Iron Ore-Shanghai rebar rises, but posts worst month ever

Oct1, 2011

* Shanghai rebar down 11 pct in Sept, off 8.7 pct in Q3
* Spot iron ore extends losses, down nearly 6 pct on month
* Slow trading ahead of week-long China holiday (Updates rebar price)
By Manolo Serapio Jr

SINGAPORE, Sept 30 (Reuters) - Shanghai steel futures rose 1 percent on Friday ahead of a week-long break in China, but posted their biggest monthly fall ever as signs of slower steel demand at home and an uncertain global economy weighed on prices.

The weakness in steel prices in China, the world's biggest consumer and producer, has spilled over to prices of raw material iron ore, which fell in September for the first time in three months.

"The credit tightening is increasingly affecting our business," said an iron ore sales official in Shanghai.

"Even state-owned steel mills are finding it more difficult to obtain enough credit from banks while they can't get cash from weak steel sales."

China has repeatedly raised interest rates and banks' reserve requirements to tame inflation that hit a three-year high of 6.5 percent in July before slowing to 6.2 percent in August.

The most-traded January rebar contract on the Shanghai Futures Exchange gained 41 yuan to close at 4,339 yuan a tonne.

On a continuing contract basis, rebar SRBc4 dropped 11 percent in September, the most ever for a month. For the third quarter, the construction steel product fell nearly 9 percent, the steepest since the second quarter of 2010.

Falling steel prices cut appetite of Chinese mills for iron ore, driving spot prices lower. The key Platts-based reference price IODBZ00-PLT slipped 0.6 percent to $170.75 a tonne on Thursday, the lowest since March 29, and down 5.7 percent for the month.

"The current level of Shanghai steel rebar futures suggest the iron ore price may ease to around $150-$160 per tonne," Commonwealth Bank of Australia said in a note.

"We think the cost support for Chinese producers is $150. If spot prices fall below this level, higher cost Chinese producers would start to lose money and may close. This should provide support for seaborne iron ore volumes and prices," it added.

Other iron ore price indexes also declined on Thursday. The Steel Index's 62-percent grade benchmark .IO62-CNI=SI dropped 0.6 percent to $171.50 a tonne and Metal Bulletin's similar gauge .IO62-CNO=MB edged down 0.2 percent to $170.18. Both are the lowest since early July.

Trading in the physical iron ore market was thin this week and is bound to slow to a halt next week with top buyer China off for the National Day holiday.

"I don't think we'll see much trading today because, if for some reason, transactions are not concluded within the day, traders will have to wait until people return to work on Oct. 10," said an iron ore trader in China's eastern Shandong province.

Prices of Singapore Exchange-cleared forward swaps <0#SGXIOS:>, which suggest where investors see spot prices going, dropped for a second day, with the nearby October contract down $2.33 at $158.17 a tonne, at least $12 cheaper than spot rates.

(sourced Reuters)

FMG sees Sept quarter iron ore shipments over 12 million tonnes

Saturday, 01 Oct 2011

Reuters reported that Australian iron ore producer Fortescue Metals Group production for the September quarter had been strong and shipped volumes would be more than 12 million tonnes.

The average selling price for the period would be around AUD 160 per tonne subject to final adjustments, company said in a statement.

The firm also said its iron ore expansion programme is progressing on time and on budget.

(Sourced from Reuters)

Legacy Iron Ore expounds on rationale for NMDC proposed investment

Saturday, 01 Oct 2011

Proactive Investors reported that Legacy Iron Ore said that India’s National Mineral Development Corporation, which has proposed an equity investment in Legacy, was committed to using Legacy for further acquisitions in bulk commodities.

Several projects have already been reviewed by NMDC and Legacy, including an established JORC compliant coal project. The strategy behind the proposed cornerstone 50% investment by NMDC in Legacy was outlined today.

NMDC also had the capacity to deliver large scale financing through lines of credit and off-take financing, provides Legacy with unrivalled long-term development security and access to additional opportunities.

Mr Rana Som NMDC Chairman said recently "With our expertise in iron ore mining and steel-making and their exploration expertise, we will make a perfect synergy for both the companies. Simultaneously, it will provide us a ready-made foothold in Australia."

Mr Sharon Heng Chief executive of Legacy said there were considerable benefits to shareholders. He said that “Legacy Iron Ore has taken a first mover advantage in securing a highly desirable cornerstone investor who can contribute significantly to the company ability to grow value and develop ongoing assets and acquisitions regardless of financial market conditions.”

The proposed equity participation by cornerstone investor NMDC is a critical enabler and first step in executing on this strategy.

The investment by NMDC is an Australian first providing Legacy with first mover advantage to drive shareholder value.

Since this investment and strategic alliance, Jupiter Mines' market capitalization has increased from approximately USD 42 million to USD 528 million at present.

Specifically, the benefits for Legacy shareholders from the NMDC strategic plan were seen as:
1. Unlocking hidden shareholder value, through the spin-off of core and non-core assets
2. The acquisition of new projects. Potential projects are currently being assessed
3. Project financing in general, but in particular, the potential to take the Mt Bevan Iron Project from exploration to production, once Legacy has secured its 60% Joint Venture interest from Hawthorn Resources Limited, after spending USD 3.5 million. Significant work is underway to underpin this outcome, which will be the subject of a later release
4. Ability to develop the necessary infrastructure in the Central Yilgarn area
5. Development funding for a range of existing and potential projects
6. Underwriting of future capital raisings to ensure funding is available to move projects forward, irrespective of global financial market cycles
7. Practical experience in large scale iron ore resource development and production
8. Mineral research and development capabilities
9. Off-take access to proven and ready purchasers in Japan, South Korea and China

Mt Bevan is a joint venture between Legacy and Hawthorn Resources hereby Legacy will earn a 60% interest in the project by expending a minimum of USD 3.5 million to develop the project to a pre-feasibility status.

(sourced from ProActiveInvestors)

Mozambican suspends granting of coal mining licenses in Tete Province

Saturday, 01 Oct 2011

The Mozambican government has decided to suspend the issue of new licenses for coal mining in Tete province.

Mr Afonso Abica inspector of the Mining Resources Ministry said that the suspension, which includes prospecting and surveying licenses, mining certificates and mining concessions aims to assess to what extent companies that already hold licenses are complying with the contracts signed with the government.

On the sidelines of a seminar on reviewing the Mining Law, Mr Mabica said that the decision to suspend the issuing of new mining licenses was only related to coal mining in Tete province and that other mining activities would not be affected.

The inspector also said that companies who were not complying with what had been stipulated in their contracts would be penalised and, in extreme cases, could have their licenses revoked.

He said “By revoking the mining licenses we want areas that are currently occupied without being explored can be handed over to other people who are interested and available to work on them.”

