Wednesday, 21 Mar 2012
Reuters reported that prices of prompt physical steam coal were largely unchanged again on Tuesday with coal lacking clear direction from fundamentals but macro factors such as China growth worries could start to erode prices, utilities and traders said.
PRICES
A May South African cargo was bid at USD 103.50 and offered at USD 104.25, unchanged.
A June South African cargo was bid at USD 104.50.
An April DES ARA cargo was bid at USD 90.00 and offered at USD 96.00, down USD 3.00 on the bid but unchanged on the offer
A May DES ARA cargo was bid at USD 95.00 and offered at USD 98.50, little changed
Bids and offers were again too far apart to trade and both buyers and sellers were uncertain of the market's strength.
No fresh trades were reported.
One European trader said “Everybody's trying to figure out how to make money in this market, which is barely moving, so for some to make a slim margin on U.S. coal to Asia is better than nothing or almost nothing.”
They said “More fixed price trades, a term contract settlement price between Australian producers and Japanese utilities and some resumption of Chinese buying would give the market a sharper picture of coal's value.”
The fundamental situation in the coal market has not significantly changed for months, Societe Generale said in a research note on Tuesday.
Global coal prices are heavily dependent upon whether China imports on a large scale or not and this in turn depends on whether domestic coal is cheaper than imports.
Source - Reuters
Wednesday, March 21, 2012
ArcelorMittal Liberia reaches 1 million tonne iron ore mark
Wednesday, 21 Mar 2012
ArcelorMittal announced the shipment of the 1 millionth tonne of DSO iron ore from its Liberia mining operations.
The vessel will sail from the Buchanan terminal to its customer in China.
Production has been operating at an annualized rate of 4 million tonne per annum since late 2011 and the company is now in commercial ramp up phase with trials cargoes being dispatched to global steel mills.
Mr Rajesh Goel CEO for ArcelorMittal Liberia said “It gives me great pleasure to announce the first one million tons ore shipment from Liberia. We are only at the beginning of our operational development in Liberia which includes significant growth plans in cooperation with the Liberian government and our local communities.”
Prior to commencing mining in Liberia, ArcelorMittal invested USD 800 USD in the rehabilitation of the railroad, port, and infrastructure around the mine in Yekepa, while building its in country capacity.
Source - Allafrica.com
ArcelorMittal announced the shipment of the 1 millionth tonne of DSO iron ore from its Liberia mining operations.
The vessel will sail from the Buchanan terminal to its customer in China.
Production has been operating at an annualized rate of 4 million tonne per annum since late 2011 and the company is now in commercial ramp up phase with trials cargoes being dispatched to global steel mills.
Mr Rajesh Goel CEO for ArcelorMittal Liberia said “It gives me great pleasure to announce the first one million tons ore shipment from Liberia. We are only at the beginning of our operational development in Liberia which includes significant growth plans in cooperation with the Liberian government and our local communities.”
Prior to commencing mining in Liberia, ArcelorMittal invested USD 800 USD in the rehabilitation of the railroad, port, and infrastructure around the mine in Yekepa, while building its in country capacity.
Source - Allafrica.com
China coal prices may ease further and boon for power
Wednesday, 21 Mar 2012
Reuters quoted a top Chinese power company executive said China thermal coal prices are likely to ease further this year as the country economic growth slows, a good sign for the world second largest power industry.
Mr Wang Yu Jun chief executive officer of state run power producer China Resources Power Holdings Co Ltd said spot thermal coal prices in China have fallen sharply and the trend would continue as demand weakens.
He said that China benchmark spot coal prices with a heating value of 5,500 kilocalories per kilogram have declined to the current CNY 765 per tonne from more than CNY 800 at the end of last year.
He added that "It is mainly because China GDP growth has slowed substantially since the last quarter. We believe coal prices will fall this year."
Mr Wang said "If this year's GDP growth is in line with what the government has just forecast, I think this year's fall in coal prices will be rather big."
Chinese Premier Mr Wen Jiabao announced earlier this month that the government had cut the nation growth target to 7.5% for 2012 versus the longstanding goal of 8% annual growth in a move anticipated by investors expecting more focus on economic rebalancing and defusing price pressures.
A coal price fall will be boon to China power sector, which predominantly relies on coal for generation and cannot freely pass on fuel costs to end-users.
Source - Reuters
Reuters quoted a top Chinese power company executive said China thermal coal prices are likely to ease further this year as the country economic growth slows, a good sign for the world second largest power industry.
