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Saturday, January 28, 2012

China overtakes Japan as world top coal importer

Sat, 28 Jan 2012

Reuters quoted customs data from both countries showed that China overtook Japan as the world top coal importer in 2011 and partly driven by robust Chinese demand.

Data from the country showed that China, also the world biggest coal producer and consumer imported 182.4 million tonnes of the fuel in 2011 up by 10.8%YoY.

Japan customs-cleared imports fell 5.1% to 175.2 million tonnes last year and hurt by slack demand for coking coal as steelmakers curbed production.

(sourced from Reuters)

Philippines offer transshipment options for Brazilian ore to Vale

Saturday, 28 Jan 2012

Lacking port entry permits into China, Vale had to come up with other options to unload it's massive 400,000 tonnes ore carrying ships.

Enter the 280,815 DWT Ore Fabrica, previously known as the crude oil tanker, Front Duchess. This vessel was converted by China State Shipbuilding Corporation from the crude oil tanker pictured above, to a specially designed platform based in the Philippines that will allow the transshipment of iron ore from these giant ore carriers, to smaller vessels for follow on transport to China, Taiwan, Japan and South Korea.

The first of these transshipment loads will commence in early February with the arrival of the Vale Brazil and Vale China in Subic Bay.

Citing safety concerns after the VLOC Vale Beijing experienced structural issues in Brazil, China has yet to approve port entry permits. Safety concerns aside however, politics and family connections appear to play an important role in this developing drama as the 388,000 DWT Berge Everest was allowed to unload her Brazilian cargo of ore in Dalian recently.

The Berge Everest, despite being on long term charter to Vale, is owned by Berge Bulk an offshoot of Singapore based BW Maritime that is controlled by the Sohmen family, the descendants of the late mainland born shipping magnate Pao Yue kong.


Dollar fall boosts Euro coal prompt prices

Saturday, 28 Jan 2012

Reuters reported that US dollar fell to its lowest for almost two months on Thursday, giving a sharp boost to coal prices which have sagged this month due to weak fundamentals globally.

Two March loading South African cargoes traded early in the day at USD 108.50 and USD 108.75, up over USD 3.00 from Wednesday, bought by banks and traders, sold by a large, international trading house.

Coal swaps rallied on Thursday, bolstered by European utilities hedging dark spreads (the profit margin from using coal to generate power) and oil's rise, despite the lack of physical buying and high stockpile levels.

End users in Europe and Asia remained noticeable for the absence from the market.

Traders said that whether China resumes large scale spot buying after the New Year holidays is absolutely critical for coal price direction, regardless of the gyrations of the swaps market.

China overtook Japan as the world's largest coal importer last year after a surge in imports in the last quarter to a total of 182.4 million tonnes, nearly 11 percent up from the previous year, much of it bought on a spot basis.

One European trader said that "The dollar got hammered overnight and that's pulled commodities up including coal, but the swaps, particularly the Calendar years, have risen even more.”

(Sourced from Thomson Reuters)

Vale gets license to mine high grade iron ore pit at Carajas mine

Saturday, 28 Jan 2012

Brazilian miner Vale SA is granted an operation license to mine a high grade iron ore pit at Carajas in north Brazil.

The license, granted by environmental authorities, will allow Vale to mine the N5 Sul pit, which is part of the N5 mine in the Serra Norte mining site at Carajas in Para state. This operation will support quality enhancement in iron ore production in Carajas in coming years.

Mr Tito Martins CFO of Vale said that the company is seeking to bring new iron ore reserves into production as reserves at some of its long standing mines, particularly in southeast Brazil, become depleted, reducing the iron content of the ore produced. Iron ore is the key raw material in steelmaking.

Carajas, where Vale already has extensive mining operations, has some of the world's highest quality iron ore reserves but its location in the Amazon has made environmental licensing a challenge in recent years.

The operation license now granted allows the opening of a new ore body in the N5 mine, which has the highest ferrous content within Vale's portfolio, strengthening Vale's position as a producer of high quality iron ore to global markets.

(Sourced from Dow Jones Newswires)

Russia Energy Ministry has not ruled out increase to export duty for energy coal - Mr Shmatko

Saturday, 28 Jan 2012

Interfax reported that Russia Energy Ministry is dissatisfied with rising prices for certain coal types and ready to initiate discussion on increasing the commodity export duty.

Mr Sergei Shmatko Energy Minsiter of Russia said "The increase in coal prices by 15% to 20% and up to 40% as well as the appearance of a deficit in certain coal type is unjustifiable for us. If this continues we will be forced again to discuss raising the export duty on coal."

Mr Shmatko did not specify the brands of coal in question.

(Sourced from Interfax)

Serbia buys local U.S. Steel unit for $1

Sat Jan28, 2012

BELGRADE - The Serbian government will buy back U.S. Steel Corp's underperforming Serbian unit for a single U.S. dollar, the country's prime minister said on Friday.

"We have agreed to buy it back for $1," Mirko Cvetkovic, the Prime Minister told a news conference. "U.S. Steel is leaving Serbia and the reason for that is the economic crisis."

U.S. Steel bought the then bankrupt Sartid steel mill from the central city of Smederevo in 2003 for $33 million, but the plant has been running well below annual capacity of 2.4 million tonnes for the past five years.

(sourced Reuters)

Griffin coal negotiations fail

Saturday, 28 Jan 2012

The latest round of negotiations at Lanco's Griffin coal mine have failed. A settlement is yet to be reached in the battle between unions and the company over pay and working hours.

According to the Collie Mail, unions previously believed they had come to an agreement with Lanco over the proposed shift changes. However the company is still pushing for an increase in shift times and hotseat changeovers on site, with the aim to enhance production fourfold.

CFMEU secretary Mr Gary Wood stated that Lanco will not be able to support its motion. He said that "There is no way in the world they can get this up. They won’t be able to get it up before arbitration. We have provided documents showing it (the longer shift time) is inappropriate from a fatigue point of view.”

He added that "It is also is inappropriate from a community point of view. There are only 24 hours in a day and the workers need to travel, prepare for work and recover."

Mr Wood stated that while the most recent round of negotiations had failed, talks are progressing. He said that "We had only half a day with Griffin on Monday and are getting close. But nothing is agreed until everything is agreed."

The major sticking point remains the increased shift hours.

Mr Wood further said that "There is no firm position one way of the other, but we are reasonably confident that common sense on the safety issues will prevail.”


Australia and Indonesia eyeing Bangladesh

Saturday, 28 Jan 2012

Australian and Indonesia coal miners are eyeing Bangladesh as a potential new market after the authorities concerned have opted to import coal, instead of exploring its domestic reserves.

Traders and experts said that meanwhile, the Bangladesh's option has also opened up scope for India to export its low quality coal to the former.

Bangladesh has been importing some 2.0 million tonnes from that country annually. Prof Mohammad Tamim, a former special assistant on energy affairs to the past caretaker government told the FE that "For power generation, we will prefer coal from Australia or Indonesia as the Indian coal is not energetic enough to serve the purpose.”

He said though the coal of South Africa is of high quality, it would be much expensive for Bangladesh.

However, a section of traders said India coal could be very much used in power plants after being blended with coal from Australia or Indonesia.

A leader of Federation of Bangladesh Chambers of Commerce and Industry told the FE that "If Indian coal starts coming in a very large quantity, the already persistent large trade gap against Bangladesh will widen further enlarging, in favour of the South Asian major economy.”

However, the trade gap was expected to narrow down as India announced duty and quota free access for Bangladeshi items including 46 garment products late last year.

The ministry of commerce officials said that with the increase in exports of garment and some other items to India following its announcement about shortening its sensitive list to 25 from 480, the trade gap is expected to narrow at a quicker pace.

Currently, India exports goods worth USD 5.0 billion to Bangladesh against its import worth only USD 500 million from the latter a year, as the trade data until June last indicated.


Friday, January 27, 2012

Karnataka mining ban being lifted soon - Mr Mukherjee

Friday, 27 Jan 2012

Vedanta group firm Sesa Goa aims to produce about 20 million tonnes of iron ore next financial year as the firm is hopeful of the mining ban in Karnataka being lifted soon.

Mr PK Mukherjee MD of Sesa Goa in an earnings call said that "I am an optimist... I can not imagine in my wildest dreams that Karnataka will not come in the next financial year. The production from the state will not be less than 6 million tonne per annum. In Goa, it will be almost at the same levels (as of this fiscal).”