Over the last two years the government has granted over 112 licenses to 45 national and foreign companies linked to coal mining in Tete province, which is thought to have the largest coal reserves in the world.

It is estimated that within five years over 100 million tonnes of coal per year will be mined from the Zambezi coal basin, making Mozambique one of the world’s largest coal exporters. However, despite the huge potential, few companies are moving to develop their concessions.

(Sourced from macauhub)

Australia Newcastle thermal coal falls by 1pct

Saturday, 01 Oct 2011

Bloomberg reported that power station coal prices at Australia Newcastle port an Asian benchmark dropped 0.7% in the week ended today.

According to the globalCOAL NEWC Index coal prices at the New South Wales port declined to USD 122.54 per tonne from USD 123.42 the previous week.

Xstrata Plc the world largest exporter of power-station coal, BHP Billiton Ltd and Rio Tinto Group are among mining companies that ship coal through Newcastle.

(Sourced from Bloomberg)

China plans to limit mining of coking coal - Report

Saturday, 01 Oct 2011

China Securities Journal reported citing people that it didn’t identify that China plans to limit the mining of coal used in steel-making under regulations that the National Energy Administration will issue soon.

The newspaper reported citing the unidentified people that companies seeking government approval to explore for coal will face more stringent criteria, while mines will be required to boost production efficiency.

China is stepping up efforts to conserve natural resources including rare earth metals and bauxite by clamping down on illegal mining and curbing exports of the commodities. Domestic prices of coking coal, a raw material in steel making, have more than doubled in the past six years as demand increases in the world’s fastest growing major economy.

Mr Zhang Weifang a Shanghai based analyst at researcher Mysteel.com “Surging prices have spurred investors to pursue coal assets in Inner Mongolia and other regions. The new rules will probably aim to curb these activities rather than limit output that will cause prices to rise further.”

According to the McCloskey Group Ltd Prices of hard coking coal sold by Shanxi Coking Coal Group in China climbed to a record CNY 1,902 per tonne as of June 30. As of the end of last month, the prices were at CNY 1,871 per tonne.

(Sourced from Reuters)

US coal consumption up 3pct last week - Genscape

Saturday, 01 Oct 2011

Reuters quoted data from power industry data monitor Genscape showed that US coal consumption rose 3% last week versus the week before but stayed unchanged from a year earlier.

Warmer weather spread last week in the populous East, WSI Corp weather service said. A slight uptick in nuclear plant outages boosted coal use despite cheapening natural gas.

Coal use swings up and down seasonally, and varies from week to week and region to region, depending on electricity demand to run air-conditioners or heaters.

Coal plants produce slightly less than 50% of US electricity. Power generation accounts for more than 90% of US coal consumption.

(Sourced from Reuters)

Demand for coking coal and manganese to accelerate - BHP Billiton

Saturday, 01 Oct 2011

Dow Jones reported that BHP Billiton Ltd, the leading producer of exported coking coal and manganese, forecast an acceleration in demand for raw steelmaking ingredients as industrial development continues in China, India and other emerging economies.

The Anglo Australian mining company said volume estimates for BHP coking coal and manganese businesses fall short of demand forecasts. It said it expects crude steel production in China, the world biggest consumer of steel to grow to about 1.1 billion tonnes by 2025.

BHP's global market share is about 26% in coking coal and 21% in manganese ore traded by sea. It has forecast average 9% growth in its production of iron ore, coking coal and manganese through the 2020 financial year.

Every tonne of crude steel requires about 600 kilograms of coking coal and roughly 30 kilograms of manganese ore. Growth in coking coal demand will be driven mainly by China and India as these populous nations continue to develop and urbanize.

Domestic supplies of quality hard coking coal in China haven't kept pace with demand while India is highly reliant on imports. China and eventually India will also drive demand for manganese.

(Sourced from Dow Jones)

NTPC plans long term steam coal offtake deal

Saturday, 01 Oct 2011

BS reported that NTPC is planning to strike a long term offtake deal with coal companies abroad to match its increasing demand. But due to the higher price range the firm might restrict the import component of the total coal use to 10%though it is looking for acquisition of coal blocks outside India.

Mr Arup Roy Choudhury NTPC Chairman and Managing Director said “We are thinking about signing a long term coal import deal with foreign companies. This would be vital, as we are planning to acquire some blocks in Indonesia, Australia and Mozambique,”

On the other hand, regarding the power producer plan to cap import component to 10 per cent he said that the aim is to source 70% of coal from the Kolkata based Coal India remaining 20% from the firm eight captive mines and about 10% from imports which include the production from acquired mines abroad. The company captive mines have a reserve of 1.8 billion tones. Set to come out of ICVL

Mr Choudhury said “The assets that ICVL had identified are mainly of coking coal. Which can only be used for steel industry requirements? While regarding the Indonesia plans of ICVL, the local government has also decided to ban exports of coal below that calorific value which could have been our requirement.”

The company’s coal requirement for the financial year 2011-12 would be around 160 million tonnes which is expected to zoom to 240 million tonnes in the next year. While this year, NTPC total CAPEX is INR 26,000 crore and it will require investments worth about INR 30,000 crore per year over the next 10 years for expansion plans.

(sourced BS)

Wesfarmers Curragh coking coal prices down 9pct for Oct Dec quarter

Saturday, 01 Oct 2011

ninemsn.com.au reported that that the price Wesfarmers will receive for metallurgical coal from its Curragh mine in Queensland during the December quarter will be down by almost 10%.

The diversified conglomerate on Friday said price negotiations with most of the mine's customers for the three months to December 30 had been concluded, with settlements at about AUD 280 per tonne.

This compares to about AUD 310 per tonne for the previous quarter.

(sourced from ninemsn)

European coal heads for biggest monthly drop since March 2010

Saturday, 01 Oct 2011

Bloomberg reported that benchmark European coal declined, heading for the biggest monthly drop since March 2010.

Thermal coal for delivery to Amsterdam, Rotterdam or Antwerp with settlement next year declined 0.4% to USD 123.10 per tonne as of 11:55 AM in London.

The contract has lost 5.5% this month and 4.2% this quarter the biggest drop since the three months ending March 2009.

(Sourced from Bloomberg)

BHPB buys Australia's Leighton Pilbara iron ore business

Saturday, 01 Oct 2011

BHP Billiton has completed its acquisition of HWE Mining Subsidiaries from Leighton Holdings.

This follows the previously announced Heads of Agreement, signed on 9 August 2011.

The acquisition relates to the mining equipment and related assets that service the Area C, Yandi and Orebody 23/25 operations. These operations collectively account for almost 70% of Western Australia Iron Ore’s total material movement.

