Saturday, 25 Feb 2012
Major South African coal producers that own shares in the Richards Bay Coal Terminal may invest to expand the terminal to handle up to 100 million tonnes of coal a year.
Mr Mxolisi Mgojo head of Exxaro's coal unit said that coal miners had been surprised by the improved rate at which logistics group Transnet transported their coal via rail to the port in the second half of last year.
While Transnet's volumes are still below the terminal's annual capacity of 91 million tonnes, the transport group has been quickly catching up.
Mr Mgojo said that "The pressure is back on us as RBCT shareholders to say, beyond 91 million tonnes what can we do? We need to get to at least 100 million tonnes.” He said the expansion would depend on the timing of Transnet's upgrades on the coal export line.
For years miners had blamed Transnet for failing to improve much-needed infrastructure, but the group has put money into new wagons and locomotives and plans to build a line via Swaziland, which would ease congestion on the main coal export line and raise capacity to close to 100 million tonnes.
Exxaro, South Africa's second-largest coal producer and a big supplier to power utility Eskom, exported 4.9 million tonnes of coal last year and expects to ship 5 million in 2012.
Mr Mgojo said there was more focus than ever on developing the Waterberg coal fields, seen as the next major coal hub as reserves in the Witbank area near depletion.
This is after the government highlighted the project as one of its economic priorities along with the need to secure coal supplies for South African power plants, now supplying 85% of the electricity powering Africa's biggest economy.
Exxaro also said it planned to more than double its capital expansion this year to ZAR 10.93 billion (USD 1.4 billion) as it seeks to diversify into other commodities such as iron ore.
(Sourced from Reuters)
Showing posts with label Exxaro. Show all posts
Showing posts with label Exxaro. Show all posts
Saturday, February 25, 2012
Thursday, February 9, 2012
Exxaro yet to reach 50 pct of African Iron
Thursday, 09 Feb 2012
South African miner Exxaro Resources is 27% shy of reaching the minimum acceptance level in its USD338 million take-over bid for Perth-based iron ore explorer African Iron, with one week left to go.
Exxaro currently has a stake in Republic of Congo-focused African Iron of 22.93%.
The suitor, which is South Africa's second largest coal producer, last week declared its offer final and free from defeating conditions including regulatory action but exluding the 50 per cent minimum acceptance level.
It also said there would be no extension to the offer closing date of February 14.
Exxaro has offered 51 cents per share, which will increase to 57 cents per share if the suitor acquires a 75% or more stake in the target.
Exxaro will also pay 31 cents per listed option, rising to 37 cents per listed option if the 75% threshold is reached.
African Iron's directors last month accepted the offer in respect of the shares and listed options in the company that they personally owned.
Its major shareholder, resources investment firm Cape Lambert Resources, has sold most of its interest in African Iron and pledged to divest the remainder into the offer.
(Sourced from news.ninemsn.com.au)
South African miner Exxaro Resources is 27% shy of reaching the minimum acceptance level in its USD338 million take-over bid for Perth-based iron ore explorer African Iron, with one week left to go.
Exxaro currently has a stake in Republic of Congo-focused African Iron of 22.93%.
The suitor, which is South Africa's second largest coal producer, last week declared its offer final and free from defeating conditions including regulatory action but exluding the 50 per cent minimum acceptance level.
It also said there would be no extension to the offer closing date of February 14.
Exxaro has offered 51 cents per share, which will increase to 57 cents per share if the suitor acquires a 75% or more stake in the target.
Exxaro will also pay 31 cents per listed option, rising to 37 cents per listed option if the 75% threshold is reached.
African Iron's directors last month accepted the offer in respect of the shares and listed options in the company that they personally owned.
Its major shareholder, resources investment firm Cape Lambert Resources, has sold most of its interest in African Iron and pledged to divest the remainder into the offer.
(Sourced from news.ninemsn.com.au)
Saturday, January 21, 2012
African Iron directors accept Exxaro offer
Saturday, 21 Jan 2012
African Iron directors have now formally accepted Exxaro offer for all of the African Iron shares and listed options owned or controlled by them.
Exxaro is offering AUD 0.51 cash for each African Iron share which Exxaro will increase to AUD 0.57 cash per share if it acquires a relevant interest in 75% or more of all the African Iron shares. Exxaro is also offering AUD 0.31 cash for each listed option which Exxaro will increase to AUD 0.37 cash per listed option if it acquires a relevant interest in 75% or more of all the African Iron shares.