He said that the company expects to produce about 14 million tonnes from Goa in the current fiscal.

Talking about Karnataka, Mr Mukherjee said Sesa Goa is ready to restart its operations in the state as and when the ban on mining imposed by the Supreme Court gets lifted. He said that "I am the smartest guy in Karnataka. The moment the whistle is blown, I will be the first person to restart the operations while admitting that all mines in the state may not be allowed to start at one go.”

The Vedanta group firm has a producing iron ore mine of about 6 million tonne per annum capacity in Chitradurga district of Karnataka.

However, it had stopped production, like all other miners in the state, post imposition of the mining ban by the apex court due to large scale environmental degradation in these areas.

(Sourced from

Government asked to divert E auction coal to power sector

Friday, 27 Jan 2012

Faced with acute fuel scarcity, private power producers, including Reliance, Adanis and TATAs have suggested to Prime Minister, Dr Manmohan Singh that the coal set side for e auction be diverted for power sector at notified prices.

The Association of Power Producers came up with detailed suggestions to address multiple woes plaguing the sector, just days after chiefs of private power companies met the Prime Minister on January 18.

APP in a communication to the Prime Minister’s Office said that “To meet the current (fuel) deficit situation, e auction coal should be diverted for the power sector at notified prices (to avoid tariff shocks).”

APP members that include Adanis, Reliance, TATAs, Essar, Lanco and GMR, account for over 95% of the power capacity in the private sector.

The communication said that “Available coal should be equally distributed to all the plants against FSA/Letter of Assurance/MoU instead of old plants with less efficient operation getting 100% coal and newer, more efficient and higher sized power critical units getting deprived of coal.”

As per the communication, the private power producers have also suggested that domestic coal should be reserved for regulated sectors such as power and fertiliser.

In August last year, a parliamentary panel had said that coal availability for power plants designed to run on indigenous coal would be only 417.5 MT in the current fiscal, as against the requirement of 480 MT.

(Sourced from BL)

Adani Power to end coal purchase contract with Mahavitaran

Friday, 27 Jan 2012

Adani Power Maharashtra Ltd a subsidiary of Adani Power Ltd, wants to terminate the power purchase agreement it signed with state owned distribution utility Mahavitaran Ltd due to reasons beyond the company’s control.

The company won’t be able to use coal from the captive block allotted to it for environmental reasons. It has offered to supply power at a higher price than agreed in the PPA.

The move raises a question mark on power supply from Adani Power’s 3,300MW Tiroda power project in the state’s Gondia district and means the state government may be unable to meet its target of ending power cuts in Maharashtra by the close of 2012.

The first 660MW unit of APML’s Tiroda power plant was scheduled to be commissioned in August and another 660MW unit by December.

Maharashtra has been reeling under a power shortfall of 4,500 to 5,500MW for more than a decade, with power cuts ranging from four hours in urban areas to 12 hours in rural areas. The shortfall has been narrowed to around 3,000MW in the last one and a half years due to the availability of power from various sources.

The state government had expected that this year an additional 3,000MW power would become available from private power producers and state power generation firm Maharashtra State Power Generation Co. Ltd (Mahagenco), which included 1,320MW from Adani Power’s plant at Tiroda.

APML cited unforeseeable circumstances for wanting to terminate the agreement in its letter to Mahvitaran, which has been reviewed by Mint.

The company said the ministry of environment and forests has denied clearance required for access to captive coal from the block allocated by the coal ministry at Lohara in the Chandrapur district of Maharashtra. MoEF said the allocated coal block is in the buffer zone of the Tadoba tiger reserve.

(Sourced from

Czech Coal uncovers extensive fraud in sized coal trade

Friday, 27 Jan 2012

An extensive internal investigation in the Czech Coal Group has helped to uncover fraudulent sales of sized coal. Some of the employees in Czech Coal’s coal purchase and sale department were illegally selling coal to companies that market brown coal. Czech Coal has suffered loss of at least CZK 100 million in this way.

The investigation, which lasted for almost a year, has helped to detect an organised group of Czech Coal employees who were selling large quantities of sized coal for much lower prices without the Board of Directors being aware of this. These prices were set on the basis of agreement between the buyers and certain Czech Coal employees, who had their own personal financial incentive to engage in such deals.

During the investigation, a large amount of evidence was gathered; this evidence mainly includes extensive findings of internal audit. The investigation also helped to reveal fundamental differences between documents approved and documents signed, and also advisory co-operation between the buyers and certain Czech Coal employees’ relatives, including the financial flows between the ‘befriended’ individuals and companies and these Czech Coal employees.

Because of this situation, the company’s entire coal purchase and sale department will be dissolved. A criminal complaint will be filed in connection with the above findings, and security measures designed to prevent this situation from recurring will be adopted.

The Czech Coal Group includes Czech Coal a.s., a trader in energy commodities, mainly brown coal and electrical energy, which also provides shared services within the Group, and Litvínovská uhelná as, which manages the largest coal deposit in the Czech Republic, Vršanská uhelná as whose coal reserves within the currently existing mining limits will last until around 2055 and a number of other service companies.

Walter Energy may lure buyers willing to bet on a recovery in coal prices

Friday, 27 Jan 2012

Bloomberg reported that Walter Energy Inc may finally lure buyers willing to bet on a recovery in coal prices with the industry's cheapest stock.

According to data compiled by Bloomberg, after losing almost half its value in the past year, the producer of steelmaking coal sold for 9.3 times earnings this week. That was less than any North American coal mining company with USD 1 billion in market capitalization. The slide also drove down the value of Walter Energy to 1.7 times its net assets this month, the lowest since the last bear market in US equities.

While a surge in coal prices last year led to the biggest wave of coal deals, most acquirers were left with losses as demand for the commodity collapsed. Walter Energy, which bought Western Coal Corporation for USD 5.3 billion in April, is an attractive target because it produces high grade steelmaking coal. A buyer could spend double Walter Energy’s closing price of USD 67.54 a share yesterday and still get the company for less relative to earnings than any coal takeover in the past year.

Mr J Christopher Haberlin analyst at Davenport & Co said that "Now is the opportune time for a buyer to potentially start looking at them. It's some of the best coal in the world and it's what steelmakers want. If somebody did make a run at Walter here, certainly they could take Walter out a price much lower than where that valuation may have been."

Walter Energy may attract interest from BHP Billiton Limited, Anglo American Plc or ArcelorMittal, and could command as much as USD 120 a share in an acquisition.

(Sourced from

Russia's MMK says output could jump 15 pct

Fri Jan 27, 2012

* MMK says finished steel output could jump 15 pct this year
* Says Russia steel consumption to grow faster than world avg
* Moscow analyst says steel prices bottomed Dec-Jan
* MMK Q4 crude steel output off 2 pct from Q3

MOSCOW, Jan 27 (Reuters) - Magnitogorsk Iron & Steel Works, Russia's third-largest steelmaker, said on Friday that 2012 finished steel output could increase by 15 percent from last year and that demand will be stronger at home than abroad.

"It is expected that steel consumption in Russia will grow in 2012 faster than the world at average," the company said.

"Steel consumption growth, realised investments in equipment modernisation and mastering of new products will help MMK to increase production of finished products in 2012 at its Russian facilities."

Analysts have noted some positive trends in steel demand recently, following price declines in the third quarter on weaker European demand and a decline in Chinese daily output.

"We believe that Russian export steel prices bottomed in December-January; they have increased $30-40/tonne (5-7 percent) year-to-date," Uralsib analyst Dmitry Smolin wrote in a note.

"Our understanding is that the steel price increases are a function of improved export and domestic demand, as well as restocking in Europe and other regions due to very low inventories."

Fourth quarter production at Russia's steel majors was largely flat compared to the previous quarter on seasonal demand factors at home and weak markets abroad.

Evraz, Russia's largest steel producer, said last week that fourth quarter crude steel volumes increased by 3 percent quarter-on-quarter.

MMK, controlled by billionaire Viktor Rashnikov, said fourth quarter output was 3.1 million tonnes, off 2 percent from the previous quarter.

Full year 2011 crude steel output reached 12.2 million tonnes, up from 11.4 million in 2010, the company also said.

(sourced Reuters)

Whitehaven Coal hit by explosives shortage

Friday, 27 Jan 2012

A shortage of explosives have affected mining at Whitehaven Coal sites Source:

The Courier Mail reported that Whitehaven Coal sales fell in the December quarter after a shortage of explosives hampered mining.

