keep the vessels out of the country's ports, fearing Vale will use the fleet to monopolise the dry bulk shipping market at their expense.

(sourced Reuters)

Morocco's JLEC launches three Panamax thermal coal tenders: trade

Tuesday, 13 December 2011

Moroccan generator Jorf Lasfar Energy has issued a tender for three 60,000 mt Panamax cargoes of thermal coal for March, April and May delivery, according to market sources.
The tender called for thermal coal with a minimum calorific value of 5,800 kcal/kg NAR, minimum 9% ash and maximum 1% sulfur.

One trader said it was "strange" that JLEC had lowered its typical sulfur content requirement from 1.5% to 1%, saying that he assumed it was because the generator had concluded a recent supply contract with a Russian producer and needed more lower-sulfur material.
Bids are due by December 20 and valid until December 22.

JLEC last month awarded a tender for four Panamaxes for delivery in January-April to a Switzerland-based trader-producer at a price in the region of $115.50-115.90/mt CIF Jorf Lasfar, according to traders.
JLEC regularly tenders for spot shipments for its coal-fired plant, which has an installed capacity of 1,372 MW, providing around one third of Morocco's electricity supply.

Source: Platts

SAIL planning 15 million tonne pr annum iron ore from Chiria

Tuesday, 13 Dec 2011

The Telegraph reported that Steel Authority of India Limited’s mining consultant Hatch has devised a strategy for a massive 15 fold jump in iron ore output from its Chiria mines.

Hatch’s plan, submitted to SAIL, envisages production from Chiria to reach 15 million tonnes per annum from 1 million tonnes now, which will make it the most productive ore mine in the country.

Hatch has proposed that output be raised in phases first to 7 million tonnes per annum and then to 15 million tonnes per annum.

The INR 5,000 crore investment proposal on mining facilities and an ore beneficiation plant will lead to Chiria meeting a third of SAIL’s ore requirements. With reserves of 2.2 billion tonnes, Chiria has Asia’s largest deposits of high grade ore.

Officials said SAIL had obtained stage 1 forest clearance from the forest and environment ministry for 595.075 hectares of Chiria covering the Ajitaburu, Budhaburu, Sukri-Latur and Dhobil leases. Separate environment clearances have been obtained in March for Chiria’s Budhaburu and Ajitaburu leases. The Indian Bureau of Mines have approved the mining plans for Chiria’s Ajitaburu, Budhaburu, Dhobil and Sukri-Latur leases.

SAIL executives said the development of Chiria is crucial to tits long term plans. They said “It’s the only deposit in India capable of sustaining up to 30 million tonne to 50 million tonne of mechanized mining annually. Over the next half a century, around 40% of SAIL’s iron ore requirement will be met from this one single field.”

Once the ore in the other mines in eastern India gets depleted, Chiria will be the sole supplier to it’s four integrated facilities at Bokaro, Burnpur, Durgapur and Rourkela and to the new unit being built at Burnpur.

(Sourced from telegraphindia.com)

China's Nov coal exports down 27% on year to 940,000 mt; up 19% from October

Tuesday, 13 December 2011

China exported 940,000 mt of coal in November, down 26.6% from a year ago but up 19% from October, preliminary figures released Saturday by the country's General Administration of Customs showed.
In the first eleven months of the year, China exported 13.85 million mt of coal, down 21.2% from a year ago.

Chinese customs authorities have yet to release November import figures, but industry sources estimated that China's coal imports hit a record high of 22 million-23 million mt last month, compared with 15.69 million mt in October and the current record high of 19.12 million mt in September. Large volumes of imported coal have apparently resulted in congestion at Chinese coal ports in November, they said.
Meanwhile, China exported 90,000 mt of coke in November, down 10% from October and down 75% year on year. In the first eleven months of the year, China exported 3.2 million mt of coke, up 6.6% year on year.

sourced Platts

Iron ore contract move may boost paper hedges for clients: Vale

Tuesday, 13 December 2011

Brazil's Vale expects that a move to price iron ore using spot prices in the same period of shipments could boost paper hedging by clients, but the world's biggest supplier will refrain, for now.
Vale is seeing how the swaps market is evolving, while it agrees to move most customers away from the quarterly lag price system for term contracts.

Trading company analysts point out that the pricing shift would need more risk management, and increase administration as a known fixed price for a three-month period is lost.
"We don't hedge," Jose Carlos Martins, Vale's executive director of iron ore and strategy, told reporters in London on Wednesday. "If the market becomes liquid and you have financial instruments...it will be mainly played by customers."

The new contracts switched from a fixed price accord based on the previous quarter with one-month lag system, that, for example, used June to August values to price Q4.
Vale said there is no going back for customers switching to price basis current quarter from the quarterly lag system.

Vale CFO Tito Martins said he didn't think there was enough liquidity in the short term to allow it to happen on a grand scale, as up to 80% of Vale's customers switch to pricing iron ore on current quarter average and even shorter benchmarks such as monthly and pure spot-based pricing.
The executives pointed out the difficulties of hedging a range of different iron ore products around a set marker, which would ensure greater liquidity.

Vale produces many higher iron content products than the 62%-Fe fines concentrate grade used as a benchmark in the physical market Platts and others publish.
One market analyst said that current quarter pricing would encourage more participants into the paper trading market. He also pointed out that it is more difficult for steel mills and miners to issue letters of credit for trade based on a floating price until settlement at the end of each quarter. Another source agreed, and said he expected more paperwork as a result.
The analyst said as Vale is the largest and more conservative than BHP Billiton and Rio Tinto that make up the top three global suppliers, the pricing mechanism change with large steel mills would likely lead smaller players in the industry to follow.
That means the "whole iron ore pricing system is based on a uncertain/floating value," he said.