The acceptance of Exxaro offer by the African Iron directors in respect of a total of 1,300,000 shares and 100,000 listed options held by them follows the announcement earlier this week that African Iron largest shareholder, Cape Lambert had formally accepted Exxaro offer for shares equivalent to 19.99% of African Iron.
The acceptance accords with the statements included in African Iron Target Statement regarding the directors’ intentions to accept the offers and increases Exxaro interest in African Iron shares above 20%.
In African Iron Target Statement, the African Iron directors also declared their intention to accept Exxaro private offers for all of the African Iron unlisted options owned or controlled by them.
Dr Ian Burston African Iron, Independent Non-Executive Chairman said “the Board had carefully considered Exxaro takeover offer and recommended that shareholders and listed option holders accept it, in the absence of a superior proposal. All shareholders and option holders should this week receive African Iron’s Target’s Statement which details the offers and we encourage them to read this document carefully before they make any decision.”
As detailed in the Target Statement, African Iron shareholders and option holders have a number of alternatives available to them:
I. Accept Exxaro offer for their African Iron shares and/or listed options
II. Sell their African Iron shares and/or listed options on market
III. Listed option holders can exercise their options and sell the shares on market; or Do nothing.
Dr Burston said that “Shareholders and option holders should be aware that if they do nothing, the price of African Iron shares and options is likely to fall if the offer closes and Exxaro has acquired a relevant interest in less than 90% of the African Iron shares on issue.”
The African Iron board unanimously recommends that shareholders and option holders accept the Exxaro takeover offers in the absence of a superior proposal.
Exxaro takeover offer will remain open until 5.00pm Perth time on 14 February 2012 unless extended.
African Iron directors have now formally accepted Exxaro offer for all of the African Iron shares and listed options owned or controlled by them.
Exxaro is offering AUD 0.51 cash for each African Iron share which Exxaro will increase to AUD 0.57 cash per share if it acquires a relevant interest in 75% or more of all the African Iron shares. Exxaro is also offering AUD 0.31 cash for each listed option which Exxaro will increase to AUD 0.37 cash per listed option if it acquires a relevant interest in 75% or more of all the African Iron shares.
The acceptance of Exxaro offer by the African Iron directors in respect of a total of 1,300,000 shares and 100,000 listed options held by them follows the announcement earlier this week that African Iron largest shareholder, Cape Lambert had formally accepted Exxaro offer for shares equivalent to 19.99% of African Iron.
The acceptance accords with the statements included in African Iron Target Statement regarding the directors’ intentions to accept the offers and increases Exxaro interest in African Iron shares above 20%.
In African Iron Target Statement, the African Iron directors also declared their intention to accept Exxaro private offers for all of the African Iron unlisted options owned or controlled by them.
Dr Ian Burston African Iron, Independent Non-Executive Chairman said “the Board had carefully considered Exxaro takeover offer and recommended that shareholders and listed option holders accept it, in the absence of a superior proposal. All shareholders and option holders should this week receive African Iron’s Target’s Statement which details the offers and we encourage them to read this document carefully before they make any decision.”
As detailed in the Target Statement, African Iron shareholders and option holders have a number of alternatives available to them:
I. Accept Exxaro offer for their African Iron shares and/or listed options
II. Sell their African Iron shares and/or listed options on market
III. Listed option holders can exercise their options and sell the shares on market; or Do nothing.
Dr Burston said that “Shareholders and option holders should be aware that if they do nothing, the price of African Iron shares and options is likely to fall if the offer closes and Exxaro has acquired a relevant interest in less than 90% of the African Iron shares on issue.”
The African Iron board unanimously recommends that shareholders and option holders accept the Exxaro takeover offers in the absence of a superior proposal.
Exxaro takeover offer will remain open until 5.00pm Perth time on 14 February 2012 unless extended.
Saturday, January 14, 2012
Exxaro reached agreement with s Arnot coalmine workers
Saturday, 14 Jan 2012
Reuters reported that South Africa Exxaro Resources said a planned strike by workers at its Arnot coal mine has been called off after it reached agreement with the union late on Thursday.
More than 1,000 mineworkers had planned to down tools from Friday, protesting employment conditions.
Exxaro is South Africa second-largest coal producer and a major supplier to power utility Eskom.
(Sourced from Reuters)
Reuters reported that South Africa Exxaro Resources said a planned strike by workers at its Arnot coal mine has been called off after it reached agreement with the union late on Thursday.
More than 1,000 mineworkers had planned to down tools from Friday, protesting employment conditions.
Exxaro is South Africa second-largest coal producer and a major supplier to power utility Eskom.