Mr Ian Ashby BHP Billiton president iron ore said “With the legal and due diligence processes now complete, our primary focus moves to ensuring the integration of the highly skilled workforce into the BHP Billiton business in a safe and efficient manner.”

New mining bill to hit Coal India the hardest - Analysts

Saturday, 01 Oct 2011

Moneycontrol.com reported that the new Mining Bill cleared by the Indian union cabinet today could impact bottom lines of metal companies in India as these companies will now have to share 100% royalty with affected locals in the region, Coal India Limited’s profits could be dented at significant levels as coal miners will now compulsorily have to share 26% of its profit after taxes to the affected tribals.

If the bill is passed, an estimated amount of INR 10,000 crore will be generated per year from miners and an average amount of INR 180 crore to INR 200 crore will be distributed among District Mining Foundations of 60 mineral rich districts in India.

Analysts quickly did a preliminary analysis on the kind of impact it will have on miners and metal sector.

Mr Bhavesh Chauhan from Angel Broking told moneycontrol.com, “As per our estimates, the EPS of metal companies is expected to be lower by 8% to 13%, while for Coal India the EPS could potentially decline by 17%. But Coal India can do some damage control as it has the cushion to pass on the additional burden to its customers as its sells coal at a price lower than global benchmarks, but metal miners do not enjoy this privilege.”

Khandwala Securities said “We expect EPS of all integrated players in metal space which includes TATA Steel, SAIL, Sterlite, Hindustan Zinc and Hindalco to be impacted by 5% to 20% depending upon their mining integration. But Coal India is expected to be impacted majorly as it is already facing employee cost pressure of around 40% of its total revenues in FY11 and revision in wages in 12th plan will put further pressure on the company earnings. Going ahead, companies might hike prices.”

Edelweiss Securities said “Profits of non coal mining companies (including integrated metal/ cement companies) could be impacted to the tune of 3% to 16% with Hindustan Zinc being hit the most and JSW Steel the least.”

Mr Tarang Bhanushali of IIFL said “The move is all set to push down profits of major mining and power companies. Most of the coal companies will be going for a downgrade.” The EPS impact on Coal India would be around 13% to 14%.”

(sourced from moneycontrol)

Krishnapatnam Port wins "Global Port" award & "Coal Port of The Year" award

Friday, 30 September 11

Krishnapatnam Port, a dynamic new generation world class port located in the East Coast of India has been adjudged the winner in the category of Port Operator Award at the Lloyd’s List Awards, Global 2011. The maritime industry’s prestigious award took place on Tuesday 20 September, 2011 at the London Hilton Park Lane. The award was received by Mr. Subhangshu Dutt, Executive Director, Singapore based arm of Krishnapatnam Port Company Ltd.

The e-Mail statement further said, Krishnapatnam Port’s winning entry impressed the judges with both the scale of its ambition and an impressive list of tangible accomplishments over the past year. It was by no means the largest operator in the shortlist, but as one of India’s fastest growing seaports it has emerged as welcome addition to an economy increasingly reliant on efficient infrastructure projects. Among the other finalists were APM Terminals, DP World, General Organization of Sea Ports, Porto nave and Red Sea Gateway Terminal.

Commenting on both the fabulous news, the port’s CEO, Anil Yendluri said: “Winning this award, is a re-validation of our vision that we are heading in the right direction and the trade is recognizing our efforts. We are not only striving to boost the economy but also working towards the overall social well-being of the region.”

According to the statement of company, the port is being built in three phases and currently the second phase of development is underway. Krishnapatnam Port is planning to invest INR 2,000 crore (approx. US$ 408,382,064) more to improve cargo handling efficiencies to meet the growing demand from local industries, thereby creating immense job opportunities.

The fresh investment is in addition to INR 4,000 crore (approx. US$ 816,764,128) for the Phase II expansion announced in March 2009. Districts around the port has witnessed a significant economic development in the last couple of years with several multi-product special economic zones, agri based and port based manufacturing facilities coming up requiring huge import and export handling facilities.

Apart from coal-fired power projects several palm oil and sugar refineries have already come up and more are lined up in the region. The port currently has the ability to handle cargoes like Agri products like Rice, Maize, General, Dry-bulk like Barytes, Coking Coal, Edible Oil, Fertilizers, Granite, Gypsum, Iron Ore, Met Coke, Palm Kernel, Pet Coke, Quartz, Raw Sugar, Rock Phosphate, Steam Coal and Oversize & non-standard cargo.

Krishnapatnam Port plans to increase its installed capacity to around 70 million tons a year by end of 2012.

Krishnapatnam Port’s abilities were also recognized by another trade body - mjunction and IHS McCloskey when it awarded the ‘Coal Port of the year’ award at the 2nd Indian Coal Industry Awards Dinner held at The Oberoi Hotel, New Delhi on the evening of Tuesday, September 27, 2011.

The port has also become the finalists for the Port Operator Award at the esteemed Lloyd’s List Awards Asia 2011 and is shortlisted for the Best Dry Bulk Port at the celebrated IBJ Awards 2011.

With numerous strengths like its strategic location, outstanding services and facilities, Krishnapatnam Port is evolving as a hub for export-import cargo and it will soon be poised to become one of the biggest ports in the world and the largest port in India.

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Indian iron ore market getting active - FEARNLEYS AS

Friday, 30 September 11

Handy
The Atlantic market continued its strong trend with fresh cargoes entering the market. Vessels open US Gulf fixed tick above US$ 27k back to the Continent and tonnage from Black Sea. Fixed to the east fetching around US$ 24/25k per day. Baltic to Brazil fixed around US$ 8k. The Pacific market remains firm but cooling off a bit by end of the week. For Indo India and Thai rounds, large eco Supra can fetch close to US$ 17k. Indian iron ore market getting active with fresh enquiries from WCI and Supras fixing around US$ 13k for WCI-China and 12k for ECI-China. RBCT-India round rates are around US$ 12k. Red Sea fertilizers to India are fixed around mid 20s. Short period rates are around 14k for large Supras but seeing less takers.

Panamax
The Panamax market started this week on a quiet note with only USG-front haul giving some fuel to the levels. In the Atlantic the market is firming up, tighter with tonnage and some fresh minerals and grains requirements entering the market. TA rounds are now fetching around US$ 14,500 while some claim to have seen US$ 16k for the shorter Baltic rounds. The front hauls closer to mid 20´s with additional premium for shorter trips via Aden. In the Pacific activity is slowing down in all areas. Some analysts warn that China´s emergency coal reserve provision is too small, and they might pick up the pase they had earlier on Indonesian coal. Mid week the Pac rounds are being fixed at around US$ 11k while the backhauls are getting around US$ 4,500. The period market has shown some activity with a few short period fixtures in the mid 12k range. With the coming holidays in China activity and levels could suffer next week.