NEW SYSTEM ALLOWS Q1 UPSIDE
Vale executives admitted it would be hit by a 20% or so lower price based on the quarterly average to date for newly revised contracts. This switch is likely to result in well over $1 billion in lost revenue, based on expected shipment volume and prices to date.

Vale's Q4 prices under the old system should have stayed flat to Q3, based on analysis by Platts.
However, if prices rise in Q1 2012 by more than the $155.794/dmt CFR North China average generated by benchmark Platts IODEX prices between September to November that would be used under the old system, Vale is betting it can recoup at least part of the loss from customers making the switch. Platts assessed IODEX 62%-Fe at $141.25/dmt CFR North China on Thursday.
Jose Carlos Martins said the market may stay in the $140-150/dmt CFR North China range for the time being, but believes the price will move up in the future.

The analyst said that even after the loss by the structural price change, Vale still makes large profits compared to mills in China that are losing money or at just breakeven.
He forecast Vale's iron ore fines and pellet export volume at around 68 million mt in Q4.
For Rio Tinto, the world's No. 2 iron ore miner and largest supplier from Australia, it too has already moved more towards spot prices. A November 28 company presentation shows about a third of sales remaining on the previous quarter with one month lag pricing basis, with the rest a mix of current quarter, monthly-prior and monthly actual, and spot.
In October, Rio Tinto said 86% of sales in the third quarter were based on historic "quarterly lagged" prices.
Rio Tinto's iron ore sales in Q3 totaled 60 million mt on a 100% project basis, based on the group's operational review.

As for BHP Billiton, the miner has been the most aggressive in pushing for short-term spot-based pricing in iron ore, as well as coking coal and other commodities. While the miners captured a change in pricing helped by China's expanded appetite for imports, it has increased volatility as Japanese-led benchmark pricing now becomes the exception.
Source: Platts

NMDC produced 25 million tonne of iron ore during 2010-11

Tuesday, 13 Dec 2011

The Indian minister of steel Mr Beni Prasad Verma said that NMDC Ltd. produced 25.15 million tonnes of iron ore during 2010-11, which is about 12% of the total estimated iron ore production of 208.11 million tonnes in the country.

In a written reply in the Lok Sabha he said, the consumption of iron ore by the domestic industries during 2010-11 was estimated at 111.4 million tonnes, whereas the total production of iron ore in the country during 2010-11 was estimated as 208.11 million tonnes.

NMDC supplied 23.75 million tonnes of iron ore during 2010-11 to domestic industries, which constitutes about 21% of estimated consumption of iron ore by the domestic industries. The remaining requirement of iron ore by the domestic industry was either sourced from captive iron ore mines or was supplied by other iron ore producers.

The minister said, Iron ore, being in deregulated sector, its supply is secured by the individual companies based on their individual requirement. However, NMDC is taking steps to increase production of iron ore by opening up new iron ore mines and expanding the capacity of existing iron ore mines.

NTPC Kahagaon receives 9 wagons of soil instead of coal

Tuesday, 13 Dec 2011

NTPC's Kahagaon unit received nine wagons of soil instead of coal from Eastern Coal India Raniganj colliery, a senior official of the power major.

Mr T Gopal Krishnan assistant GM fuel management of NTPC said that a rail rake containing 59 wagons had arrived at the NTPC plant in Bihar's Bhagalpur district via the merry go round rail route from Ukhra in West Bengal. During unloading, nine wagons were found to have soil in them instead of coal.

Mr Krishnan added that “While the coal consignment from 50 wagons have been unloaded, the nine wagons filled with soil have been left untouched. ECL has been intimated about the incident and asked to visit Kahalgaon to investigate the matter.”

The 2340 MW Kahalhgaon plant receives 11 to 15 rail rakes per day to meet coal demand, but this was the first time that such an incident took place.

(Sourced from PTI)

Iron Ore-Spot prices seen edging up, but gains capped

Tuesday, 13 December 2011

Spot iron ore prices are expected to tick higher this week as Chinese steel mills replenish inventories ahead of the Lunar New Year in late January, although subdued steel prices could limit any buying interest. Iron ore with 62 percent iron content was nearly flat at $139.50 a tonne on Friday, cost and freight delivered to China, according to Steel Index.
The raw material gained half a percent for all of last week, reflecting slow demand from top importer China where steady steel prices point to thin demand.

"We expect the Chinese mills to come in and buy to restock as we approach the Chinese New Year. If the mills want to go on holidays they're going to have to do all their buying in December," said an iron ore physical trader in Singapore. The 2012 Lunar New Year holidays start from Jan. 22, earlier than in 2011 when they were in early February.

Chinese steel mills normally heavily restock on iron ore ahead of the Lunar New Year, pushing spot prices higher. Prices hit a record of above $190 a tonne in February, helped by the buying momentum built ahead of the festival. But traders said they don't expect the Chinese to be as aggressive in replenishing inventories this time given sluggish steel demand.
"We're capped on the upside, the price will probably be capped at $150," said the Singapore trader, referring to the 62-percent iron ore reference price by Steel Index.

In a sign that Chinese steel demand remains thin, Baoshan Iron and Steel said it plans to keep hot-rolled coil prices unchanged for January bookings, and increase cold-rolled coil by 100 yuan ($16) per tonne, a hike that analysts deem small.
Sellers of imported iron ore in China kept their offer prices unchanged on Monday, amid hopes buyers would return to the market. Australian Pilbara iron ore fines were quoted at $139-$141 a tonne, C&F, and Newman fines were offered at $141-$143, said Chinese consultancy Umetal. Indian 63.5/63-grade fines were quoted at $149-$151 a tonne.