Mr Wang Yu Jun chief executive officer of state run power producer China Resources Power Holdings Co Ltd said spot thermal coal prices in China have fallen sharply and the trend would continue as demand weakens.
He said that China benchmark spot coal prices with a heating value of 5,500 kilocalories per kilogram have declined to the current CNY 765 per tonne from more than CNY 800 at the end of last year.
He added that "It is mainly because China GDP growth has slowed substantially since the last quarter. We believe coal prices will fall this year."
Mr Wang said "If this year's GDP growth is in line with what the government has just forecast, I think this year's fall in coal prices will be rather big."
Chinese Premier Mr Wen Jiabao announced earlier this month that the government had cut the nation growth target to 7.5% for 2012 versus the longstanding goal of 8% annual growth in a move anticipated by investors expecting more focus on economic rebalancing and defusing price pressures.
A coal price fall will be boon to China power sector, which predominantly relies on coal for generation and cannot freely pass on fuel costs to end-users.
Source - Reuters
Tuesday, March 20, 2012
Export of iron ore through MMTC
Tuesday, 20 Mar 2012
Mr Jyotiraditya M Scindia minister of state for commerce and industry, said that under the extant Foreign Trade Policy, export of iron ore with Fe content 64% and above (except iron ore of Goa & Redi origin) is under the State Trading Regime through MMTC Limited.
However, the feasibility of nodal agency operation, as an interim measure, to cover exports of most grades of iron ore as an accounting procedure is under examination, to enforce legitimacy and tighter regulation of iron-ore exports and compliance with mining regulations. Procedures for end-to end monitoring of mineral movement (from mining stage to end-use/export) and mandatory registration of and reporting by all stakeholders would help to establish the traceability of the ore thereby ensuring that it is sourced through legal mining operations.
To ensure domestic availability of iron ore, Government has raised the ad-valorem export duty on iron ore lumps and fines to 30% and imposed differential railway freight on iron ore meant for export.
Source - PIB
Mr Jyotiraditya M Scindia minister of state for commerce and industry, said that under the extant Foreign Trade Policy, export of iron ore with Fe content 64% and above (except iron ore of Goa & Redi origin) is under the State Trading Regime through MMTC Limited.
However, the feasibility of nodal agency operation, as an interim measure, to cover exports of most grades of iron ore as an accounting procedure is under examination, to enforce legitimacy and tighter regulation of iron-ore exports and compliance with mining regulations. Procedures for end-to end monitoring of mineral movement (from mining stage to end-use/export) and mandatory registration of and reporting by all stakeholders would help to establish the traceability of the ore thereby ensuring that it is sourced through legal mining operations.
To ensure domestic availability of iron ore, Government has raised the ad-valorem export duty on iron ore lumps and fines to 30% and imposed differential railway freight on iron ore meant for export.
Source - PIB
Indonesia forces miners into new deals
Tuesday, 20 Mar 2012
BHP Billiton and Newcrest will be forced to renegotiate their long standing mining leases under controversial new divestment laws in Indonesia.
A senior official in Indonesia's Department of Mines and Energy has confirmed that all companies without exception, must implement the new policy under which foreigners cannot own more than 49% of a mining project in the country.
But the details of the divestment for projects operating under existing contracts are subject to negotiation.
The regulation, which was signed by the Indonesian President, Susilo Bambang Yudhoyono, last month but only published last week, has caused turmoil in the global mining industry as companies that have billions in assets try to work out what it means.
The divestment must start taking place after a mine has been in production for five years, and be complete after 10 years.
BHP and Newcrest have both stated recently that they expect to be unaffected by the new rules, despite holding majority stakes in Indonesia's Indomet and Gosowong mines respectively.
But Mr Sujatmiko a senior adviser to Thamrin Sihite, the director-general of mines and energy, told BusinessDay that even existing miners working under older leases, called contracts of work, would be required to divest.
Mr Sujatmiko said that "In the case of contract of work like PT Nusa Halmahera Minerals [Newcrest's Gosowong project] and Coal Contract of Work like Indomet Project-BHP group, applying [the law] will depends on result of renegotiation between Government and company.”
"To adjust those contracts, government and companies [are] doing renegotiation now and agreement hasn't happened between both parties to date."
Source - www.watoday.com.au
BHP Billiton and Newcrest will be forced to renegotiate their long standing mining leases under controversial new divestment laws in Indonesia.
A senior official in Indonesia's Department of Mines and Energy has confirmed that all companies without exception, must implement the new policy under which foreigners cannot own more than 49% of a mining project in the country.