Cape size
A psychological barrier seems to kick in every time spot levels for this segment climb close to US$ 30k. A robust strengthening on high volume is turning into a soft slide as activity cools down and nervousness spread. Despite last few days´ developments, average daily earnings are still up 12% w-o-w at US$ 28k, and fundamental parameters still appear robust for transatlantic and pacific trades. Period activity has been fair on the back of paper support - most recently exemplified by 2 x 206kdwt Newcastle max NBs delivering Feb + April 2012 for about 4 years to major energy producers at US$ 18k, 175kdwt/built 2010 delivering Japan early Oct done for 4-6 months at US$ 19k and also 176kdwt/built 2010 delivering N. China early Oct for 4-6 months at US$ 18k.

source: FEARNBULK, Coalspot

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Mining bil cleared, firms to share 26% profits with locals - NDTV

Friday, 30 September 11

NDTV reported that, The Union Cabinet cleared the draft mining bill aimed at regulating mining activities Friday. The bill proposes a profit-sharing system and bidding of mining rights. It will mandate coal companies to provide 26 per cent of post-tax profit for the welfare of affected people, a move intended to benefit mostly tribals.

Niraj Shah, Senior VP (Equity Research) at Fortune Financial Services (India) Ltd said, "The biggest negative will be on Coal India... 26 per cent profits would be transferred and will be calculated on previous years' profit. So, the EPS would be impacted."

Coal India slumped 3 per cent post the decision and was the top loser on the 30-stock Sensex.

Bhavesh Chauhan of Angel Broking said the biggest impact will be on Coal India followed by Hindustan Zinc. "For Coal India, there is a cushion of passing prices to customers because it sells coal at a subsidy," Mr Chauhan added.

Companies that have captive coal mines will also be affected, Mr Shah said. "Profit will be calculated on the basis of mine head costs and the transfer pricing, so power and steel companies will be impacted," Mr Shah added.

The Mines & Minerals (Regulation and Development) Bill, 2011, which seeks to replace a 1957 act, also provides for setting up of National Mining Regulatory Authority and Tribunal and formation of District Mineral Foundations in 60 mineral-rich districts across the country. The states will also be advised to set up authorities and tribunals on these lines.

The Bill, which advocates "sustainable and scientific" mining, also suggests non-coal miners like bauxite and iron ore firms to share an amount equal to that of royalty with local residents instead of just sharing profits.

A 10-member ministerial panel set up in June last year, has finalised the methodology ensuring that people in mineral-rich districts of Andhra Pradesh, Orissa, Chhattisgarh, Goa, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh and West Bengal get monetary benefits from mining.

If the bill is passed, an estimated amount of Rs. 10,000 crore (approximately US$ 2.042 billion) will be generated per year from miners and an average amount of Rs. 180 to 200 crore (approximately US$ 36,754,535 to 40,838,239) will be distributed among District Mining Foundations of 60 mineral rich districts that include 25 districts affected by Left Wing Extremism.

Mr Shah said money will be transferred to an escrow account that would be used for the benefit of the tribals.

(sourced NDTV)

Peabody Energy opens coal trading office in Germany

Sept30, 2011

Peabody Energy announced it has opened an office in Essen, Germany, expanding the company coal trading platform into a growing market for coal.

Mr Richard Navarre Peabody Energy president and chief commercial officer said the decision provides Europe with new alternatives of power.

He said that “Our presence in Essen broadens our sourcing and shipping capabilities to deliver coal from Peabody US operations to European customers who increasingly are turning to coal to displace nuclear generation and high cost natural gas.”

Peabody Essen office will be headed by Mr Juergen Treschan who has been named the director of trading and logistics for Northern Europe. He will be in charge of operations dealing with international trading activities in Germany and neighbouring countries.

Chinese iron ore imports seen soaring to 1 billion tonnes

Sept30, 2011

Reuters reported that China iron ore imports may surge to 1 billion tonnes by 2015 up around 60% from last year with the world biggest steel producer able to cope with a potential recession in developed economies.

Australian miner Fortescue Metals Group Ltd which sells nearly all of its iron ore to China forecast a rise in Chinese imports to 1 billion tonnes by 2015 at an industry conference in China North Eastern city of Qingdao.

That will be more than 60% higher than China imports last year of nearly 619 million tonnes.

Mr Neville Power CEO of Fortescue said global prices are expected to remain high next year before additional capacity comes online between 2013 and 2015.

Brazil Vale the world No 1 iron ore miner said China robust demand will keep global supplies tight.

Mr Jose Carlos Martins executive director for sales and marketing of Vale said "Vale is still confident in the market fundamentals. He said that besides China, several emerging regions with large population also have strong growth potential. Emerging countries still have a significant gap in housing and infrastructure requirements, indicating strong potential for steel consumption growth in the long run."

Mr Murilo Ferreira CEO of Vale said earlier this month that the miner was not seeing any slowdown in the global iron ore market despite a crippling sovereign debt crisis in Europe and a weak US economy. But analysts say China strength may not be enough to hold up prices.

Mr Graeme Train commodity analyst at Macquarie in Shanghai said "If Europe turns around to Vale and says 'we want 20% less ore this month' then that tonnage finds its way to China so you have China sucking up all the weakness from everywhere."

He said that "The risk though is even if China is buying iron ore and the situation ex China gets really bad and not even China strength can hold the price up at where it is."

(Sourced from Reuters)

German iron ore import prices in Aug down by 1pct MoM

Friday, 30 Sep 2011

According to a report released by the German Federal Statistical Office, in August this year the import price of iron ore increased by 14.9%YoY in Germany while it decreased by 1.2%MoM as compared to July this year.

In August this year, the import price of pig iron, steel and ferroalloys in Germany rose by 3.3%YoY while it decreased by 0.5% compared to July this year.

(sourced from Steel Orbis)

Vale: Global iron ore supply will be tight for next few years

Friday, 30 September 2011

Brazil-based mining giant Vale SA's executive officer of marketing, sales and strategy, Jose Carlos Martins, stated at an industry conference on Wednesday, September 28 that global iron ore supply will be tight for the next few years due to strong steel demand in emerging economies and "disappointing" levels of iron ore capacity in recent years.

Another global recession is not likely to happen despite some risks from Europe's debt crisis and the softened growth of the US economy, the Vale official said. In addition, fast-growing emerging markets are supporting the steel industry's fundamentals, he continued, adding that therefore global iron ore supply will be tighter in the coming years. However, some projects planned by iron ore companies may face "significant risks of delays" due to factors such as environmental concerns.

Mr. Martins also said the current quarterly iron ore pricing system is fair, as it is based on market prices that reflect fundamentals.

