Rio Tinto to spend $2 billion in Orissa iron ore mining project

Tue, Mar 06, 2012

New Delhi : Australian mining major Rio Tinto is planning to invest around $2 billion (Rs 9,886 crore) in setting up a major iron ore mining project in Orissa. The investment, largest so far by the miner in India, would help it establish a strong foothold in the country’s mining space.

“It is a $2-billion project. We expect ramping up the project’s capacity quickly to 15 million tonnes per annum (mtpa) to cater to clients ,” Sam Walsh, chief executive of Rio Tinto’s iron ore division said during a press conference. Walsh is part of a group of chief representatives of Australian and Indian companies. The chief executive officers’ (CEOs) forum, that held its meeting today, has been formed to build bilateral economic partnerships across sectors. Total foreign direct investment (FDI) from Australia between April 2000 and December 2011 stood at $486.5 million (Rs 2,402 crore), a mere 0.3 per cent of the country's total FDI flows, according to the commerce ministry's data.

While Walsh did not share details of the project, he said the company has applied for mining approvals with the state government. Rio Tinto has 51 per cent stake in a joint venture (JV) it holds with the state government-owned Orissa Mining Corporation (OMC) to develop iron ore deposits in Keonjhar district. OMC has a 44 per cent stake in the JV while the rest is held by India’s state-owned miner NMDC Ltd.

According to the initial plan, the JV called Rio Tinto Orissa Mining Company, set up in 1995, had plans to build supporting infrastructure of rail links and port capacity. Walsh said the project would be commissioned as soon as the “government approvals” are received.

The CEO forum also indicted on plans to raise the concerns of Australian companies over the proposals of the new Indian mining legislation being worked out by the government. A Bill to revive the mining sector, that proposes mandatory sharing of royalty with locals, is currently pending in the Indian Parliament.

“The issues of infrastructure bottlenecks in mineral trade with Australia will also be put up before the government,” said Naveen Jindal, a Congress Member of Parliament and Chairman of Jindal Steel and Power Ltd during the press briefing of the CEO Forum organised by industry chamber Ficci. Jindal is the Indian co-chair of the forum. Taking up the issue of facilitating temporary entry of skilled labour and professionals into Australia is also on the agenda.

(sourced BS)

Australia shares down but off lows on China PMI

Sunday, 04 Mar 2012

Australian shares fell 1% with miners dented by falls in copper and gold prices on signs the US is not planning fresh stimulus measures though the local market was lifted from its lows by positive signs from top customer China.

China's factory sector grew more than expected in February as export orders expanded for the first time in 4 months, supporting hopes the world's second biggest economy can avoid a hard landing.

Mr David Spry research manager at broker FW Holst said that "China is continuing to chug on. It's coming off a bit but it's not something that at this stage we get too concerned about. I think we'll range trade as we have been for a little while. There's nothing really to give us that next kick. To get a uniform swing up is going to take something quite dramatic to happen and I just can't see anything ion the horizon to drive that.

Mr Cameron Peacock analyst at CMC Markets said that "How did the market interpret these comments? Don't expect QE3 anytime soon. The ramifications for the commodity complex were significant, with base metals selling off sharply, oil continuing its pullback from recent highs and gold getting slammed by more than USD 85.

New Zealand's benchmark NZX 50 index rose 0.3% to 3330.9. Among other major movers in Australia, coal miner New Hope Corp dived 4.9% after it scrapped plans to sell itself for more than USD 5 billion.

Woolworths was flat after 3.2% rise in H1 earnings satisfied analyst forecasts and the supermarket leader said it was still on track to achieve full year guidance for 2% to 6% profit growth.

Source - Economic Times

Rio and Vale in talks on infrastructure sharing in Guinea

Tuesday, 28 Feb 2012

According to the Australian Financial Review, Rio Tinto Ltd is in talks with Brazilian mining giant Vale about sharing rail and port infrastructure for their two Simandou iron ore projects in Guinea, in a significant shift for the Anglo Australian miner.

The newspaper reported that sources close to Rio have said that talks between the two miners were taking place before the signing of a final infrastructure agreement with Guinea's government.

The discussions are being held in parliament over Rio's ability to access the coal infrastructure that Vale is constructing in Mozambique where both miners have coking coal projects.

