Saturday, 10 Dec 2011
Mr Dinsha Patel minister of state for mines in a written reply to a question in Lok Sabha said that “Recently State Government of Karnataka and State Government of Orissa had, inter-alia, suggested ban on export of iron ore with a view to conserve minerals and allow value addition in the country. Demand for ban on iron ore is not new and it has arisen in the past out of concerns on depletion of ore due to exports, need to conserve the ore for future domestic requirement, leveraging domestic value addition capacity and inflationary impact of exports on domestic pricing.
These concerns had been duly considered by the Government and it was felt that these fears of depletion were misplaced and that though the Steel Industry needed protection, ban or cap on exports would not be the correct instrument, and the appropriate mechanism to control exports would lie in the fiscal measures.
It was also held that this position should be revisited after 10 years. The Government is also of the opinion that while exports of iron ore has increased in the last few years, these exports largely consist of Iron ore Fines(approximately 80%) which do not have sufficient domestic market, which if allowed to accumulate in the mines could pose serious environmental hazard apart from restricting production of Iron ore.”
Saturday, December 10, 2011
Indian steel ministry update on POSCO steel plant progress
Saturday, 10 Dec 2011
The Indian union minister for steel Mr Beni Prasad Verma has recently said given an update on 21 steel plants in India under planning and commissioning stages
POSCO India Project
Orissa Greenfield plant at Jagatsinghpur
Proposed Capacity: 12.0 million tonne per annum in three phases
Total land required - 4004 acres. 628 acres of non forest Govt. land was leased to the company.
Environment clearance and CRZ clearance for construction of port issued by MoEF
Proposed project cost - INR 51,000 crores approximately
Government of Orissa PL for 2500 Ha in Khandadhar in favour of the company. Matter Subjudice in Supreme Court in respect of Khandadhar iron ore mines.
On 29.12.2009, Ministry of Environment & Forests, accorded final (Stage-II) approval, for diversion of the forest land. Forest Clearance (Stage II) kept suspended since 06.08.2010.
Phase 1: 3.0 million tonne per annum will be commissioned 3 years after land possession.
The Indian union minister for steel Mr Beni Prasad Verma has recently said given an update on 21 steel plants in India under planning and commissioning stages
POSCO India Project
Orissa Greenfield plant at Jagatsinghpur
Proposed Capacity: 12.0 million tonne per annum in three phases
Total land required - 4004 acres. 628 acres of non forest Govt. land was leased to the company.
Environment clearance and CRZ clearance for construction of port issued by MoEF
Proposed project cost - INR 51,000 crores approximately
Government of Orissa PL for 2500 Ha in Khandadhar in favour of the company. Matter Subjudice in Supreme Court in respect of Khandadhar iron ore mines.
On 29.12.2009, Ministry of Environment & Forests, accorded final (Stage-II) approval, for diversion of the forest land. Forest Clearance (Stage II) kept suspended since 06.08.2010.
Phase 1: 3.0 million tonne per annum will be commissioned 3 years after land possession.
Peabody buys stake in Chinese coal importer
Saturday, 10 Dec 2011
Peabody Energy Corp the world biggest private-sector coal company bought a 5.1% stake in a Chinese coal importer. China is the world biggest coal market.
Financial terms for the stake of Winsway Coking Coal Holdings Ltd were not disclosed. Winsway is a major importer of coking coal for China steel industry and is a top supplier of Mongolian coal into China.
Peabody said the company currently operates a coal and uranium joint venture with Winsway in Mongolia. The two companies also recently reached a tentative deal to establish a joint venture to market coal in China and the Asia-Pacific region.
Peabody bought its equity stake by purchasing Winsway shares on the Hong Kong Stock Exchange.
(Sourced from www.cbsnews.com)
Peabody Energy Corp the world biggest private-sector coal company bought a 5.1% stake in a Chinese coal importer. China is the world biggest coal market.
Financial terms for the stake of Winsway Coking Coal Holdings Ltd were not disclosed. Winsway is a major importer of coking coal for China steel industry and is a top supplier of Mongolian coal into China.
Peabody said the company currently operates a coal and uranium joint venture with Winsway in Mongolia. The two companies also recently reached a tentative deal to establish a joint venture to market coal in China and the Asia-Pacific region.
Peabody bought its equity stake by purchasing Winsway shares on the Hong Kong Stock Exchange.
(Sourced from www.cbsnews.com)
MetroCoal achieves 520MT initial thermal coal JORC Resource at Dalby West
Saturday, 10 Dec 2011
MetroCoal has established a maiden JORC Resource of 520 million tonnes thermal coal for the Dalby West project, following completion of its 2011 exploration drilling program.
Dalby West is located at the south eastern end of the Surat Basin in Queensland and MetroCoal’s total Surat Basin underground coal resources now equal 2,883 million tonnes. The resource is based on using underground mining methods to extract the coal seams.
MetroCoal's extensive coal exploration tenements in the Surat Coal Basin cover 4,000 square kilometres and are down dip of well known resources including Wandoan, Elimatta, Cameby Downs and Worri.
Based on the geological information from the historic drilling programs and its own drilling results, MetroCoal expects to identify a coal JORC Inferred Resource of at least 2 billion tonnes within the next two years for conventional underground coal mining.
Modelling has identified the Macalister Upper Seam as being continuous and correlateable within the polygon area. This seam has a minimum thickness of 2.5 metres and an average thickness of over 4.5 metres and has the best potential for mining as a single section.
Several other seams including the Kogan and Macalister Lower Seams were identified.
Coal quality analysis was consistent with expectations of the Macalister Upper Seam which is a low sulphur medium ash thermal coal.
On November 18 MetroCoal and joint venture partner SinoCoal Resources achieved another milestone with the increased Inferred Resource for the Columboola Project in the Surat Basin to nearly 1.3 billion tonnes of thermal coal, up from 540 million tonnes previously.
(sourced Proactiveinvestors)
MetroCoal has established a maiden JORC Resource of 520 million tonnes thermal coal for the Dalby West project, following completion of its 2011 exploration drilling program.
Dalby West is located at the south eastern end of the Surat Basin in Queensland and MetroCoal’s total Surat Basin underground coal resources now equal 2,883 million tonnes. The resource is based on using underground mining methods to extract the coal seams.
MetroCoal's extensive coal exploration tenements in the Surat Coal Basin cover 4,000 square kilometres and are down dip of well known resources including Wandoan, Elimatta, Cameby Downs and Worri.
Based on the geological information from the historic drilling programs and its own drilling results, MetroCoal expects to identify a coal JORC Inferred Resource of at least 2 billion tonnes within the next two years for conventional underground coal mining.
Modelling has identified the Macalister Upper Seam as being continuous and correlateable within the polygon area. This seam has a minimum thickness of 2.5 metres and an average thickness of over 4.5 metres and has the best potential for mining as a single section.
Several other seams including the Kogan and Macalister Lower Seams were identified.
Coal quality analysis was consistent with expectations of the Macalister Upper Seam which is a low sulphur medium ash thermal coal.
On November 18 MetroCoal and joint venture partner SinoCoal Resources achieved another milestone with the increased Inferred Resource for the Columboola Project in the Surat Basin to nearly 1.3 billion tonnes of thermal coal, up from 540 million tonnes previously.
(sourced Proactiveinvestors)
Richards Bay Terminal BRR 3 billion upgrade
Saturday, 10 Dec 2011
Public Enterprises Minister Malusi Gigaba said that the government would invest R3 billion in the Richards Bay Terminal in the next five years.
The money would be invested in loading equipment, off-loading equipment, conveyor belts and other handling equipment. Mr Gigaba said that “An efficient port system enhances our national reputation… creating competition and choice for shippers.”
The terminal contains 21 berths for loading and off-loading ships.
Mr Gigaba said infrastructure roll-out was pivotal to stimulating the economy and creating employment. He added that “Infrastructure development is vital for industrialization… and it is vital for the establishment of social cohesion through facilitating shared growth and the sharing of wealth.”
The coal terminal section would also be expanded.
He added that “We intend expanding the coal export line to over 81 million tons per annum by 2016. This expansion will involve the migration of Eskom’s domestic coal from road to rail, the establishment of the Waterberg rail, port expansion and capacity allocation to junior miners.”
(sourced from www.iol.co.za)
Public Enterprises Minister Malusi Gigaba said that the government would invest R3 billion in the Richards Bay Terminal in the next five years.
The money would be invested in loading equipment, off-loading equipment, conveyor belts and other handling equipment. Mr Gigaba said that “An efficient port system enhances our national reputation… creating competition and choice for shippers.”
The terminal contains 21 berths for loading and off-loading ships.
Mr Gigaba said infrastructure roll-out was pivotal to stimulating the economy and creating employment. He added that “Infrastructure development is vital for industrialization… and it is vital for the establishment of social cohesion through facilitating shared growth and the sharing of wealth.”
The coal terminal section would also be expanded.
He added that “We intend expanding the coal export line to over 81 million tons per annum by 2016. This expansion will involve the migration of Eskom’s domestic coal from road to rail, the establishment of the Waterberg rail, port expansion and capacity allocation to junior miners.”
(sourced from www.iol.co.za)
Rio urges Guinea to start transporting iron ore from Simandou project
Saturday, 10 Dec 2011
Reuters reported that Rio Tinto has proposed to the government of Guinea to start transporting iron ore from its Simandou project by trucks in 2015, while waiting for a planned railway so as to honor delivery contracts.
Mr Tom Albanese CEO of Rio Tinto said that "We have proposed this option in order meet the terms of agreements which provides for the delivery of the first tonnes of ore in 2015."
Mr Albanese said that over USD 1.1 billion has been committed for urgent studies on the 650 km railway to link the mine in the north to the west coast of the gulf of Guinea nation.
The global miner is ramping up infrastructure spending on the Simandou project, which it has said will see first shipment of ore by mid 2015.
Rio approved USD 1.3 billion of funding in October 2011, bringing taking total amount spent or committed to the project to USD 3 billion.
The miner, the world's second largest iron ore producer behind Brazil's Vale, has said work was progressing on obtaining regulatory approvals with its project partner, China's Chalco), which will trigger the creation of a JV and an earn in payment of USD 1.35 billion.
The infrastructure investment framework for the project is expected to be finalized in early 2012, prompting the government's requirement to contribute its share of infrastructure expenditure incurred to date.
Mr Albanese said that "Our priority is currently to develop our activities in the mine to allow meeting the deadline of 2015."
Mr Alan Davis, Rio's president for international operation, told the news conference that only after the feasibility studies would the firm be able to determine the actual cost of the railway.
(sourced from Reuters)
Reuters reported that Rio Tinto has proposed to the government of Guinea to start transporting iron ore from its Simandou project by trucks in 2015, while waiting for a planned railway so as to honor delivery contracts.
Mr Tom Albanese CEO of Rio Tinto said that "We have proposed this option in order meet the terms of agreements which provides for the delivery of the first tonnes of ore in 2015."
Mr Albanese said that over USD 1.1 billion has been committed for urgent studies on the 650 km railway to link the mine in the north to the west coast of the gulf of Guinea nation.
The global miner is ramping up infrastructure spending on the Simandou project, which it has said will see first shipment of ore by mid 2015.
Rio approved USD 1.3 billion of funding in October 2011, bringing taking total amount spent or committed to the project to USD 3 billion.
The miner, the world's second largest iron ore producer behind Brazil's Vale, has said work was progressing on obtaining regulatory approvals with its project partner, China's Chalco), which will trigger the creation of a JV and an earn in payment of USD 1.35 billion.
The infrastructure investment framework for the project is expected to be finalized in early 2012, prompting the government's requirement to contribute its share of infrastructure expenditure incurred to date.
Mr Albanese said that "Our priority is currently to develop our activities in the mine to allow meeting the deadline of 2015."
Mr Alan Davis, Rio's president for international operation, told the news conference that only after the feasibility studies would the firm be able to determine the actual cost of the railway.
(sourced from Reuters)
Colombian coal production is stalling after rains
Saturday, 10 Dec 2011
Rain in Colombia will stall coal production until early next month. Production in November, December and early January likely will be unchanged from last year, when flooding also hampered mining, National Federation of Coal Producers President Jaime Olivella said in a phone interview in Bogota.
Colombia, South America’s largest coal supplier, will produce 75 million tonnes to 80 million tonnes this year, according to Olivella. That figure is below a government forecast for 85 million tonnes of output.
(sourced from Resourceintelligence.net)
Rain in Colombia will stall coal production until early next month. Production in November, December and early January likely will be unchanged from last year, when flooding also hampered mining, National Federation of Coal Producers President Jaime Olivella said in a phone interview in Bogota.
Colombia, South America’s largest coal supplier, will produce 75 million tonnes to 80 million tonnes this year, according to Olivella. That figure is below a government forecast for 85 million tonnes of output.
(sourced from Resourceintelligence.net)
Friday, December 9, 2011
S&P’s Adelson Steps Down as Chief Credit Officer, Jacob Leaves in Shuffle
Friday, Dec09, 2011
Standard & Poor’s is replacing its chief credit officer, Mark Adelson, as the world’s largest ratings company winds down a year in which its grades of governments have faced growing scrutiny.
Adelson, 51, who oversaw an overhaul of S&P’s methodologies that was designed to address their failures during the collapse of the mortgage-bond market, will become a “senior research fellow,” the New York-based unit of McGraw-Hill Cos. said yesterday in a statement. Also, David Jacob, global head of structured finance, will depart at the end of the month.
The changes come three months after Douglas Peterson left Citigroup Inc. to become S&P’s president, following its decision to strip the U.S. of its top AAA ranking. This week, the firm warned it may downgrade Germany, France and 13 other European countries. Even as S&P’s moves roil credit markets, McGraw-Hill is planning to separate its financial businesses from its textbook publishing unit under pressure from hedge fund Jana Partners LLC.
“There are a lot of changes going on at McGraw-Hill broadly,” Peter Appert, an analyst who follows the company at Piper Jaffray & Co. in San Francisco, said in a telephone interview. Peterson has been discussing removing layers of management, he said.
Ian Thompson, who was previously responsible for the Asia- Pacific region, will replace Adelson, S&P said in the statement. Peterson, the former chief operating officer of Citibank NA, replaced Deven Sharma, who had led the unit since 2007.
Worked Together
Jacob and Adelson joined S&P in 2008 from Adelson & Jacob Consulting, where they worked together. Jacob took over a structured-finance business that was blamed by congressional investigators for contributing to the worst financial crisis since the Great Depression by assigning top grades to risky real-estate bonds.