But the details of the divestment for projects operating under existing contracts are subject to negotiation.
The regulation, which was signed by the Indonesian President, Susilo Bambang Yudhoyono, last month but only published last week, has caused turmoil in the global mining industry as companies that have billions in assets try to work out what it means.
The divestment must start taking place after a mine has been in production for five years, and be complete after 10 years.
BHP and Newcrest have both stated recently that they expect to be unaffected by the new rules, despite holding majority stakes in Indonesia's Indomet and Gosowong mines respectively.
But Mr Sujatmiko a senior adviser to Thamrin Sihite, the director-general of mines and energy, told BusinessDay that even existing miners working under older leases, called contracts of work, would be required to divest.
Mr Sujatmiko said that "In the case of contract of work like PT Nusa Halmahera Minerals [Newcrest's Gosowong project] and Coal Contract of Work like Indomet Project-BHP group, applying [the law] will depends on result of renegotiation between Government and company.”
"To adjust those contracts, government and companies [are] doing renegotiation now and agreement hasn't happened between both parties to date."
Source - www.watoday.com.au
Transnet delivers wagons to Mozambique
Tuesday, 20 Mar 2012
Public Enterprises Minister Malusi Gigaba marked the shipping of the last 98 of the 200 wagons and spare parts designed, engineered and manufactured in Transnet Rail Engineering's facility in Uitenhage, Eastern Cape.
The wagons, which were built for global mining giant Rio Tinto, will be carrying coal from the company's coking coal mine at Moatize in Mozambique's Tete province to the port of Beira.
The wagons and two containers with spare parts were railed from Transnet Rail Engineering's Wagon Business at Uitenhage about 23km from Port Elizabeth to the Port Elizabeth harbour where they were loaded on the MV Thorco Sunrise SW cargo vessel, which departs for Mozambique on Friday.
Gigaba said that "This is a particularly proud moment for us not only because of the significance of this achievement but because of the stringent standards we imposed on ourselves to satisfy our customer. The design, development, prototyping, industrialization and starting production of this new wagon were accomplished in less than five months an impressive lead time by any international standards."
In line with Transnet's commitment to the competitive supplier development program, 85% of the raw materials and components used to manufacture the wagons were sourced locally or built in-house. Only the draw gear and a few specialized components were imported.
Chief executive Brian Molefe said that "A total service solution is key to our customer satisfaction strategy. For this reason and to maximize the life-cycle of the wagons and to ensure a low total cost of ownership, we will be sending our experts to train and supervise local staff in the maintenance of these wagons in Mozambique.”
The wagon business at Uitenhage specializes in manufacturing, conversion, heavy repair and upgrading of railway wagons for domestic fleets. It supplies wagons to the east coast intermodal operators of Tanzania and the west coast mines of Ghana.
Source - www.businesslive.co.za
Public Enterprises Minister Malusi Gigaba marked the shipping of the last 98 of the 200 wagons and spare parts designed, engineered and manufactured in Transnet Rail Engineering's facility in Uitenhage, Eastern Cape.
The wagons, which were built for global mining giant Rio Tinto, will be carrying coal from the company's coking coal mine at Moatize in Mozambique's Tete province to the port of Beira.
The wagons and two containers with spare parts were railed from Transnet Rail Engineering's Wagon Business at Uitenhage about 23km from Port Elizabeth to the Port Elizabeth harbour where they were loaded on the MV Thorco Sunrise SW cargo vessel, which departs for Mozambique on Friday.
Gigaba said that "This is a particularly proud moment for us not only because of the significance of this achievement but because of the stringent standards we imposed on ourselves to satisfy our customer. The design, development, prototyping, industrialization and starting production of this new wagon were accomplished in less than five months an impressive lead time by any international standards."
In line with Transnet's commitment to the competitive supplier development program, 85% of the raw materials and components used to manufacture the wagons were sourced locally or built in-house. Only the draw gear and a few specialized components were imported.
Chief executive Brian Molefe said that "A total service solution is key to our customer satisfaction strategy. For this reason and to maximize the life-cycle of the wagons and to ensure a low total cost of ownership, we will be sending our experts to train and supervise local staff in the maintenance of these wagons in Mozambique.”
The wagon business at Uitenhage specializes in manufacturing, conversion, heavy repair and upgrading of railway wagons for domestic fleets. It supplies wagons to the east coast intermodal operators of Tanzania and the west coast mines of Ghana.