The most-traded May rebar contract on the Shanghai Futures Exchange closed nearly flat at 4,168 yuan, after rising just 0.1 percent last week.
Steel prices in China, the world's largest consumer and producer, are likely to hit bottom in January or February, Mirae Asset Securities analysts said in a note.
"But given the current low steel inventory level, we may see a small and quick rally, at most, in December. In addition, a rally should follow in the second quarter after the early Chinese New Year when steel demand recovers seasonally in March or April," they said.
Elsewhere, Vale may start operating its iron ore transshipment centre in the Philippines early next year, two years ahead of a similar facility in Malaysia, as the world's top iron ore miner moves closer to its biggest market, China.

sourced Reuters

Chinese iron ore imports in November jumps by 29pct

Tuesday, 13 Dec 2011

Bloomberg reported that iron ore imports by China, the biggest buyer rebounded 29% in November from an eight month low as some steelmakers replenished their stockpiles after prices fell.

The General Customs said the country imported 64.2 million tonnes of iron ore last month. This is the highest since January and compares with 49.94 million tonnes in October.

IG Markets Chris Weston said November 30 that iron ore prices for immediate delivery tumbled 31% in October amid China credit tightening and slowing steel demand from builders and automakers. The prices will find a floor at USD 120 a ton as Chinese steelmakers replenish stockpiles

(Sourced from Bloomberg)

Only time will tell if Vale's giant ore carriers will enter China

Tuesday, 13 December 2011

Brazilian iron ore miner Vale said it would take time for its new mega-ships to be able to enter Chinese ports but stood by its shipping strategy.Its multi-billion dollar plan to cut freight costs by ordering a fleet of 35 of the world's biggest iron-ore carriers as it aims to tap demand in China, the world's No. 1 importer of the raw material used to produce steel, has faced stiff opposition from Chinese shipping players.
"It was definitely not a mistake," Vale's executive director of iron ore and strategy, Jose Carlos Martins, told a news conference on Wednesday in due time. These safety measures, the drafting situations when asked whether he regretted building the mega-vessels before getting permission to berth at Chinese ports."I think it is a question of time, and these vessels will be very much used on this route from Brazil to Asia."

Martins would not speculate how long it will take. "I think things will happen in ports, all of these things have to be seen, to be developed, without being in a hurry. It takes time. You need to be patient," he said. China has yet to allow any of Vale's giant ships to dock at its ports, forcing the world's biggest iron-ore producer to send its vessels instead to Italy, Oman and other destinations. Martins said there was one ship owner, "who is not happy with our strategy".

He added, "The Chinese government never said anything against it. This is a port issue. We need to solve it with port authorities." In a further setback for the group, the damaged Vale Beijing, which is the world's largest iron ore carrier, was towed on Tuesday from its berth in Brazil for repairs, raising potential safety worries about the mega-ships. The ship, delivered in September to its owner and operator, South Korea's STX Pan Ocean, is longer and wider than three soccer fields. It was about to start its first fully loaded voyage, a planned run to Rotterdam.
"Vale Beijing belongs to STX. It is an STX project, so we are awaiting their appraisal. The other ships have nothing to do with this. They are the same size but they are different projects. They are different," Martins said."Now we are waiting ... I am not minimising this, it is very serious and we are really concerned. But we need to wait for the conclusions. Everything we say now is speculation."

Martins said he hoped the ship classification society would have "a good explanation" for the damaged vessel.
He added that he was confident about the seaworthiness of other mega-ships already in service.
"Vale Brasil is now on its fifth voyage, and we have Vale Rio de Janeiro, Vale Italia. All those ships are already berthing, loading without a problem," he said.

NEW IRON ORE PRICE ERA
Vale's iron ore pricing strategy was also going through changes.
A 31 percent plunge in spot iron ore prices .IO62-CNI=SI in October prompted Asian steel producers to scour for adjustments in pricing the steelmaking ingredient to more closely reflect spot rates.
China Steel, Taiwan's top steelmaker, said it had agreed on a 23 percent cut in iron ore prices for October-December with the Brazilian miner, but Martins said rather than a discount, this was due to a switch to a new pricing method.
"Until last quarter we were using a lagging quarterly price, but with the recent drop in price, we got a lot of pressure from customers to change it and to use the (current) quarter average," Martins said.
"So we are now basing the price on the current quarter average ... nearly 80 percent of our sales are now done this way."
Vale said looking at average spot prices so far this quarter, based on the new mechanism, contract prices should be about 20 percent lower than if they were based on the previous method.
Martins said a move towards even shorter pricing was inevitable, adding there were several initiatives in the industry to create a pricing platform.
Source: Reuters

Indian government update on export of iron ore

Tuesday, 13 Dec 2011

The Indian minister of steel Mr Beni Prasad Verma said that during the year 2010-11, 97.66 million tonnes of iron ore was exported out of the total estimated production of 208.11 million tonnes of iron ore in the country.

In a written reply in the Lok Sabha he said that out of the total export, only about 2.93 million tonnes (about 3%) of iron ore was of high quality (with Fe content 64% and above). The total domestic consumption of iron ore (including both private sector and public sector steel plants) during 2010-11 was estimated as 111.4 million tonnes.

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

Mr Verma said that ministry of steel is of the view that iron ore, being a non renewable natural resource, should be conserved for long term utilization of domestic steel industry. The government has decided that conservation of iron ore resources of the country should be achieved not by banning or capping the export of iron ore but by taking recourse to appropriate fiscal measures.