Under Adelson, S&P revised the way it graded governments, banks and bonds backed by assets such as mortgages. The new criteria for structured finance were designed to be “tougher,” Adelson said in an undated video on S&P’s website. Any bonds carrying AAA ratings should be able to withstand stress similar to the Great Depression, Adelson wrote in a paper in 2009.
S&P downgraded the U.S. one step to AA+ on Aug. 5, saying that gridlock in Washington and the rising national debt were making it riskier to invest in government bonds. The cut was questioned by President Barack Obama, who said in a speech on Aug. 8 that the ratings company was basing its judgment on politics, not on the government’s ability to pay its debts.
Europe Warning
On Dec. 5, S&P warned that it may cut 15 euro nations as policy makers prepared to meet in Brussels to end a crisis that led to bailouts of Greece, Ireland and Portugal, and now threatens to engulf Italy.
European Central Bank governing council member Christian Noyer lambasted S&P.
“They changed their methodology and it’s now more linked to political factors and less to fundamentals,” Noyer said on Dec. 5 at a conference in Paris. “The rating agencies fueled the crisis in 2008 and we can question whether they’re not doing the same thing in the current crisis.”
Moritz Kraemer, S&P’s head of European sovereign ratings, denied that the company was trying to influence politics.
Deal Scuttled
In July, S&P withdrew grades it had assigned to a $1.5 billion offering of bonds backed by commercial mortgages from Goldman Sachs Group Inc. and Citigroup Inc., forcing the banks to scuttle the deal after it was placed with investors.
“The manner in which S&P took its action has severely eroded investor and issuer confidence in its ratings,” Morgan Stanley analysts led by Richard Parkus in New York wrote in a note on July 28.
Last month, after revising its bank criteria, S&P lowered its ratings of Goldman Sachs Group Inc., Bank of America Corp. and UBS AG.
Prior to consulting, Adelson was head of structured finance research at Nomura Securities International, according to a statement announcing his hiring.
S&P also said that it was looking to hire a new chief economist and chief risk officer. McGraw-Hill said on Dec. 7 it would eliminate 550 jobs at its education unit.
(sourced Bloomberg)
Standard & Poor’s is replacing its chief credit officer, Mark Adelson, as the world’s largest ratings company winds down a year in which its grades of governments have faced growing scrutiny.
Adelson, 51, who oversaw an overhaul of S&P’s methodologies that was designed to address their failures during the collapse of the mortgage-bond market, will become a “senior research fellow,” the New York-based unit of McGraw-Hill Cos. said yesterday in a statement. Also, David Jacob, global head of structured finance, will depart at the end of the month.
The changes come three months after Douglas Peterson left Citigroup Inc. to become S&P’s president, following its decision to strip the U.S. of its top AAA ranking. This week, the firm warned it may downgrade Germany, France and 13 other European countries. Even as S&P’s moves roil credit markets, McGraw-Hill is planning to separate its financial businesses from its textbook publishing unit under pressure from hedge fund Jana Partners LLC.
“There are a lot of changes going on at McGraw-Hill broadly,” Peter Appert, an analyst who follows the company at Piper Jaffray & Co. in San Francisco, said in a telephone interview. Peterson has been discussing removing layers of management, he said.
Ian Thompson, who was previously responsible for the Asia- Pacific region, will replace Adelson, S&P said in the statement. Peterson, the former chief operating officer of Citibank NA, replaced Deven Sharma, who had led the unit since 2007.
Worked Together
Jacob and Adelson joined S&P in 2008 from Adelson & Jacob Consulting, where they worked together. Jacob took over a structured-finance business that was blamed by congressional investigators for contributing to the worst financial crisis since the Great Depression by assigning top grades to risky real-estate bonds.
Under Adelson, S&P revised the way it graded governments, banks and bonds backed by assets such as mortgages. The new criteria for structured finance were designed to be “tougher,” Adelson said in an undated video on S&P’s website. Any bonds carrying AAA ratings should be able to withstand stress similar to the Great Depression, Adelson wrote in a paper in 2009.
S&P downgraded the U.S. one step to AA+ on Aug. 5, saying that gridlock in Washington and the rising national debt were making it riskier to invest in government bonds. The cut was questioned by President Barack Obama, who said in a speech on Aug. 8 that the ratings company was basing its judgment on politics, not on the government’s ability to pay its debts.
Europe Warning
On Dec. 5, S&P warned that it may cut 15 euro nations as policy makers prepared to meet in Brussels to end a crisis that led to bailouts of Greece, Ireland and Portugal, and now threatens to engulf Italy.
European Central Bank governing council member Christian Noyer lambasted S&P.
“They changed their methodology and it’s now more linked to political factors and less to fundamentals,” Noyer said on Dec. 5 at a conference in Paris. “The rating agencies fueled the crisis in 2008 and we can question whether they’re not doing the same thing in the current crisis.”
Moritz Kraemer, S&P’s head of European sovereign ratings, denied that the company was trying to influence politics.
Deal Scuttled
In July, S&P withdrew grades it had assigned to a $1.5 billion offering of bonds backed by commercial mortgages from Goldman Sachs Group Inc. and Citigroup Inc., forcing the banks to scuttle the deal after it was placed with investors.
“The manner in which S&P took its action has severely eroded investor and issuer confidence in its ratings,” Morgan Stanley analysts led by Richard Parkus in New York wrote in a note on July 28.
Last month, after revising its bank criteria, S&P lowered its ratings of Goldman Sachs Group Inc., Bank of America Corp. and UBS AG.
Prior to consulting, Adelson was head of structured finance research at Nomura Securities International, according to a statement announcing his hiring.
S&P also said that it was looking to hire a new chief economist and chief risk officer. McGraw-Hill said on Dec. 7 it would eliminate 550 jobs at its education unit.
(sourced Bloomberg)
Glencore takes stake in SA coal firm
Friday, Dec 09 2011
Johannesburg - Commodities giant Glencore said on Wednesday it has completed the acquisition of a 43.66% stake in an unlisted South African coal mining business for R900m.
Glencore said in a statement that the stake in Umcebo Mining gives it access to South Africa’s principal coal field in the northeastern Mpumalanga province.
“In addition the transaction also secures access to an eventual 1.5 million metric tonnes of export allocation in Phase V of the Richards Bay Coal Terminal,” it said.
Umcebo has three thermal coal mines in operation and a stand-alone wash plant, with a total annual production capacity of 7.2 million run of mine metric tonnes.
Glencore has also been trying to gain control of South African coal miner Optimum as part of its strategy to become a major force in all top coal exporting regions.
Sourced: Reuters
Johannesburg - Commodities giant Glencore said on Wednesday it has completed the acquisition of a 43.66% stake in an unlisted South African coal mining business for R900m.
Glencore said in a statement that the stake in Umcebo Mining gives it access to South Africa’s principal coal field in the northeastern Mpumalanga province.
“In addition the transaction also secures access to an eventual 1.5 million metric tonnes of export allocation in Phase V of the Richards Bay Coal Terminal,” it said.
Umcebo has three thermal coal mines in operation and a stand-alone wash plant, with a total annual production capacity of 7.2 million run of mine metric tonnes.
Glencore has also been trying to gain control of South African coal miner Optimum as part of its strategy to become a major force in all top coal exporting regions.
Sourced: Reuters
SA misses coal boom
Fri, Dec9, 2011
London - South Africa's coal exports are surging into 2012 just when top spot buyers China and India are out of the market and supply bottlenecks elsewhere have eased, so it will have to fight for market share, eroding prices in a fundamentally weak landscape.
South Africa has the port capacity to export 81 million tonnes a year of coal from Richards Bay Coal Terminal, but in recent years the tonnage shipped has been far lower at about 64 million tonnes due to rail bottlenecks.
Exports in 2012 are forecast at around 70 million tonnes due to operator Transnet Freight Rail's (TFR's) improved railing rate, exporters and analysts said.
Even if TFR cannot sustain its target 1.6 million tonnes of coal a week moved to Richards Bay, after years of doubt and stinging criticism exporters expect rail rates to rise enough for an extra 7-10 million tonnes of exports.
"I think there's a lot of room for prices to come down - I wouldn't be surprised to see $85.00 a tonne FOB Richards Bay then rebounding back to $105 next year,” said Jaime Correal, analyst at Wood Mackenzie in Annapolis.
Exporters who have enjoyed fat margins on sales at over $100 against cash costs of about $60 are weighing up their likely profits on a higher volume sales at lower prices.
South Africa will export 21 million tonnes of coal in Q4, only slightly less than the 27 million shipped in the first half of the year, following a dramatic performance improvement by rail operator TFR.
Benchmark South African prices FOB Richards Bay have fallen from January’s highs of over $130.00 a tonne to about $100.00, on weakening fundamentals which will bite harder and push prices down in the coming year.
"Isn't it ironic that South Africa gets its act together on railings just as China withdraws from the market?," one major European trader said.
"It's the coal without any visible means of support because it isn't yet pricing in to any market in the world," he said.
This year began with a price spike and supply disruption due to floods in Australia's Queensland state and the Japanese tsunami. Indonesia and Colombia's output was hampered by severe rains and South Africa's exports seemed set for a shockingly low total of under 57 million tonnes.
"Last year almost every exporter had problems - but this year it's the reverse, nobody has a major problem exporting and South Africa is shipping at a totally unexpected rate," one major South African exporter said.
"It's bearish next year and the South African exporters are not in the best position to be trying to increase sales now," said Emmanuel Fages, an analyst with Societe Generale.
But some are unconvinced that TFR can keep up the pace.
"The performance of TFR has really improved lately but it's not clear if it will be sustainable or whether they'll start to have problems again," said Jaime Correal, coal analyst with Wood Mackenzie.
"For this reason and because of strong domestic demand, we expect a slow growth in South African exports to 68 million tonnes maximum next year and slowly beyond that."
Retired drivers save the day
Among numerous TFR initiatives this year, the re-hiring of locomotive drivers had a dramatic impact on productivity, exporter, rail and transport sources said.
"TFR re-employed 26 retired or semi-retired train drivers; their knowledge is very important, they know how to handle a train and can do their own minor repairs," one source said.
These experienced drivers are able to drive new longer trains with many more jumbo wagons over some challenging parts of the line prone to derailments, and can save hours by avoiding the need to send out repair teams.
The move to a scheduled rail service, infra-red inspections of rail track (two potential derailments were averted that way) and raised security to prevent cable theft all played a part.
Rising quantities of American coal bought 1-2 years ago at discount prices are being shipped to Europe, increasing the pressure on South African sellers to shift sales to Asia.
India has been the biggest single buyer of South African coal since 2007, much of it now sold under term contracts but from next year India's biggest trade importers say they will buy spot only and will seek cheaper alternatives where possible.
"There's no doubt that some of the Indian buyers with index-linked term contracts have really suffered and will be more short-term buyers," another major exporter said.
India has been out of the spot market for several months and in the meantime, China absorbed the unwanted tonnes.
China is now the second-largest buyer of South African coal and absorbed about 9.5 million tonnes in January-October, roughly a fifth of the country's exports and a huge increase.
South Korea, which has reverted to buying standard grade coal, is also expected to buy more from South Africa.
"China and India, especially China, are such a huge price influence and the Chinese buyers like South African coal so as long as freight rates remain fairly low, it will still be competitive into China," the second exporter said.
(sourced Reuters)
London - South Africa's coal exports are surging into 2012 just when top spot buyers China and India are out of the market and supply bottlenecks elsewhere have eased, so it will have to fight for market share, eroding prices in a fundamentally weak landscape.
South Africa has the port capacity to export 81 million tonnes a year of coal from Richards Bay Coal Terminal, but in recent years the tonnage shipped has been far lower at about 64 million tonnes due to rail bottlenecks.
Exports in 2012 are forecast at around 70 million tonnes due to operator Transnet Freight Rail's (TFR's) improved railing rate, exporters and analysts said.
Even if TFR cannot sustain its target 1.6 million tonnes of coal a week moved to Richards Bay, after years of doubt and stinging criticism exporters expect rail rates to rise enough for an extra 7-10 million tonnes of exports.
"I think there's a lot of room for prices to come down - I wouldn't be surprised to see $85.00 a tonne FOB Richards Bay then rebounding back to $105 next year,” said Jaime Correal, analyst at Wood Mackenzie in Annapolis.
Exporters who have enjoyed fat margins on sales at over $100 against cash costs of about $60 are weighing up their likely profits on a higher volume sales at lower prices.
South Africa will export 21 million tonnes of coal in Q4, only slightly less than the 27 million shipped in the first half of the year, following a dramatic performance improvement by rail operator TFR.
Benchmark South African prices FOB Richards Bay have fallen from January’s highs of over $130.00 a tonne to about $100.00, on weakening fundamentals which will bite harder and push prices down in the coming year.
"Isn't it ironic that South Africa gets its act together on railings just as China withdraws from the market?," one major European trader said.
"It's the coal without any visible means of support because it isn't yet pricing in to any market in the world," he said.
This year began with a price spike and supply disruption due to floods in Australia's Queensland state and the Japanese tsunami. Indonesia and Colombia's output was hampered by severe rains and South Africa's exports seemed set for a shockingly low total of under 57 million tonnes.
"Last year almost every exporter had problems - but this year it's the reverse, nobody has a major problem exporting and South Africa is shipping at a totally unexpected rate," one major South African exporter said.
"It's bearish next year and the South African exporters are not in the best position to be trying to increase sales now," said Emmanuel Fages, an analyst with Societe Generale.
But some are unconvinced that TFR can keep up the pace.
"The performance of TFR has really improved lately but it's not clear if it will be sustainable or whether they'll start to have problems again," said Jaime Correal, coal analyst with Wood Mackenzie.
"For this reason and because of strong domestic demand, we expect a slow growth in South African exports to 68 million tonnes maximum next year and slowly beyond that."
Retired drivers save the day
Among numerous TFR initiatives this year, the re-hiring of locomotive drivers had a dramatic impact on productivity, exporter, rail and transport sources said.
"TFR re-employed 26 retired or semi-retired train drivers; their knowledge is very important, they know how to handle a train and can do their own minor repairs," one source said.
These experienced drivers are able to drive new longer trains with many more jumbo wagons over some challenging parts of the line prone to derailments, and can save hours by avoiding the need to send out repair teams.
The move to a scheduled rail service, infra-red inspections of rail track (two potential derailments were averted that way) and raised security to prevent cable theft all played a part.
Rising quantities of American coal bought 1-2 years ago at discount prices are being shipped to Europe, increasing the pressure on South African sellers to shift sales to Asia.