Source - www.businesslive.co.za
Vale to reopen Carajas iron ore rail track
Tuesday, 20 Mar 2012
Bloomberg reported that Vale SA said that it will reopen operations at a railroad that transports production from the world’s largest iron ore mine after an accident lowered shipments by 300,000 tonnes.
It said “Vale has taken all the necessary measures to restore the railway traffic.”
Vale said “Traffic at the Carajas railroad in northern Brazil will resume and the expected iron ore shipment loss is relatively small. The company may be able to offset the loss by increasing shipments from other ports such as Tubarao, Ilha de Guaiba and Itaguai.”
Vale shut the Carajas railroad after part of a bridge it was building next to the railroad collapsed March 16 when 7 workers suffered light injuries.
The railroad links the Carajas mine with the Ponta da Madeira port in Brazil’s northeastern state of Maranhao, from which Vale exports iron ore to clients as far away as Asia. Vale produced a record 109.8 million tonnes of iron ore in Carajas last year, or about 34% of its total output.
Source - Bloomberg
Bloomberg reported that Vale SA said that it will reopen operations at a railroad that transports production from the world’s largest iron ore mine after an accident lowered shipments by 300,000 tonnes.
It said “Vale has taken all the necessary measures to restore the railway traffic.”
Vale said “Traffic at the Carajas railroad in northern Brazil will resume and the expected iron ore shipment loss is relatively small. The company may be able to offset the loss by increasing shipments from other ports such as Tubarao, Ilha de Guaiba and Itaguai.”
Vale shut the Carajas railroad after part of a bridge it was building next to the railroad collapsed March 16 when 7 workers suffered light injuries.
The railroad links the Carajas mine with the Ponta da Madeira port in Brazil’s northeastern state of Maranhao, from which Vale exports iron ore to clients as far away as Asia. Vale produced a record 109.8 million tonnes of iron ore in Carajas last year, or about 34% of its total output.
Source - Bloomberg
Resource super profit tax - Australian miners unhappy
Tuesday, 20 Mar 2012
The Association of Mining and Exploration Companies, which represents small and mid tier miners, condemned the tax.
Association chief executive Mr Simon Bennison said “The tax is simply unfair to smaller emerging miners, and is so complex that the administrative and compliance burden on industry and government will be extreme. “The introduction of this anti-competitive legislation in Australia will only further push investment capital offshore, and change our reputation as a safe place in which to invest.”
Source - Reuters
The Association of Mining and Exploration Companies, which represents small and mid tier miners, condemned the tax.
Association chief executive Mr Simon Bennison said “The tax is simply unfair to smaller emerging miners, and is so complex that the administrative and compliance burden on industry and government will be extreme. “The introduction of this anti-competitive legislation in Australia will only further push investment capital offshore, and change our reputation as a safe place in which to invest.”
Source - Reuters
Monday, March 19, 2012
More coal imports likely following duty reduction
Monday, 19 Mar 2012
Seeking to address the coal shortage affecting the power and steel sectors, government has announced a slew of measures for enhancing its availability in the Budget, a development welcomed by Coal India Ltd.
Mr Zohra Chatterji CMD of CIL said that "We welcome the removal of import duty on coal.”
The Coal Ministry is of the view that development would lead to an increase in import of fossil fuel to the country.
While presenting the Budget for 2012-13, Finance Minister Pranab Mukherjee said that "I propose to ease the situation by providing full exemption from basic customs duty and a concessional CVD (Countervailing Duty) of 1% to steam coal for a period of two years till March 31, 2014."
On the proposals, Coal Secretary Mr Alok Perti said that "The exemption will result in increase in import of non-coking coal by around one million tonnes as the prices of the dry fuel would come down.”
The coal ministry had pitched for the reduction in the duty and had even written to the Finance Ministry on the same prior to the budget announcement.
Singareni Collieries Company Ltd CMD S Narsing Rao, however, said the duty exemption would not have much impact on the domestic coal industry.
The government has proposed to remove 5% customs duty on non-coking coal.
According to an official in the state-owned firm, the duty exemption will also result in reducing the demand-supply gap of fossil fuel.
Power sector is one of the main consumers of non coking coal and nearly two third of the electricity generation in the country is coal based.
The power sector is likely to miss the non-coking coal import target of 55 million tonnes for the current fiscal as companies have imported only 30 million tonnes till December.
Source - www.indianexpress.com
Seeking to address the coal shortage affecting the power and steel sectors, government has announced a slew of measures for enhancing its availability in the Budget, a development welcomed by Coal India Ltd.