Tags: iron ore , raw mat , USA , Brazil , North America , South America , Vale , fin. Reports , steelmaking

Iron ore discovery boost for local industry

Friday, 30 Sep 2011

Centrex Metals a significant discovery of more iron ore at its deposits on Lower Eyre Peninsula should help boost the prospects for mining in the region.

The company says an extra 135 million tonnes of magnetite has been found at its Fusion project.

Mr Jim White Managing director says it helps establish a critical mass for other projects in the region. He said that "We will now go and do some more drilling to confirm these resources and to add more certainty so we're still some way away from a mine, which I think it's important to realise. But nonetheless this is a step towards a mine."

(sourced from abc.net.au)

Affero Mining uncovers high grade iron ore in its Nkout project

September30, 2011

British mineral exploration and development company Affero Mining announced that drilling at the company's 100 percent-owned Nkout iron ore project in southern Cameroon has uncovered high grade material with direct shipping ore (DSO) potential.

The DSO material was found in one minable area in a line of adjacent holes and the headline results include 51 meters at 63.4 percent Fe, 30 meters at 60.4 percent Fe and 48 meters with 58.6 percent Fe. To date, Affero Mining has drilled 113 holes totalling 18,500 m and the rate of drilling is expected to increase, with the addition of two further drill rigs bringing the total number of rigs on site to seven.

Chief executive of the company Luis da Silva said, "These results are very encouraging and continue to support the DSO potential of the Nkout project and the possibility of having an early phase of production."

Tags: UK , Europe , European Union

Australia’s High Court grants Fortescue leave to appeal against ASIC

Sept30,2011

Australian miner Fortescue Metals Group (Fortescue) has announced that the Australian High Court has granted Fortescue leave to appeal the Full Federal Court decision dated February 18, 2011 in the civil penalty proceedings brought by Australia's corporate regulator Australian Securities and Investments Commission (ASIC) against Fortescue and Fortescue's chairman Andrew Forrest.

Fortescue and Mr. Forrest requested to appeal the Federal Court decision to allow ASIC's appeal against the original judgment in favor of Fortescue and Mr. Forrest on December 23, 2009. The hearing date of the High Court Appeal has not been revealed yet.

As SteelOrbis previously reported, ASIC had alleged that Fortescue made misleading and deceptive statements about agreements with three Chinese enterprises which the company termed binding contracts when actually this was not the case.

Tags: Australia , Oceania , steelmaking , Fortescue
(sourced steelorbis)

Coal miner CCPF continues to acquire coal mines in Colombia

Friday, 30 Sep 2011

California based coal mining company Colombia Clean Power & Fuels, Inc will take over operation of a working coal mine at Ruku in Colombia on first of October and expects to put a second larger mine into operation within the next quarter or two to be known as Otanche.

The company newly appointed CEO Mr Ron Stovash said that Colombia offers a great opportunity for the metallurgical market which is robust and will continue to be. Colombia has an estimated 2 billion tonnes of met coal reserves and the country's total annual production is currently only about 3 million tonnes.

(sourced from Steel Orbis)

Macarthur Coal awards Codrilla contract

Friday, 30 Sep 2011

Bowen Basin miner Macarthur Coal has awarded USD 85 million contract to construct the coal handling and preparation plant at the Codrilla Coal Mine for the Coppabella Moorvale Joint Venture to mining services company Sedgman and Thiess, a subsidiary of Leighton Holdings.

The Thiess Sedgman Joint Venture will design, procure, construct and commission the plant on behalf of Macarthur with it due for completion by mid 2013 a year and a half after mining operations commence.

Sedgman relationship with Macarthur Coal spans 12 years starting with building the coal handling and preparation plant for Coppabella Mine and then for the Moorvale and Middlemount mines.

Mr Nick Jukes CEO & MD of Sedgman says the company is extremely pleased to be further strengthening this relationship with the miner.

The contract is not contingent on any outcomes of the USD 4.83 billion PEAMCoal takeover offer for Macarthur Coal.

(sourced from ABC.net.au)

INDONESIA'S MINERS FACE AN UNCERTAIN FUTURE - RUPERT WALKER

Sept30, 2011

An evolving regulatory framework for the country's minerals industry could threaten its profitability and stifle investment.

The five-year surge in commodity prices has been kind to Indonesia. Certainly, there were shocks to both prices and volumes in late 2008, but the wealth created by the country's primary exports during that period has been sufficient to sustain its economic growth and underpin domestic consumption.

It has also given support to a resurgence of nationalist sentiment, reflected in legislation and the formation and implementation of new regulations. Understandably for a country that is growing more affluent and catching up with its regional neighbours, Indonesia no longer intends to be simply a repository for other countries' raw materials inputs. Instead, it plans to exploit its resources for its own burgeoning industrial and manufacturing base.

Also, as Indonesia's energy policy moves toward greater domestic coal usage, producers will be forced to negotiate new contracts at official prices with local buyers.

Earlier this year, the government said that it will ban exports of raw commodities by 2014. Miners would need to build smelters to add value to exports. For instance, ferronickel rather than the raw metal would be exported and coal would have to be blended to reach 5,600 kilo calories before it could be sold abroad.

The catalyst for the shift was the 2009 Mining Law which replaced the "Contract of Work" and "Coal Contract of Work" system in use since 1967. The aim is to stimulate the development of the country's mineral resources and help support broader-based economic growth. The 2009 act provides a basic framework, but government regulations from later that year, and in 2010, provided some clarity and are now expected to gather pace.

However, there are worries that the law will backfire and that these regulations will stifle future investment and damage the existing operations of Indonesia's miners.

"Indonesia's mining industry is undergoing a regulatory overhaul that is likely to weaken the operating and financial performance of domestic mining companies," warned Standard and Poor's Xavier Jean.

Standard & Poor’s argued in a report issued this summer that besides increasing operating uncertainty for Indonesian mining companies, the new regulations may also make the industry less attractive to foreign investors.

For instance, the mining law states that several government and ministerial regulations will need to be issued before its impact can be understood. There are also conflicts between mining operations and forestry regulations, overlapping authority between central and local governments and contradictory tax rules. Indeed, "a more clear legal framework would give investors more assurance about the predictability of policies," agreed Wellian Wiranto, Asia economist at HSBC, in a July research report. But he said he hoped that the evolving regulations "will only be implemented after intense feedback from industry players".

Domestic market obligations
It is likely some of the feedback will be about who bears an inordinate share of the burden. Some market participants note, for example, that the provisions on domestic market obligation (DMO) and reference pricing, where miners must sell a portion of the production domestically at a minimum reference price before exporting, will affect coal producers more than metals producers because the domestic demand for coal is higher than for metal ore. Given current and expected domestic coal consumption trends, Standard & Poor's estimated that the DMO could average 20% to 25% of the industry's annual coal production during the next five years, although this proportion could increase above 30% as Indonesia shifts its domestic energy mix from oil to coal during the next decade.