India has been the biggest single buyer of South African coal since 2007, much of it now sold under term contracts but from next year India's biggest trade importers say they will buy spot only and will seek cheaper alternatives where possible.
"There's no doubt that some of the Indian buyers with index-linked term contracts have really suffered and will be more short-term buyers," another major exporter said.
India has been out of the spot market for several months and in the meantime, China absorbed the unwanted tonnes.
China is now the second-largest buyer of South African coal and absorbed about 9.5 million tonnes in January-October, roughly a fifth of the country's exports and a huge increase.
South Korea, which has reverted to buying standard grade coal, is also expected to buy more from South Africa.
"China and India, especially China, are such a huge price influence and the Chinese buyers like South African coal so as long as freight rates remain fairly low, it will still be competitive into China," the second exporter said.
(sourced Reuters)
South Africa plans Richards Bay terminal upgrade
Friday, 09 December 2011
South Africa plans to invest 3 billion rand over the next five years on new equipment to boost handling capacity at the Richards Bay Terminal RBT.L, Public Enterprises Minister Malusi Gigaba said, Reuters reports.
RBT is a multi-purpose terminal and is different from the Richards Bay Coal Terminal RBCT.L that handles exclusively coal.
Gigaba told a business meeting in the Indian ocean port of Richards Bay that government was committed to have adequate investment in container handling at the port to give it a competitive advantage.
"We plan to invest 3 billion rand over the next 5 years at the RBT in loading equipments, off-loading equipments, conveyor belts and other handling equipment, bearing in mind that it is estimated that more might need to be invested over the next 7-8 years," Gigaba said.
Gigaba reiterated plans by state-owned logistics group Transnet to expand the coal export line leading to the RBCT to 81 million tonnes per year by 2016.
"This expansion of the coal export line will involve the migration of Eskom's domestic coal from road to rail, the establishment of the Waterberg rail, port expansion and capacity allocation to junior miners," he said.
RBCT is the world's single largest export coal terminal, with an expanded capacity of 91 million tonnes.
Source: Port News
Iron Ore-China steel futures ease after weak data
Fri Dec 9, 2011
* Weak China CPI, PPI point to sharply cooling economy
* Iron ore unchanged as buying interest stalls
SINGAPORE, Dec 9 (Reuters) - Shanghai rebar futures dropped for a second day on Friday, weighed down by a weak outlook for steel demand in top market China after fresh data suggested the Chinese economy was cooling off rapidly.
China's annual inflation rate slid to 4.2 percent in November -- the lowest level in more than a year -- from 5.5 percent in October, fuelling expectations of further monetary policy easing to fight deteriorating domestic and international economic conditions.
Producer inflation in the world's second-largest economy fell steeply to 2.7 percent in November from 5.0 percent in October. The most-traded May rebar contract on the Shanghai Futures Exchange eased 0.3 percent to 4,162 yuan a tonne by the midday break, and was nearly flat on week.
"Steel demand is really slow, so there's no real interest for iron ore at this point," said an iron ore trader in the port city of Rizhao in China's eastern Shandong province.
Iron ore with 62 percent iron content was unchanged at $139.40 a tonne on Thursday, cost and freight delivered to China, according to Steel Index .IO62-CNI=SI.
"We are offering our cargoes to all our customers, including traders and mills, but most of them choose to wait and see," said the Shandong-based trader, adding he was only able to sell 10,000 tonnes of iron ore this week, versus at least 50,000 tonnes a week when the market rallied in November.
"Chinese steel mills are generally not eager to replenish stocks, with many expecting further price falls," Steel Index said in a note. China's average daily crude steel output in late November rose for the first time since late September, although doubts remain about underlying steel demand amid a slowing economy and a government clampdown on the property sector still in place.
Average daily steel output in China stood at 1.685 million tonnes on Nov. 20-30, up 1.3 percent from mid-November, data from the China Iron and Steel Association showed.
The end-November run rate puts China's annualised steel output at 615 million tonnes, down from a record 627 million tonnes in 2010.
China's crude steel output stood at 581 million tonnes in January to October, up 11 percent from a year ago.
"End demand remains challenged by weak new residential construction activity, and slowing growth in steel demand more broadly," Commonwealth Bank of Australia said in a note.
But with access to trade finance improving and steel inventories remaining relatively low, the Australian bank said "a moderate demand recovery and/or restocking cycle cannot be ruled out in the short term".
* Weak China CPI, PPI point to sharply cooling economy
* Iron ore unchanged as buying interest stalls
SINGAPORE, Dec 9 (Reuters) - Shanghai rebar futures dropped for a second day on Friday, weighed down by a weak outlook for steel demand in top market China after fresh data suggested the Chinese economy was cooling off rapidly.
China's annual inflation rate slid to 4.2 percent in November -- the lowest level in more than a year -- from 5.5 percent in October, fuelling expectations of further monetary policy easing to fight deteriorating domestic and international economic conditions.
Producer inflation in the world's second-largest economy fell steeply to 2.7 percent in November from 5.0 percent in October. The most-traded May rebar contract on the Shanghai Futures Exchange eased 0.3 percent to 4,162 yuan a tonne by the midday break, and was nearly flat on week.
"Steel demand is really slow, so there's no real interest for iron ore at this point," said an iron ore trader in the port city of Rizhao in China's eastern Shandong province.
Iron ore with 62 percent iron content was unchanged at $139.40 a tonne on Thursday, cost and freight delivered to China, according to Steel Index .IO62-CNI=SI.
"We are offering our cargoes to all our customers, including traders and mills, but most of them choose to wait and see," said the Shandong-based trader, adding he was only able to sell 10,000 tonnes of iron ore this week, versus at least 50,000 tonnes a week when the market rallied in November.
"Chinese steel mills are generally not eager to replenish stocks, with many expecting further price falls," Steel Index said in a note. China's average daily crude steel output in late November rose for the first time since late September, although doubts remain about underlying steel demand amid a slowing economy and a government clampdown on the property sector still in place.
Average daily steel output in China stood at 1.685 million tonnes on Nov. 20-30, up 1.3 percent from mid-November, data from the China Iron and Steel Association showed.
The end-November run rate puts China's annualised steel output at 615 million tonnes, down from a record 627 million tonnes in 2010.
China's crude steel output stood at 581 million tonnes in January to October, up 11 percent from a year ago.
"End demand remains challenged by weak new residential construction activity, and slowing growth in steel demand more broadly," Commonwealth Bank of Australia said in a note.
But with access to trade finance improving and steel inventories remaining relatively low, the Australian bank said "a moderate demand recovery and/or restocking cycle cannot be ruled out in the short term".
Shanghai rebar futures and iron ore indexes at 0459 GMT
Contract Last Change Pct Change
SHANGHAI REBAR* 4162 -14.00 -0.34
PLATTS 62 PCT INDEX 141.25 -0.25 -0.18
THE STEEL INDEX 62 PCT INDEX 139.4 0.00 0.00
METAL BULLETIN INDEX 139.75 -0.16 -0.11
*In yuan/tonne
#Index in dollars/tonne, show close for the previous trading day
(sourced Reuters)
Isdemir to maintain coking coal purchases in 2012
Friday, 09 Dec 2011
According to preliminary data, in 2012 Turkish steelmaker Isdemir plans to keep coking coal purchases at this year’s level of 3 million tonne. Nevertheless, the volumes may be lower if coke production is reduced. The material is imported from Australia, the USA and Canada.
According to available information, Isdemir operates 4 coke batteries with a total designed capacity of 2 million tonne per year. The company is running two blast furnaces with a total capacity of 3.6 million tonne per year and is self sufficient in coke. The leftover is shipped to Erdemir.
(Sourced from www.arabsteel.info)
According to preliminary data, in 2012 Turkish steelmaker Isdemir plans to keep coking coal purchases at this year’s level of 3 million tonne. Nevertheless, the volumes may be lower if coke production is reduced. The material is imported from Australia, the USA and Canada.
According to available information, Isdemir operates 4 coke batteries with a total designed capacity of 2 million tonne per year. The company is running two blast furnaces with a total capacity of 3.6 million tonne per year and is self sufficient in coke. The leftover is shipped to Erdemir.
(Sourced from www.arabsteel.info)
India has no problem with Iran imports
Friday, 09 Dec 2011
Gulf News reported that India sees no impediments to importing Iranian oil despite a new wave of sanctions imposed by the West.
Mr S Jaipal Reddy oil minister of India said that "As long as there are no sanctions on oil as such, other problems can be managed. There are some practical problems in making payments but we have managed to surmount those problems."
Iran is India's second biggest oil supplier after Saudi Arabia and exports total about USD 12 billion per year meeting about 12% of India's import needs.
India and Iran have been struggling to find a permanent mechanism to settle their bilateral trade especially since December when India's central bank scrapped a clearing house mechanism a move welcomed by the US which is trying to isolate Iran over its nuclear program.
The US, Britain and Canada announced new measures against Iran's energy and financial sectors last month and France proposed unprecedented new sanctions including freezing the assets of its central bank and suspending purchases of its oil. Meanwhile, the European Union last week added 180 people and entities to its Iran sanctions list and laid out plans for a possible embargo of Iranian oil.
Mr Reddy declined to comment on whether India would buy more Iranian oil if the EU bans imports or whether India was in talks with Saudi Arabia about fallback supplies if Iran crude stops coming, saying both were hypothetical situations.
(Sourced from Gulf News)
Gulf News reported that India sees no impediments to importing Iranian oil despite a new wave of sanctions imposed by the West.
Mr S Jaipal Reddy oil minister of India said that "As long as there are no sanctions on oil as such, other problems can be managed. There are some practical problems in making payments but we have managed to surmount those problems."
Iran is India's second biggest oil supplier after Saudi Arabia and exports total about USD 12 billion per year meeting about 12% of India's import needs.
India and Iran have been struggling to find a permanent mechanism to settle their bilateral trade especially since December when India's central bank scrapped a clearing house mechanism a move welcomed by the US which is trying to isolate Iran over its nuclear program.
The US, Britain and Canada announced new measures against Iran's energy and financial sectors last month and France proposed unprecedented new sanctions including freezing the assets of its central bank and suspending purchases of its oil. Meanwhile, the European Union last week added 180 people and entities to its Iran sanctions list and laid out plans for a possible embargo of Iranian oil.
Mr Reddy declined to comment on whether India would buy more Iranian oil if the EU bans imports or whether India was in talks with Saudi Arabia about fallback supplies if Iran crude stops coming, saying both were hypothetical situations.
(Sourced from Gulf News)
Turkish scrap imports in October down by 8pct MoM
Friday, 09 Dec 2011
According to the data provided by the Turkish Statistical Institute, in October this year Turkey's steel scrap imports fell by 8.05% from September and were up 3% compared to the same month last year amounting to 1.78 million tonnes.
The data show that, in the given period, the average import price of Turkey's steel scrap stood at USD 468 per tonne remaining unchanged compared to the previous month but up USD 76 per tonne or 19.4% compared to October 2010.
In October, the US was Turkey's top scrap import source with 468,628 tonnes down 36.4% while Russia followed the US with its scrap exports to Turkey amounting to 270,134 tonnes up 51.5% both compared to September. In the given month, the UK exported 160,984 tonnes of steel scrap to Turkey up 2.3% while Belgium exported 160,348 tonnes to Turkey up 39.6% both compared to September this year.
Meanwhile, in the first 10 months of the year Turkey's scrap imports amounted to 17.43 million tonnes. In the January to October period, the US was Turkey's top scrap import source with 4.7 million tonnes while Russia and Romania followed the US with 1.89 million tonnes and 1.85 million tonnes respectively.
(Sourced from Steel Orbis)
According to the data provided by the Turkish Statistical Institute, in October this year Turkey's steel scrap imports fell by 8.05% from September and were up 3% compared to the same month last year amounting to 1.78 million tonnes.
The data show that, in the given period, the average import price of Turkey's steel scrap stood at USD 468 per tonne remaining unchanged compared to the previous month but up USD 76 per tonne or 19.4% compared to October 2010.
In October, the US was Turkey's top scrap import source with 468,628 tonnes down 36.4% while Russia followed the US with its scrap exports to Turkey amounting to 270,134 tonnes up 51.5% both compared to September. In the given month, the UK exported 160,984 tonnes of steel scrap to Turkey up 2.3% while Belgium exported 160,348 tonnes to Turkey up 39.6% both compared to September this year.
Meanwhile, in the first 10 months of the year Turkey's scrap imports amounted to 17.43 million tonnes. In the January to October period, the US was Turkey's top scrap import source with 4.7 million tonnes while Russia and Romania followed the US with 1.89 million tonnes and 1.85 million tonnes respectively.
(Sourced from Steel Orbis)
Shah Commission begins probe into illegal mining in Orissa
Friday, 09 Dec 2011
PTI reported that the Centre appointed Shah Commission led by former Supreme Court judge Justice MB Shah has formally began investigation into illegal mining in Orissa.
The Commission held a discussion with the district authorities of Keonjhar and Sundergarh besides authorities of the railways, Indian Bureau of Mines and forest officials.
Collectors, superintendents of police, divisional forest officers, regional manager of the pollution control board and vigilance officer of the south eastern railways attended the meeting.
The commission members are scheduled to visit certain mines in Joda areas of Keonjhar district and Koida area in Sundergarh district, an official said.
The commission was unlikely to hold public hearing due to shortage of time.
(Sourced from PTI)
PTI reported that the Centre appointed Shah Commission led by former Supreme Court judge Justice MB Shah has formally began investigation into illegal mining in Orissa.
The Commission held a discussion with the district authorities of Keonjhar and Sundergarh besides authorities of the railways, Indian Bureau of Mines and forest officials.
Collectors, superintendents of police, divisional forest officers, regional manager of the pollution control board and vigilance officer of the south eastern railways attended the meeting.
The commission members are scheduled to visit certain mines in Joda areas of Keonjhar district and Koida area in Sundergarh district, an official said.
The commission was unlikely to hold public hearing due to shortage of time.
(Sourced from PTI)
FMG chairman Mr Forrest sees more iron ore price volatility
Friday, 09 Dec 2011
Fortescue Metals Group, Australia's third biggest exporter of iron ore, sees strong prices for the steelmaking ingredient in 2012 with potential for quick declines similar to those seen this year.
Mr Andrew Forrest chairman of FMG said that "Prices will be reasonably strong, but don't be surprised if there's a couple of sudden dip. I call reasonable anything above USD 100. That's a good sustainable iron ore price."