Presently, an export duty of 20% ad valorem is levied on all grades and varieties of iron ore (except pellets).

Iron ore spot prices seen edging up

Tuesday, 13 Dec 2011

Reuters reported that spot iron ore prices are expected to tick higher this week as Chinese steel mills replenish inventories ahead of the Lunar New Year in late January, although subdued steel prices could limit any buying interest.

An iron ore physical trader in Singapore said that "We expect the Chinese mills to come in and buy to restock as we approach the Chinese New Year. If the mills want to go on holidays they're going to have to do all their buying in December.”

Chinese steel mills normally heavily restock on iron ore ahead of the Lunar New Year, pushing spot prices higher.

But traders said they don't expect the Chinese to be as aggressive in replenishing inventories this time given sluggish steel demand.

(Sourced from Reuters)

Monday, December 12, 2011

Orissa stops iron ore exports permits to 2 ports

Monday, Dec12, 2011

BHUBANESWAR (Reuters) - Orissa has stopped issuing iron ore export permits for cargoes shipped via two ports in Andhra Pradesh, Orissa mines minister told Reuters.

"The Gangavaram and Kakinada ports did not cooperate" with the state mines and steel department's queries on the volume of the ore exported through these ports and the mechanism they followed to prevent illegal exports, minister Raghunath Mohanty said.

The state government had sought such details from all the ports that exported iron ore from the state.

"We will not issue the permits until they (the port authorities) submit details and tell us what system they have," a senior official of the steel and mines department, who did not want to be named, told Reuters.

On the total export of 35 million tonnes iron ore from the country, 2 million tonnes were shipped through these ports in the first seven months of the current fiscal year ending March, data from the Federation of Indian Minerals and Industry, a trade body, showed.

(sourced Reuters)

Indonesia Stock Movers: Bank Negara, Summarecon Agung, Renuka

Monday, Dec 12, 2011

Shares of the following companies had unusual (JCI) moves in Indonesian trading. Stock symbols are in parentheses, and share prices are as of the close in Jakarta.

The Jakarta Composite Index rose 0.9 percent to 3,792.15.

Coal producers: PT Bumi Resources (BUMI) , Asia’s largest exporter of power-station coal, gained 1.1 percent to 2,225 rupiah. PT Adaro Energy (ADRO) , the second-largest producer, rose 5 percent to 1,930 rupiah. PT Tambang Batubara Bukit Asam (PTBA) , a state-owned coal producer, gained 1.8 percent to 17,200 rupiah.

Power-station coal prices at Australia’s Newcastle port, an Asian benchmark, rose 0.2 percent in the week ended Dec. 9, according to the globalCOAL NEWC Index.

PT Bank Negara Indonesia (BBNI) , the third-biggest state-owned bank by market value, rose 1.3 percent to 3,975 rupiah. Bank Indonesia Governor Darmin Nasution told the nation’s commercial lenders to lower borrowing costs as Southeast Asia’s biggest economy looks to domestic consumption to drive growth amid a global slowdown.

PT Renuka Coalindo (SQMI) , an Indonesian coal producer jumped 23.7 percent to 365 rupiah, the highest close since Nov. 30, 2004. Renuka expects to boost annual coal output at its wholly-owned unit, PT Jambi Prima Coal, to at least 1 million metric tons next year, Renuka President Director Ganesh Mane said by telephone in Jakarta on Dec. 9. Jambi Prima, which has begun operating a mine in Jambi province in Sumatra, is producing 50,000 tons to 60,000 tons of coal a month, Mane said.

PT Summarecon Agung (SMRA) , a property developer, gained 4.5 percent to 1,170 rupiah, set for the highest close since Nov. 4. Summarecon may spend 1.3 trillion rupiah ($143 million) in 2012 to fund projects such as a shopping mall, a convention center and a sports club, Investor Daily Indonesia reported, citing President Director Johanes Mardjuki. Mardjuki couldn’t be reached when called at his office.

(sourced Bloomberg)

South African Coal Export Prices Rise for Second Straight Week

Monday, Dec 12, 2011

Coal export prices at South Africa’s Richards Bay, the continent’s biggest terminal for shipping the fuel, rose for the second week.

Prices increased 66 cents, or 0.6 percent, last week to an average $103.18 a metric ton, following a 0.2 percent gain in the week ended Dec. 2, according to data on Bloomberg from researcher IHS McCloskey. The price is quoted on a free-on-board basis, excluding delivery costs.

(sourced Bloomberg)

Indonesia’s October Coal Exports Rise 3.9%, Trade Ministry Says

Monday, Dec 12, 2011

Indonesia, the world’s biggest exporter of thermal coal, increased shipments 3.9 percent in October from the previous month, according to data released by the Ministry of Trade.

Indonesia supplied 27.9 million tons from 26.8 million the month before, the data showed. The country shipped 22.9 million in October 2010.

Indonesia’s overseas shipments of the fuel in January to October rose 11.5 percent to 254.2 million tons from 228 million tons in the same period a year earlier, the trade ministry reported.

The department didn’t provide an explanation for the rise in exports or details of buyers. The figures, which come from surveyors’ reports before shipment, are subject to change.

(sourced Bloomberg)

Power equipment producers unhappy with 14% import duty

Mon, Dec 12, 2011

The struggle for domestic power equipment manufacturers against their Chinese counter parts is gathering steam. Sources tell CNBC-TV18 that they are not happy with the Power Ministry proposing only a 14% import duty on power equipments from China, reports Mehak Kasbekar.