Rio had previously denied that Vale or its partner, BSG Resources, had any rights to develop the Northern half of the Simandou project, which the Guinean governments removed from Rio's ownership in 2008.

(sourced Businessspectator.com.au)

African Energy Resources uncovers 15000 tonne of coal for export trials

Thursday, 23 Feb 2012

Australian junior miner, African Energy Resources has mined and prepared 15,000 tonnes of coal at its Sese project near Francistown as a sample to test target export markets as the project nears commercial development.In a presentation made available, Mr Frazer Tabeart MD of AFR said the sample would also be used for bulk washing trials and to test key components such as the boiler.

However, it is the export trials that have sparked investor interest, being potentially the first time coal from Botswana will leave the continent and be tested in world markets, a development eagerly awaited by government and other coal sector investors.Perhaps more importantly, the export trial could potentially illuminate an export route for other coal sector players for whom the absence of a route from mine to port has paralyzed project development.

While AFR has not specifically said the coal sample will reach export markets via rail and port, the company's development plans include one million tonnes per annum through Zimbabwe and Mozambique to markets in India.According to its development plan, AFR plans to export up to one million tonnes per annum next year while producing another 600,000 tonnes for the domestic market from its thermal coal resources estimated at over 2.5 billion tonnes.

By 2014, the Australian miner expects Sese to be producing 4 million tonnes per annum, with up to 2 million tonnes targeted for export while the balance will be for a local power project and the local market. According to the plans, by 2017, with new rail infrastructure in place, Sese targets the production of 12.4 million tonne per annum with exports of 9.3 million tonnes, a figure that is expected to rise to 14 million tonne per annum by 2020.

Mr Tabeart at a conference last July said that "The challenge is infrastructure and we are taking a keen interest in this. We do not expect that a major railway line will be in place by 2017 and that’s something we have planned into our approach. We are starting with 1 million tonnes per annum and perhaps by 2014/15 we could partner with a local independent power producer and ramp up to five million tonne per annum. A much larger export operation is possible of even up to 30 million tonne per annum if the infrastructure for exports is put in place."

(sourced www.mmegi.bw)

Taiwan's China Steel to invest in Australia coal mine

Feb22, 2012

TAIPEI (Reuters) - China Steel, Taiwan's top steel maker, said on Tuesday it will pay T$3.06 billion ($104 million) to invest in a coal mine in Australia and take rights to 10 percent of the future output, in a move to counter the impact of higher coal prices.

About half the amount will be used to buy the share of output rights at the MDL 162 site in the northern state of Queensland, while the rest will go on building facilities and on future development, China Steel said in a statement.

The investment will secure annual output of 600,000 tons of metallurgical coal for China Steel once completed in 2016, raising its owned coal supply to 7 percent from 3 percent of total supply, a spokesman said separately.

Falling demand for steel amid a global slowdown but higher prices of raw materials like coal have prompted China Steel and global rivals to try and seek their own supplies.

In December China Steel agreed to a 23 percent cut in iron ore prices and had earlier said it was seeking to delay some raw material deliveries.

Shares of China Steel ended flat before the announcement, versus a 0.42 percent slide of the broader market.

(sourced Reuters)

Global coking coal market comes face to face with oversupply - Mr McCloskey

Sunday, 19 Feb 2012

The global coking coal market is currently oversupplied and prices are poised for further declines. Despite this, a variety of new projects and expansions will continue to swell global supply for the foreseeable future, although the largest new tonnages will not make their appearance until the next decade. Australia and China remain the keys to supply and demand respectively.

Mr Gerard McCloskey of McCloskey Group said that “There is an oversupply. If Australia comes back to the sort of levels it was doing in the first half of 2010, another 30 million tonnes will come onto a very balanced market.”

He said that prices will fall, but will remain at pretty decent levels that are likely to be well above producer costs.

Mr McCloskey said that “Whatever happens to prices in next quarter, you’ll have seen the longest period with coking coal above USD 200 eight quarters.”

He added “During that time, price volatility has been extraordinary, with prices hitting as much as USD 330 in the second quarter of 2011, before falling back to USD 235 in the current quarter.”