The miner reported total coal sales of almost 1.43 million tonnes for the three months to December 31st down 22% compared with the same period in 2010.

According to Whitehaven, a shortage of explosives due to the shutdown of Orica's Newcastle plant prevented it from mining ore bodies in the preferred sequence.

The company sad that a shipment scheduled to load late last month did not load until this month and there was a minor impact from wet weather on its open cut mines.

Morningstar senior resources analyst Mr Gareth James said that "This doesn't change the outlook for Whitehaven. Short term issues like this don't really have much meaning."

According to the company, Whitehaven's underground mine under development at Narrabri, in northwest NSW, continued to be hampered by a lack of skilled underground miners. But the capital cost estimate for the project of about USD 300 million remained unchanged.

The company had to buy 381,000 tonnes of coal from other suppliers during the December quarter to meet fixed price legacy contracts entered into in 2005-06, but these obligations would be fully met by the end of the current financial year.

(Sourced from AAP)

Kilo Goldmine finds high grade iron ore in Congo

Friday, 27 Jan 2012

Canadian junior miner Kilo Goldmines Ltd said it found high grade iron ore at the Asonga Prospect in the Republic of Congo, sending its shares up 14%

The company said Rio Tinto, its joint venture partner for Asonga, drilled five holes in the mine and found 73.5 meters of iron ore containing 66.6% iron.

Kilo said the drill results indicated the area may contain direct shipping iron ore a high grade ore variety that requires less processing and is therefore cheaper to mine.

(Sourced from Thomson Reuters)

Thyssen to decide on stainless next week - sources

Fri Jan 27, 2012

* ThyssenKrupp board to meet on Tuesday - source
* ThyssenKrupp aims to divest majority stake - source
* Shares fall 1 percent (Adds second source, background, share price)

DUESSELDORF, Germany/FRANKFURT, Jan 27 (Reuters) - German steelmaker ThyssenKrupp's supervisory board is to decide on a possible sale of its stainless steel unit to Finnish group Outokumpu in an extraordinary meeting next week, two people familiar with the negotiations said.

One of the people told Reuters on Friday the meeting was due to take place on Tuesday, the day before Outokumpu publishes full-year 2011 financial results.

"Negotiations with Outokumpu and labour representatives are ongoing," a spokesman for ThyssenKrupp said, adding an agreement with the labour side was needed before any supervisory board meeting could take place.

Hannu Hautala, Executive Vice President - General Stainless of Outokumpu, said: "We are currently in the process of examining the situation and the schedule is still wide open, so I can't give any comment."

ThyssenKrupp shares were down 1 percent at 21.92 euros by 0854 GMT, underperforming the German blue-chip index, which was down 0.2 percent.

ThyssenKrupp and Outokumpu said this week they were in early talks over a stainless steel tie-up, moving towards the long-awaited consolidation of a sector that has struggled to battle overcapacity and cheap Chinese imports.

ThyssenKrupp, a steelmaking conglomerate whose business stretches from submarines to lifts, is in the throes of a radical restructuring that will see it shed non-core assets with revenues of 10 billion euros ($13.2 billion) to slash debt.

The sale of all or part of Thyssen's stainless steel unit, renamed Inoxum, would mark a key step forward in the slimming down of Germany's largest steelmaker.

It would also provide a welcome piece of good news for its shareholders still reeling from cost overruns that pushed the company into the red last year.

The second source said on Friday that ThyssenKrupp aimed to divest a majority stake in Inoxum. ($1 = 0.7601 euros)

(sourced Reuters)

Thursday, January 26, 2012

PLN's Unit to Transport 7.3 Million Tons of Coal

Thu, 25 Jan, 2012

JAKARTA : PT Pelayaran Bahtera Adiguna (BAG), a subsidiary of state-utility PT PLN, will transport around 7.3 million tons of coal in 2012 from Tarahan Lampung port to several Steam Power Plant (PLTU).

The plants, which are part of PLN’s Phase I of 10,000MW project, are the PLTU Labuan Banten 2x300 MW, PLTU Suralaya Baru Banten 1x625 MW, PLTU Lontar Tangerang 3x315 MW, PLTU Indramayu West Java 3x330 MW, PLTU Rembang Central Java 2x315 MW, PLTU Paiton East Java 1x660 MW, PLTU Cilacap Central Java 1x660 MW, PLTU Pelabuhan Ratu West Java 3x350 MW, and PLTU Pacitan East Java 2x315 MW.

“To realize the vessel needs: tug and barge, self propeller barge, etc., BAG will also jointly operate with company’s partners in sea transportation provider,” President Director Bima Putrajaya said in a press statement.

According to Bima, ship procurement for 2012 fiscal year and beyond will be done through second hand market and from shipyards.

From the 10,000MW PLTUs operational, PLN needs at least 80 million tons per annum until 2014, and “BAG will only able to transport maximum of 20% from all coal needs,” Mr. Bima added.

BAG has previously operated two coal vessels: KM Kartini Baruna and KM Kartini Samudra, starting from Monday (16/1), representing the very first-owned vessels since becoming PLN’s subsidiary in August 2011.

The vessels are able to transport total of 136,274 tons of coal. The vessels’ destination is to supply the 2 x 662MW Tanjung Jati B Steam Power Plant Unit 3 and 4, Jepara, Central Java.

KM Kartini Baruna will transport 68,264 tons from Bontang Coal Terminal, East Kalimantan, while KM Kartini Samudra will deliver 68,010 tons from Tanjung Bara port, Kaltim Prima Coal. Additionally, KM Kartini Samudra is jointly operated between PBA and PT Jaya Samudra Karunia (JSK).


Borneo Seeks to Acquire Thermal Coal Mining Rights in Kalimantan

Thu, 25 January, 2012

Borneo Resource Investments Ltd. (OTCPK: BRNE) said it seeks to acquire highly prospective thermal coal mining rights primarily in East Kalimantan, Indonesia, a highly-stable mining jurisdiction.

"Our objective is to add value through grassroots exploration and target refinement and then seek option or joint venture partners through to production," Borneo Chairman and CEO, Nils Ollquist commented.

Borneo's business model is that of a Project Generator and coal trader. The Project Generator model is particularly suited to the company's ongoing interest in the East Kalimantan province where Borneo has a wealth of intellectual capital and experience.

To add to cash flow and reduce the need for dilutive financings to fund its activities, Borneo engages actively in coal trading. Management seeks to identify and broker transactions between buyers and sellers, earning a profit as the intermediary.

The company currently has interests in two thermal coal exploration projects in East Kalimantan province with an estimated resource potential of 12-14 million metric tonnes, pending confirmation by geological studies.

The first is an 80% interest in PT Chaya Meratus Primecoal, an Indonesian company holding exclusive exploration and development rights for up to 6,000 hectares in the Tanjung Area Basin of south east Kalimantan.

The second is an exploration and production license covering 1,300 hectares in the East Kalimantan province through an agreement with the concession holder, PT Integra Prime Coal.

The company also has an extensive pipeline of additional projects under review for potential licensing or acquisition. East Kalimantan has the distinction of being at the epicenter of thermal coal mining and exports from Indonesia.

For context, most of the country's coal mines, including the largest, are located in East and South Kalimantan and two of the world's largest coal mining companies, BUMI and Adaro Resources operate in the region. Our concessions show extensive coal formations at the surface, and preliminary field work by our field geologists give us a high level of confidence in the resource estimates previously mentioned.

Currently our projects do not have JORC-compliant resource estimates, which is one of the standards used in the mining industry to assure shareholders and other stakeholders that the resources a company says they have are in fact present.

"We are actively engaged in securing JORC estimates for both of our concessions, and will do so for all additional concessions we acquire. This will significantly increase our company's attractiveness to institutional investors," Borneo said.


Clean Coal and Jindal Steel to Set Up JV

Thursday, 26 January, 2012

NEW YORK, Indonesia Today - Clean Coal Technologies, Inc. (CCTI) established a joint venture with India-based Jindal Steel & Power Ltd to construct coal moisture pilot plant which will use Jindal’s Indonesian coal production.
CCTI will bag around 35% stake in the JV by contributing 25-year exclusive license to market and deploy Pristine-M™ Technology, covering the ASEAN countries including Indonesia, the Philippines, Cambodia, Vietnam, Malaysia, Brunei, Thailand, Laos and Myanmar.

Meanwhile, Jindal will own 65% ownership through US$6 million payment of which US$4 million of them will be paid to CCTI for an exclusive license of the technologies.