This proposal has been on the back burner for a while and finally a draft Cabinet note has been floated by the Power Ministry. The Ministry note says that 5% will be charged on import duty, 5% of special additional duty and 4% of countervailing duty, totaling to 14%.

However, as we know, the Heavy Industries Ministry is not happy with it. Big names like BHEL were hoping that the import duty would at least be between 19-24%. The Maira Committee report which had done in-depth analysis of this had also recommended 14%, but additional duty on top of it would have taken it to between 19-24%.

Big companies that are hurt by import of Chinese equipments just want a level playing field, so sources say that the DIPP and Heavy Industries will be writing their comments this week voicing their displeasure with the draft Cabinet note.

Source : CNBC-TV18

New Mining Bill tabled in Lok Sabha

Monday, December 12, 2011

New Delhi: The Mines Ministry today tabled the new Mining Bill in Lok Sabha proposing coal miners to share 26% of the profit and non-coal miners' 100% of the royalty annually to project-affected people.

The Mines and Minerals (Development and Regulation) Bill, 2011, which will replace the over-a-century old, often-amended Act of 1957, also seeks to empower state governments to constitute special courts for the purpose of providing speedy trial of offences relating to illegal mining.

"The holder of a mining lease shall pay annually to the District Mineral Foundation...In case of major minerals [except coal and lignite] an amount equivalent to the royalty paid during the financial year," the Bill proposes.

"...In case of coal and lignite, an amount equivalent to twenty six% of the profit...In case of minor minerals, such amount as may be prescribed by the State government with the concurrence of the National Mining Regulatory Authority," it added.

The long-pending Bill also envisages introduction of competitive bidding process to encourage participation of private parties and a change in the role of the central and state governments, particularly to incentivise them for investing in exploration and mining.

The Mines & Minerals (Development and Regulation) Bill, 2011 provides for a simple and transparent mechanism for grant of mining lease or prospecting licence through competitive bidding in areas of known mineralisation, and on the basis of first-in-time in areas where mineralisation is not known.

(sourced Business Standard)

Mundra Port delivers record coal to Adani Power

Monday, 12 Dec 2011

The Mundra Port and SEZ, the country's top private multi-port operator and a subsidiary of Adani Enterprises Ltd, has said its West Basin bulk coal handling terminal in the Gulf of Kutch delivered 62,718 tonnes a day of coal to Adani Power's power plant located adjacent to the port.

This large tranche of coal was delivered recently through a high speed conveyor belt at a speed of 6,000 tonnes per hour. The belt runs across 20 kilometers from the port to the power plant.

Adani Power Ltd is setting up a 4,620MW imported coal fired power plant at Mundra, while TATA Power Company is constructing a 4,000 MW ultra power project nearby.

Dr Malay Mahadevia whole time director at MPSEZ said the West Basin is Asia's largest coal import terminal, set up primarily to supply imported coal to the power plants in the region. It can handle capsize vessels up to 250,000 DWT and will have draft of 19.5 metres when fully developed.

Mundra Port, the country's fourth-largest commercial port, is expanding the West Basin terminal and construction for the fourth berth is going on in full swing. The company is also augmenting the material handling system to cater to additional volumes of imported coal for power plants in the vast North West Indian hinterland.

Last month, Mundra Port also commenced double-stack container trains to help control transportation costs. The trains are running from Mundra Port to Patli near Gurgaon, Haryana, thus, connecting Northern India to the west.

Keywords: West Basin bulk coal handling terminal, Gulf of Kutch,

(Sourced from BL)

First of Vale's mega ships arriving in Asia next week


Sunday, 11 Dec 2011

According to Reuters Freightviews data, one of Brazilian mining giant Vale's huge iron ore carriers, the world's biggest, will arrive fully loaded in Asia for the first time next week with a stop in Singapore.

The 388,000 tonne Berge Everest, which has been leased to Vale, is expected to arrive in Singapore on December 15th 2011, but it was not clear whether the citystate was the ship's final destination.

China, Vale's main market, has yet to give these ships access to domestic ports, forcing the world's largest iron ore producer to send its vessels instead to Italy, Oman and other destinations.

The vessel's arrival also comes amid rising concerns over the safety of these Valemax ships after a similar vessel, Vale Beijing, became disabled before setting sail on its maiden voyage.

The crew of the Berge Everest has not formally requested to stop in Singapore, said a port official, and may decide instead to anchor far offshore for supplies and to refuel.

Singapore's ports were wide and deep enough to handle the Berge Everest should the crew decide to dock, authorities said.

A spokeswoman with Singapore-based Berge Bulk, the owner of the vessel, was not immediately available to comment on the ship's voyage plans.

The Berge Everest, built by China's Bohai Shipbuilding Heavy Industry, is one of six mega bulk ships to be delivered to Vale so far this year.

The company wants to build a fleet of as many as 35 mega vessels to sharply cut the cost of delivering the steel making ingredient to China.

(sourced from mb.com.ph)

Vale may begin iron ore transshipment ops in Philippines Jan/Feb-source

Mon Dec 12, 2011

SINGAPORE Dec 12 (Reuters) - Top iron ore miner Vale may start operating its iron ore transshipment centre in the Philippines' Subic Bay Freeport in late January or early February, a source with knowledge of the plan said on Monday.

Vale will be putting a large floating storage vessel in the Subic port, located in the main Luzon island, where iron ore from its massive 400,000-tonne carriers can be stored and transferred to smaller vessels that would bring the raw material to Asian buyers such as China, the source told Reuters.

Brazil's Vale is spending more than $2 billion on the fleet of giant vessels to cut its cost of shipping iron ore to top market China.