Mr Zohra Chatterji CMD of CIL said that "We welcome the removal of import duty on coal.”
The Coal Ministry is of the view that development would lead to an increase in import of fossil fuel to the country.
While presenting the Budget for 2012-13, Finance Minister Pranab Mukherjee said that "I propose to ease the situation by providing full exemption from basic customs duty and a concessional CVD (Countervailing Duty) of 1% to steam coal for a period of two years till March 31, 2014."
On the proposals, Coal Secretary Mr Alok Perti said that "The exemption will result in increase in import of non-coking coal by around one million tonnes as the prices of the dry fuel would come down.”
The coal ministry had pitched for the reduction in the duty and had even written to the Finance Ministry on the same prior to the budget announcement.
Singareni Collieries Company Ltd CMD S Narsing Rao, however, said the duty exemption would not have much impact on the domestic coal industry.
The government has proposed to remove 5% customs duty on non-coking coal.
According to an official in the state-owned firm, the duty exemption will also result in reducing the demand-supply gap of fossil fuel.
Power sector is one of the main consumers of non coking coal and nearly two third of the electricity generation in the country is coal based.
The power sector is likely to miss the non-coking coal import target of 55 million tonnes for the current fiscal as companies have imported only 30 million tonnes till December.
Source - www.indianexpress.com
Supply shortage continues in Karnataka
Monday, 19 Mar 2012
Business Standard reported that the postponement of the Supreme Court verdict on illegal mining in Karnataka has put steel producers in a quandary as most of them have already cut production because only low grade iron ore is available from the E auctions of the Metal Scrap Trading Company.
The Supreme Court said that the three judges hearing the case will not be available for hearing on March 16. Last month, the apex court had adjourned the hearing on the case by two weeks to enable the Central Empowered Committee to hear the responses of the affected companies and the State Government.
Mr Seshagiri Rao joint MD of JSW Steel said the company has to cut down its capacity utilization to 70 per cent in February against 90% in January due to poor quality of iron ore being supplied by Metal Scrap.
He added that “We have about three to four million tonnes of iron ore stockpile left with us. The question now is whether we should be using it. Use of low grade iron ore is taking a heavy toll on our furnace.”
He added that “Unlike coal, iron ore cannot be imported as it will be unaffordable. The costs will increase substantially even if we have to source it from other states. Even if the Court allows opening up new mines in the state, it will take at least two to three months to start mining.”
Karnataka produces 16 million tonnes annually of iron and steel, constituting about 24% of the country's production of 66 million tonnes annually. Karnataka also supplies iron ore to companies located outside the State.
Source - Business Standard
Business Standard reported that the postponement of the Supreme Court verdict on illegal mining in Karnataka has put steel producers in a quandary as most of them have already cut production because only low grade iron ore is available from the E auctions of the Metal Scrap Trading Company.
The Supreme Court said that the three judges hearing the case will not be available for hearing on March 16. Last month, the apex court had adjourned the hearing on the case by two weeks to enable the Central Empowered Committee to hear the responses of the affected companies and the State Government.
Mr Seshagiri Rao joint MD of JSW Steel said the company has to cut down its capacity utilization to 70 per cent in February against 90% in January due to poor quality of iron ore being supplied by Metal Scrap.
He added that “We have about three to four million tonnes of iron ore stockpile left with us. The question now is whether we should be using it. Use of low grade iron ore is taking a heavy toll on our furnace.”
He added that “Unlike coal, iron ore cannot be imported as it will be unaffordable. The costs will increase substantially even if we have to source it from other states. Even if the Court allows opening up new mines in the state, it will take at least two to three months to start mining.”
Karnataka produces 16 million tonnes annually of iron and steel, constituting about 24% of the country's production of 66 million tonnes annually. Karnataka also supplies iron ore to companies located outside the State.
Source - Business Standard
FMG sees iron ore at USD 120 to USD 150 per tonne near term
Monday, 19 Mar 2012
Fortescue Metals Group chief executive Mr Nev Power sees iron ore prices holding between USD 120 and USD 150 per tonne in the near term, on Thursday after the company raised USD 2 billion to help fund a tripling in its iron ore capacity.
Source - Reuters
Fortescue Metals Group chief executive Mr Nev Power sees iron ore prices holding between USD 120 and USD 150 per tonne in the near term, on Thursday after the company raised USD 2 billion to help fund a tripling in its iron ore capacity.
Source - Reuters
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