Prices for the steelmaking raw material delivered into China slumped in October, falling 31% for the month, including the biggest one day drop in more than two years as demand waned. Rio Tinto Group, the second biggest exporter, last week said some Chinese buyers have had credit difficulties while customers are still purchasing all its output.
Mr Forrest said that "All of our customers have been very strong and I would point out that Chinese growth has collapsed to over nine per cent. If any other economy had over nine per cent they would all be drinking champagne."
China's economy grew by 9.1% in the third quarter as compared with a year earlier, the slowest pace in two years. The credit tightening policy has curbed demand and prompted local mills including Baoshan Iron & Steel Co. to cut prices. The debt crisis in Europe has raised concerns that economic growth may slow in emerging countries.
Mr Forrest, who controls about 32% of Fortescue, which has a market value of AUD 15 billion, said that "Fortescue's in a unique position in that it's very popular in China."
Since October 31st 2011, the price of ore delivered to China's Tianjin port has rebounded 18%. It dropped 0.1% to USD 139.40.
(sourced from Theage.com.au)
Fortescue Metals Group, Australia's third biggest exporter of iron ore, sees strong prices for the steelmaking ingredient in 2012 with potential for quick declines similar to those seen this year.
Mr Andrew Forrest chairman of FMG said that "Prices will be reasonably strong, but don't be surprised if there's a couple of sudden dip. I call reasonable anything above USD 100. That's a good sustainable iron ore price."
Prices for the steelmaking raw material delivered into China slumped in October, falling 31% for the month, including the biggest one day drop in more than two years as demand waned. Rio Tinto Group, the second biggest exporter, last week said some Chinese buyers have had credit difficulties while customers are still purchasing all its output.
Mr Forrest said that "All of our customers have been very strong and I would point out that Chinese growth has collapsed to over nine per cent. If any other economy had over nine per cent they would all be drinking champagne."
China's economy grew by 9.1% in the third quarter as compared with a year earlier, the slowest pace in two years. The credit tightening policy has curbed demand and prompted local mills including Baoshan Iron & Steel Co. to cut prices. The debt crisis in Europe has raised concerns that economic growth may slow in emerging countries.
Mr Forrest, who controls about 32% of Fortescue, which has a market value of AUD 15 billion, said that "Fortescue's in a unique position in that it's very popular in China."
Since October 31st 2011, the price of ore delivered to China's Tianjin port has rebounded 18%. It dropped 0.1% to USD 139.40.
(sourced from Theage.com.au)
Russian coal output rises in first eleven months
Friday, 09 Dec 2011
According to the State Statistics Committee of Russia (Russtat), in the January to November period of the current year Russia produced 303.73 million tonnes of coal up by 4.1%YoY.
According to the data for the first 11 months of the current year, Russia coal exports increased by 8.6%YoY to 97.15 million tonnes. In November alone, Russia exported 8.657 million tonnes of coal up by 6.5%YoY.
(Sourced from SteelOrbis)
According to the State Statistics Committee of Russia (Russtat), in the January to November period of the current year Russia produced 303.73 million tonnes of coal up by 4.1%YoY.
According to the data for the first 11 months of the current year, Russia coal exports increased by 8.6%YoY to 97.15 million tonnes. In November alone, Russia exported 8.657 million tonnes of coal up by 6.5%YoY.
(Sourced from SteelOrbis)
Take time for mega ships to enter China - Vale
Friday, 09 Dec 2011
Brazilian iron ore miner Vale said it would take time for its new mega ships to be able to enter Chinese ports but stood by its shipping strategy.
Its multi billion dollar plan to cut freight costs by ordering a fleet of 35 of the world's biggest iron ore carriers as it aims to tap demand in China, the world's No 1 importer of the raw material used to produce steel, has faced stiff opposition from Chinese shipping players.
Mr Jose Carlos Martins Vale's executive director of iron ore and strategy told a news conference that "It was definitely not a mistake.”
These safety measures, the drafting situations when asked whether he regretted building the mega vessels before getting permission to berth at Chinese ports.
Mr Martins said that "I think it is a question of time, and these vessels will be very much used on this route from Brazil to Asia." Mr Martins would not speculate how long it will take.
He added that "I think things will happen in ports, all of these things have to be seen, to be developed, without being in a hurry. It takes time. You need to be patient.”
China has yet to allow any of Vale's giant ships to dock at its ports, forcing the world's biggest iron-ore producer to send its vessels instead to Italy, Oman and other destinations.
(Sourced from Reuters)
Brazilian iron ore miner Vale said it would take time for its new mega ships to be able to enter Chinese ports but stood by its shipping strategy.
Its multi billion dollar plan to cut freight costs by ordering a fleet of 35 of the world's biggest iron ore carriers as it aims to tap demand in China, the world's No 1 importer of the raw material used to produce steel, has faced stiff opposition from Chinese shipping players.
Mr Jose Carlos Martins Vale's executive director of iron ore and strategy told a news conference that "It was definitely not a mistake.”
These safety measures, the drafting situations when asked whether he regretted building the mega vessels before getting permission to berth at Chinese ports.
Mr Martins said that "I think it is a question of time, and these vessels will be very much used on this route from Brazil to Asia." Mr Martins would not speculate how long it will take.
He added that "I think things will happen in ports, all of these things have to be seen, to be developed, without being in a hurry. It takes time. You need to be patient.”
China has yet to allow any of Vale's giant ships to dock at its ports, forcing the world's biggest iron-ore producer to send its vessels instead to Italy, Oman and other destinations.
(Sourced from Reuters)
Cape Lambert Resources Looks to Sell Sierra Leone Iron Ore Project
Friday, 09 Dec 2011
Cape Lambert Resources is likely to sell its Marampa iron ore project in Sierra Leone soon. The mine which has been put up for sale has attracted many interested buyers including the Chinese/
Mr Tony Sage MD of Cape Lambert said that the mining entrepreneur from Perth was in Hong Kong last week where he said that Marampa was ready for sale. While his expectations contrast with the market assessment of the value of the project, he is confident of getting what he wants.
Mr Tony Sage added that they have at least three or four Chinese companies and other corporates larger than them in the data room. He expected this sale to go through as soon as the market recovered a little bit. The mining project is being valued at between USD 1 billion to 1.9 billion by different brokers.
Marampa is likely to have a life of between 30 to 40 years. It contains close to 680 million tons of iron ore. It is of 28.2 % iron ore and can be upgraded to 65% iron ore by some grinding and separation as per test work conducted by the company.
(sourced from azomining.com)
Cape Lambert Resources is likely to sell its Marampa iron ore project in Sierra Leone soon. The mine which has been put up for sale has attracted many interested buyers including the Chinese/
Mr Tony Sage MD of Cape Lambert said that the mining entrepreneur from Perth was in Hong Kong last week where he said that Marampa was ready for sale. While his expectations contrast with the market assessment of the value of the project, he is confident of getting what he wants.
Mr Tony Sage added that they have at least three or four Chinese companies and other corporates larger than them in the data room. He expected this sale to go through as soon as the market recovered a little bit. The mining project is being valued at between USD 1 billion to 1.9 billion by different brokers.
Marampa is likely to have a life of between 30 to 40 years. It contains close to 680 million tons of iron ore. It is of 28.2 % iron ore and can be upgraded to 65% iron ore by some grinding and separation as per test work conducted by the company.
(sourced from azomining.com)
Iron ore price negotiations - Who will blink first - Vale or China
Friday, 09 Dec 2011
FE reported that Vale SA’s scare as one of its new gigantic iron ore ships cracked two ballast tanks is a mere sideshow to the bigger battle between the world’s largest producer of the ore and China, the biggest buyer. At stake is who gets to hold the whip hand in the 1 billion tonne a year seaborne iron ore market, and neither side is going to want to blink first.
Neither the Brazilian company or the Chinese may have to give in first, as there are reasons to think that a compromise may be the best way to resolve the dispute.
The heart of the problem lies in Vale’s plan to build 35 mega-bulk carriers with a capacity of around 4,00,000 tonne each, or about double the average size of existing Capesize vessels that haul the world’s iron ore.
Vale’s reasoning is simple enough, it will allow them to cut freight costs and better compete with BHP Billiton and Rio Tinto, whose mines in Western Australia are substantially closer to China than those in Brazil, whose ore has to cross two oceans and go around the Cape of Good Hope. Using the massive vessels, six of which are already sailing will reduce freight costs and could cut the USD 14 per tonne freight charge from Brazil to China in half.
If Vale owns the ships, it will get the saving, and USD 7 a tonne on the around 140 million tonne a year Vale sells to China represents a gain of as much as USD 980 million. The entry of the ultra-large ore carriers will also depress freight rates for Capesize vessels, meaning Vale will also benefit from lower charges on the 180 million tonne of output that it sells to customers other than China. And it’s here where the Chinese objections to Vale’s shipping plans come to the fore.
China’s state owned Cosco Group will suffer if Vale’s giant vessels depress freight rates further. COSCO will also lose volumes to the Vale ships, so it’s a double whammy. And Chinese steelmarkers fear that if Vale controls both the mines and the ships it will lessen their ability to bargain for better prices.
The steelmakers also worry they won’t share in the benefit of falling freight rates, with the extra cash accruing to the miners, who have already gained from changing to short-term contracts . So it comes as no surprise that Vale’s ships have so far been blocked from docking at Chinese ports, on the grounds that facilities aren’t yet ready for them and questions as to how they would be guided to the docks.
But it may also be that the Chinese are upping the ante with Vale, effectively saying that they aren’t going to allow the ships in until the Brazilian company makes some concessions.
These could include leasing out or selling the massive ore carriers, or agreeing to some price reductions to steelmakers so the benefits of cheaper freight costs are shared.
Vale maintains it doesn’t want the new vessels in order to make money from the volatile shipping business, rather it wants to improve its own competitiveness against the Australians. That may well be the case, but then Vale should be willing to compromise in order to lock in some profits.
The longer the matter remains unresolved, the more likely it becomes that the winners will be BHP and Rio. China’s imports of iron ore rose 10.9% in the year to October over the same period last year, with Brazil’s share gaining 13.3% while Australia’s rose by 9.2%.
(Sourced from FE)
FE reported that Vale SA’s scare as one of its new gigantic iron ore ships cracked two ballast tanks is a mere sideshow to the bigger battle between the world’s largest producer of the ore and China, the biggest buyer. At stake is who gets to hold the whip hand in the 1 billion tonne a year seaborne iron ore market, and neither side is going to want to blink first.
Neither the Brazilian company or the Chinese may have to give in first, as there are reasons to think that a compromise may be the best way to resolve the dispute.
The heart of the problem lies in Vale’s plan to build 35 mega-bulk carriers with a capacity of around 4,00,000 tonne each, or about double the average size of existing Capesize vessels that haul the world’s iron ore.
Vale’s reasoning is simple enough, it will allow them to cut freight costs and better compete with BHP Billiton and Rio Tinto, whose mines in Western Australia are substantially closer to China than those in Brazil, whose ore has to cross two oceans and go around the Cape of Good Hope. Using the massive vessels, six of which are already sailing will reduce freight costs and could cut the USD 14 per tonne freight charge from Brazil to China in half.
If Vale owns the ships, it will get the saving, and USD 7 a tonne on the around 140 million tonne a year Vale sells to China represents a gain of as much as USD 980 million. The entry of the ultra-large ore carriers will also depress freight rates for Capesize vessels, meaning Vale will also benefit from lower charges on the 180 million tonne of output that it sells to customers other than China. And it’s here where the Chinese objections to Vale’s shipping plans come to the fore.
China’s state owned Cosco Group will suffer if Vale’s giant vessels depress freight rates further. COSCO will also lose volumes to the Vale ships, so it’s a double whammy. And Chinese steelmarkers fear that if Vale controls both the mines and the ships it will lessen their ability to bargain for better prices.
The steelmakers also worry they won’t share in the benefit of falling freight rates, with the extra cash accruing to the miners, who have already gained from changing to short-term contracts . So it comes as no surprise that Vale’s ships have so far been blocked from docking at Chinese ports, on the grounds that facilities aren’t yet ready for them and questions as to how they would be guided to the docks.
But it may also be that the Chinese are upping the ante with Vale, effectively saying that they aren’t going to allow the ships in until the Brazilian company makes some concessions.
These could include leasing out or selling the massive ore carriers, or agreeing to some price reductions to steelmakers so the benefits of cheaper freight costs are shared.
Vale maintains it doesn’t want the new vessels in order to make money from the volatile shipping business, rather it wants to improve its own competitiveness against the Australians. That may well be the case, but then Vale should be willing to compromise in order to lock in some profits.
The longer the matter remains unresolved, the more likely it becomes that the winners will be BHP and Rio. China’s imports of iron ore rose 10.9% in the year to October over the same period last year, with Brazil’s share gaining 13.3% while Australia’s rose by 9.2%.
(Sourced from FE)
Iron ore price offers steady but no impact from Vale ship incident
Friday, 09 Dec 2011
Iron ore price offers in top market China steadied on Tuesday as leaner steel demand curbed buying interest in the raw material, with Shanghai steel futures edging lower.
Traders said while a disabled mega vessel of top miner Vale in a Brazilian port has the potential to affect supplies if the problem is not resolved soon, it was too early to influence spot trading in iron ore.
Shipping agents and the ship's operator said that world's largest iron-ore vessel is disabled and could sink in a port where Vale, the world top producer, loads about 10 percent of global supplies of the commodity.
An iron ore trader in Singapore said that "It's not going to affect the (iron ore) market in the very short term but it has the potential to. It depends on how long it's going to take them for it to get off the berth.”
(Sourced from Reuters)
Iron ore price offers in top market China steadied on Tuesday as leaner steel demand curbed buying interest in the raw material, with Shanghai steel futures edging lower.
Traders said while a disabled mega vessel of top miner Vale in a Brazilian port has the potential to affect supplies if the problem is not resolved soon, it was too early to influence spot trading in iron ore.
Shipping agents and the ship's operator said that world's largest iron-ore vessel is disabled and could sink in a port where Vale, the world top producer, loads about 10 percent of global supplies of the commodity.
An iron ore trader in Singapore said that "It's not going to affect the (iron ore) market in the very short term but it has the potential to. It depends on how long it's going to take them for it to get off the berth.”
(Sourced from Reuters)
Ukraine coke exports rise by 52pct in January to October
Friday, 09 Dec 2011
According to the official data for the first 10 months of the current year, Ukrainian exports of metallurgical coke increased by 52.4%YoY to 1.736 million tonnes worth a total of USD 661.98 million.
In October alone, coke exports from Ukraine decreased by 33.6% from September to 166,060 tonnes worth a total of USD 63.36 million.