"We are just waiting for the arrival of their floating storage vessel right now and we are in contact with Vale Singapore regarding the project," said the source.

"We expect it to start in late January or early February," the source said, referring to Vale's planned iron ore distribution center in Subic Bay.

Officials at Vale in Singapore and Subic Bay Freeport in the Philippines declined to comment.

The iron ore transshipment center in Subic is one of at least two that Vale is planning to set up in the region.

The Brazilian company in October broke ground for its $1.3 billion iron ore distribution center in Malaysia's northern Perak state. The Malaysian project would only be ready by 2014.

Vale's Subic transshipment centre was previously scheduled to start in October following a memorandum of agreement signed between the firm and the Subic Bay Metropolitan Authority earlier in the year.

"There was a delay because the floating storage vessel that will be stationed in Subic had to be retrofitted," the source said. "We had to upgrade it."

(sourced Reuters)

Vale iron ore pricing brings profit damage forward

Monday, 12 December 2011

Vale's revenue from iron ore is expected to take a big hit in the fourth quarter after the Brazil-based miner agreed with most customers to switch to an iron ore pricing system that more immediately reflects a tumble in spot prices.
The price system switch will cost Vale about $1.5 billion in revenue from iron ore sales this quarter, compared with what the miner would have made by sticking to the previous pricing system, according to a Reuters calculation.
This decline in revenue would have been postponed to next quarter if the previous method had been preserved.

The switch was unavoidable for Vale, however, to prevent customers from migrating to other miners such as BHP Billiton and Rio Tinto , who offer contracts on even shorter pricing mechanisms, analysts said.
"Under Vale's former quarterly arrears pricing model, its profits in the first quarter 2012 would reflect this quarter's lower spot prices, so by renegotiating with some customers, mainly in Europe and China, in effect Vale has brought forward the damage to its profitability by three months," said Melinda Moore, principal of CleanUP Commodities Research.
"Vale's pricing methodology was unlikely to ever survive because of market volatility and because of an increasing majority of steel mill customers using more immediate pricing terms with their own downstream customers. Baosteel in China is one of the few mills pricing monthly; many others price spot or every 10 days," she added.

NEW PRICING FORMULA
Vale has agreed with nearly 80 percent of its customers to switch to a pricing method that is based on the average spot price for the quarter in which the ore is delivered, Vale's executive director of iron ore and strategy, Jose Carlos Martins, told a news conference on Wednesday.
The previous system was based on the average spot prices for the three months preceding the month before the quarter in which the delivery was due to take place.
The move was fuelled by a 31 percent plunge in spot iron ore prices in October, which prompted Asian steel producers to scour for adjustments in pricing the steel-making ingredient to more closely reflect spot rates.

Vale said looking at average spot prices so far this quarter, based on the new mechanism, contract prices should be about 20 percent lower than if they were based on the previous method.
"Iron ore is the main product for Vale, and if they are using the new mechanism, which makes prices 20 percent lower, that is a lot of money," said Patrick Cleary, CRU steelmaking raw materials consultant.
"But obviously a lot of people were unhappy with the system since spot prices started to fall. Basically this is an admission that the previous system wasn't fit to pourpose."
The pricing change also has wider implications for the market. Vale until recently had been the most cautious of the major iron ore miners when it came to price changes.
BHP Billiton, on the other hand, has never kept secret its desire to move as close as possible to spot prices.

Vale's move to the new, shorter formula in not the end of the evolution of iron ore contract pricing, which until only two years ago was based on a decades-old annual benchmark system.
Iron ore contract pricing is destined to move much closer to the spot price in the near future, analysts said.
"This is a step nearer to something that is manageable, but I think the system will continue to evolve," Cleary said. "At some stage buyers will be unhappy to use quarter averages. The next push could be for monthly contracts."
Source: Reuters

Baltic index higher, capesizes at over 1-yr high


Monday, 12 December 2011

The Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, rose for a third day on Friday helped by firm iron ore trade to China with earnings for the larger capesizes jumping to their highest in over a year.
Nevertheless, the shipping sector is expected to see more turmoil in coming months as a supply glut and growing economic gloom keep earnings under pressure with growing worries over the outlook for Chinese raw materials demand.

The overall index rose 40 points or 2.13 percent to 1,922 points.
"Despite the demand headwinds from muted steel production in China and slowing industrial production, the capesize segment has been remarkably resilient. Mix of factors including higher port congestion, recovery in coal exports from Australia and increasing Chinese iron ore imports from Brazil, aiding tonne mile have supported the segment," RS Platou Markets said.

"Declining steel output and slowing industrial production remains a key challenge going into 2012 for dry bulk demand and we still expect rates to see a gradual decline."
China's industrial output growth hit its slowest pace in more than two years in November and inflation tumbled as economic conditions deteriorated, raising expectations Beijing will ease monetary policy again.

Iron ore shipments account for around a third of seaborne volumes on the larger capesizes, and brokers said price developments remained a key factor for dry freight.
Shanghai rebar futures dropped for a second day on Friday, weighed down by a weak outlook for steel demand in top market China after fresh data suggested the Chinese economy was cooling off rapidly, although hopes of further monetary easing capped losses.

Capesizes, which typically transport 150,000 tonne cargoes such as iron ore and coal, had driven a recent rally, helped by firmer coal and iron ore exports from Australia and Brazil to China as well as a pick-up in Japanese coal imports. A build-up of port congestion also provided support.
The Baltic's capesize index rose 4.76 percent on Friday, with average daily earnings rising to $32,617 and at their highest since November 2010.