DMO and minimum reference price regulations could increase uncertainty about revenues and cash flows. If reference prices are set too low, it could lower the revenues for producers (given the lack of a domestic competitive market), reduce margins, and increase opportunity costs. If they are too high, they could hurt the government-owned electricity generator Perusahaan Listrik Negara (PLN), the largest domestic coal buyer, and hence make coal producers vulnerable to customer concentration risk.

Worst affected among coal miners will be those with small domestic sales because they will need to negotiate local contracts from scratch and rapidly increase local sales to meet regulatory requirements. Bayan Resources, with 2% of domestic sales last year, could fall into this category, and even Bumi Resources, whose domestic sales have been historically around 10%, might be exposed.

Meanwhile, miners now negotiating off-take contracts with PLN will be vulnerable to price risk. For example, Bukit Asam generated 64% of its revenues domestically in 2010 and is currently in negotiation for an off-take contract with PLN for 265 million tonnes of coal during the next 20 years.

Although the mining law grandfathers existing coal contracts of work, these new regulations will apply to both existing contracts and prospective mining investments. As S&P's Jean pointed out: "the provisions on DMO and reference pricing [and] domestic market processing...are likely to have the greatest impact on the Indonesian mining sector."

But, Standard & Poor's expects the government will take a few years "to calibrate the pricing system and balance producers' and consumers' interests", based on the experience from the implementation of oil and gas DMO in Indonesia. The regulatory environment is still evolving, after all, so when rules are ultimately enforced they tend to look different from their original forms.

A salutary warning
The allusion to Indonesia's oil industry is pertinent, however. The country was a substantial oil exporter until turning into an importer in 2004, and then finally leaving Opec in 2009.

Analysts blame a lack of investment in oil exploration. In the 1990s, Indonesia pumped out more than 1.5 million barrels a day; this year the average daily output is 916,000, well below the government's target of 970,000, according to HSBC's Wiranto. The World Bank calculated that investment in oil exploration is now less than half the $1 billion spent each year before the Asian financial crisis in the late 1990s.

Wiranto pointed out that Indonesia's resource riches are simply not matched by investment conditions in the commodity sector. He referred to a survey of international mining companies by the Fraser Institute that found that the "perceived lack of transparency in the legal process and the risk of regulatory duplication and inconsistencies continue to act as deterrents to more substantial investment".

Indonesia's production-to-reserves ratio for coal and copper is half that of its competitors (Australia, Chile and China), according to the World Bank. A poor investment environment could mean that the country's proven mineral resources are actually vastly underestimated.

So, it would be a pity if regulatory uncertainty and onerous obligations again prevent Indonesia from fully exploiting the benefits of its natural riches. Especially, given the laws were introduced to spur growth not cripple an industry. (By Rupert Walker)

About Rupert Walker
Rupert Walker is a senior writer and has been a financial journalist based in Hong Kong for three years. Previously he was employed by Asiamoney, and has written for various magazines and newspapers on assignments in Central Europe, Russia and Africa. Rupert was also a fund manager in London – investing in emerging markets for Govett Investment, working in capital markets for SG Warburg and Goldman Sachs, and setting up a capital markets business in Singapore for NatWest. He has a BA/MA in Modern History from Keble College, Oxford University and an MA in Anthropology from SOAS, London University. He is also a CFA charterholder.

This story was first published in FinanceAsia
The views and opinions / conclusion expressed on this article is purely the writers’ own.

If you believe an article violates your rights or the rights of others, please contact us.
(source coalspot)

ArcelorMittal votes down Valin Iron and Steel’s restructuring plan

Sept30, 2011

According to the announcement released by Hunan Province-based Chinese steelmaker Valin Iron and Steel Group, on September 27 its board of directors discussed the proposal to incorporate and restructure domestic steelmaker Jiangsu Xigang Group. During the discussion, five directors appointed by foreign shareholders (notably global steel giant ArcelorMittal) all voted against the proposal, while the other four directors approved it. Accordingly, the proposal was rejected.

The reasons given by the foreign shareholders' representatives were that, although Valin Iron and Steel Group's financial performance has improved sharply as compared to last year, its capacity for earning profits is still insufficient. Also, while Xigang Group is undergoing a relocation project at the current time, it is not clear whether it will be able to make a profit this year. They also said that it is critical for Valin Iron and Steel Group at the current time to reduce losses and increase profits.

Tags: Europe , Southeast Asia , ArcelorMittal , fin. Reports
sourced steelorbis

German iron ore import prices down 1.2 percent in August from July levels

Wednesday, 28 September 2011

According to a report released by the German Federal Statistical Office (Destatis), in August this year the import price of iron ore increased by 14.9 percent year on year in Germany, while it decreased by 1.2 percent as compared to July this year. In August this year, the import price of pig iron, steel and ferroalloys in Germany rose by 3.3 percent year on year, while it decreased by 0.5 percent compared to July this year.

Tags: pig iron , iron ore , alloys , raw mat , Germany , Europe , imp/exp statistics , steelmaking , European Union

(sourced steelorbis)

Zimbabwe government issues 20 coal exploration licenses

Wednesday, 28 Sep 2011

Zimbabwe, which currently imports virtually all of its oil needs, averaging roughly 14,000 barrels per day, is seeking to expand its indigenous energy resources, particularly coal.

Mr Obert Mpofu Zimbabwe Mines and Mining Development Minister said during the third Zimbabwe Mining Indaba that "We have awarded 20 licenses for coal exploration and mining. This should help in ensuring that the country can generate adequate electricity for the economy in general."

The five firms awarded licenses were Makomo Investments, WK Blasting, Clidder, Apex and Liberation Mining. The majority of the 20 companies receiving prospecting licenses are joint ventures with Zimbabwean partners owning controlling stakes in accordance with the Zimbabwe indigenization and empowerment law.

Business research and consulting firm Frost and Sullivan reports that Zimbabwe has coal reserves that will approximately last the next 200 years at a production output of 5 000 tons per annum with the coal reserves being suitable for providing feedstock for coal-powered thermal power stations. In addition, the Zimbabwe Electricity Regulatory Commission recently licensed 13 independent power projects.

(Sourced from Oil Price)

India’s JSW Steel cuts production to 30 percent

September28, 2011

India's leading steelmaker JSW Steel has had to reduce its steel production to 30 percent of its capacity at its Vijaynagar plant due to the abrupt disruption of supplies to JSW Steel from Indian state-run mining company National Mineral Development Corporation (NMDC).