In the first 10 months of 2011, Ukraine registered a 46%YoY decrease in its metallurgical coke imports to 126,520 tonnes worth USD 49.96 million.
In October alone, Ukraine metallurgical coke imports increased by 4.4 times compared to September to 40,710 tonnes worth a total of USD 16.71 million.
(Sourced from SteelOrbis)
According to the official data for the first 10 months of the current year, Ukrainian exports of metallurgical coke increased by 52.4%YoY to 1.736 million tonnes worth a total of USD 661.98 million.
In October alone, coke exports from Ukraine decreased by 33.6% from September to 166,060 tonnes worth a total of USD 63.36 million.
In the first 10 months of 2011, Ukraine registered a 46%YoY decrease in its metallurgical coke imports to 126,520 tonnes worth USD 49.96 million.
In October alone, Ukraine metallurgical coke imports increased by 4.4 times compared to September to 40,710 tonnes worth a total of USD 16.71 million.
(Sourced from SteelOrbis)
Wednesday, December 7, 2011
Workers strike at ArcelorMittal European sites
Wed Dec 7, 2011
* 24-hour strikes announced in Florange, France and Luxembourg - company
* Unions say 40,000 demonstrators protest closures in Liege, Belgium
* Unions protest steel mill closures in Europe
LONDON/BRUSSELS, Dec 7 (Reuters) - Thousands of workers were staging strikes and demonstrations at European plants of ArcelorMittal, the world's largest steelmaker, on Wednesday in what the European Metalworkers' Federation (EMF) said was a protest against job insecurity.
"There are strikes at Liege in Belgium, Florange in France and some smaller units in Luxembourg," Arne Langner a spokesman for ArcelorMittal said.
"The unions have announced a 24-hour strike. They have started this morning and we don't know yet whether it will be tonight or tomorrow morning that they will start to work again."
The EMF said strikes ranging from two hours per shift to a 24-hour walkout would take place at plants across France.
Stoppages were also expected to take place in Italy, Spain and at some sites in Germany, while rallies are planned in the Czech Republic, Romania, Macedonia and Poland.
Belgian unions said that there were 40,000 people at the demonstration in the Belgian town of Liege on Wednesday.
"There are not just steel workers here today, there are also workers from other sectors, both industry and services, which are on strike," Eric de Deyn spokesman for the BBTK union said.
"All shops in the city centre are closed out of solidarity with the workers of ArcelorMittal."
In October, Arcelor said it would permanently end liquid phase steel production at its site in Liege, given over-capacity and a slow recovery in the European market.
The group also idled blast furnaces in Florange in France and Eisenhuettenstadt in Germany.
The EMF said it would give an update on the walkouts and impact on production at a news conference in London later on Wednesday.
ArcelorMittal spokesman Langner did not comment on what impact the strike would have on the company's production.
The steel producer, which makes between 6 and 7 percent of global steel and has been laying off staff at some plants, said in early November a summer dip in demand is deepening into a second-half slump and customers were increasingly cautious due to economic uncertainties.
* 24-hour strikes announced in Florange, France and Luxembourg - company
* Unions say 40,000 demonstrators protest closures in Liege, Belgium
* Unions protest steel mill closures in Europe
LONDON/BRUSSELS, Dec 7 (Reuters) - Thousands of workers were staging strikes and demonstrations at European plants of ArcelorMittal, the world's largest steelmaker, on Wednesday in what the European Metalworkers' Federation (EMF) said was a protest against job insecurity.
"There are strikes at Liege in Belgium, Florange in France and some smaller units in Luxembourg," Arne Langner a spokesman for ArcelorMittal said.
"The unions have announced a 24-hour strike. They have started this morning and we don't know yet whether it will be tonight or tomorrow morning that they will start to work again."
The EMF said strikes ranging from two hours per shift to a 24-hour walkout would take place at plants across France.
Stoppages were also expected to take place in Italy, Spain and at some sites in Germany, while rallies are planned in the Czech Republic, Romania, Macedonia and Poland.
Belgian unions said that there were 40,000 people at the demonstration in the Belgian town of Liege on Wednesday.
"There are not just steel workers here today, there are also workers from other sectors, both industry and services, which are on strike," Eric de Deyn spokesman for the BBTK union said.
"All shops in the city centre are closed out of solidarity with the workers of ArcelorMittal."
In October, Arcelor said it would permanently end liquid phase steel production at its site in Liege, given over-capacity and a slow recovery in the European market.
The group also idled blast furnaces in Florange in France and Eisenhuettenstadt in Germany.
The EMF said it would give an update on the walkouts and impact on production at a news conference in London later on Wednesday.
ArcelorMittal spokesman Langner did not comment on what impact the strike would have on the company's production.
The steel producer, which makes between 6 and 7 percent of global steel and has been laying off staff at some plants, said in early November a summer dip in demand is deepening into a second-half slump and customers were increasingly cautious due to economic uncertainties.
285862 million tonnes coal reserves estimated in India
Wednesday, 07 Dec 2011
As per Geological Survey of India, as on April 1st 2011, a total of 285,862 million tonnes of geological resources (coking coal 33.47 billion tonnes and non-coking coal 252.40 billion tonnes) of coal have so far been estimated in India up to the maximum depth of 1200 meter.
The assessed coal resources are broadly categorized as coking and non coking coal only. However, grade wise assessment is not done.
Grade wise details are worked out at the time of projectization of coal reserves.
So far 195 mining rights (Coal blocks) have been given to different public and private sector companies. Out of these 195 coal blocks, 84 blocks with a coal reserve of about 22 billion tonnes have been given to government companies and 111 blocks with a reserve of 22.15 billion tonnes including 12 blocks for Ultra Mega Power Projects with 4.8 billion tonnes of coal reserve have been given to private sector companies.
As per Geological Survey of India, as on April 1st 2011, a total of 285,862 million tonnes of geological resources (coking coal 33.47 billion tonnes and non-coking coal 252.40 billion tonnes) of coal have so far been estimated in India up to the maximum depth of 1200 meter.
The assessed coal resources are broadly categorized as coking and non coking coal only. However, grade wise assessment is not done.
Grade wise details are worked out at the time of projectization of coal reserves.
So far 195 mining rights (Coal blocks) have been given to different public and private sector companies. Out of these 195 coal blocks, 84 blocks with a coal reserve of about 22 billion tonnes have been given to government companies and 111 blocks with a reserve of 22.15 billion tonnes including 12 blocks for Ultra Mega Power Projects with 4.8 billion tonnes of coal reserve have been given to private sector companies.
Richard Bay coal export prices rise for first week in seven
Wednesday, 07 Dec 2011
Bloomberg reported that coal export prices at South Africa’s Richards Bay, the continent’s biggest terminal for shipping the fuel, rose for the first week in seven.
Bloomberg from researcher IHS McCloskey, prices increased 22 cents, or 0.2% last week to an average USD 102.52 a metric tonne, following a 3.4% decline in the week ended November 25.
The price quoted is on a free on board basis, excluding delivery costs.
(Sourced from Bloomberg.net)
Bloomberg reported that coal export prices at South Africa’s Richards Bay, the continent’s biggest terminal for shipping the fuel, rose for the first week in seven.
Bloomberg from researcher IHS McCloskey, prices increased 22 cents, or 0.2% last week to an average USD 102.52 a metric tonne, following a 3.4% decline in the week ended November 25.
The price quoted is on a free on board basis, excluding delivery costs.
(Sourced from Bloomberg.net)
Indian EGoM refers coal diversion issue to attorney general
Wednesday, 07 Dec 2011
Live Mint reported that the empowered group of ministers on so called ultra mega power projects on Monday decided to refer to attorney general Goolam E. Vahanvati the issue of allowing Reliance Power Ltd to divert surplus coal from captive coal mines associated with one of its projects to other plants owned by it.
Mr Sushil Kumar Shinde power minister said that “We have discussed the issue and the matter will be taken to the attorney general for legal opinion.”
This follows the Comptroller and Auditor General of India questioning a ministerial group’s decision to allow such diversion by the Anil Ambani controlled Reliance Group firm.
After the attorney general submits his opinion, the eGoM will meet again to decide on the issue. The Monday meeting was presided over by finance minister Pranab Mukherjee and was attended by law minister Salman Khursheed, coal minister Sriprakash Jaiswal, Shinde and deputy chairman of the Planning Commission Montek Singh Ahluwalia.
A spokesperson for Reliance Power declined to comment.
Mint reported on 28 September that CAG was looking into an earlier eGoM decision to allow Reliance Power to use coal meant for the Sasan project in Chitrangi, both located in Madhya Pradesh. Reliance Power is committed to selling power generated at Sasan at INR 1.19 a unit while it plans to charge INR 2.45 a unit for power produced by its proposed 4,000MW plant at Chitrangi.
(Sourced from Livemint)
Live Mint reported that the empowered group of ministers on so called ultra mega power projects on Monday decided to refer to attorney general Goolam E. Vahanvati the issue of allowing Reliance Power Ltd to divert surplus coal from captive coal mines associated with one of its projects to other plants owned by it.
Mr Sushil Kumar Shinde power minister said that “We have discussed the issue and the matter will be taken to the attorney general for legal opinion.”
This follows the Comptroller and Auditor General of India questioning a ministerial group’s decision to allow such diversion by the Anil Ambani controlled Reliance Group firm.
After the attorney general submits his opinion, the eGoM will meet again to decide on the issue. The Monday meeting was presided over by finance minister Pranab Mukherjee and was attended by law minister Salman Khursheed, coal minister Sriprakash Jaiswal, Shinde and deputy chairman of the Planning Commission Montek Singh Ahluwalia.
A spokesperson for Reliance Power declined to comment.
Mint reported on 28 September that CAG was looking into an earlier eGoM decision to allow Reliance Power to use coal meant for the Sasan project in Chitrangi, both located in Madhya Pradesh. Reliance Power is committed to selling power generated at Sasan at INR 1.19 a unit while it plans to charge INR 2.45 a unit for power produced by its proposed 4,000MW plant at Chitrangi.
(Sourced from Livemint)
L&L Energy inks coal marketing deal with Chinese Co
Wednesday, 07 Dec 2011
Reuters reported that L&L Energy Inc a US based company with coal mining and distribution businesses in China subsidiary signed an agreement with China Chengtong Metal Corporation to jointly sell one million tons of coal in China during 2012.
L&L Energy which was founded in 1995 and operates in Yunnan and Guizhou provinces in southwest China said the sale pact is expected to generate USD 150 million in revenues at USD 150 per ton coal price.
L&L Energy said in a statement that DaXing-L&L Coal Inc a subsidiary of L&L Energy and China Chengtong Metal Tianjin Company a subsidiary of state owned CCMC will jointly source and sell coal in China.
(Sourced from Reuters)
Reuters reported that L&L Energy Inc a US based company with coal mining and distribution businesses in China subsidiary signed an agreement with China Chengtong Metal Corporation to jointly sell one million tons of coal in China during 2012.
L&L Energy which was founded in 1995 and operates in Yunnan and Guizhou provinces in southwest China said the sale pact is expected to generate USD 150 million in revenues at USD 150 per ton coal price.
L&L Energy said in a statement that DaXing-L&L Coal Inc a subsidiary of L&L Energy and China Chengtong Metal Tianjin Company a subsidiary of state owned CCMC will jointly source and sell coal in China.
(Sourced from Reuters)
Efforts to expedite clearance for coal projects in India
Wed, 07 Dec 2011
At present, 176 Coal projects are awaiting Environment & forestry clearances at different levels. Ministry of Coal has taken up the issue with coal producing States and MOEF for fast tracking the Environment & Forest clearances, land acquisition R& R issues. Further following steps have been taken by the coal companies to expedite the clearances:
1. Vigorous follow up action with land acquisition officials of State Government to expedite acquisition proceedings.
2. Regular meetings with State Authorities viz. Land Revenue Commissioner, LR Secretary are held to resolve the issues.
3. Forest Officials are contacted on regular basis at District & Tehsil level to fulfill the requirement and answer the queries.
4. Periodical contacts are done with the Regional Office of MOEF/ MOEF, New Delhi for expediting clearance of the environmental & forestry proposals.
5. Discussions are held with the land owners/ villagers for selection of rehabilitation site and also to persuade them to shift to the rehabilitation site.
Besides this in order to bridge the demand-supply gap CIL is contemplating to acquire coal assets abroad and import the produces from the acquired coal to India. This foreign venture is being pursued from Coal Videsh Division at CIL Kolkata and several initiatives have been taken which are as follows :
CIL emerged as the successful bidder in the global tender process run by Govt. of Mozambique and acquired prospecting license of two coal blocks in Mozambique, namely A1 and A2, covering an area of 22,400 hectares in Tete Province. The PL entitles CIL to explore and develop the coal blocks over a period of 5 years. A 100% wholly owned subsidiary of CIL namely, Coal India Africana Limitada, has been registered in Mozambique for investment in coal resources.
Coal India Ltd had floated a global Expression of Interest in July 2009 to select Strategic Partner(s) in preferred destination countries like Australia, USA, South Africa and Indonesia to acquire stakes in the existing or Greenfield coal resources under the following deal structures:
1. Equity investment by CIL with long-term off-take contract at a price less than prevailing import price.
2. Only long-term off-take contract on cost plus basis at a price less than prevailing import price, with financial assistance (if required) by way of loan from CIL for production augmentation.
3. Formation of JV for exploration, development and operation of coal assets in any of the destination countries.
Through all the above deal structures, CIL proposes to import coal with the dual objective of ensuring security of supply and insulation from the volatility of global prices. However, the process is still underway and CIL has not yet acquired any mines abroad. In addition to this, Government of India has approved formation of a Special Purpose Vehicle through Joint Venture between CIL/SAIL/RINL/NMDC and NTPC, which has been registered as International Coal Ventures Private Ltd on May 20th 2009. The purpose of ICVL is to invest in coal resources abroad to meet the coal demand of partner companies. The SPV has been approved to have an authorized capital of INR 10,000 Crores and an initial paid up capital of INR 3,500 crores. Initiatives have been taken to primarily acquire coking coal assets in Australia, Mozambique, USA etc.
At present, 176 Coal projects are awaiting Environment & forestry clearances at different levels. Ministry of Coal has taken up the issue with coal producing States and MOEF for fast tracking the Environment & Forest clearances, land acquisition R& R issues. Further following steps have been taken by the coal companies to expedite the clearances:
1. Vigorous follow up action with land acquisition officials of State Government to expedite acquisition proceedings.
2. Regular meetings with State Authorities viz. Land Revenue Commissioner, LR Secretary are held to resolve the issues.
3. Forest Officials are contacted on regular basis at District & Tehsil level to fulfill the requirement and answer the queries.