Without mentioning the plant location, the construction will take between 16-24 weeks to complete and will start by February 2012. The construction will be followed by an initial 1 million tons commercial plant at Jindal’s Indonesian mines. The JV will market and deploy Pristine-M™ Technology to third parties throughout ASEAN region.

Jindal will fund the working capital for the JV on terms to be negotiated in JV agreement until CCTI is able to fund their share or until joint venture revenues are adequate to cover operating costs.

Headquartered in New York, CCTI owns a patented Pristine-M™ process technology to convert coal into a cleaner burning fuel source. This technology is a “mild gasification” process that removes moisture and volatile matters without pulverizing the coal or pelletizing it.


Peabody hires UBS to sell Wilkie Creek mine

Thursday, 26 Jan 2012

US coal giant Peabody Energy has moved to capitalize on red hot demand for producing Australian coal mines, hiring UBS to find a buyer for its Wilkie Creek mine in Queensland state.

The mine, which produces over 2 million tons of thermal coal a year in the Surat Basin, is likely to interest North Asian buyers who already account for nearly all its exports.

Peabody acquired Wilkie Creek a decade ago, but sees it as non-core following its AUD 4.9 billion (USD 5.1 billion) takeover of Macarthur Coal last year. Macarthur’s mines are clustered in the Bowen Basin, so selling Wilkie Creek would allow Peabody to concentrate on its operations there.

The decision to sell Wilkie Creek, which has a resource of over 500,000 tons of thermal coal for use in power stations, was disclosed by Peabody in its full year earnings announcement Tuesday.

(Sourced from Wall Street Journal)

China coal firm rejects fraud claims after shares tank

Thursday, 26 Jan 2012

Reuters reported that China Winsway Coking Coal Holdings Ltd dismissed a research report alleging financial fraud at the logistics company that sent its shares plunging on Thursday.

Hong Kong listed Winsway which made its market debut in 2010 and has a market value of HKD 7.2 billion said that nothing in a 10-page report by a company called Jonestown Research alleging fraud at the firm had been substantiated and that its accountants were reputable and had carried out due diligence.

Mr Jerry Xie Winsway Chief Financial Officer said "There is nothing funny or smelly in our prospectus."

He made the remarks in response to the Jonestown Research report, which alleged that "Winsway has material misstatements in its reported numbers that amount to securities fraud."

Mr Xie said "The information in the Jonestown report was unsubstantiated and wrong. KPMG will be fully behind us. We don't know if there will be a review. We need time to decide how to respond to this officially and if an investigation is warranted."

He said that "Jonestown was using Moody report to say Winsway is a fraud. I don't know how credible that report was. He added that Winsway would arrange tours to show investors the company was not a fraud.”

Jonestown Research said in a disclaimer at the end of its report that it had built a short position on Winsway shares and had every reason to want its stock price to go down.

No contact details for Jonestown were immediately available.

China-focused private equity fund Hopu Investment Management Co in May last year sold nearly half its stake in Winsway for around USD 82 million.

(Sourced from Reuters)

Ms Rinehart fortune to soar on POSCO deal

Thursday, 26 Jan 2012

Australia's richest person, iron ore magnate Ms Gina Rinehart could see her fortune nearly double to AUD 20 billion after South Korean steel giant POSCO moved to increase its stake in the Roy Hill iron ore project.

POSCO last week announced it would pay KRW 1.8 trillion (AUD 1.5 billion) to raise its interest in the project to 15% by mid 2014.

POSCO the world's third-largest steelmaker, already owns 3.75% of Roy Hill. The deal places an estimated value of AUD 10 billion on the project in Western Australia's Pilbara region.

Roy Hill is a joint venture between Ms Rinehart's company Hancock Prospecting and Posco, which says it is still in talks to finalise the purchase.

POSCO announced its intention to acquire 15% of Roy Hill in 2010 but did not reveal the value of the deal until last week.

(Sourced from ABC/Reuters)

Wednesday, January 25, 2012

Commissioner increases ownership in Adaro

Wed, Jan25, 2011

A commissioner at PT Adaro Energy Tbk (ADRO), Indonesia’s second-largest coal producer, has purchased 300,000 shares of the company at Rp 1,830 per share to increase his ownership of the growing company.

Malaysian national Lim Soon Huat, who has been a commissioner at Adaro since October 2008, made the deal on Friday, Jan. 20, when the firm’s stock price closed at Rp 1,820 a share, according to a file submitted to the Indonesia Stock Exchange (IDX).

The stock purchase was done for investment, the file said, without disclosing the total shares Soon Huat owned. Soon Huat has over 15 years experience in the financial industry and corporate management in Singapore, Thailand, Malaysia, Hong Kong, China and Indonesia.

Major international ratings agency Fitch Ratings recently said it might upgrade Adaro’s credit rating to investment grade from the current BB+ with stable outlook, on the company’s strong financial fundamentals amid rising demand for coal.

Adaro’s shares traded at Rp 1,840 at 10:23 a.m. on Wednesday, gaining 0.55 percent from the previous day’s close when the broader stock index was in the red.

sourced: The Jakarta Post

Guangxi is now China's largest coal importer

Wednesday, January 25, 2012

With implications for Australian coal companies, ports in China's southwestern Guangxi Zhuang region surpassed their counterparts in neighboring Guangdong province to become the largest throughput of coal imports in 2011.

Ports in Guangxi recorded a total throughput of over 27 million tonnes of coal in 2011, up 61.3 percent over the previous year and accounting for 15 percent of China's total.

Guangxi is not known as a coal production region. With increasing demand for power from local industrial users, coal imports have grown significantly, as the region struggles to meet capacity through hydropower.

China's largest coal producer, China Shenhua Group Co. Ltd., signed an agreement with the Guangxi regional government late last year to build Asia's largest thermal power project in Beihai city.

It will boast eight power generators with a capacity of one million kw each in five years.

Zhang Xiwu, chairman of Shenhua, said Guangxi lacks coal mines but has deep-water ports.

To ensure industry's supply of raw materials, Guangxi needs to build four docks with a handling capacity of 100,000 tonnes each to allow Shenhua's cargo ships to unload coal sent from the company's mines in Indonesia and Australia.

Guangxi's coal was mainly imported from Vietnam, Indonesia and Australia last year. The province's imports from Vietnam jumped by 42.8 percent in 2011 to 11.7 million tonnes.

Vietnam's rise was significant and the import surge was attributed to the price advantage of Vietnam's coal.


Assocham seeks 10% import duty on steel products

Wed, Jan25, 2012

New Delhi: Industry body Assocham has called for raising the import duty on steel products from 5 per cent to a minimum of 10 per cent so that local manufacturers have a level playing field vis-a-vis imports from China and the Commonwealth of Independent States (CIS) countries.

The challenging global environment has resulted in fierce competition and increased pressure on performance and price reduction.

“The oversupply in international markets is forcing China and the Commonwealth of Independent States (CIS) to dump their steel products like hot-rolled coils... and other coated products into growing markets like India,” said the Assocham Secretary General, Mr D.S. Rawat.

As a result, the Indian steel industry has reduced its production and is running at lower capacity utilisation, he said.

China and CIS countries possess huge coking coal and iron ore resources, which give them cost-competitiveness, whereas India depends on imports for its requirement.

In the past one year, coking coal prices have increased by more than 100 per cent, putting an additional burden on steel manufacturers. Nearly 50 per cent of the steel manufacturing cost is on account of coking coal and 20 per cent on account of iron ore.

“Most importing nations protect their domestic producers by imposition of a marginally higher import duty while encouraging exports by offering various incentives,” Mr Rawat said.

Raising import duty to a minimum of 10 per cent will encourage the growth of the domestic steel industry and ensure that the India growth story is kept intact, he said in a pre-Budget memorandum to the ministries of finance and steel.

In the next two years, steel-making capacity is set to expand by 15-20 million tonnes to meet the growing demand for high-end consumer products like cars, fridges and washing machines.

Keywords: Assocham, steel products, import duty, China, CIS countries, imports, exports

(sourced Business Line)

Privatise Coal India to improve production, suggests Ficci

Wed, 25 Jan, 2012,

NEW DELHI: Industry body Ficci has suggested privatisation of CIL to improve coal production at a time when power plants are facing an acute fuel shortage.

"Either you privatise or break it up (Coal India) into several independent units, not keep it centralised... You have to do something drastic," Ficci's new President Rajya Vardhan Kanoria said.