Mr McCloskey predicted that “There will be a correction of prices down towards USD 200. It’s a great price. Until two years ago we had not had prices above USD 200 except for one brief period in 2008.”

Mr McCloskey said that additional supply meanwhile is coming from Australia, which is just getting back to normality following last year’s extensive flooding in Queensland, the country’s major coal producing region. Australian producers are in the process of adding another 30 million tonnes to a hard coking coal market that is probably only about 140 million tones.

(sourced Futuresmag.com)

Global steam coal prices may zoom if CIL pushes imports

Saturday, 18 Feb 2012

ET reported that International coal prices are likely to move up further as the world's largest producer CIL needs to go on global shopping for the dry fuel to meet the increased demand of the power sector.

A Committee of Secretaries, set up by Prime Minister Manmohan Singh to sort out issues relating to the power sector, has asked CIL to sign Fuel Supply Agreements with power plants that have already been commissioned or would go on stream on or before March 31st 2015 for 20 years.


The analysts said that "It will be a Herculean task for Coal India Ltd to meet the additional obligations since its entire production now gets exhausted to feed the power sector. In the current situation, CIL's only way out is to go for procuring the raw material in countries like Indonesia, Mozambique, Australia and South Africa.”

Analyst said that "The international prices of coal are likely to go up as India's state run miner Coal India looks for procuring in the global market. The demand for coal in India is likely to go up manifold as projects go on stream.”

The international price of coal is now hovering a little over USD 100 per tonne.

(Sourced from ET)

Oracle announces USD 610 million investments in Thar Block VI

Friday, 17 Feb 2012

Oracle Coalfields Plc, the operators of Block VI of the Thar coal project have announced their plans to invest up to USD 610 million for a coal mine of 5 million tonnes per annum capacity.

Mr Shahrukh Khan CEO Oracle Coalfields said that “The institutional investors abroad have no reservations in investing in Pakistan and they are willing to expose in the resource sector particularly in a project that is expected to yield a return of 20.5%. Besides, the international lenders are also interested in the project.”

Mr Khan informed about the details of the feasibility of coal mining and power generation project at Block VI and continuing significant progress in the development of its 1.4 billion tonnes flagship coal resource project in Thar, Sindh.

He said that the results of the comprehensive technical feasibility study undertaken last year confirmed the technical and economic viability of the project. This represents a significant step towards providing the nation, Sindh and local communities in Thar with a new sustainable source of energy for decades to come by bringing into production its first large scale open pit coal mine.

Oracle has also signed MoU with Karachi Electricity Supply Company to develop initially 300 MW mine mouth power plant with the plan to develop up to 11 MW at the Block VI site. Initial coal production is expected in 2014 with mine development to be started by the end of the current year.

The feasibility study results concentrated on an initial mining area with Block VI of approximately 20 square kilometers and reported in accordance with the international recognized 2004 Australian JORC Code, a mineral resource of 529 million of wet tonnes.

Mr Khan said that within this overall mining area, a Phase 1 zone was determined with coal reserves of 113 MWT. With further potential increase in reserves in Phase 2 of the mining area, the life of mine could be extended by a further 30 years or more.

Mr Younas Dhaga Sindh Coal and Energy Secretary said that infrastructure development is underway on a fast pace and the provincial government had approved various schemes and allocated funds.

Mr Dhaga also informed about the Engro’s project and said that they have completed their bankable feasibility and are waiting some infrastructure updating. The Sindh government has decided to award Block IV of the Thar coal project to Chinese state owned Three Gorges.

(sourced www.thenews.com.pk)

BHPB BMA miners strike could hit coking coal production in Australia

Fri, 17 Feb 2012

ABS reported that more than 3000 BHP Billiton Mitsubishi Alliance workers began a 7 day strike in Queensland, in the biggest industrial action in Australia in more than a decade, potentially cutting output by approximately 1 million tonnes.

Workers are threatening week long stoppage at seven Bowen Basin mines, which produce one fifth of the world's coking coal.

There are warnings from analysts, that the stoppages will cause big problems for Asian customers.

BHP says the action won't affect pay negotiations, or decisions on issues the company says are vital to competitiveness.