The Supreme Court of India first suspended all mining activity in the Bellary district of India's Karnataka state, but then it allowed NMDC to mine iron ore and sell 1 million mt per month. However, JSW Steel stated that NMDC has not yet fulfilled this order even after 50 days.

According to the company statement, due to this artificial shortage of iron ore, raw material prices may increase to unnatural levels. Steel industry in Karnataka region contributes 0.5 percent to India's GDP and provides employment to thousands of people. If steel production does not continue with timely supply of iron ore, the already slowing Indian economy will suffer from loss of steel production in the Karnataka region as well, the statement said.

Tags: raw mat , India , Indian Subcon , Southeast Asia , investments , mining , JSW Steel , South Asia

(sourced steelorbis)

CIL to hike steam coal prices only after wage revision

Wednesday, 28 Sep 2011

PTI reported that the proposed price hike by state-run Coal India Ltd is unlikely before the beginning of next year and will take place after evaluating the impact of the wage revision.

Mr NC Jha CIL Chairman said "The quantum of price revision will be done on the basis of the wage revision. We had two meetings since August this year on wage revision. A third meeting of the Wage Committee is going to happen in November, but the final decision is unlikely to be taken before December. Price revision will happen after that."

He said that CIL has 3.8 lakh employees and wages account for 40% of its production cost. He added that the additional burden due to increased wages could not be ascertained immediately as this would entirely depend upon the quantum of raise the Wage Committee decides.

Mr Jha said that the revision in coal prices will have to be effected post the wage revision as otherwise it will have a huge burden on the company.

The wages of CIL employees were last raised in 2006 and the CIL employees recently gave a strike call demanding a 100% to 500% rise in pay package. Although a Voluntarily Retirement Scheme is in place in the company, very few have sought this option.

Mr R Mohan Das CIL HR Director said the management has already conveyed to the unions that such a steep hike could not be possible and urged them to work on the level of percentage hike. CIL has five major operating unions.

The company had raised the price of coal in 2009 for all products and a partial revision was undertaken in February 2011. Although coal pricing has been deregulated since the beginning of 2000, the government still plays a role in determining the price.

(Sourced from PTI)

New Indonesian coal law adds to power company woes in India

Wednesday, 28 Sep 2011

Power projects that had planned to get coal from Indonesia are yet to find a solution to the new law there that increased their costs and upset their viability calculations, even as the regulation that did all this took effect on Monday.

The new regulation says coal sold from the country is to be indexed to the international price and revised annually.

Among the high profile projects facing uncertainty is TATA Power ultra mega power project in Mundra, which is to commission its first unit of 800 MW this month. Reliance Power UMPP at Krishnapatnam where site work is yet to begin is also awaiting clarity on what to do. Both companies have made representations to the power ministry. Adani Power 4,000 Mw project at Mundra would also see cost escalation on the fuel side.

Estimates say projects of this size will lose INR 2,000 crore annually due to fuel price fluctuations. The ministry of power has yet to come up with a decision on a request made by the Association of Power Producers to allow them to pass on increased fuel prices to buyers. Senior electricity authorities say a decision on this matter now rests with individual power procurers mostly state-owned power utilities.

Mr Pramod Deo chairman of the Central Electricity Regulatory Commission said “If they feel they need the power contracted to them, they can make the decision.”

Experts note there is now provision in the law which allows a company to pass on escalation of fuel costs after a contract has been signed. The imported coal-based projects of both TATA Power and Reliance Power were awarded after competitive bidding. The winning companies were to shoulder the responsibility to arrange coal from an international location and made bids based on these. Both had acquired coal assets in Indonesia.

Mr Anil Razdan an energy consultant said concessions should be offered to these projects to facilitate timely implementation.

(sourced from Business Standard)

Aston seeks 8 million tonnes coal capacity at Newcastle Port

Wednesday, 28 Sep 2011

Dow Jones reported that Australian coal developer Aston Resources Ltd has set plans in train to raise its coal exports to as much as 14 million tonnes a year.

Aston which plans to mine an average of 10.8 million tonnes a year from its Maules Creek project said it had requested port operator Port Waratah Coal Services to deliver an extra 1 million tons per year from 2014 and 3.5 million tons from 2015. Aston expects allocations to be confirmed in December.

Last December, Aston was awarded 2 million tons per year from 2012, 5 million tons from 2013, and 10.5 million tons from 2015 taking its full capacity potential to 14 million tons a year from 2015.

The company said it was in final negotiations over a tender for a company to carry its coal to port from the mine site in the Gunnedah Basin north of the Hunter Valley coal basin, and would award contracts by the fourth quarter of 2011.

Australia only major coal train operators, QR National Ltd and Asciano Ltd are competing fiercely for new haulage contracts in the Hunter region.

(Sourced from Dow Jones)

Shandong to expand emergency coal storage

Wednesday, 28 Sep 2011

East China Shandong province is working to improve emergency storage capacity for coal to secure supplies to local users.

According to Shandong Coal Industry Bureau the province plans to boost its coal emergency storage capacity to over 3 million tonnes in 2011 and construction of some storage bases are going on smoothly.

The Luxi emergency storage base which has officially started construction recently is designed to reach storing capacity of 1 million tonnes and turnover capacity of 20 million tonnes per annum. With construction area of 14760 square kilometres the base is expected to complete in three years. And, the first phase of Longkou base had finished construction, with storing capacity reaching 2 million tonnes.

Additionally, construction of Zhucheng, Laiwu and Qihe bases are accelerating and planning for Rizhao and Heze bases are underway.

(sourced from SXCoal)

NMDC iron ore reserves set to be 2 billion tonnes

Wednesday, 28 Sep 2011

BS reported that NMDC Limited, the public sector mining major, has opened a new mine the Kumaraswamy Iron Ore Mine in Bellary district to increase its iron ore reserves. This comes in view of the depleting reserves in its Donimalai mines in the district. Simultaneously, the company is also exploring new mines in the state.

Mr Rana Som chairman and managing director, NMDC Limited said “With further geological exploration, additional mineral resources of 20 million tonne in Donimalai iron ore mine is anticipated to extend the present life of Donimalai mine by another 4 to 5 years. Considering this, it is now proposed to operate two mines in the Bellary Hospet sector, Donimalai and Kumaraswamy Iron Ore Mines. With this, the iron ore availability from the Bellary-Hospet sector would also drastically improve.”

In his address to the shareholders at the 53rd annual general meeting, Mr Som said the new exploration has yielded positive result for the company over the last year.

He said “The company biggest strength has been in its possessing large reserves of high grade iron ore at its existing mines at Bailadila and Donimalai. The company has been consistently active in carrying out planned exploration works in its existing mines.”

He added that the new exploration studies have indicated additional reserves of 111 million tonnes of iron ore in the Bailadila sector alone. Considering the geological continuity of ore deposits, it is expected that additional occurrence of 611 million tonne iron ore reserves could be established.