His comments come at a time when most power projects are grappling with a severe coal shortage, mainly on account of lower domestic production.

"... I think that why don't they (government) strategically divest Coal India to make it private. It will serve two purposes: one is that it will make sure revenue for the government and second, (change in) culture. The culture has to change," Kanoria said.

"The coal problem is becoming serious. One is pricing and the other is availability," he noted.

Even though fuel linkages have been assured for many projects, Coal India has been unable to meet demand. As a result, entities are importing coal at higher prices from overseas.

"The government is lacking in their approach in the coal sector. Some serious decisions have to be taken (with regard to coal issue)... There is coal. India has one of the largest reserves," he said.

State-run Coal India had missed its April-September production target of 196 MT, recording an output of just 176 MT. The entity had blamed adverse weather, including heavy rains in August-September, for the fall in production.

The PSU missed its revised production target last fiscal as well, recording an output of just 431 MT against the commitment of 460.5 MT.

As per the Central Electricity Authority (CEA), as many as 40 thermal power stations had coal stocks for less than seven days as of January 23.

Last week, the head honchos of private power producers met Prime Minister Manmohan Singh to apprise him of various problems faced by the sector, including fuel shortages.

(sourced ET)

Euro coal dips as China holiday hits demand

Wednesday, 25 Jan 2012

Reuters quoted traders and utilities said prompt European physical coal prices dipped by around 50 cents on Monday as the absence of Chinese players due to the New Year holiday began to be felt.

They said minimal European demand and a hiatus in Chinese buying should be strong enough factors to pull DES ARA European prices below the support level of USD 100 a tonne during the next two weeks from USD 105 currently.

Traders said oil strength is expected to limit coal potential to fall due to weak fundamentals but with key buyers out of the market some further price falls were highly likely in the very near term.

Firm oil prices mostly due to supply concerns have masked the effect of poor coal fundamentals. Oil retreated on Wednesday as optimism, spurred by talk the IMF may do more to help resolve the European debt crisis, proved shortlived with a gloomy demand outlook pressuring prices.

The FOB benchmarks for South African and Australian coal have been more robust. South African prompt cargoes have been bid higher by players counting on resumption soon of Chinese buying while Newcastle prices tend to be resilient while annual contracts with end-users are being negotiated.

Traders said coal API2 and API4 swaps saw the quietest trading day of the year so far.

One European trader said "Swaps have done almost nothing a lot of people are not around by 0930 GMT only one trade had taken place."

A utility source said "Today is the first day of the Chinese New Year and the buyers there are totally absent, won't be back for two weeks so that taken some support away from prices."

He added that "A few aggressive players are bidding up South African prompt cargoes in the hope that Asian buying will return after the New Year but European demand looks appalling."

(Sourced from Reuters)

Bulgarian coal miners end strike

Wednesday, 25 Jan 2012

Bulgarian miners are resuming work at the country's biggest coal mines, ending a weeklong strike that led to a halt in electricity exports to neighboring countries.

Union leader Konstantin Trenchev said on Sunday that a compromise deal has been struck with management that includes cash bonuses for the miners and an improvement in working conditions.

The three open pit mines of the state-owned company supply coal to four thermal power plants, whose output covers a quarter of the country's electricity needs.

Bulgaria also helps supply Greece, Turkey, Serbia and Macedonia but had to suspend exports due to the strike. The Balkan country exports more than 10 billion kilowatt hours of electricity per year.

It was not immediately clear when power exports will be restarted.

(Sourced from Associated Press)

Japan 2012 crude steel output to fall yr/yr -industry body

Wed Jan 25, 2012

TOKYO Jan 25 (Reuters) - Crude steel output in Japan is set to fall slightly in 2012 from the year before due to weak domestic demand and exports, an industry body said on Wednesday.

Eiji Hayashida, chairman of the Iron and Steel Industry Federation, said production would drop by around 2-3 million tonnes from 107.6 million tonnes in 2011.

Hayashida, also head of JFE Holdings, added that Tokyo Electric Power Co's plan to increase rates for corporate customers would be hard for steel makers to stand.

The utility, known as Tepco, is struggling in the aftermath of the disaster at its Fukushima Daiichi nuclear plant.

(sourced Reuters)

Iron ore steady with a chance of slipping as China out

Wednesday, 25 Jan 2012

Reuters reported that iron ore steadied with trading activity nearly halted as top market China remained shut recently for the Lunar New Year holiday blunting any impact from miner Vale decision to lift a force majeure on Brazilian shipments.
Vale, the world No 1 iron ore producer said it has resumed mining and export operations after rains eased in southeastern Brazil. Vale earlier this month declared force majeure on iron ore shipments from Brazil a legal clause that allows a company to break contractual obligations because of heavy rains that cut its output by around 2 million tonnes.

Mr Dhruv Goel managing director at iron ore trading firm SteelMint in India eastern Orissa state said there are hardly any deals in the spot market with the Chinese away for the holiday and chances are prices may slip marginally.

But Mr Goel said Chinese demand for lower grade Indian iron ore has improved recently and he expects it to continue after the holiday. He said that "Chinese buyers are interested in buying low grade from India, as cargoes from Australia and Brazil are generally high grade."

India biggest iron ore miner, NMDC Ltd has resumed operations in the central state of Chhattisgarh which accounts for two-thirds of its annual ouput of 25 million tonnes after protests disrupted railway movements for 10 days.

Local protests had forced NMDC to halt production and exports of iron ore from the mines. The protest was called off after the federal government agreed to improve the overall rail network in the Bastar region a predominently tribal area that has roughly a fifth of India iron ore deposits.

Reflecting a slump in Chinese buying, the Baltic Exchange main sea freight index which tracks rates to ship dry commodities fell to its lowest in more than three years on Monday.

(Sourced from Reuters)

7 held for transporting iron ore in Orissa

Wednesday, 25 Jan 2012

PTI reported that seven persons were arrested for illegally transporting iron ore and metal scraps in Orissa's Sundargarh district.

Three persons were arrested from Ranisala village under Koida police limit for illegal transportation of iron ore from Koida mines area last night.

Police said that altogether 25 tonnes of iron ore stocked in Patabeda forest under Koida police limit were also seized.

Four others were arrested from Kuanramunda and Rajgangpur and a metal scrap loaded minitruck and stocked scraps were seized from a godown under Rajgangpur police limit last night.

(Sourced from PTI)

Orissa seeks info on land requirement for coal blocks

Wednesday, 25 Jan 2012

BS reported that in a bid to expedite the development of coal blocks in the state, the steel and mines department has asked the Industrial Investment Promotion Corporation of Orissa Limited to submit a report on the total land requirement of non Coal India limited companies.

A letter from the steel and mines department said that “As the matter is urgent, it is requested that the required information in respect of the 19 coal blocks may kindly be furnished, without further delay.”

Out of allocated 32 coal blocks in Orissa, IPICOL, in November last year, had furnished the data on land requirement of 13 coal blocks allotted to 29 public sector undertakings and private firms. The IPICOL is yet to provide the information on land requirement of the remaining 19 blocks allocated to various non CIL companies.

The step from the state government comes barely a day after the Union ministry of Coal drafted guidelines for timely development of allotted coal blocks to expedite the process of coal production. The ministry has advised the allocatees to adhere to the timeline in the development of the blocks or else face de allocation.

It may be noted, the Ministry of Coal has allocated 32 coal blocks to 56 companies, both PSUs and private firms in Orissa. These coal blocks have a total reserve of 15,212 million tonnes. Of the 56 firms which have been allocated the coal blocks, there are 16 PSUs including public sector companies from Orissa and other states. However, of the 32 coal blocks, only one block (Talabira I) coal block has gone into production.

The combined area required for operation of all the 32 coal blocks, is about 325 sq km and the implementation of these projects would involve displacement of around two lakh people.

(Sourced from BS)

Tuesday, January 24, 2012

Newcastle weekly coal exports increase by 43%

Tuesday, 24 Jan 2012

Bloomberg reported that coal shipments from Australia’s Newcastle port increased 43% last week. The queue of ships waiting to load coal cargoes lengthened to 16 from 14.

(Sourced from Bloomberg)

Steam coal prices dips as Chinese holiday starts

Tuesday, 24 Jan 2012

Prompt European physical coal prices dipped by around 50 cents on Monday as the absence of Chinese players due to the New Year holiday began to be felt.