(Sourced from Reuters)
Friday, January 13, 2012
Exxaro says reached agreement with mineworkers
Fri Jan 13, 2012
JOHANNESBURG (Reuters) - South Africa's Exxaro Resources said a planned strike by workers at its Arnot coal mine has been called off after it reached agreement with the union late on Thursday, the company said in a statement.
More than 1,000 mineworkers had planned to down tools from Friday, protesting employment conditions.
Exxaro is South Africa's second-largest coal producer and a major supplier to power utility Eskom.
(sourced Reuters)
JOHANNESBURG (Reuters) - South Africa's Exxaro Resources said a planned strike by workers at its Arnot coal mine has been called off after it reached agreement with the union late on Thursday, the company said in a statement.
More than 1,000 mineworkers had planned to down tools from Friday, protesting employment conditions.
Exxaro is South Africa's second-largest coal producer and a major supplier to power utility Eskom.
(sourced Reuters)
Thursday, January 12, 2012
Cash takeover offer by Exxaro for African Iron
Thursday, 12 Jan 2012
Exxaro Resources Limited and African Iron Limited announced that African Iron and a wholly owned subsidiary of Exxaro Resources Limited, Exxaro Australia Iron Investments Pty Ltd have signed a Takeover Bid Implementation Agreement for an off market, cash takeover for all of the shares and listed options in African Iron.
Key points
1. Exxaro is offering AUD 0.51 cash base consideration for each African Iron share
2. Exxaro will increase the consideration to AUD 0.57 cash where Exxaro has a relevant interest in 75% or more of African Iron shares
3. In addition, Exxaro is offering AUD 0.31 cash base consideration for each listed African Iron option. Exxaro will increase the consideration to AUD 0.37 cash where Exxaro has a relevant interest in 75% or more of African Iron shares
4. African Iron largest shareholder, Cape Lambert Resources has entered into a pre bid acceptance agreement with Exxaro in respect of 19.99% of African Iron current shares on issue
5. The African Iron board unanimously recommends that shareholders and option holders accept the Exxaro takeover offer in the absence of a superior proposal
6. Each African Iron director intends to accept the offer with respect to all shares and listed options owned or controlled by them within 6 business days of the offer opening, in the absence of a superior proposal,
7. The offer is subject to only a small number of conditions, namely more than 50% minimum acceptance, no regulatory action, no material adverse change and no prescribed occurrences
8. The base consideration of AUD 0.51 per share represents a 49% premium to African Iron 30 day VWAP of AUD 0.343 and a 76% premium to African Iron 90 day VWAP of AUD 0.289. The increased consideration of AUD 0.57 per share represents a 66% premium to African Iron 30 day VWAP of AUD 0.343 and a 97% premium to African Iron 90 day VWAP of AUD 0.289
9. The base consideration of AUD 0.31 per option represents a 73% premium to the 30 day VWAP of listed African Iron options of AUD 0.179 and a 121% premium to the 90 day VWAP of listed African Iron options of AUD 0.140. The increased consideration of AUD 0.37 per option represents a 107% premium to the 30 day VWAP of African Iron listed options of AUD 0.179 and a 164% premium to the 90 day VWAP of African Iron listed options of AUD 0.140
10. Exxaro will fund the takeover from cash reserves and existing debt facilities, and has already obtained Foreign Investment Review Board and all necessary South African regulatory approvals for the takeover,
11. The offer at the increased consideration of AUD 0.57 per share values African Iron at approximately AUD 338 million on a fully diluted basis
12. The offer will be open for acceptances until 5pm Perth time on 14 February 2012
Dr Ian Burston Independent, Non-Executive Chairman of African Iron said the African Iron Board of Directors has carefully considered the offer by Exxaro and in the absence of a superior proposal, the Board unanimously recommends that shareholders and listed option holders should accept the offer.
Mr Mr Sipho Nkosi CEO of Exxaro Resources Limited said “We are very excited about African Iron’s projects in the Republic of Congo, as they will provide Exxaro with the opportunity to realise its stated ambitions of developing a significant iron ore asset in this rapidly emerging and prospective region.”
Mr Nkosi further added “The African Iron acquisition will enable Exxaro to leverage its bulk commodity and iron ore expertise into the development of the Mayoko project. We have invested a significant amount of time and resources in due diligence on this acquisition including several site visits and meetings with senior members of the Republic of Congo government.”
Exxaro Resources Limited and African Iron Limited announced that African Iron and a wholly owned subsidiary of Exxaro Resources Limited, Exxaro Australia Iron Investments Pty Ltd have signed a Takeover Bid Implementation Agreement for an off market, cash takeover for all of the shares and listed options in African Iron.