Analyst Mr Tim Morris says the action could affect coal prices. He said “It's a reflection of workers wanting a larger slice of what's been a growing profit pie in the coal industry. You've already got significant flooding affecting coal output and Australia's one of the world's largest suppliers of coal to Asia. So it could have an impact on short-term pricing and if the tension continues, you could see some medium-term issues as well.”

Workers at BHP’s Goonyella Riverside, Broadmeadow, Peak Downs, Saraji, Norwich Park, Gregory Crinum, and Blackwater mines will be involved in the strikes.

(Sourced from abc.net.au)

South Korea January coal imports up 3pct

Friday, 17 Feb 2012

South Korea's imports of coal in January rose 3.8 percent to 10.71 million tonnes from 10.32 million tonnes a year earlier, customs data showed on Wednesday.

Details of January imports are as follows

	Jan '12	Price	Jan '11	Price
Australia	3,761,874	161.01	3,618,429	132.98
Indonesia	3,236,837	96.46	3,943,822	85.97
Canada	1,055,996	193.90	867,003	148.93
S. Africa	1,054,408	128.12	137,476	89.82
Russia	966,939	124.15	760,921	118.71
U.S.	414,786	230.24	419,356	232.34
China	198,533	169.62	386,113	121.76
Malaysia	22,000	90.23		_
Colombia		-	165,025	105.81
Cyprus		-	23,340	216.07

Price in USD

(Sourced from Reuters)

Iron ore stocks at Chinese ports approaching alarm line

Friday, 10 Feb 2012

Mr Zhang Chunliang scheduler from Dalian Port Ore Terminal Company Limitev said that iron ore piled at docks in Dalian Port can be seen everywhere, most of which are shipped from Brazil and Australia. Although current capacities are approaching the alarm level, more ships are on the way.

Mr Zhang said that mills and traders usually take cargos away soon after unloading. Impacted by gloomy downstream demand since last year, there is an obvious slowdown in taking deliveries. They had loading and unloading of around 2.5 million tonnes in January 2011 but the figure has now fallen to 1.6 million tonnes in this January.

He said that this is not the only case many other ports in China are also facing full yards. Period of storage of some cargos even exceed half a year, versus the normal three months.

Up to February 3rd 2012, iron ore inventory at 36 Chinese ports totaled around 99.15 million tonnes. Most traders say demand for spot port will improve this week but are only cautiously optimistic over the question if prices will step up adding mills are seeing deficit, downstream steel consuming industries are slowing down and large rises will be confined by sizable port inventories.

(Source: www.steelhome.cn/en)

Iron ore steady with a chance of slipping as China out

Wednesday, 25 Jan 2012

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

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

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

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

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

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

(Sourced from Reuters)

Iron Ore-Spot at 7-week top, Australian miners suspend loading

Wed Jan 11, 2012
* Rio, Fortescue suspend loading ops ahead of cyclone
* China iron ore demand seen rising after Lunar holiday

SINGAPORE, Jan 11 (Reuters) - Spot iron ore prices rose to seven-week highs, spurred by Chinese steel mills building inventories ahead of the Lunar New Year break later this month and expectations prices may climb further after the holiday.News of supply disruption from top iron ore exporter Australia, where miners Rio Tinto and Fortescue Metals Group have suspended loading operations ahead of a cyclone bearing down on the west coast, should also support prices.

Iron ore with 62 percent iron content gained 1.6 percent to $142.30 a tonne on Tuesday, cost and freight delivered to China, its highest since Nov. 23, according to Steel Index .IO62-CNI=SI.
The Australian supply disruption may cause a "near-term tightness in supply", said Rory MacDonald, iron ore broker at Freight Investor Services. But given a lacklustre steel market in China, the world's biggest iron ore buyer, MacDonald saw limited impact on the supply-demand balance from the closure of some of the world's largest iron ore ports in Australia."Whether we see prices gain significantly because of this is another thing altogether, but I don't think it's necessarily going to drive us into another upward cycle that we wouldn't be entering into anyway post-Chinese New Year holiday.