4. Periodical contacts are done with the Regional Office of MOEF/ MOEF, New Delhi for expediting clearance of the environmental & forestry proposals.
5. Discussions are held with the land owners/ villagers for selection of rehabilitation site and also to persuade them to shift to the rehabilitation site.
Besides this in order to bridge the demand-supply gap CIL is contemplating to acquire coal assets abroad and import the produces from the acquired coal to India. This foreign venture is being pursued from Coal Videsh Division at CIL Kolkata and several initiatives have been taken which are as follows :
CIL emerged as the successful bidder in the global tender process run by Govt. of Mozambique and acquired prospecting license of two coal blocks in Mozambique, namely A1 and A2, covering an area of 22,400 hectares in Tete Province. The PL entitles CIL to explore and develop the coal blocks over a period of 5 years. A 100% wholly owned subsidiary of CIL namely, Coal India Africana Limitada, has been registered in Mozambique for investment in coal resources.
Coal India Ltd had floated a global Expression of Interest in July 2009 to select Strategic Partner(s) in preferred destination countries like Australia, USA, South Africa and Indonesia to acquire stakes in the existing or Greenfield coal resources under the following deal structures:
1. Equity investment by CIL with long-term off-take contract at a price less than prevailing import price.
2. Only long-term off-take contract on cost plus basis at a price less than prevailing import price, with financial assistance (if required) by way of loan from CIL for production augmentation.
3. Formation of JV for exploration, development and operation of coal assets in any of the destination countries.
Through all the above deal structures, CIL proposes to import coal with the dual objective of ensuring security of supply and insulation from the volatility of global prices. However, the process is still underway and CIL has not yet acquired any mines abroad. In addition to this, Government of India has approved formation of a Special Purpose Vehicle through Joint Venture between CIL/SAIL/RINL/NMDC and NTPC, which has been registered as International Coal Ventures Private Ltd on May 20th 2009. The purpose of ICVL is to invest in coal resources abroad to meet the coal demand of partner companies. The SPV has been approved to have an authorized capital of INR 10,000 Crores and an initial paid up capital of INR 3,500 crores. Initiatives have been taken to primarily acquire coking coal assets in Australia, Mozambique, USA etc.
Euro coal price up by 25 to 50 cents with oil gains
Wednesday, 07 Dec 2011
Reuters reported that physical prompt coal prices moved up by around 25 to 50 cents on Monday in line with oil's gains.
No fixed price trades were reported and demand remained minimal in Europe although steady enquiries are still coming through from China for January cargoes and several new Indian tenders have been issued.
One exporter said that "Oil's been the driver again, fundamentals are taking a back seat but the gap between API4 swaps and Richards Bay prices is too wide again and that's putting off buyers.”
Some analysts are forecasting a fall in prices from Q1 due to growing supply and limp demand but they caution that any further surge in oil will keep a floor under coal and stop a drift below $100.
A utility trader said that "South African coal looks on paper as if it's very good value compared with Indonesian into India but it remains to be seen what they'll actually buy.”
Chinese trade importers have said repeatedly during the past few months that they are not looking for spot cargoes due to high port stockpiles and credit issues but China imported a record level of South African coal in October and November.
(Sourced from Thomson Reuters)
Reuters reported that physical prompt coal prices moved up by around 25 to 50 cents on Monday in line with oil's gains.
No fixed price trades were reported and demand remained minimal in Europe although steady enquiries are still coming through from China for January cargoes and several new Indian tenders have been issued.
One exporter said that "Oil's been the driver again, fundamentals are taking a back seat but the gap between API4 swaps and Richards Bay prices is too wide again and that's putting off buyers.”
Some analysts are forecasting a fall in prices from Q1 due to growing supply and limp demand but they caution that any further surge in oil will keep a floor under coal and stop a drift below $100.
A utility trader said that "South African coal looks on paper as if it's very good value compared with Indonesian into India but it remains to be seen what they'll actually buy.”
Chinese trade importers have said repeatedly during the past few months that they are not looking for spot cargoes due to high port stockpiles and credit issues but China imported a record level of South African coal in October and November.
(Sourced from Thomson Reuters)
Tuesday, December 6, 2011
Vale readies first Moatize coking coal shipment
Tue Dec 6, 2011
LONDON Dec 6 (Reuters) - Brazil's Vale is set to move its first coking coal shipment next week from its Moatize mine in Mozambique, sources said on Tuesday.
This will be the first coking coal shipment, after 3 thermal coal shipments, and is destined for steelmaker ArcelorMittal's South African unit.
"They're loading it now, will finish very shortly," said a source close to Moatize.
Vale last month unveiled a a $6 billion expansion of its Moatize coal project in Mozambique to lift output to 22 million tonnes per year from the 11 million tonnes it expects to mine initially.
(sourced Reuters)
LONDON Dec 6 (Reuters) - Brazil's Vale is set to move its first coking coal shipment next week from its Moatize mine in Mozambique, sources said on Tuesday.
This will be the first coking coal shipment, after 3 thermal coal shipments, and is destined for steelmaker ArcelorMittal's South African unit.
"They're loading it now, will finish very shortly," said a source close to Moatize.
Vale last month unveiled a a $6 billion expansion of its Moatize coal project in Mozambique to lift output to 22 million tonnes per year from the 11 million tonnes it expects to mine initially.
(sourced Reuters)
Thar coal: Pakistan turns down Indian businessman investment proposal
Tue, December 6, 2011
Pakistan has turned down a proposal by an Indian businessman to invest in the Thar coal project, an official source told The Express Tribune on Tuesday.
A senior official of the Government of Sindh, also associated with the Thar coal project, on the condition of anonymity told The Express Tribune that the offer was made by Indian industrial tycoon Lakshmi Mittal’s company and was brokered through a consultant firm in Dubai.
The investment offer was reportedly above $2 billion.
In the offer, it was said that the coal obtained from Thar would be used by the company ArcelorMittal’s steel plants situated in India and other countries.
The official said that the reason why ArcelorMittal expressed interest in the project was the low rate of the coal.
“Indian demand for coal is increasing rapidly and Thar coal can be a cheap source of energy for Indian industries,” the official said.
The reason for rejecting the offer, according to the official, was sensitive relations between the two countries.
Officially there is no ban on cross border investment between Pakistan and India but there is a lack of confidence on the part of investors.
“We can attract a lot of investment from India if we are able to hold an investment conference in India,” the official said.
The official also added that India had a vast experience in the coal sector and it would be a “win win situation” for both the countries.
(sourced Tribune.com)
Pakistan has turned down a proposal by an Indian businessman to invest in the Thar coal project, an official source told The Express Tribune on Tuesday.
A senior official of the Government of Sindh, also associated with the Thar coal project, on the condition of anonymity told The Express Tribune that the offer was made by Indian industrial tycoon Lakshmi Mittal’s company and was brokered through a consultant firm in Dubai.
The investment offer was reportedly above $2 billion.
In the offer, it was said that the coal obtained from Thar would be used by the company ArcelorMittal’s steel plants situated in India and other countries.
The official said that the reason why ArcelorMittal expressed interest in the project was the low rate of the coal.
“Indian demand for coal is increasing rapidly and Thar coal can be a cheap source of energy for Indian industries,” the official said.
The reason for rejecting the offer, according to the official, was sensitive relations between the two countries.
Officially there is no ban on cross border investment between Pakistan and India but there is a lack of confidence on the part of investors.
“We can attract a lot of investment from India if we are able to hold an investment conference in India,” the official said.
The official also added that India had a vast experience in the coal sector and it would be a “win win situation” for both the countries.
(sourced Tribune.com)
India to seek ‘special status’ from Indonesia in allocation of coal blocks
Tue, Dec6, 2011
New Delhi : The Government has said that it will seek Indonesia’s cooperation for the accord of “special status” to Indian companies in the grant of coal blocks, a move aimed at bridging the widening demand-supply gap for the dry fuel at home.
The Ministry of Coal will “... impress upon the provisional government/regional government to allocate blocks under their special status (most favoured nation type) to Indian government coal companies...,” the Coal Ministry has said.
Seeking the allocation of coal blocks on a “nomination basis”, an official document of the Ministry has said it will be sending a team from the Coal Ministry and CIL to Indonesia to pursue the matter.
The decision to approach the Indonesian Government was taken at a meeting of an India-Indonesia Joint Working Group on Coal on November 24 and 25.
Seeking the allocation of large greenfield (new) coal concessions on a nomination basis, the Ministry will also impress upon the Indonesian Government the need for expeditious environmental and forest clearances, besides smooth land acquisition.
Coal India (CIL), which accounts for 81 per cent of domestic coal production, recently said that it has zeroed in on two overseas coal assets, including one in Indonesia, for acquisition and expects to begin a serious dialogue with the owners soon.
The PSU has put together a war-chest of Rs 6,000 crore for the acquisition of the mines.
At present, the country is faced with a coal demand-supply shortfall of 142 million tonnes, with domestic output likely to amount to 554 mt in the current fiscal.
Keywords: Special status, coal blocks, Indonesia, CIL, mines
Sourced Business Line
New Delhi : The Government has said that it will seek Indonesia’s cooperation for the accord of “special status” to Indian companies in the grant of coal blocks, a move aimed at bridging the widening demand-supply gap for the dry fuel at home.
The Ministry of Coal will “... impress upon the provisional government/regional government to allocate blocks under their special status (most favoured nation type) to Indian government coal companies...,” the Coal Ministry has said.
Seeking the allocation of coal blocks on a “nomination basis”, an official document of the Ministry has said it will be sending a team from the Coal Ministry and CIL to Indonesia to pursue the matter.
The decision to approach the Indonesian Government was taken at a meeting of an India-Indonesia Joint Working Group on Coal on November 24 and 25.
Seeking the allocation of large greenfield (new) coal concessions on a nomination basis, the Ministry will also impress upon the Indonesian Government the need for expeditious environmental and forest clearances, besides smooth land acquisition.
Coal India (CIL), which accounts for 81 per cent of domestic coal production, recently said that it has zeroed in on two overseas coal assets, including one in Indonesia, for acquisition and expects to begin a serious dialogue with the owners soon.
The PSU has put together a war-chest of Rs 6,000 crore for the acquisition of the mines.
At present, the country is faced with a coal demand-supply shortfall of 142 million tonnes, with domestic output likely to amount to 554 mt in the current fiscal.
Keywords: Special status, coal blocks, Indonesia, CIL, mines
Sourced Business Line
As coal prices surge, Power Ministry seeks scrapping of import duty
Coal from Australia, Indonesia get more expensive
Tuesday, Dec6, 2011
The Power Ministry is pushing for abolition of Customs duty on imported coal.
The Ministry, senior officials said, is trying to garner the support of the Planning Commission on the issue, which is expected to be countered by the Finance Ministry in light of the revenue implications.
On Tuesday, speaking at an industry conference, the Power Minister, Mr Sushilkumar Shinde, hinted at the measures being considered following the increase in imported coal prices.
“The Government will initiate some corrective measures to reduce the burden on the consumers resulting from the increased price of imported coal,” he said.
Power project developers setting up units that are to run on imported coal, including two upcoming Ultra Mega Power Projects (UMPP), have raised concerns about the hike in prices of imported coal from countries such as Indonesia and Australia.
Currently, a five per cent basic Customs duty is levied on imported coal. Key coal exporting countries such as Indonesia and Australia have changed their coal pricing methodology in recent months, leading to international coal prices skyrocketing.
Seeking legal opinion
Responding to a query on the legal issues related to the pit-head-based Sasan UMPP, where the issue of diversion of coal to other projects by the developer had forced the Ministry to seek the Attorney-General's opinion, Mr Shinde said: “Some problems have come up; we pointed them out to the Empowered Group of Ministers (eGoM)... On that, we are seeking legal opinion.”
In a meeting late last night, the eGoM, headed by the Finance Minister Mr Pranab Mukherjee, had asked the Power Ministry to seek the Attorney-General's opinion on the 4,000-MW Sasan UMPP.
The panel is also believed to have discussed the progress of the Mundra UMPP in Gujarat, Krishnapatnam UMPP (Andhra Pradesh) and the Tilaiya UMPP in Jharkhand.
Keywords: Power Ministry, coal import duty, Planning Commission, Mundra UMPP, Krishnapatnam UMPP, customs duty on import coal,
Sourced Business Line
Tuesday, Dec6, 2011
The Power Ministry is pushing for abolition of Customs duty on imported coal.
The Ministry, senior officials said, is trying to garner the support of the Planning Commission on the issue, which is expected to be countered by the Finance Ministry in light of the revenue implications.
On Tuesday, speaking at an industry conference, the Power Minister, Mr Sushilkumar Shinde, hinted at the measures being considered following the increase in imported coal prices.
“The Government will initiate some corrective measures to reduce the burden on the consumers resulting from the increased price of imported coal,” he said.
Power project developers setting up units that are to run on imported coal, including two upcoming Ultra Mega Power Projects (UMPP), have raised concerns about the hike in prices of imported coal from countries such as Indonesia and Australia.
Currently, a five per cent basic Customs duty is levied on imported coal. Key coal exporting countries such as Indonesia and Australia have changed their coal pricing methodology in recent months, leading to international coal prices skyrocketing.
Seeking legal opinion
Responding to a query on the legal issues related to the pit-head-based Sasan UMPP, where the issue of diversion of coal to other projects by the developer had forced the Ministry to seek the Attorney-General's opinion, Mr Shinde said: “Some problems have come up; we pointed them out to the Empowered Group of Ministers (eGoM)... On that, we are seeking legal opinion.”
In a meeting late last night, the eGoM, headed by the Finance Minister Mr Pranab Mukherjee, had asked the Power Ministry to seek the Attorney-General's opinion on the 4,000-MW Sasan UMPP.
The panel is also believed to have discussed the progress of the Mundra UMPP in Gujarat, Krishnapatnam UMPP (Andhra Pradesh) and the Tilaiya UMPP in Jharkhand.
Keywords: Power Ministry, coal import duty, Planning Commission, Mundra UMPP, Krishnapatnam UMPP, customs duty on import coal,
Sourced Business Line
Brazil port moves disabled ore vessel from berth
Tue Dec 6, 2011
RIO DE JANEIRO Dec 6 (Reuters) - The damaged Vale Beijing, the world's largest iron-ore carrier, was being moved from berth in Brazil for repairs, opening up space at a port responsible for about 10 percent of the world's iron ore exports, the harbor pilot's office in Sao Luis said on Tuesday.