Key points
1. Exxaro is offering AUD 0.51 cash base consideration for each African Iron share
2. Exxaro will increase the consideration to AUD 0.57 cash where Exxaro has a relevant interest in 75% or more of African Iron shares
3. In addition, Exxaro is offering AUD 0.31 cash base consideration for each listed African Iron option. Exxaro will increase the consideration to AUD 0.37 cash where Exxaro has a relevant interest in 75% or more of African Iron shares
4. African Iron largest shareholder, Cape Lambert Resources has entered into a pre bid acceptance agreement with Exxaro in respect of 19.99% of African Iron current shares on issue
5. The African Iron board unanimously recommends that shareholders and option holders accept the Exxaro takeover offer in the absence of a superior proposal
6. Each African Iron director intends to accept the offer with respect to all shares and listed options owned or controlled by them within 6 business days of the offer opening, in the absence of a superior proposal,
7. The offer is subject to only a small number of conditions, namely more than 50% minimum acceptance, no regulatory action, no material adverse change and no prescribed occurrences
8. The base consideration of AUD 0.51 per share represents a 49% premium to African Iron 30 day VWAP of AUD 0.343 and a 76% premium to African Iron 90 day VWAP of AUD 0.289. The increased consideration of AUD 0.57 per share represents a 66% premium to African Iron 30 day VWAP of AUD 0.343 and a 97% premium to African Iron 90 day VWAP of AUD 0.289
9. The base consideration of AUD 0.31 per option represents a 73% premium to the 30 day VWAP of listed African Iron options of AUD 0.179 and a 121% premium to the 90 day VWAP of listed African Iron options of AUD 0.140. The increased consideration of AUD 0.37 per option represents a 107% premium to the 30 day VWAP of African Iron listed options of AUD 0.179 and a 164% premium to the 90 day VWAP of African Iron listed options of AUD 0.140
10. Exxaro will fund the takeover from cash reserves and existing debt facilities, and has already obtained Foreign Investment Review Board and all necessary South African regulatory approvals for the takeover,
11. The offer at the increased consideration of AUD 0.57 per share values African Iron at approximately AUD 338 million on a fully diluted basis
12. The offer will be open for acceptances until 5pm Perth time on 14 February 2012
Dr Ian Burston Independent, Non-Executive Chairman of African Iron said the African Iron Board of Directors has carefully considered the offer by Exxaro and in the absence of a superior proposal, the Board unanimously recommends that shareholders and listed option holders should accept the offer.
Mr Mr Sipho Nkosi CEO of Exxaro Resources Limited said “We are very excited about African Iron’s projects in the Republic of Congo, as they will provide Exxaro with the opportunity to realise its stated ambitions of developing a significant iron ore asset in this rapidly emerging and prospective region.”
Mr Nkosi further added “The African Iron acquisition will enable Exxaro to leverage its bulk commodity and iron ore expertise into the development of the Mayoko project. We have invested a significant amount of time and resources in due diligence on this acquisition including several site visits and meetings with senior members of the Republic of Congo government.”
Tuesday, January 10, 2012
S.Africa 2011 Richards Bay coal exports rise 3.3%
Tue, Jan10, 2012
JOHANNESBURG (Reuters) - South Africa's coal exports from the Richards Bay terminal rose 3.3 percent to 65.5 million tonnes in 2011, the terminal's data showed on Monday, as improvements on the rail lines leading to the port started to pay off.
State-owned logistics group Transnet has been investing heavily to upgrade its lines and to invest in new wagons and locomotives, but export figures are still far below the coal terminal's expanded capacity of 91 million tonnes.
Coal producers in South Africa including Anglo American, BHP Billiton, Exxaro, Optimum Coal and Xstrata have been eager to export more coal to meet rising demand from India and China but have been limited by bottlenecks on the lines leading to the port.
Last week, South Africa's coal exporters provided a slightly lower 2011 export estimate of 64.6 million tonnes, a rise of 1.9 percent.
Transnet has said it will take until at least 2015 to be able to carry 81 million tonnes to the Richards Bay Coal Terminal (RBCT) each year.
The group also plans to free up an additional 14 million tonnes of capacity on the coal line by moving non-coal cargo to a new line via Swaziland.
Coal producers have begun to look beyond South Africa and explore export routes via Mozambique and Namibia, although the rail links or expansion at the relevant ports are still in the planning stage or would involve higher costs.