"If it's fairly minimal, then they'll be back on track in 48 hours or so, but if it repeats then obviously we're talking about a different scenario, but we'll have to wait and see," he said.
Traders are relatively upbeat about China's iron ore demand after the week-long holiday that starts Jan. 23, with construction activity seen picking up and on expectations the government will loosen monetary policy to boost the economy. The construction sector accounts for around half of steel demand in China. Iron ore touched a 2011 peak of $191.90 a tonne in mid-February in a rally following last year's Chinese New Year.

"Even as Chinese mills wind down buying activity ahead of Chinese New Year, traders are increasingly taking positions with a view that demand will increase following the New Year holidays in February, and on an expectation that more Chinese policy loosening will be delivered in the next quarter or two,"
Commonwealth Bank of Australia said in a note.

Several cargoes of Australian iron ore fines were sold on Tuesday at levels slightly higher than previous deals, surpassing expectations of many participants, Steel Index said. Rio Tinto sold 61.4-percent grade Pilbara fines at around $141.50 a tonne, while BHP Billiton sold 61-grade MAC fines also at $141.50, traders said. BHP also sold 62.7-grade Newman iron ore fines at $145.50 a tonne, traders said.

Shanghai rebar futures and iron ore indexes at 0744 GMT
Contract Change Pct Change
SHANGHAI REBAR* 4224 9.00 0.21
PLATTS 62 PCT INDEX 143.5 0.50 0.34
THE STEEL INDEX 62 PCT INDEX 142.3 2.30 1.64
METAL BULLETIN INDEX 141.42 0.71 0.50

*In yuan/tonne
#Index in dollars/tonne, show close for the previous trading day.

(sourced Reuters)

Iron ore price fall raises doubts on Australia mine tax plan

Friday, 06 Jan 2012

Reuters reported that Australia politically charged mining profits tax could raise less of the initial AUD 11 billion Prime Minister Ms Julia Gillard is promising if iron ore prices return to November levels accountants BDO warned in a senate submission.

BDO said If iron ore experiences a double dip drop prices could fall to a point where no one will pay MRRT. It SAID between USD 120 and USD 125 a tonne for ore, it was difficult to envisage established mining companies paying any tax, given large deductions afforded to them under the plan.

BDO said "We respectfully request treasury advice what MRRT tax will be collected if iron ore prices remain at USD 120 for an extended period of time."

Mega miners Xstrata, BHP Billiton and Rio Tinto last year agreed with Ms Gillard to pay the Minerals Resource Rent Tax only if the tax was cut to 30% from 40% and limited to profits from iron ore and coal mining.

(Sourced from Reuters)

Iron ore fall raises doubts on Australia mine tax plan

Wed Jan 4, 2012

SYDNEY, (Reuters) - Australia's politically charged mining profits tax could raise less of the initial A$11 billion Prime Minister Julia Gillard is promising if iron ore prices return to November levels, accountants BDO warned in a senate submission.

Mega-miners Xstrata, BHP Billiton and Rio Tinto , last year agreed with Gillard to pay the Minerals Resource Rent Tax only if the tax was cut to 30 percent from 40 percent and limited to profits from iron ore and coal mining.An earlier version was deemed unworkable within the ruling Labor Party and led to the removal of Australia's first Labor leader in 11 years, Kevin Rudd.

Analysts are divided on the direction of iron ore prices, which this year dropped as low as $116 a tonne and ranged from $119 to $147 a tonne over November.On Wednesday, the price stood at $138.30 a tonne.

Steel industries in most countries requiring ore are suffering, leaving China and other robust Asian economies with healthier balance sheets the key buyers.If iron ore experiences a "double dip drop" prices could fall to a point "where no one will pay MRRT", BDO said.

Between $120 and $125 a tonne for ore, it was "difficult to envisage" established mining companies paying any tax, given large deductions afforded to them under the plan, BDO said."We respectfully request treasury advise what MRRT tax will be collected if iron ore prices remain at $120 for an extended period of time," BDO said in its submission.

TAX BEING CLOSELY WATCHED

Gillard wants to use the tax to boost payments into worker pension funds and to spread the benefits of Australia's resources boom to other parts of the economy.The tax is being closely watched by other resource nations.Huge expansion plans underway by big mining houses promise to deliver hundreds of millions more tonnes of iron ore to the global supply pool.