In August, the overall index, which gauges the cost of shipping commodities including iron ore, coal and grain, fell for 18 consecutive sessions and reached its lowest in more than three months. It has remained erratic and is still down over 12 percent from the same period last year.

The Baltic's panamax index rose 1.18 percent. Average daily earnings for panamaxes, which usually transport 60,000-70,000 tonne cargoes of coal or grains, reached $$13,682.
"In the Pacific, the Christmas holiday lull is biting further and business conditions have continued to slow, with much of owners' focus on securing sufficient employment duration to see their (panamax) vessels past the holiday period," broker Braemar Seascope said. "The outlook for the remainder of the year is still flat/negative."

Growing ship supply, which is outpacing commodity demand, is set to cap dry bulk freight rate gains in the coming months, with economic uncertainty and a slowdown in China adding to headwinds.
Daewoo Shipbuilding & Marine Engineering said on Friday it had lost an order from a European customer, including two dry bulk vessels, worth over half a billion dollars in a sign of worsening conditions in the seaborne sector and a growing euro zone lending squeeze.

Source: Reuters

Baosteel raises some main steel product prices for Jan

Mon Dec 12, 2011

SHANGHAI Dec 12 (Reuters) - China's Baoshan Iron & Steel will raise prices for some main steel products for January bookings, the company said on Monday, signalling that steel demand may improve at the beginning of the new year.

The company plans to keep hot-rolled coil prices flat but will raise cold-rolled coil by 100 yuan per tonne ($16) and some electro galvanized steel prices by 100-200 yuan per tonne, after it cut main steel product prices by 200-300 yuan in December from November.

The firm, also known as Baosteel, is the country's biggest listed steelmaker and its pricing is often seen as a barometer of China's steel market. ($1 = 6.3647 Chinese yuan)

(sourced Reuters)

Coal ministry to auction 54 blocks on upfront payment basis

Monday, 12 Dec 2011

ET recently reported that the Indian coal ministry has decided to auction 54 blocks on upfront payment basis but might not offer mines to power companies. The ministry is mulling a proposal to earmark blocks to states that can call competitive bids for power supply.

The coal ministry has also decided that blocks will not be given free to government companies.

A senior coal ministry official said that blocks with over 18,000 million tonnes of reserves would soon go under hammer in the first round of competitive bidding. The government has not awarded single coal or lignite block for captive use to private companies since October 2008.

The coal ministry would initiate auction within a month by putting the list of blocks on its website. Information on estimated reserves, exploration status and environmental clearances would also be provided.

The ministry official said that "Based on comments received from stakeholders, we have decided to bid coal blocks on the amount of upfront payment a bidders agrees to pay. We would soon put the list of blocks earmarked for each sector including steel and cement.”

He, however, said there is confusion over power sector for which blocks may be earmarked to states at reserve price. The official added that "The objective is to avoid double bidding for power companies that after January 2011 have to participate in tariff-based bidding to bag power supply contracts from states.”

(Sourced from ET)

Weak rupee stalls overseas coal mine buys

Monday, 12 Dec 2011

Indian power producers, which were aggressively bidding for coal assets overseas over the past 12 to 18 months, are ‘fighting shy’ in pursuing further acquisitions, courtesy the rising cost of funding such acquisitions after the nearly 19% drop in the rupee since August, near standstill infrastructure sector, recent changes in rules by suppliers such as Indonesia, Australia and Africa, and a fall in their stock valuations, which reduce the ability of promoters to leverage on their, said investment bankers and consultants.

Mr Kameswara Rao leader for energy, utilities and mining at PwC India said that “Companies which have made big coal mine acquisitions in recent times will be very selective from here on as they need time to digest earlier acquisitions.”

According to Mr Sanjay Sakhuja CEO of Ambit Corporate Finance power and infrastructure companies are going through severe stress now. He said that “I am not anticipating any big mining deals by those firms, which have already swallowed big acquisitions.”

There has been tremendous shortage of domestic coal due various problems, including tighter environmental norms, the controversy surrounding mining licences in Karnataka and security threats from Maoist groups near coal mining areas, forcing private power producers to venture outside to source coal for their power projects.

Mr HK Mittal chairman of Mumbai based Mercator told Financial Chronicle that “Indian companies are going slow with their acquisition plans. There are several issues. Power projects are moving at a snail’s pace. Coal prices have also gone through the roof.”

TATA Power, which had been looking at small mines of around 10 million tonnes annual capacity in South Africa, Indonesia and Australia, may be going slow in any new purchase.

Mr S Ramakrishnan executive director of TATA Power recently told FC that the power sector is going through a tough phase in India. He added that “Buying new coal mines will be on hold till such time issues back home are sorted out. High coal prices and issues related to land acquisition have slowed down activities in the power sector. Poor financial health of distribution companies has led to drop in purchase of electricity by them, and merchant power rates have crashed.”

A Deutsche Bank report early this week said that owing to the ongoing and likely persisting coal shortage, India’s power demand-supply gap may not be bridged even in FY15.

(Sourced from www.mydigitalfc.com)

Coal minister opposes proposal for sale of coal by block holders

Monday, 12 Dec 2011

PTI reported that the Commission, in a letter to the ministry had suggested that incentives could be provided to block holders for the development and production from the mines by allowing them to sell coal.

Coal ministry has said in reply to the Plan panel that "The value of the mineral held by the captive coal holders is very high in terms of today's prices and block holders will be unduly benefited if permitted to sell coal. If the suggestion of the Planning Commission is agreed to it will pave the way, allowing captive block holders to make huge profits.”