Coal stocks at the terminal stood at 3.3 million tonnes at the end of December, RBCT added.
(sourced Reuters)
JOHANNESBURG (Reuters) - South Africa's coal exports from the Richards Bay terminal rose 3.3 percent to 65.5 million tonnes in 2011, the terminal's data showed on Monday, as improvements on the rail lines leading to the port started to pay off.
State-owned logistics group Transnet has been investing heavily to upgrade its lines and to invest in new wagons and locomotives, but export figures are still far below the coal terminal's expanded capacity of 91 million tonnes.
Coal producers in South Africa including Anglo American, BHP Billiton, Exxaro, Optimum Coal and Xstrata have been eager to export more coal to meet rising demand from India and China but have been limited by bottlenecks on the lines leading to the port.
Last week, South Africa's coal exporters provided a slightly lower 2011 export estimate of 64.6 million tonnes, a rise of 1.9 percent.
Transnet has said it will take until at least 2015 to be able to carry 81 million tonnes to the Richards Bay Coal Terminal (RBCT) each year.
The group also plans to free up an additional 14 million tonnes of capacity on the coal line by moving non-coal cargo to a new line via Swaziland.
Coal producers have begun to look beyond South Africa and explore export routes via Mozambique and Namibia, although the rail links or expansion at the relevant ports are still in the planning stage or would involve higher costs.
Coal stocks at the terminal stood at 3.3 million tonnes at the end of December, RBCT added.
(sourced Reuters)
Thursday, November 3, 2011
SA Coal, Use it or lose it
Thursday, 3 Nov 2011
SA has some of the world’s richest coal deposits . Yet the country is failing to exploit this natural resource, as Charlotte Mathews reports.
The idea that SA’s coal industry needs a co-ordinated “road map”, or long- term plan, was first aired four years ago by a handful of its top executives — Eskom’s Steve Lennon, Exxaro’s Sipho Nkosi and Anglo American’s Roger Wicks.
It has taken three years, and some energetic problem-solving, to reach a point where the first report of the SA Coal Road Map project is about to be released. The report will help the country plan what to do with its coal deposits over the next few decades.
It’s a vital industry. In 2009, according to Chamber of Mines figures, coal became the country’s largest mining activity, generating R65bn in revenue against R49bn from gold, the mineral that has always distinguished SA in the world’s eyes.
The team, organised by the Fossil Fuel Foundation, an industry think-tank, had to overcome issues such as the coal companies’ desire to keep market-sensitive data confidential, and possibly breaching the Competition Act, if they shared information.
In 2008 the department of minerals & energy was split into two , one department focusing on minerals, the other on energy. While key staff were moved around, the project had to wait.
It had a relatively modest budget of about R4m, which would have been enough if the participants had contributed their data. But that didn’t happen and a lot more legwork was needed. The project will need more funds for the second phase.
“Bit by bit we had to accumulate the information we needed,” says steering committee chairman Ian Hall. But as the project evolved, the levels of communication and co-operation improved.
“We attracted a number of people who wanted to be included,” Hall says. “The road map’s stakeholders now represent a big cross-section of the industry.”
The need for long-term planning in the industry was highlighted by government’s recent release of its IRP2 strategy for SA’s future electricity generation mix. The target under the IRP2’s “balanced scenario” is to have 48% of SA’s energy come from coal by 2030 compared with 93% now.
For Greenpeace SA, even that is too much. A report commissioned by the organisation entitled “The True Cost of Coal” and released last week says the externalised cost of the Kusile coal-fired power station (mainly the effect on water sources) would be about R60,6bn /year. That is equivalent to about 97c- R1,88/kWh , which means the indirect costs of the station are at least a third more than the 65c/kWh that Eskom’s customers will pay in 2012/2013.
Eskom declined to comment on the Greenpeace report but referred to its previous statements on climate change and pollution control. It has a “six-point plan” to contribute to global efforts to combat climate change, including reducing its reliance on coal over time, installing clean coal technologies at new coal-fired power stations, improving its own and its customers’ energy efficiency and researching other ways to reduce carbon emissions.
Greenpeace’s view is obviously not shared by the mining industry, or parts of government, which feel SA is not extracting as much value from its coal endowment as other countries.
Most of SA’s coal is thermal, used in power stations, and it has relatively small quantities of coking coal, which is used in steelmaking. There are also scattered deposits of anthracite, a higher-value type of energy coal.
Latest data from the department of mineral resources shows SA ranks fourth-largest in the world in its coal reserves of 30,4bn t but seventh-largest in production, at 250,6Mt in 2009. At current rates of extraction, SA has about 40-50 years of coal supplies.