At the same time, there are some signs China's steel production is waning after years of near-uninterrupted growth.China's daily crude steel output fell to 1.666 million tonnes in the second 10 days of December, down 0.44 percent from the preceding 10 days, data from the China Iron & Steel Association showed.

JULY 1 START

For the first half of 2012 -- the tax starts on July 1, 2012 -- seasonally weaker seaborne iron ore supply and some recovery in steel production should keep iron ore prices in a $130-$150 range according to CLSA analysts. By 2014, the price could be as low as $100 a tonne, CLSA forecasts.

Supporters of the tax have accused detractors of waging a scare campaign by saying Australia, whose economy relies heavily on mining, would see less investment in mining if the tax was introduced.

Mining is the lifeblood of the Australian economy and iron ore and coal generate the lion's share of national overseas earnings.But to date, even detractors concede that there's been little sign Australia was losing its appeal as a mining centre.

Rio Tinto is accelerating a plan to lift output by 50 percent to 333 million tonnes a year by 2015. BHP is aiming for a 37 percent rise in production to 220 million tonnes by around the same time.Gillard's supporters estimate Xstrata, BHP and Rio Tinto would shoulder 80 percent of the $11.1 billion in added tax revenue collected in the first three years.

(sourced Reuters)

Giant Vale ship completes maiden journey to China

Tue Jan 3, 2012

SINGAPORE Jan 3 (Reuters) - The first of Vale's giant dry bulk vessels to arrive in China has completed delivery of its iron ore cargo, shipping data showed on Tuesday, a key step forward in the Brazilian miner's plan to cut shipping costs to its biggest market.

Reuters Freightviews and independent shipping data confirmed the 388,000-tonne vessel, Berge Everest, had departed China's Port of Dalian over the weekend for Singapore, where it will likely refuel for its journey back to Brazil.

Draught measurements indicated the ship had unloaded all or nearly all of its iron ore cargo in Dalian.

Vale has ordered 35 of the world's largest dry bulk carriers, of which six are already on the water, at an estimated cost of $4.2 billion from Chinese and Korean shipyards.

The world's second largest miner had been trying since June 2011 to get Chinese authorities to allow the megaships to enter the country's ports.

Chinese port officials have declined to comment on the arrival of Berge Everest, leaving it unclear as to whether other giant Vale ships will be allowed to dock in the country's ports.

Five other giant ships operated by Vale, the world's top iron ore producer, were not expected to follow Berge Everest into China at least in the near term.

Shipping data showed two heading back to Brazil, two in Europe and one -- the Vale Beijing -- anchored off Brazil's Ponta da Madeira Port.

The Vale Beijing, the newest member of the "Valemax" fleet, developed cracks in its hull on its maiden voyage, sparking concerns from Chinese shipowners about the safety of these ships.

Chinese shipowners and steelmakers are strongly opposed to Vale's vessels, fearing the ships are a "Trojan Horse" that the miner will use to monopolize both the shipping and iron ore markets at China's expense.

Vale, which sells about 40 percent of its ore to China, is counting on Valemaxes to slash shipping costs and better compete with Australian rivals BHP Billiton and Rio Tinto . While Vale's ore is generally of higher quality, that advantage is cancelled by Australia's proximity to China, the world's top steelmaker and biggest ore importer.

(sourced Reuters)

IMX Resources to sell iron ore shipment on spot market

Tuesday, 03 Jan 2012

IMX Resources has taken steps to sell its 19th shipment of magnetite ore from the Cairn Hill Phase 1 project in South Australia to an existing spot shipment customer.

The company had anticipated the resumption of magnetite ore deliveries to joint venture partner Taifeng Yuanchuang International Development Company, starting with the 19th shipment, following the modification of its processing plant at Bayuquan in China and reduction of its inventory of stockpiled ore.

However, Taifeng advised the joint venture operating entity, Termite Resources NL, that it is unwilling to pay the Phase 1 Life of Mine sales contract pricing for the shipment and has requested renegotiation of the terms of the contract.

Taifeng has also advised the joint venture that as a result of continuing bottlenecks at its processing plant it cannot take all of the ore it has contracted to purchase under the contract.

Mr Neil Meadows MD of IMX Resources said that the company is working with Taifeng to resolve the issues in an equitable and timely manner.