Contending that only 28 coal blocks out of 193 allotted to various power, steel and cement firms in the past 18 years for captive use have come to production, the ministry is of the view that if they are permitted to sell coal they would not show interest in bringing up their end use plants.

The coal ministry said that "...If a part of these reserves are diverted... Block holders would again turn to government for making available equivalent amount of reserves for meeting their requirements sometime in future after extracting profit from reserve...If they start selling coal, they would never show interest in bringing up end use plant.”

Contending that the block holders were allotted mines free of cost for power generation, it added that the proposal of selling coal will not only lead to government's criticism but would allow firms to take undue advantage of the allocation.

(Sourced from PTI)

6 coal firms unite for QR National rail access bid

Monday, 12 Dec 2011

Six coal companies will be allowed to collectively bargain with QR National for access to rail infrastructure.

The companies will act as one, when negotiating prices and access to the Goonyella, Blackwater and Newlands coal rail systems.

The rail systems will link up with the export terminal at Abbot Point, near Bowen in north Queensland.

Last week, it was announced the port would be expanded from three berths to nine.

The Australian Competition and Consumer Commission has given preliminary approval for the negotiations, with a final ruling in March.

(sourced ABC.net.au)

CoalTek in USD 350 million venture in China

Monday, 12 Dec 2011

A Marlboro company is using microwave technology to upgrade low quality coal so it can be used at a majority of the world’s power plants.

CoalTek recently announced a USD 350 million plus joint venture with Chinese partners to build and operate its first commercial clean coal processing facility in Inner Mongolia.

According to the company, it’s the first Sino US clean coal project licensed by the Chinese government since a 2009 strategic partnership agreement announced by president Mr Obama and Chinese president Mr Hu Jin Tao.

Mr Chris Poirier CEO of CoalTek said that “It’s a landmark, groundbreaking approval. We went through a very, very rigorous process to demonstrate our technology.”

According to Mr Poirier, coal is the biggest source of stored energy in the world, and more than 6 billion tons a year are mined and consumed, primarily in power generation and steel manufacturing.

(Sourced from Boston Herald.com)

Trade surplus narrows as commodity prices drop

December 12, 2011

The monthly trade surplus narrowed more than expected in October to its smallest since March as demand for commodities from China faltered.

The trade surplus narrowed to $1.59 billion from $2.56 billion in September, according to the Australian Bureau of Statistics. Economists polled by Bloomberg expected the trade surplus to fall to $2 billion.

"It could be the first sign of a weakness for demand for commodities from China but a lot will depend on how Europe evolves," said St George Bank chief economist Besa Deda. "We think the weaker commodities prices and the relative strength of the Aussie dollar, combined with strong demand for capital goods imports probably means we've seen the peak of the surplus."

The ABS said iron ore fines exports to China, on a recorded trade basis, fell $110 million or 3 per cent in October. Volumes for lump iron ores were up 6 per cent but prices fell 9 per cent.

The fears of a steep recession in Europe have weakened demand for Chinese exports which in turn is hurting Australian sales into China.

The Australian dollar fell after the release of the trade figures and a separate report on housing finance, losing about one quarter of a US cents to about $US1.017 in recent trade.

China effect

Ms Deda noted that China recently began easing policy in response to the impact of the European debt crisis and economic slowdown in China. Europe is China's biggest export market.

Rural goods, seasonally adjusted, rose 2 per cent to $3 billion in October.

Ms Deda said St George is still forecasting healthy trade surpluses to come, especially with Queensland's coal industry's production improving after the floods at the beginning of the year however the peak of the surplus has probably passed.

In seasonally adjusted terms, non-rural goods exports edged up $14 million to $19 billion in October, helped by mineral fuels which rose $144 million, or 7 per cent in the month.

Manufactured goods exports, however, fell $84 million, or 6 per cent, while coal, coke and briquettes shipments abroard fell $75 million, or 2 per cent.

Goods and services imports rose 2 per cent, or $605 million, to $25.7 billion in October, with capital goods rising $60 million or 1 per cent.

"We had a big rise in capital goods imports coming through that is reflecting the strong business investment boom," Ms Deda said.

Import boost

Moody's Economy.com analyst Matthew Circosta said demand for exports is weakening and that the trade surplus would continue to narrow.

"Softer commodity prices are flowing through to lower export receipts, while strong business investment and household consumption are boosting imports."

"Recent interest rate cuts will support domestic demand, which along with the rampant mining boom, will continue lifting the import bill and narrow the trade surplus," said Mr Circosta.

HSBC chief economist Paul Bloxham said rising imports are consistent with the solid domestic demand in the Australian economy.

"Some (demand) is leaking offshore, given the elevated level of the Aussie dollar," he said.

Mr Bloxham said the leakage is not just around online retail shopping but investment in the mining boom, which includes the surge in equipment imports.

Lumps, fines, coal

In October the price of iron ore plunged by 30 per cent, to about $US120 a tonne, as Chinese steel mills slowed production. Iron ore prices have since recovered to be about $US140 a tonne.

Exports of the premium lump iron ore to China fell $23 million, or 2 per cent, with volumes rising 8 per cent in the month while prices fell 10 per cent.

Hard coking coal exports to China fell 19 per cent, in the month, but rose 9 per cent to Japan and 11 per cent to India. Overall, hard coking coal exports fell 4 per cent, $79 million, in the month.

Semi-soft coal exports to China sank 50 per cent in October, by $107 million, with volumes down 47 per cent and prices 6 per cent lower, the ABS said.

Thermal coal exports to China rose $47 million, or 25 per cent, with volumes up 23 per cent, and prices up 1 per cent.

Sourced smh.com.au