Hall told last month’s SA National Energy Association (Sanea) conference that the last authoritative estimate of SA’s recoverable coal resources was carried out in 1982, suggesting the country had 59,2bnt . In 2009 the figure was adjusted for depletion to an estimate of 33,1bnt. The Council for Geosciences is updating these figures and is expected to release its report in January.
SA’s coal sales rose a modest 8,7% over the 10 years to 2009 but most of the increased output went to Eskom. Coal exports were almost flat in that period, peaking at 71,5Mt in 2003 but falling as low as 57,8Mt in 2008, the year when the average benchmark export coal price soared to R737/t from R361/t in 2007. In that year average inland prices for coal were R153/t, from R108/t in 2007. Domestic coal prices are generally below exports, mainly because Eskom, the biggest customer, uses a lower quality.
About 84% of SA’s coal comes from the Witbank, Ermelo and Highveld coal fields, which will be largely exhausted within the next 10 years. While the Waterberg has substantial resources of coal — about 40% of the country’s remaining resources — it presents geological challenges which are likely to make mining more expensive. Lack of rail infrastructure and minimal water will also have to be addressed.
The country’s biggest coal producers are Anglo American Coal, Exxaro, Sasol Mining, Xstrata Coal and BHP Billiton Export Coal SA (Becsa). Other large producers include Total Coal, Optimum and Shanduka. There are also numerous smaller miners with one or two mines or projects in development. Among the five biggest producers, only three have major new projects which will supply both Eskom and export markets: Anglo American’s US$512m Zibulo mine in Mpumalanga; Exxaro’s R9bn Grootegeluk expansion in the Waterberg; and the Xstrata/African Rainbow Minerals R3,5bn joint-venture Goedgevonden mine near Witbank.
When Becsa, Exxaro, Anglo Coal and Rio Tinto recently put up for sale some of their undeveloped coal prospects, it was widely seen as a vote of no confidence in long-term growth prospects for the SA coal industry.
This is surprising, considering strong demand from India and China for SA coal and Eskom’s heavy reliance on coal- fired power stations. The utility has even expressed a desire to protect its long- term supply. The only sector of the coal industry that is showing an appetite for new projects is the junior miners, which have more appetite for risk.
Some pressures affecting investment in coal are global: fluctuations in prices, changes in SA’s target markets from Europe to Asia, and environmental pressures against burning fossil fuels. Others are shared by SA’s entire mining industry: talk of nationalisation, delays and complexities in securing mining licences and, since the global economic crisis started, limited access to financing for new projects.
Exxaro chairman Len Konar says in the group’s latest annual report that in the 16 years to 2009 SA’s mining sector actually shrank, while the global average growth in mining was 5%. He ascribes this to outside factors like the volatile rand-dollar exchange rate and the recession. He says other issues affecting the local industry are being addressed, such as infrastructural challenges, bureaucratic delays, regulatory uncertainty, the balance between productivity and cost, and the limited pool of skills .
In his medium-term budget policy statement last week, finance minister Pravin Gordhan conceded SA had lagged behind other countries, like Brazil and Australia, in growth in mining production in the past eight years. He identified six main factors: regulatory uncertainty, logistical challenges, limited electricity generation capacity, currency volatility, the debate on nationalisation and the risks of deep-level gold mining .
To this, says Frans Barker of the Chamber of Mines, should be added the high cost of services provided by parastatals, like electricity, transport and potentially water. Xavier Prevost of XMP Consulting adds that talk of nationalisation is another big issue.
“The department of mineral resources said recently it didn’t think this was deterring investment. When you talk to investors from other countries, the first question they ask is whether SA is going to nationalise the mines. Until government makes a decision on it, no-one is going to invest in mines in SA.”
The logistical problem of rail and port bottlenecks is cited repeatedly by participants in the coal industry.
Prevost says SA’s problems are not impossible to overcome but that the country is not tackling them properly.
“Certainly, the coal industry is responsible for some of them. Transnet’s inability to provide enough rail capacity to move coal from mines to ports and local users has been one of the main issues preventing many mine projects from becoming feasible .
“Mines are prepared to invest in rail, but Transnet isn’t implementing talk into action. Transnet has been discussing expansion for a long time, but nothing happens,” he says.
Slides presented by Transnet CEO Brian Molefe at the recent Coaltrans conference in Madrid showed five coal export corridors in SA: Richards Bay Coal Terminal (RBCT) , Richards Bay Navitrade Terminal and Matola (the coal terminal at Maputo) for thermal coal, while Maputo main port and Durban Bulk Connections also handle sized coal. That gives total port capacity of 99,5Mt/year against rail capacity of 75,4Mt/year .