A March South African cargo traded at USD 105.75


A February South African cargo was bid at USD 106.00, up 50 cents

A March South African cargo was bid at USD 105.50 and offered at USD 107.00

A March DES ARA cargo was offered at USD 105.25, down around 50 cents

An April DES ARA cargo was bid at USD 100.00 and offered at USD 105.75, also slightly weaker

Minimal European demand and a hiatus in Chinese buying should be strong enough factors to pull DES ARA European prices below the support level of USD 100 a tonne during the next two weeks, from USD 105 currently.

(Sourced from Reuters)

BHPB gets conditional approval for iron ore port expansion

Tuesday, 24 Jan 2012

Bloomberg reported that BHP Billiton Ltd received conditional approval for a AUD 14 billion expansion of its iron ore export harbor in Western Australia to boost supply to steel mills.

The Western Australian Environmental Protection Authority said that the spending on Port Hedland harbor, which includes rail, ore stockpiles and a four kilometer (2.5 mile) jetty will add capacity of 240 million metric tonnes a year. The cost estimate comes from a report last year by the state’s Department of Mines and Petroleum.

The enlarged port will help Melbourne-based BHP, which trails Vale SA and Rio Tinto Group in iron ore production, increase supply to China, the world’s biggest steelmaker. Over the next eight years, global supply of iron ore needs to rise by at least 100 million tonnes annually to meet demand and replace high cost mines, according to Rio Tinto.

Ms Kelly Quirke a spokeswoman for BHP said that “We look forward to this next stage in the assessment process which involves a two week public comment period followed by the Western Australian Appeals Convenor’s consideration of any appeals.”

(Sourced from Bloomberg)

Vale lifts force majeure on iron ore shipments

Tuesday, 24 Jan 2012

Vale informed that it is lifting force majeure effective January 23, 2012, on a number of its iron ore sales contracts.

Force majeure was declared on January 11, 2012 following heavy rainfall since mid December 2011 and continuing over the beginning of January in the Brazilian states of Minas Gerais, Rio de Janeiro and Espírito Santo, that affected the Southern and Southeastern systems.

NMDC resumes iron shipment from Chhatisgarh

Jan24, Tuesday, 2012

Raipur, (IANS): NMDC Ltd, India's largest iron ore producer and exporter in public sector, Monday resumed iron ore supplies from its key mines in Chhattisgarh, a company official said.

"The supply from Bailadila sector mines located at Bacheli and Kirandul complexes, have returned to normalcy after hundred percent disruption for nearly 10 days," S.P. Himanshu, the company's deputy general manager based in Bacheli, told IANS.

Several top clients were hit due to the total halt in shipment and production but the company would strive to increase supplies to cover up losses, the official said.

The NMDC (National Mineral Development Corporation) was forced to suspend shipments from Chhattisgarh, which accounts for two-thirds of its 25 million tonnes annual output, as railways refused to provide rakes following a protest by cadres of the ruling Bharatiya Janata Party' (BJP) youth wing.

The Bharatiya Janata Yuva Morcha activists squatted on tracks from Jan 13 to press the central government to increase rail connectivity in the sprawling under-developed 40,000 sq km Bastar region that has roughly 20 percent stocks of India's total iron ore deposits.

The protest was called off after an assurance that the rail network in the region would be increased.

NMDC's mines in the state, located in Dantewada district, produce about 40,000 tonnes of iron ore a day. Vast areas of the state are under control of Maoist guerrillas.

(sourced IANS)

Iron Ore-Steady with a chance of slipping as China out

Tue Jan 24, 2012
* Vale lifts force majeure on Brazilian shipments
* India's NMDC resumes supply from major mines
* Global steel output growth slows in 2011

SINGAPORE, Jan 24 (Reuters) - Iron ore steadied with trading activity nearly halted as top market China remained shut on Tuesday for the Lunar New Year holiday, blunting any impact from miner Vale's decision to lift a force majeure on Brazilian shipments.

Vale, the world's No. 1 iron ore producer, said on Monday it has resumed mining and export operations after rains eased in southeastern Brazil.

Vale earlier this month declared force majeure on iron ore shipments from Brazil, a legal clause that allows a company to break contractual obligations, because of heavy rains that cut its output by around 2 million tonnes.

Iron ore with 62 percent iron content .IO62-CNI=SI was unchanged at $139.80 a tonne on Monday, according to Steel Index.

There are hardly any deals in the spot market with the Chinese away for the holiday and chances are prices may slip marginally, said Dhruv Goel, managing director at iron ore trading firm SteelMint in India's eastern Orissa state.

But Goel said Chinese demand for lower grade Indian iron ore has improved recently and he expects it to continue after the holiday.

"Chinese buyers are interested in buying low grade from India, as cargoes from Australia and Brazil are generally high grade," he said.

India's biggest iron ore miner, NMDC Ltd, has resumed operations in the central state of Chhattisgarh, which accounts for two-thirds of its annual ouput of 25 million tonnes, after protests disrupted railway movements for 10 days.

Local protests had forced NMDC to halt production and exports of iron ore from the mines. The protest was called off after the federal government agreed to improve the overall rail network in the Bastar region, a predominently tribal area that has roughly a fifth of India's iron ore deposits.

Reflecting a slump in Chinese buying, the Baltic Exchange's main sea freight index, which tracks rates to ship dry commodities, fell to its lowest in more than three years on Monday.

Expected slower growth in China's steel production this year could similarly curb its demand for raw material iron ore.

China's crude steel output rose 8.9 percent to around 683 million tonnes in 2011, versus a 9.3 percent clip in 2010. A Reuters poll in mid-December showed the country's steel output may reach 728 million tonnes this year, 6.5 percent higher than 2011.

Globally, steel production rose 6.8 percent to 1.527 billion tonnes in 2011, less than half the 15 percent increase in 2010, data from the World Steel Association showed on Monday.

(sourced Reuters)

Monday, January 23, 2012

TTA seeks plants for coal output

Monday, 23 January 2012

Thoresen Thai Agencies (TTA), a leading SET-listed dry bulk carrier, is studying a possible investment in coal-fired power plants in Indonesia and the Philippines and a deep-sea port in Myanmar.
With a coal output of 4-5 million tonnes a year, TTA will be ready to operate power plants, said M.L. Chandchutha Chandratat, the president and chief executive. Under the current plan, TTA plans to produce 3 million tonnes of Indonesian coal and one million tonnes from the Philippines by 2014.
TTA and three partners have been awarded a concession for four coal exploration blocks covering 200,000 rai in Kalimantan, on Borneo.

The company is producing coal from its first mine in the Philippines and looking for a second mine there.
"We are considering investment in power plants near our mines in Indonesia and the Philippines so we don't have to spend a lot on logistics cost," said M.L. Chandchutha.On Cebu in the Philippines and Borneo in Indonesia, there are large-scale coal-fired power plants in operation, he acknowledged.Meanwhile, TTA has been invited by Premchai Karnasuta, chairman of Italian-Thai Development Plc, to co-invest in a deep-sea port in Dawei, Myanmar.

Thailand's largest construction firm by market value is seeking partners and mobilising at least US$12.5 billion this year to develop infrastructure on the coast of the neighbouring country."I agree there's a lot of potential in Myanmar and we are interested," said M.L. Chandchutha. "However, we need time to study the regulations there, as well as strategic partners who understand this business quite well." TTA owns a 20% share of Baria Serece, which operates the largest deep-water port in southern Vietnam.

M.L. Chandchutha said TTA plans to dilute its ownership in Unique Mining Services (UMS), a SET-listed coal importer and distributor, from 86% now. TTA acquired shares and warrants of UMS in late 2009 with a total investment of 3.9 billion baht at 23 baht per share. UMS shares now trade at 13-14 baht.
"We will consider reducing shares when the price improves, and we will still take control of more than 50% in the coal mine subsidiary, as TTA has a plan for long-term investment in energy," said M.L. Chandchutha.TTA has said that its core shipping business will bottom out this year as the new supply of ships eases from next year onwards.

In 2011, 70 million tonnes of vessels arrived on the market, denoting a 14% increase from the year before.
Supply is expected to rise by 10% or more this year, but the gloomy global economic outlook will continue to pressure the demand side. "We expect the Baltic Dry Index (BDI) to stay on par with last year's level or even worse," said M.L. Chandchutha. The BDI, a measure of shipping cost for dry-bulk commodities, just slipped below 1,000 points, compared with last year's low of 1,043.
"Our shipping business might be flat from last year or slightly drop, but it should gradually recover from this quarter onwards," he said.