The port is operated by Vale , the world's second-largest mining company, which also mined the iron ore that was loaded aboard the vessel.
(sourced Reuters)
RIO DE JANEIRO Dec 6 (Reuters) - The damaged Vale Beijing, the world's largest iron-ore carrier, was being moved from berth in Brazil for repairs, opening up space at a port responsible for about 10 percent of the world's iron ore exports, the harbor pilot's office in Sao Luis said on Tuesday.
The port is operated by Vale , the world's second-largest mining company, which also mined the iron ore that was loaded aboard the vessel.
(sourced Reuters)
Government update on private steel plants in Chhattisgarh
Tuesday, 06 Dec 2011
Indian union minister for Steel Mr Beni Prasad Verma has informed that details of MoUs signed between state government and private players for setting up of steel plants in the country during the last five years.
MoUs with Chhattisgarh government (Year 2006 onwards)
(Capacity in million tonne)
Indian union minister for Steel Mr Beni Prasad Verma has informed that details of MoUs signed between state government and private players for setting up of steel plants in the country during the last five years.
MoUs with Chhattisgarh government (Year 2006 onwards)
| Sl. No. | Name of the Company | Location | Capacity | Status |
| 1 | Ind Synergy Limited (Expansion Project) | Raigarh | Sponge Iron - 0.40 | Partially commissioned |
| 2 | Shree Bajranj Power and Ispat Limited (Expansion Project) | Raipur | Sponge Iron - 0.60 Blast Furnace - 0.231 | Production not Started |
| 3 | SKS Ispat Limited (Expansion Project) | Raipur | Sponge Iron - 0.33 Mini Blast Furnace - 0.5 | Production not Started |
| 4 | Raipur Alloys and Steel Limited (Expansion Project) | Raipur | Sponge Iron - 0.50 Steel - 0.24 | Production not Started |
| 5 | Shree Bajrang Metallics and Power Limited (Expansion Project) | Raipur | Pig Iron - 0.060 | Production not Started |
| 6 | Rajesh Strips Limited (Expansion Project) | Raipur | Steel Melting Shop - 0.30 | Production not Started |
| 7 | Jindal Steel and Power Ltd | Raigarh | Blast Furnace - 0.32 | Production not Started |
| 8 | Bhushan Power and Steel Ltd. | Rajnandgaon | Integrated Steel Making Facility - 1.2 | Production not Started |
| 9 | Monnet Ispat and Energy Ltd | Naharpalli, Raigarh | Blast Furnace - 1.0 Sponge Iron for captive use - 0.40 | Production not Started |
| 10 | Vandana Ispat Limited | Borai, Durg, Anjora, Rajnandgaon | Integrated Steel Plant - 0.83, Steel Melting Shop - 0.75 | Production not Started |
| 11 | Topworth Steel Pvt. Ltd | Borai, Durg | Blast Furnace - 0.50 | Production not Started |
| 12 | MSP Steel and Power Limited | Raigarh | Pig Iron - 0.40, Sponge Iron for captive use - 0.3 | Production not Started |
| 13 | Salasar Sponge and Power Ltd | Raigarh | Steel Plant - 0.10 | Production not Started |
| 14 | Prakash Industries Ltd | Champa, Janjgir, Champa | Steel Plant - 1.2 | Production not Started |
| 15 | Singhal Enterprises | Raigarh | Sponge Iron - 0.2, Steel - 0.3 | Production not Started |
| 16 | Anjani Steel Private Limited | Raigarh | Integrated Steel Plant- 0.25 | Production not Started |
| 17 | H.E.G. Limited | Durg | Sponge Iron - 0.35 | Production not Started |
| 18 | Mangal Sponge & Steel Limited | Bilaspur | Sponge Iron - 0.12 | Production not Started |
| 19 | S.K. Sarawagi and Company Pvt Ltd. | Bilaspur | Sponge Iron - 0.21, Steel - 0.15 | Production not Started |
| 20 | Aarti Sponge and Power Pvt. Ltd. | - | Sponge Iron - 0.105, Steel Melting Shop - 0.09 | Production not Started |
| 21 | API Ispat and Powertech Pvt. Ltd. | - | Sponge Iron - 0.525 | Production not Started |
| 22 | Jai Balaji Industries Ltd. | - | DRI Plant - 0.6, Steel Melt Shop - 1.0 | Production not Started |
| 23 | Baldev Alloys Pvt. Ltd | - | Sponge Iron - 0.54, SMS Plant - 0.2 | Production not Started |
| 24 | Crest Steel and Power Pvt. Ltd | - | Sponge Iron - 0.75, Steel Melting Shop - 0.5, EAF - 0.32 | Production not Started |
| 25 | Godawari Power and Ispat Ltd. | - | DRI - 0.6, Steel Billet - 0.6 | Production not Started |
| 26 | Jindal Steel and Power Ltd | Gram Saraipali, Kosampali, Dhanagar, Raigarh | DRI - 5.1 | Production not Started |
| 27 | Khetan Sponge and Infrastructure Pvt. Ltd | - | Sponge iron - 0.09, Induction Furnace - 0.06 | Production not Started |
| 28 | Nalwa Steel and Power Ltd | Gram Taraimal, Raigarh | DRI (coal based) -0.33, Steel Melting Shop - 0.336,DRI (gas based)-2.0 | Production not Started |
| 29 | Jaysawal Necco Industries Ltd. | - | Sponge Iron - 0.6, Steel Billet - 0.7 | Production not Started |
| 30 | Nova Iron and Steel Ltd | Bilaspur | Sponge Iron - 0.6 | Production not Started |
| 31 | Raipur Power and Steel Ltd | - | Sponge Iron 0.135, Induction Furnace - 0.09 | Production not Started |
| 32 | Rashmi Ispat Pvt. Ltd. | - | Sponge Iron - 0.315, Steel Melting Shop - 0.21 | Production not Started |
| 33 | Real Ispat and Power Ltd | - | Sponge Iron - 0.30 | Production not Started |
| 34 | RL Steel and Energy Ltd. | - | Sponge Iron - 0.4 | Production not Started |
| 35 | Satya Power and Ispat Pvt. Ltd. | - | Sponge Iron - 0.24 | Production not Started |
| 36 | Shri Shyam Sponge and Power Ltd | - | Sponge Iron - 0.135 | Production not Started |
| 37 | SKS Ispat and Power Ltd. | - | Sponge iron - 1.2, Blast furnace - 0.27 | Production not Started |
| 38 | Surya Global Steel and Jenpower Ltd. | - | DRI - 1.4, Blast furnace with PCM- 0.6 | Production not Started |
| 39 | Visa Steel Limited | - | Blast furnace with sinter - 1.5, Sponge iron - 1.0 | Production not Started |
| 40 | NMDC Limited | - | Integrated Steel Plant - 3.00 | Production not Started |
| 41 | K. Energy Limited | - | Sponge iron - 0.21, Induction furnace - 0.192 | Production not Started |
| 42 | Prakash Industries Limited | - | Blast furnace - 1.15, Sponge iron - 1.6, Steel Melting shop - 2.0 | Production not Started |
| 43 | Singhal Steel Pvt. Ltd. | - | Blast furnace - 0.3, Sponge iron - 0.2, Induction furnace - 0.3,EAF - 0.3 | Production not Started |
| 44 | MSP Steel and Power Ltd. | - | Sponge iron - 0.9, Blast furnace - 0.7, Steel melting shop - 1.5 | Production not Started |
| 45 | Mahendra Sponge and Power Pvt. Ltd. | - | Sponge iron - 0.27, Steel Billet - 0.15 | Production not Started |
| 46 | Hind Energy and Coal Beneficiation (India) Pvt. Ltd. | - | Sponge iron - 0.405, Steel melting shop - 0.216 | Production not Started |
| 47 | Sky Aloys and Power Pvt. Ltd. | - | Induction Furnace - 0.1 | Production not Started |
| 48 | Godwari Power and Ispat Limited | - | Steel Melting Shop - 0.2 | Production not Started |
| 49 | Rashi Strips Private Limited | - | DRI plant with gasification - 1.0, Steel Melting Shop - 0.9 | Production not Started |
(Capacity in million tonne)
NTPC likely to exit JVs with Alstom - Report
Tuesday, 06 Dec 2011
Live Mint reported that India’s biggest power generation utility NTPC Ltd may wind up one affiliate and exit a joint venture with European company Alstom SA as part of a restructuring exercise suggested by consultant Deloitte Touche Tohmatsu India Pvt. Ltd.
People familiar with the situation said that the state owned company is considering closing NTPC Hydro Ltd and leaving NTPC-Alstom Power Services Pvt. Ltd, as suggested in a draft report submitted by Deloitte.
NTPC Singrauli Super Thermal Power Station at Shaktinagar in Sonbhadra District of Uttar Pradesh.
In addition, the report recommended a timed exit by NTPC from equipment manufacturing joint ventures such as NTPC BHEL Power Projects Pvt. Ltd, BF NTPC Energy Systems Ltd (BFNESL) and NTPC-Telk, a tie-up with Transformers and Electricals Kerala Ltd.
(Sourced from Livermint.com)
Live Mint reported that India’s biggest power generation utility NTPC Ltd may wind up one affiliate and exit a joint venture with European company Alstom SA as part of a restructuring exercise suggested by consultant Deloitte Touche Tohmatsu India Pvt. Ltd.
People familiar with the situation said that the state owned company is considering closing NTPC Hydro Ltd and leaving NTPC-Alstom Power Services Pvt. Ltd, as suggested in a draft report submitted by Deloitte.
NTPC Singrauli Super Thermal Power Station at Shaktinagar in Sonbhadra District of Uttar Pradesh.
In addition, the report recommended a timed exit by NTPC from equipment manufacturing joint ventures such as NTPC BHEL Power Projects Pvt. Ltd, BF NTPC Energy Systems Ltd (BFNESL) and NTPC-Telk, a tie-up with Transformers and Electricals Kerala Ltd.
(Sourced from Livermint.com)
Indonesian minister calls for coal exports restrictions
Tuesday, 06 Dec 2011
Indonesia’s enterprises minister Mr Dahlan Iskan has urged for the limitation of coal exports in order to secure enough coal for domestic needs.
The minister during a National Energy Policy seminar at the House of Representatives building said that “Let’s not be all about profit.”
If the policy cannot be issued, Mr Dahlan suggested that the government prepare a location for coal resources which holds reserves enough for 200 years. “In Indonesia, wherever it is Kalimantan, Papua, Sumatra, or somewhere else.”
Mr Dahlan proposed that energy consumption pattern be switched from oil fuel to coal. Oil production tends to decline with gas production has a high potential.
Mr Dahlan added that “Vehicles from trucks to bajaj should convert from oil fuel to compressed natural gas.”
(sourced Tempointeractive.com)
Indonesia’s enterprises minister Mr Dahlan Iskan has urged for the limitation of coal exports in order to secure enough coal for domestic needs.
The minister during a National Energy Policy seminar at the House of Representatives building said that “Let’s not be all about profit.”
If the policy cannot be issued, Mr Dahlan suggested that the government prepare a location for coal resources which holds reserves enough for 200 years. “In Indonesia, wherever it is Kalimantan, Papua, Sumatra, or somewhere else.”
Mr Dahlan proposed that energy consumption pattern be switched from oil fuel to coal. Oil production tends to decline with gas production has a high potential.
Mr Dahlan added that “Vehicles from trucks to bajaj should convert from oil fuel to compressed natural gas.”
(sourced Tempointeractive.com)
Ukrainian coal output in 11 months surges by 9pct YoY
Tuesday, 06 Dec 2011
Interfax Ukraine citing an official at the energy and coal ministry reported that Ukraine increased coal production by 9.6% to 75 million metric tonnes in first 11 months of the year compared with the same period of 2010.
According to Interfax, coke coal extraction rose 3.8% to 22.8 million tonnes.
Energy coal output rose 12.4% to 52.3 million tonnes.
(Sourced from Interfax Ukraine )
Interfax Ukraine citing an official at the energy and coal ministry reported that Ukraine increased coal production by 9.6% to 75 million metric tonnes in first 11 months of the year compared with the same period of 2010.
According to Interfax, coke coal extraction rose 3.8% to 22.8 million tonnes.
Energy coal output rose 12.4% to 52.3 million tonnes.
(Sourced from Interfax Ukraine )
Indian coal ministry considering royalty share - Report
Tuesday, 06 Dec 2011
Live Mint reported that the Indian coal ministry is considering a change in a forthcoming legislation that could lead to an increase in the price of the fuel for end users.
The change relates to the way benefits are to be passed on to the local community by miners such as Coal India Ltd and Singareni Collieries Co Ltd, which sell the commodity in the open market.
The draft Mines and Minerals (Development and Regulation) Bill requires them to give the people affected by mining activities 26% of profit.
The ministry wants that to be changed to a share in royalties, according to two senior government officials with direct knowledge of the matter. Both spoke independently of each other and declined to be named. They said, however, that a final call had not been taken on the issue.
One of the two officials said that the coal ministry is of the opinion that a royalty share could be passed on to users, leaving profit intact. The official said that “If companies are asked to share 26% profit, it directly impacts their bottom line. Royalties, on the other hand, were pass through.”
Both officials said such a move was unlikely to alter the money that the communities would get.
The Union cabinet approved the draft Mines and Minerals (Development and Regulation) Bill on September 30th. While it stipulated a 26% profit share for coal mining companies, non-coal miners are required to share royalties.
A group of ministers approved the draft Bill in its current form on 7 July. The original version had sought a 26% profit share for non-coal miners as well.
Following this, in October, the coal ministry had written to the finance and mines ministries, suggesting that captive coal miners also be asked to share profit along the same lines as companies selling the fuel in the open market.
(sourced from Livemint.com)
Live Mint reported that the Indian coal ministry is considering a change in a forthcoming legislation that could lead to an increase in the price of the fuel for end users.
The change relates to the way benefits are to be passed on to the local community by miners such as Coal India Ltd and Singareni Collieries Co Ltd, which sell the commodity in the open market.
The draft Mines and Minerals (Development and Regulation) Bill requires them to give the people affected by mining activities 26% of profit.
The ministry wants that to be changed to a share in royalties, according to two senior government officials with direct knowledge of the matter. Both spoke independently of each other and declined to be named. They said, however, that a final call had not been taken on the issue.
One of the two officials said that the coal ministry is of the opinion that a royalty share could be passed on to users, leaving profit intact. The official said that “If companies are asked to share 26% profit, it directly impacts their bottom line. Royalties, on the other hand, were pass through.”