Molefe said Transnet’s target was to build up coal freight capacity to 81Mt/year by 2014/2015.
But why isn’t Transnet targeting at least 100Mt/year, if that’s what the ports can handle? There are two main reasons: the parastatal’s own lack of funding and, possibly more important, Transnet’s belief that the coal industry cannot produce as much as it claims it will.
With changing patterns of global economic growth, the focus of SA’s coal exports has moved from its traditional European market to Asia. Indian and Chinese buyers have been actively seeking to secure coal offtake from SA in the past couple of years.
The Financial Times reported on October 17 that the European Union’s “Energy Roadmap to 2050”, being prepared for release by the end of this year, suggests European consumers’ costs of energy would double by 2050 as wind power, requiring more infrastructure, would contribute more to the energy mix than nuclear and coal. Coal and gas currently provide about half of the EU’s electricity.
The International Energy Agency’s World Energy Outlook suggests OECD countries’ coal-fired power generation will fall up to 2035 as they move away from fossil fuels, but this will be more than offset by rising demand from developing countries. China’s 600 gigawatts (GW) of new coal-fired electricity capacity exceeds the current capacity of the US, EU and Japan.
According to statistics that Lars Schernikau of coal traders HMS Bergbau presented at the recent Coaltrans Madrid conference, India’s demand for steam coal is expected to rise to 1bn t by 2017 as domestic production cannot meet the country’s needs. He says it is difficult to predict China’s production and imports but its impact on the global thermal coal market is likely to be “huge”.
Yet the 2009/2010 department of mineral resources report forecasts that SA’s coal exports will increase only “slightly” this year. It says though demand from developed countries is expected to remain weak until clean coal technology is widely used, demand from Asia could push up prices.
Are changes in markets and fluctuating prices deterring investment in SA coal mines? Not as much as generally believed, Prevost says.
“Back in 2006/2007 SA was exporting 88% of its coal to Europe but, because it was unable to meet that demand, we lost ground, and now Colombia, which is further away, is supplying more coal to Europe than we are.
“Our main market is now Asia, but the Indians and Chinese buyers are very price-sensitive. When the price was $122/t, demand from Asia fell. Now the price is $110/t-$112/t and no-one is buying , which is why RBCT is not moving the tonnages that Transnet is delivering to the port.”
But that’s no reason for Transnet to slow down rail expansion, Prevost says.
“The general view in the market is that coal is the fuel of the future. Germany is replacing its nuclear power stations with coal-fired power stations using clean coal technology. Demand for coal will be good for 20 years or more. Clean coal technology will not remove all emissions but it will reduce them to negligible levels.”
Greenpeace SA doesn’t agree. “The assessments made by the Business Enterprises unit at the University of Pretoria show that ‘clean coal’ simply does not exist,” Greenpeace says in its report.
Hall told the Sanea conference that coal accounted for almost a third of the world’s primary energy in 2010, its highest share since 1970. The main reason is rapid demand from industrialising populations in the developing economies of China and India. The populations of the world’s cities will rise to 5,2bn by 2035 from 3,3bn at present, pushing up demand for energy and steel.
The SA Coal Road Map is to present 30-year scenarios for the industry, open these options for comment, and then move into its second phase, identifying a preferred scenario and ways to achieve this scenario.
The Fossil Fuel Foundation didn’t want to disclose its findings ahead of the general release. But Hall’s comments at the Sanea conference suggest the road map presents three scenarios.
The first assumes significant exploitation of SA’s coal resources, if government’s plans for 10GW from nuclear power stations and its renewable targets encounter capital constraints and delays. That would mean building more coal- fired power stations and developing the resources in the Waterberg, Soutpansberg and Limpopo basins, with associated rail infrastructure.
The second possibility is “moderate” use of SA’s coal, if government achieves its targets and SA fulfils its carbon emission-reduction promises. That would still see some development of rail infrastructure in the Waterberg, but slowly. Coal exports would rise until 2020, but only gradually, if at all, after that.
The third scenario is that the country’s future energy and that of the rest of the world would be sourced mainly from non fossil fuel sources, which means no new coal-fired power stations would be built and coal exports would decline.
If clean coal technology can be made to work successfully, SA should not ignore a major resource that can generate cheap electricity for economic development and continue to provide a large number of jobs.