Source: Bangkok Post

Indian government may make coal imports cheaper for power companies

Monday, 23 Jan 2012

Business Standard reported that the Indian government may ease import of coal to tide over the requirement for power generation companies and other infrastructure utilities.

Official sources said while Customs duty may not be completely rolled back, a partial rollback of the countervailing duty on imports done for power infrastructure projects is being considered by the finance ministry.

They added the consideration is for relaxing the five per cent CVD, if the import was specifically meant for thermal power generation or coal based power plants and related infrastructure projects. At present, there is a five per cent Customs duty on non coking coal, besides one per cent excise duty, announced on 130 items in the last Budget. This was done when the government proposed a levy of one per cent excise duty on 130 items without Cenvat credit.

If Cenvat credit is taken, then these goods will attract a tariff of 5%. This applies to all categories of coal imports lignite, peat, coke, tar, etc. They explained that CVD was imposed to provide a level field for domestic manufacturers and charged at a rate equal to the excise duty.

Cenvat credit means the credit availed by a goods manufacturer in the form of a deduction of input tax paid on the purchase of raw materials, fixed assets, packing material, etc, from the total tax payable to the government.

CVD is also called anti-subsidy duty. Besides industry representation, the power ministry has also suggested to the finance ministry for a relook into the coal import duty structure. It feels while global coal prices have gone up 35 to 40% additional import duty is adding to the cost.

(Sourced from BS)

SAIL not to develop Rowghat iron ore project

Monday, 23 Jan 2012

Business Line reported that Steel Authority of India Limited has decided not to develop and operate the proposed 14 million tonnes per annum Rowghat iron ore mine project in Chhattisgarh; instead it would assign a private outsider for the job on entire mineral off take contract at a prescribed price.

Mr CS Verma chairman of SAIL confirming this to Business Line said that at a recently held pre bid conference, there were participations of more than 25 intending bidders including overseas miners.

He said that “We would request expressions of interest for the project in the first half of the next fiscal.”

The SAIL chairman said that though life of BSP's existing mine at Dalli-Rajhara, also in Chhattisgarh, had been extended by a few years, development and operation of the Rowghat project needed to commence without further delay so as to match the BSP's expansion schedule.

The delay has been caused activities and threats by ultra Leftist outfits. Mr Verma said a couple of months ago, Railway Vikash Nigam Ltd had resumed work on construction of the 90 km track from Dalli-Rajhara to Rowghat.

The Rowghat deposit's 2,029 hectare F block that was allocated to Bhillai Steel Plant of SAIL in 2009 is estimated to contain 511 million tonnes of iron ore. BSP's on going capacity expansion is dependant on this resource project. The Rowghat project envisaged no ore beneficiation plant and tailing dam at the site. The ore after crushing at the site is to be transported for beneficiation to Dalli Rajhara.

(Sourced from BL)

Tokyo Steel keeps Feb prices steady amid import worries

Mon Jan 23, 2012

TOKYO Jan 23 (Reuters) - Tokyo Steel Manufacturing Co , Japan's biggest construction steelmaker, said on Monday it would keep prices unchanged in February, seeking to stem an inflow of cheaper imports, but added that the market shows signs of improvement on growing reconstruction demand.

Its pricing strategy is closely watched by Asian rivals like Hyundai Steel, POSCO and Baosteel, which have ramped up capacity, aiming to take advantage of their weaker currencies to boost exports to Japan.

"We hope to raise prices but the current yen rate and a potential rise in imports make it difficult to do so," Kiyoshi Imamura, marketing director at Tokyo Steel, told a news conference.

The company is hoping that China will ease its lending policy after the Lunar New Year break, stimulating steel demand.

In Japan, demand for construction steel has picked up since late last month on rebuilding of Japan's northeast that was devastated by massive earthquake and tsunami last March, Imamura said.

Coal miners strike makes Bulgaria halt power export

Monday, 23 Jan 2012

It is reported that the strike of coal miners in the Maritsa Iztok made the thermal power plants to shut down power facilities generating about 1000 MW. This amounts to about one third of the entire capacity of the Maritsa Iztok and AEC Galabovo thermal power plants or one unit of the Kozloduy NPP. Power generation has been decreased because of a fuel deficit as coal supplies from the Maritsa Iztok mines had been halted.

Currently two units of the Varna TPP manage to compensate for the stopped facilities in the plants hit by the strike. However, Bulgaria was compelled to suspend power export for indefinite time. Recently over 1000 miners and trade union leaders staged a protest rally in the town of Radnevo.

The miners went on strike at 8pm on January 15 demanding BGN 1000 bonuses for each employee for the company's record coal output in 2011. The labor stoppage has cost the mining company more than BGN 1 million a day. (sourced

Iron ore laden MV Sun Spirit sink in Philippines

Monday, 23 Jan 2012

Associated Press reported that a cargo ship loaded with cement sank in the central Philippines on Sunday and another vessel carrying iron ore went down off the country's eastern coast.

All 32 crewmen from both ships were rescued.

The ship carrying iron ore, the Panamanian registered MV Sun Spirit, began to list Saturday off Catanduanes province and sent a distress signal. Though coast guard officials immediately deployed three ships and a helicopter for a search and rescue, it was a Philippine cargo ship and a fishing boat that saved the crew of 12 Indonesians and two Koreans, who had abandoned the ship.

It was not immediately clear why the ship sank. It was bound for China after leaving the central Philippine province of Leyte.

Separately, a Philippine cargo ship with 18 Filipino crewmen sank early Sunday off central Antique province when its hull hit a hard object and took in water. The crewmen were rescued by fishing boats.

The MV Seaford 2 was destined for Antique with about 35,000 sacks of cement.

(Sourced from AP)

Iron Ore-Seen treading water this week with China away

Mon Jan 23, 2012

* Iron ore posts first weekly loss in five last week
* Limited downside risk seen for iron ore-analyst

SINGAPORE, Jan 23 (Reuters) - Spot iron ore prices may be little changed this week with top buyer China off for the Lunar New Year holiday, and stockpiles at Chinese ports more than enough to meet any immediate demand.Iron ore with 62 percent iron content .IO62-CNI=SI was nearly flat at $139.80 a tonne on Friday, according to Steel Index, ending 1.7 percent lower last week, its first weekly loss in five.
Demand for the steelmaking ingredient in the spot market thinned sharply last week as trading activity ground to a halt ahead of this week's holiday.Those seeking small cargoes this week can readily secure
material from Chinese ports, traders said, where stockpiles of imported iron ore stood at 98.41 million tonnes last week, up 1 percent from the previous week, data from industry consultancy Mysteel showed on Friday.

Traders are relatively optimistic iron ore prices, languishing near two-week lows, will rebound after the holiday, with steel prices gradually edging higher.The most-traded May rebar contract on the Shanghai Futures Exchange hit a three-month high on Friday, and finished last week up 2.2 percent, its biggest gain since early December."I don't see much downside risk for iron ore because China continues to produce steel and liquidity is improving although not significantly," said Henry Liu, head of commodity research at Mirae Asset Securities. At current steel and iron ore prices, Chinese producers of
long steel products still make a margin of 150-200 yuan per tonne ($24-32), said Liu.Data released on Saturday showed China diversified its spot iron ore buying away from India in 2011, largely in favour of
South Africa, but failed to reduce its dependence on term purchases from top suppliers Australia and Brazil.
China imported 64 percent of its iron ore from Australia and Brazil, unchanged from the year before, while iron ore purchases from India dropped by 24 percent, as exports from that country were curbed by policy restrictions.

Iron ore indexes
PLATTS 62 PCT INDEX 140.75 0.00 0.00
THE STEEL INDEX 62 PCT INDEX 139.8 0.10 0.07
METAL BULLETIN INDEX 139.56 -0.15 -0.11
*Index in dollars/tonne, show close for the previous trading day

($1 = 6.3390 Chinese yuan)
(sourced Reuters)

PT Bumi to explore iron ore in West Africa

Monday, 23 Jan 2012

It is reported that PT Bumi Resources Minerals Tbk, a non-coal mining unit of coal giant PT Bumi Resources Tbk is set to start iron ore production in Mauritania after securing exploitations permit from the West African government.

Mr Kenneth Farrell CEO of Bumi Minerals said the concession is expected see exploitation activities start between March and May this year, with an output of 600,000 tons of iron ore per year.