Both officials said such a move was unlikely to alter the money that the communities would get.
The Union cabinet approved the draft Mines and Minerals (Development and Regulation) Bill on September 30th. While it stipulated a 26% profit share for coal mining companies, non-coal miners are required to share royalties.
A group of ministers approved the draft Bill in its current form on 7 July. The original version had sought a 26% profit share for non-coal miners as well.
Following this, in October, the coal ministry had written to the finance and mines ministries, suggesting that captive coal miners also be asked to share profit along the same lines as companies selling the fuel in the open market.
(sourced from Livemint.com)
India coal demand expected to rise by 41pct by 2017
Tuesday, 06 Dec 2011
Indian coal minister Mr Sriprakash Jaiswal told parliament in New Delhi that India’s annual coal demand may rise 41% in the year ending March 2017 from the current financial year.
Mr Jaiswal said that coal demand is estimated to surge to 980.5 million tonnes from 696 million tonnes estimated this year. Domestic output of coal is expected to rise 28% in the period, widening the supply-demand gap to 265.5 million tones.
(sourced from Bloomberg)
Indian coal minister Mr Sriprakash Jaiswal told parliament in New Delhi that India’s annual coal demand may rise 41% in the year ending March 2017 from the current financial year.
Mr Jaiswal said that coal demand is estimated to surge to 980.5 million tonnes from 696 million tonnes estimated this year. Domestic output of coal is expected to rise 28% in the period, widening the supply-demand gap to 265.5 million tones.
(sourced from Bloomberg)
Monday, December 5, 2011
East Kalimantan province coal miners shares drop on bridge collapse
Monday, 05 Dec 2011
The Jakarta Globe reported that shares of Harum Energy and other Indonesian coal miners that operate in East Kalimantan province fell on concern that the collapse of the Kutai Kartanegara bridge into the Mahakam River would affect their profitability.
Mr Herman Koeswanto, an analyst at Mandiri Sekuritas, in a report sent to clients, said that "The Mahakam River is the largest river in East Kalimantan and has one of the most crowded coal barging traffic activities. This will affect almost all listed coal companies that are located in East Kalimantan."
He said that the most affected listed coal companies would be Harum Energy, Indo Tambangraya Megah, Sakari Resources and Bayan Resources. These companies, which do a lot of business in resource-rich East Kalimantan, use the Mahakam River to transport coal for distribution at a port from their facilities.
Mr Alexandara Mira spokesperson of Harum Energy said that "The closure will prevent us from transporting coal from our Separi port to our transshipment points in Muara Jawa and Muara Berau."
Ms Dileep Srivastava, Bumi Resources' investor relations director, said that "Our coal shipment for the month of November 2011 should largely be unaffected since almost all of the coal due to be loaded for the month has been barged past the affected section of Mahakam River. We have notified our customers of potential delays of future shipments resulting from the river closure. We expect to maintain normalcy of coal shipments from our dedicated ports to our valued clients."
Analysts in Jakarta, however, were not so sure that the disaster would have such a light impact on the companies.
Mandiri Sekuritas' Herman said that "This accident should affect the coal loading and deliveries activities that may incur demurrage cost for coal producers."
Ms Erindra Krisnawan, an analyst with CIMB Niaga, said that "As long as the evacuation schedule is not clear, we expect their stock to be pressured."
(sourced TheJakartaglobe)
The Jakarta Globe reported that shares of Harum Energy and other Indonesian coal miners that operate in East Kalimantan province fell on concern that the collapse of the Kutai Kartanegara bridge into the Mahakam River would affect their profitability.
Mr Herman Koeswanto, an analyst at Mandiri Sekuritas, in a report sent to clients, said that "The Mahakam River is the largest river in East Kalimantan and has one of the most crowded coal barging traffic activities. This will affect almost all listed coal companies that are located in East Kalimantan."
He said that the most affected listed coal companies would be Harum Energy, Indo Tambangraya Megah, Sakari Resources and Bayan Resources. These companies, which do a lot of business in resource-rich East Kalimantan, use the Mahakam River to transport coal for distribution at a port from their facilities.
Mr Alexandara Mira spokesperson of Harum Energy said that "The closure will prevent us from transporting coal from our Separi port to our transshipment points in Muara Jawa and Muara Berau."
Ms Dileep Srivastava, Bumi Resources' investor relations director, said that "Our coal shipment for the month of November 2011 should largely be unaffected since almost all of the coal due to be loaded for the month has been barged past the affected section of Mahakam River. We have notified our customers of potential delays of future shipments resulting from the river closure. We expect to maintain normalcy of coal shipments from our dedicated ports to our valued clients."
Analysts in Jakarta, however, were not so sure that the disaster would have such a light impact on the companies.
Mandiri Sekuritas' Herman said that "This accident should affect the coal loading and deliveries activities that may incur demurrage cost for coal producers."
Ms Erindra Krisnawan, an analyst with CIMB Niaga, said that "As long as the evacuation schedule is not clear, we expect their stock to be pressured."
(sourced TheJakartaglobe)
Coal supply in India will be in strain for sometime- Expert
Monday, 05 Dec 2011
Expert said that among several challenges currently being faced by the power sector, fuel supply especially coal will be in strain for sometime. Speaking at the fifth edition of Confederation of Indian Industry Energy Conclave 2011 in Ahmedabad, Mr Sudhir Trehan vice chairman of Crompton Greaves Ltd said that the power sector will have to be prepared to face a continual shortage of fuel for the near future.
Mr Trehan who is also the chairman for the CII Energy Conclave 2011 said that "The Indian power industry will be dependent on four things, namely fuel supply, last mile connectivity by distributors, other infrastructure like ultra high tension network and regulatory support. Of these, fuel, especially coal supply will be in strain for sometime. Also, none of the new generation capacity will benefit until the last-mile connectivity is achieved by distributors.”
Similarly, speaking about shortage in fuel supply, Mr Vikas Kaushal partner and vice president at AT Kearney Ltd said that the game changes for power sector in the coming times will be reforms in the fuel sector, rise of renewable energy, consumer enforcement through vibrant retail market and increase in smart grids. He added that "Considering the shortage in other major fuels, renewable energy will become the mainstay for Indian power sector sooner than expected. Moreover, retail competition will increase since by 2015 onwards, 15 to 20 GW will be added per annum in the country.”
Focusing on the theme of 'Roadmap for a new ear of power market in India', the three-day conclave-cum-exhibition will showcase the latest new and emerging technologies for the power sector, with a major highlight on renewable energy.
Mr Pradeep Bhargav deputy chairman of CII Western region said that other industries as consumers should be reasonable when it comes to power tariff hikes. He added that "Industry as a consumer should not blame the sector alone for tariff hike since they are also determined based on global trends. Also, industry should be equally a party in improving AT&C losses.”
(sourced from BS)
Expert said that among several challenges currently being faced by the power sector, fuel supply especially coal will be in strain for sometime. Speaking at the fifth edition of Confederation of Indian Industry Energy Conclave 2011 in Ahmedabad, Mr Sudhir Trehan vice chairman of Crompton Greaves Ltd said that the power sector will have to be prepared to face a continual shortage of fuel for the near future.
Mr Trehan who is also the chairman for the CII Energy Conclave 2011 said that "The Indian power industry will be dependent on four things, namely fuel supply, last mile connectivity by distributors, other infrastructure like ultra high tension network and regulatory support. Of these, fuel, especially coal supply will be in strain for sometime. Also, none of the new generation capacity will benefit until the last-mile connectivity is achieved by distributors.”
Similarly, speaking about shortage in fuel supply, Mr Vikas Kaushal partner and vice president at AT Kearney Ltd said that the game changes for power sector in the coming times will be reforms in the fuel sector, rise of renewable energy, consumer enforcement through vibrant retail market and increase in smart grids. He added that "Considering the shortage in other major fuels, renewable energy will become the mainstay for Indian power sector sooner than expected. Moreover, retail competition will increase since by 2015 onwards, 15 to 20 GW will be added per annum in the country.”
Focusing on the theme of 'Roadmap for a new ear of power market in India', the three-day conclave-cum-exhibition will showcase the latest new and emerging technologies for the power sector, with a major highlight on renewable energy.
Mr Pradeep Bhargav deputy chairman of CII Western region said that other industries as consumers should be reasonable when it comes to power tariff hikes. He added that "Industry as a consumer should not blame the sector alone for tariff hike since they are also determined based on global trends. Also, industry should be equally a party in improving AT&C losses.”
(sourced from BS)
Rio Tinto ships 100 millionth tonne of iron ore to BaoSteel
Monday, 05 Dec 2011
miningaustralia.com.au reported that Rio Tinto has shipped its 100 millionth tonne of iron ore from the Pilbara to Baosteel under its Bao HI joint venture.
The 100 millionth tonne left Dampier on Friday, bound for Shanghai.
Under this milestone, the joint venture has reached the half way mark of the agreement for 200 million tonnes to be mined and sold to Chinese company Baosteel.
Mr Sam Walsh Rio Tinto's head of iron ore and Australia said that this is a great day for Rio Tinto, for Baosteel and for the relationship between our two nations.
He said “The Bao-HI joint venture is one of two such partnerships we have forged since [Rio Tinto first shipped iron ore to China in 1973], delivering hundreds of millions of tonnes into the world’s fastest growing and largest steel industry.”
The joint venture was first formed in 2002 between Rio's subsidiary Ranges Mining, which owns 54%, and Baosteel Australia Mining which owns 46%. The majority of the iron ore shipped under the joint venture was produced at the Eastern Ranges mines, near Paraburdoo, which was established specifically for the joint venture.
(Sourced from miningaustralia.com.au)
miningaustralia.com.au reported that Rio Tinto has shipped its 100 millionth tonne of iron ore from the Pilbara to Baosteel under its Bao HI joint venture.
The 100 millionth tonne left Dampier on Friday, bound for Shanghai.
Under this milestone, the joint venture has reached the half way mark of the agreement for 200 million tonnes to be mined and sold to Chinese company Baosteel.
Mr Sam Walsh Rio Tinto's head of iron ore and Australia said that this is a great day for Rio Tinto, for Baosteel and for the relationship between our two nations.
He said “The Bao-HI joint venture is one of two such partnerships we have forged since [Rio Tinto first shipped iron ore to China in 1973], delivering hundreds of millions of tonnes into the world’s fastest growing and largest steel industry.”
The joint venture was first formed in 2002 between Rio's subsidiary Ranges Mining, which owns 54%, and Baosteel Australia Mining which owns 46%. The majority of the iron ore shipped under the joint venture was produced at the Eastern Ranges mines, near Paraburdoo, which was established specifically for the joint venture.
(Sourced from miningaustralia.com.au)
Mongolia Energy Corp to commence China coal shipment
Monday, 05 Dec 2011
Mongolia Energy Corporation Limited announced that it has completed construction of the 311 kilometers Khushuut Road at the beginning of November 2011. It was successfully accepted by the State Commission Inspection Committee made up of 25 members on November 6th 2011.
MEC is expected to receive the final conclusion permission in writing on 28 November 2011. Once it has been received, MEC will commence coal shipment exporting to China. MEC is the first mining company to successfully construct the longest hard-surface paved road for coal transport in Mongolia.
The Kliushuut Road has a distance of 311 kilometers in length, stretching from Khushuut mine site to Yarant (Mongolia) and Takeshensken border (Xinjiang). The road crosses five sub provinces of Kliovd (Darvi, Tsetseg, Altai, Uyench, Bulgan). There are 17 bridges and more than 200 waste water pipes built along the Road.
The Kliushuut Road was built and commissioned for a payload of up to 110 tones. A completion of a paved road has a direct positive impact to reduce the operating costs to the mining business. What used to be a gravel travel road which takes over 8 hours to travel to the border will now only take 4 horns.
The road project being the biggest infrastructure development project for Khovd province, and one of the large scale road investment projects by privately owned mining enterprise in the Mongolia history. It provides many social benefits to the local community. Not only does it provide an efficient mode of transportation for all the local residence, the road project itself also created hundreds of jobs for local provinces and a considerable income for provinces and state.
Coal trucks traveling on paved road will minimize a negative environment impact to the area by minimizing the potential dust which normally caused by coal transport on gravel roads. In addition, a paved road provides a safer road environment for coal shipments.
MEC being the first is now a role model for all mining projects in Mongolia to build the infrastructure (road) prior to shipping minerals for export. It's such an environmentally friendly decision which is praised by many Mongolians and government bodies.
Mr James Schaeffer Jr CEO of MEC said that "The commission of the Khushuut Road indicates a milestone in our coking coal exporting and our team will continue our efforts in all aspects to expand our Khushuut operations."
Mongolia Energy Corporation Limited announced that it has completed construction of the 311 kilometers Khushuut Road at the beginning of November 2011. It was successfully accepted by the State Commission Inspection Committee made up of 25 members on November 6th 2011.
MEC is expected to receive the final conclusion permission in writing on 28 November 2011. Once it has been received, MEC will commence coal shipment exporting to China. MEC is the first mining company to successfully construct the longest hard-surface paved road for coal transport in Mongolia.
The Kliushuut Road has a distance of 311 kilometers in length, stretching from Khushuut mine site to Yarant (Mongolia) and Takeshensken border (Xinjiang). The road crosses five sub provinces of Kliovd (Darvi, Tsetseg, Altai, Uyench, Bulgan). There are 17 bridges and more than 200 waste water pipes built along the Road.
The Kliushuut Road was built and commissioned for a payload of up to 110 tones. A completion of a paved road has a direct positive impact to reduce the operating costs to the mining business. What used to be a gravel travel road which takes over 8 hours to travel to the border will now only take 4 horns.
The road project being the biggest infrastructure development project for Khovd province, and one of the large scale road investment projects by privately owned mining enterprise in the Mongolia history. It provides many social benefits to the local community. Not only does it provide an efficient mode of transportation for all the local residence, the road project itself also created hundreds of jobs for local provinces and a considerable income for provinces and state.
Coal trucks traveling on paved road will minimize a negative environment impact to the area by minimizing the potential dust which normally caused by coal transport on gravel roads. In addition, a paved road provides a safer road environment for coal shipments.
MEC being the first is now a role model for all mining projects in Mongolia to build the infrastructure (road) prior to shipping minerals for export. It's such an environmentally friendly decision which is praised by many Mongolians and government bodies.
Mr James Schaeffer Jr CEO of MEC said that "The commission of the Khushuut Road indicates a milestone in our coking coal exporting and our team will continue our efforts in all aspects to expand our Khushuut operations."
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