Mr Som said the company has also embarked on ensuring ‘zero-waste mining’ in its mines. It is now proposed that BHJ and BHQ ore could also be valuably beneficiated to produce around 64% to 65% Fe grade iron ore. The company proposes to set up a plant to process this ore at Donimalai.

For the year 2010-11, NMDC achieved production of 25.15 million tonnes of iron ore as against 23.80 million tonnes, showing a growth of 5.6% over the previous year.

(sourced from Business Standard)

India coal import in 2011-12 seen at 142 million tonnes - Government

Wednesday, 28 Sep 2011

Reuters citing Mr Alok Perti coal secretary of India as saying that India coal demand is seen at 696 million tonnes in 2011/12 against an expected local production of 554 million tonnes.

Earlier estimates have suggested Asia's third largest economy is likely to import about 135 million tonnes in the year ending March 31 2012.

(Sourced from Reuters)

Brazilian iron ore exports rise 11 percent in July

Sept28, 2011

According to the statistics provided by Brazil's National Union of the Industry of Extraction of Iron and Base Metals (Sinferbase), in July this year Brazil's iron ore exports amounted to 23.73 million metric tons, rising by 11 percent year on year.

The share of the world's largest iron ore exporter Vale in Brazil's total iron ore exports in July equalled 93.04 percent, amounting to 22.08 million metric tons, up 14.86 percent year on year.

Meanwhile in the first seven months of 2011 Brazilian iron ore exports rose by 4.76 percent year on year, reaching 157.33 million metric tons.

Vale's share in Brazil's total iron ore exports in the January-July period of this year reached 91.75 percent, amounting to 144.36 million metric tons, up 7.28 percent compared to the corresponding period of 2010.

Tags: iron ore , raw mat , Brazil , South America , Vale , imp/exp statistics , mining

South African coal export prices down by 1pct last week

Wednesday, 28 Sep 2011

Bloomberg quoted according to data on Bloomberg from researcher IHS McCloskey coal export prices at Richards Bay, South Africa, the continent biggest terminal for shipping the fuel fell USD 1.39 or 1.2% last week to an average USD 114.20 a metric ton.

The spot price declined 1.7% to an average USD 115.59 a ton in the previous week.

(sourced from Bloomberg)

JSW coking coal output may drop this year

Tuesday, 27 Sep 2011

Poland top coking coal miner JSW could see a drop in output to 12.5 million tonnes this year from 13.3 million tonnes in 2010

An accident earlier this year forced a cut in production at one of JSW's mines, but the miner expects output next year to rebound by 1 million tonnes following the restart of production on one of its walls.

Mr Andrzej Tor Deputy Chief Executive said "Despite unfavourable events in the first half of this year our actions will allow JSW to return to proper levels in the fourth quarter."

(Sourced from Reuters)

Greece plans to sell two PPC coal plants - Minister

Tuesday, 27 Sep 2011

Reuters reported that Greece plans to sell two coal-fired power stations belonging to its dominant electricity utility PPC to comply with European Union competition rules and the terms of an EU/IMF bailout.

The European Commission has been pushing Greece for years to lift PPC's de-facto monopoly on production of lignite, a form of soft brown coal that forms the backbone of electricity production in the country.

PPC is the EU second-biggest and the world sixth biggest producer of lignite with total annual production of about 60 million tonnes. Opening-up by 40% of the lignite market has been part of the economic reforms required by the country EU/IMF bailout.

Mr George Papaconstantinou Energy Minister of Greece said "We believe the negotiations (with the EU on selling the units) will be completed in the next weeks."

On sale will be the units at Amyntaion, North West Greece and Megalopolis in the country south. According to PPC documents, the two units have a combined installed capacity of 900 MW. Mr Papaconstantinou did not elaborate on when the units would be sold.
Mr Papaconstantinou said apart from the two power station sales, Greece plans to grant PPC rivals a concession to run a new lignite field at Vevi. The cash-strapped country will also tell PPC to proceed to power swaps with other energy players.

He said that all these measures combined will get Greece close to the target of opening up 40% of the lignite market.

Mr Papaconstantinou reiterated that the government was planning to sell a stake in the company in 2012 preferably to a strategic investor and not through the stock exchange. He said that another sale option would be to divest stakes in individual PPC subsidiaries to investors.

(Sourced from Reuters)

Mining ban to impact tipper demand in Karnataka

Tuesday, 27 Sep 2011

BS reported that the ban on illegal mining in Karnataka is adversely impacting the sales of trucks and tippers. Manufacturers such as Ashok Leyland, India second biggest truck maker and VE Commercial Vehicles are expecting a hit on retail offtake of trucks if the Supreme Court ban on mining is not lifted.

Already, demand for tippers in the ban-effected mining areas of Bellary, Chitradurga and Tumkur have been on a downtrend for the last few weeks. These trucks which are utilised by large fleet owners are used ferry the ore from mines to the ports.

Mr Somnath Bhattacharjee president Volvo Trucks India and executive vice-president said “Of course, stoppage of work will have a demand glut. I won’t be able to put a specific number to it now, but would definitely have an impact on the demand for tippers, as this is one of the areas where they are consumed.”

According to industry players about 9,500-10,000 tippers are sold every year in iron ore producing states like Karnataka and Goa. With such mines increasingly coming under the scanner of authorities, vehicle makers fear demand for tippers in Goa too will come under pressure.

Mr K Sridharan CFO of Ashok Leyland said "We would not be able to comment at this moment specifically on the impact of the mining ban on demand for trucks which serve such sectors. But if the ban continues it will certainly have an impact."

Chennai based Ashok Leyland signalling a broader slowdown in overall demand for commercial vehicles marked a dip of 4.6% in sales of medium and heavy commercial vehicles of last month to 4,584 units as against 4,796 units sold in the same month a year ago. The company does not provide classification according to the type of vehicle.

(sourced from BS)

Coal and iron ore prices will survive the downturn - Analyst

Tuesday, 27 Sep 20

Although copper, nickel, zinc and tin prices have dropped substantially in the last week, one analyst doesn't think the global market turmoil will extend to coal and iron ore prices.

Those two commodities are Australia's largest export earners, with China being the main buyer.

Analyst Imran Valibhoy says although China will remain cautious, it needs to keep its prime revenue source, manufacturing, going.

He said “China will continue to need large amounts of coal and iron ore. No, I don't think they'll pull back. I think they'll be a little bit more patient and take the time in investing in the rest of the world.”

He added that “I think there's still quite a strong belief around the world that Asia will still be the main driver for our commodity prices and they're still going to be the main consumer of our commodities.”

(sourced from abc.net.au)