He said that Bumi Minerals is to boost output to 1 million tons of ore by 2014 in 990 square kilometers area of iron ore. He added that “We were happy to obtain the necessary exploitation permit early this month, adding that the permit was obtained earlier on January 13.”

Bumi Minerals file submitted to the Indonesia Stock Exchange said “In this case, the government of Mauritania has exercised its right. Therefore, its ownership in Tamagot Bumi is 20%.”

Based on the regulation in Mauritania, all concessions that have received exploitation permits are required to divest a 10 percent stake of the respective concession at no cost to the local government prior to commercial productions.

The same regulation also gives the Mauritanian government the right to buy another 10% stake in these concessions for prices agreed by the buyers and sellers.


Sunday, January 22, 2012

Coal India production target likely at 464 MT for FY13

Sunday, Jan 22, 2012

The production target for world's largest coal producer Coal India (CIL) is likely to be fixed at 464 million tonnes (MT) for 2012-13.

"In the preliminary meeting held last week, the Planning Commission has set a production target of 464 million tonnes (MT) for CIL for 2012-13," a government official said.

However, the Planning Commission, in a meeting to be headed by Planning Commission Member (Energy) B K Chaturvedi, is likely to take the final decision on the production target by the month-end, the official said.

Representatives from different ministries, including coal, steel and power are likely to participate in the meeting, he said.

Last month, CIL had lowered its production target for the ongoing financial year to 440 MT from the estimate of 452 MT in its annual plan.

The company had cited various reasons like heavy rainfall, strike and delays in the grant of forestry and environmental clearances to coal projects for the downward revision in the production target.

Earlier, CIL had asked the government to scale down its production target for the 2011-12 to 448 MT, fearing it will not be able to make up for the slippage in output in the first half of the fiscal.

The public sector company had missed its April-September target by about 20 MT, recording an output of 176 MT against the target of 196 MT.

The PSU had also missed its revised production target last fiscal too, recording an output of just 431 MT.

CIL had a production target of 460.5 MT for 2010-11, which was revised down to 440.2 MT.

(sourced BS)

Coal handling loss at Chennai port

Sunday, 22 Jan 2012

Chennai port's loss was Ennore port's gain with coal handling moving away from Chennai to Ennore in the last nine months. This was the most significant trend observed in cargo handling among the country's major ports in the first nine months of the current financial year a period which witnessed a flat growth rate in cargo traffic when compared to previous year.

The country's major ports managed a 0.38% increase in cargo handling to 418 million tonne from April to December 2011 when compared to 416 million tonne in the same period last year.

A Chennai Port Trust official said that a 19.44% drop in iron ore handling was one of the main reasons for the flat growth. The ban on exports of iron ore by the Karnataka Government continues to bother ports such as Chennai.

The shift in coal to Ennore also coincides with the order of the Madras High Court to shift coal to Ennore from Chennai last year.

The Ennore port handled an additional 2.4 million tonne of thermal coal in the first nine months when compared with the same period last year. Similarly, the port handled 251,000 tonne of coking coal while it was nil in the previous year.

According to the latest data by the Indian Ports Association, on the contrary, the Chennai port lost nearly 400,000 tonne of thermal coal in the first nine months and nearly 140,000 tonne of coking coal.

Due to the 38% increase in handling of thermal coal, the Ennore port recorded the highest growth rate among all the ports of 42.69%.

On the other hand, the Chennai port suffered 8.35% decline in cargo handling due to drop in poor coal handling in the period under review.

(Sourced from BL)

Vale superships challenge rivals

Sunday, 22 Jan 2012

It is reported that with the docking of Vale first monster 400,000 tonne ore carrier in China, the Brazilian iron ore producer hopes to increase competitive pressure on BHP Billiton and Rio Tinto.

After much protest from Chinese steel mills and freighters, the first of its Valemax super-size ore carriers docked in the Chinese port of Dalian on December 28.

Industry analysts say it is the latest attempt by Vale to rein in its transport costs and expand its presence in the all-important Chinese market where BHP and Rio Tinto enjoy a significant cost advantage.

But the miner decision to run its own fleet of super ships instead of using charter vessels as it has in the past also has ramifications for global shipping, especially the charter companies that have benefited from soaring shipping costs during the decade-long iron ore boom.

Chinese ship owners had petitioned Chinese authorities to prevent the Valemax ships from docking and had succeeded until last month. China Ministry of Transport is still considering whether to allow further Valemax dockings.

UBS global commodity analyst Mr Thomas Price who said it might result in dry bulk freight rates dropping more than 10% in the next year said ''Vale's decision to build its own fleet of Valemax vessels has sent shock waves through the global shipping industry.”

Vale has described the move to the Valemax vessels as strategic.

Mr Jose Carlos Martins head of Vale iron ore division said ''The Australians are 10 days from China we are 45 days.”

But Australian mining industry sources played down the threat to BHP and Rio arguing that Western Australia 35 day advantage was still likely to trump any cost savings Vale gained.

(Sourced from

Odds of rain in Australia iron belt rise - Bureau

Sunday, 22 Jan 2012

Reuters quoted the Australian Bureau of Meteorology said Australia coastal Pilbara iron belt, a cyclone prone region where two thirds of the world traded iron ore is shipped, should expect above-average rainfall over the next three months.

It said 60% to 75% chance of above average rainfall existed over parts Western Australia State which includes the Pilbara.

Iron ore exports from the Pilbara were brought to a stand still last week when Tropical Cyclone Heidi swept across coastal communities dumping up to 250 mm of rain and temporarily halting the port operations of Rio Tinto RIO, BHP Billiton and Fortescue Metals Group.

Heavy rains alone do not typically affect port loadings, though inland mine pits and rail lines leading to the coast run the risk of flood damage.

Heidi temporarily shut export terminals in the town of Port Hedland, where around 20 million tonnes of ore is shipped monthly mostly from BHP and Fortescue mines.

Such odds for rainfall set out by meteorologists mean that for every 10 years with similar ocean patterns to those currently being observed about six or seven years would be wetter than average.

(Sourced from Reuters)

Coal fired generation and consumption declines span US

Sunday, 22 Jan 2012

Argus quoted the Energy Information Administration said coal-fired generation declined across the US in October despite overall generation rising slightly while natural gas picked up share in the eastern part of the country.

Coal-fired generation fell 4.1pc on the year in October, and natural gas-fired generation rose 1.7pc, EIA's Electric Power Monthly report showed. The month matches the trend in 2011. On a year-to-date basis, coal-fired generation fell 4.2pc in the first 10 months of the year compared with natural gas generation gaining 1.6pc.

Net generation from coal totalled 126.9mn MWH, the lowest October output since at least 2009. Coal generation fell in 30 states and rose in 15 states from a year prior. EIA said meanwhile, natural gas-fired generation fell in 17 states.

Output from all fuel sources rose 0.4pc in October from a year earlier with 22 states posting declines. Hydroelectric, wind and other renewables posted strong gains to grow their share to 15.3pc of total generation from 12.8pc a year prior. Coal's share of generation fell to 41pc from 42.9pc a year prior.

Falling natural gas prices are pressuring coal demand especially in the eastern US at the same time that environmental regulations and a slow economic turnaround have caused power companies to examine their fuel choices.

Natural gas generation rose in 20 of the states where coal-fired output fell. The gains were concentrated in states east of the Mississippi River particularly the mid-Atlantic and the eastern areas of the Midwest.

According to EIA electric utilities which account for the bulk of power generation and consumption spent an average USD 4.72 per mmBtu burning natural gas in October, 5¢ lower than a year earlier while the cost of coal increased 13¢ to $2.42 per mmBtu.

(Sourced from Argus)

SouthGobi Resources sells more than 4 million tonnes of coal in 2011

Sunday, 22 Jan 2012

SouthGobi Resources Ltd announces the successful completion of 2011 on guidance in terms of coal sales and production. The 2011 sales and production levels represent significant achievements for SouthGobi.

SouthGobi completed the fourth quarter of 2011 in line with its guidance in terms of coal sales and production. The Company sold approximately 1.15 million tonnes of coal during the fourth quarter of 2011 resulting in full year 2011 sales of 4.02 million tonnes against 2.54 million tonnes sold in 2010 an increase in sales of approximately 58%.

Coal production for the fourth quarter of 2011 was approximately 1.34 million tonnes resulting in full year 2011 production of approximately 4.57 million tonnes against coal production of 2.79 million tonnes in 2010, showing growth for the year of approximately 64%.