He said “We have had strong interest from other parties in our product and we are confident that we will have long term offtake agreements to support the operation in place by the end of the third quarter of the 2012 financial year.”

The joint venture has begun negotiations of long term contracts with alternative parties for the part of the ore production from Cairn Hill that Taifeng has indicated it will not take.

IMX’s interest in the Cairn Hill JV is held through a direct 51% interest in the joint venture company Outback Iron, which holds the Cairn Hill mining lease through subsidiary Termite. Taifeng has the remaining 49% interest in Outback.

(Sourced from proactiveinvestors.com.au)

Chinese acquisitions into Australia trebles

Saturday, 31 Dec 2011

It is reported that though the UK, the US and Canada are home to companies that engaged in 60% of Australian M&A in 2011, Chinese corporates announced deals worth USD 9.9 billion almost three times the USD 3.7 billion notched in 2010 according to Dealogic.

At 15.1%, China market share of inbound M&A volume has been helped by two deals which are yet to close the USD 2.1bn merger between Yanzhou Coal Mining and Gloucester Coal and Hanlong Mining USD 1.65 billion takeover of Sundance Resources.

Both are the largest Chinese Australian tie-ups on record behind Yanzhou USD 3.5 billion acquisition of Felix Resources in 2009 making Australia the most targeted nation by China in 2011 followed by France, Hong Kong, Canada and Brazil.

(Sourced from www.theaustralian.com.au)

Earnings of smallest bulkers fall to lowest in 33 months

Tuesday, 27 Dec 2011

It is reported that earnings from the world’s smallest commodity ships fell to the lowest level in almost three years as the vessels miss out on a boom in Chinese iron ore demand that buoyed rates for larger carriers.

According to the data from the Baltic Exchange in London Hire costs for Handysizes that haul at most 35,000 tonnes of cargo slid for a 22nd day declining USD 2 to USD 8,389 a day. The ships which move cargoes from grains to lumber are down 31% this year compared with a 57% rally in rates for Capesize carriers that are at least four times bigger and transport iron ore.

Mr Jeffrey Landsberg president of Commodore Research in New York said “China is taking a large amount of iron ore even though the world is still going through significant economic trouble. Handysizes are more susceptible to changes in the developed world.”

According to ship-tracking data compiled by Bloomberg for carriers signaling arrival dates within the next month that 10% of the global fleet of Handysizes is bound for the Asian country compared with 21% of Capesizes. Almost half of the Capesize fleet is sailing for China or for Australia or Brazil, the two largest iron ore exporters compared with 18% of Handysizes.

According to economists’ forecasts compiled by Bloomberg and data from Clarkson Research Services Ltd a unit of the world largest shipbroker China, growing more than three times faster than the global average will import 10% more of the ingredient used in steelmaking this year. While that bolsters demand for both Capesize and Handysizes vessels, the smaller ships have a wider cargo mix, meaning they benefit less.

(Sourced from www.mb.com.ph)

Mining taxes impede Indian firms foray into Australia

Monday, 19 Dec 2011

Even as it proposes a Free Trade Agreement with the Indian government, Australia is keen to lay out a red carpet for Indian companies looking to mine coal or iron ore in Australia. However, new taxes on mining could also mean that Indian companies will have to buy assets in Australia as well.

GVK recently paid a little over USD 1 billion for 3 coal mines in Australia and it is not alone. Indian power and infra companies are making a beeline for Australia. But two new taxes, carbon and mining tax could act as a spoiler. The Australian government however is at pains to explain that the incidence of these two taxes will be minimal.

Mr Bill Shorten minister for financial services of Australia said "It’s better to tax profits rather than an umbrella royalty. Australia can definitely offer large natural resources to Indian companies looking for mining opportunities."

He said that "We have long term pension funds which are really keen to be part of the Indian growth story and infrastructure is an attractive investment area.”

Meanwhile, the Australian government is also looking to invest in India. Australian pension funds, some with assets over USD 15 billion are keen to pump in long term funds in the infrastructure sector.

Even as Australia and India increase their engagement, the Australian government is ultimately looking at a FTA with India to boost economic co-operation between the two countries.

(Sourced from profit.ndtv.com)