Though there are environmental reservations about coal mining, the reality is that if SA doesn’t exploit its coal reserves, its own needs and those of the coal-hungry markets of Asia will be sourced from elsewhere.
(sourced Financial Mail)
SA has some of the world’s richest coal deposits . Yet the country is failing to exploit this natural resource, as Charlotte Mathews reports.
The idea that SA’s coal industry needs a co-ordinated “road map”, or long- term plan, was first aired four years ago by a handful of its top executives — Eskom’s Steve Lennon, Exxaro’s Sipho Nkosi and Anglo American’s Roger Wicks.
It has taken three years, and some energetic problem-solving, to reach a point where the first report of the SA Coal Road Map project is about to be released. The report will help the country plan what to do with its coal deposits over the next few decades.
It’s a vital industry. In 2009, according to Chamber of Mines figures, coal became the country’s largest mining activity, generating R65bn in revenue against R49bn from gold, the mineral that has always distinguished SA in the world’s eyes.
The team, organised by the Fossil Fuel Foundation, an industry think-tank, had to overcome issues such as the coal companies’ desire to keep market-sensitive data confidential, and possibly breaching the Competition Act, if they shared information.
In 2008 the department of minerals & energy was split into two , one department focusing on minerals, the other on energy. While key staff were moved around, the project had to wait.
It had a relatively modest budget of about R4m, which would have been enough if the participants had contributed their data. But that didn’t happen and a lot more legwork was needed. The project will need more funds for the second phase.
“Bit by bit we had to accumulate the information we needed,” says steering committee chairman Ian Hall. But as the project evolved, the levels of communication and co-operation improved.
“We attracted a number of people who wanted to be included,” Hall says. “The road map’s stakeholders now represent a big cross-section of the industry.”
The need for long-term planning in the industry was highlighted by government’s recent release of its IRP2 strategy for SA’s future electricity generation mix. The target under the IRP2’s “balanced scenario” is to have 48% of SA’s energy come from coal by 2030 compared with 93% now.
For Greenpeace SA, even that is too much. A report commissioned by the organisation entitled “The True Cost of Coal” and released last week says the externalised cost of the Kusile coal-fired power station (mainly the effect on water sources) would be about R60,6bn /year. That is equivalent to about 97c- R1,88/kWh , which means the indirect costs of the station are at least a third more than the 65c/kWh that Eskom’s customers will pay in 2012/2013.
Eskom declined to comment on the Greenpeace report but referred to its previous statements on climate change and pollution control. It has a “six-point plan” to contribute to global efforts to combat climate change, including reducing its reliance on coal over time, installing clean coal technologies at new coal-fired power stations, improving its own and its customers’ energy efficiency and researching other ways to reduce carbon emissions.
Greenpeace’s view is obviously not shared by the mining industry, or parts of government, which feel SA is not extracting as much value from its coal endowment as other countries.
Most of SA’s coal is thermal, used in power stations, and it has relatively small quantities of coking coal, which is used in steelmaking. There are also scattered deposits of anthracite, a higher-value type of energy coal.
Latest data from the department of mineral resources shows SA ranks fourth-largest in the world in its coal reserves of 30,4bn t but seventh-largest in production, at 250,6Mt in 2009. At current rates of extraction, SA has about 40-50 years of coal supplies.
Hall told last month’s SA National Energy Association (Sanea) conference that the last authoritative estimate of SA’s recoverable coal resources was carried out in 1982, suggesting the country had 59,2bnt . In 2009 the figure was adjusted for depletion to an estimate of 33,1bnt. The Council for Geosciences is updating these figures and is expected to release its report in January.
SA’s coal sales rose a modest 8,7% over the 10 years to 2009 but most of the increased output went to Eskom. Coal exports were almost flat in that period, peaking at 71,5Mt in 2003 but falling as low as 57,8Mt in 2008, the year when the average benchmark export coal price soared to R737/t from R361/t in 2007. In that year average inland prices for coal were R153/t, from R108/t in 2007. Domestic coal prices are generally below exports, mainly because Eskom, the biggest customer, uses a lower quality.
About 84% of SA’s coal comes from the Witbank, Ermelo and Highveld coal fields, which will be largely exhausted within the next 10 years. While the Waterberg has substantial resources of coal — about 40% of the country’s remaining resources — it presents geological challenges which are likely to make mining more expensive. Lack of rail infrastructure and minimal water will also have to be addressed.
The country’s biggest coal producers are Anglo American Coal, Exxaro, Sasol Mining, Xstrata Coal and BHP Billiton Export Coal SA (Becsa). Other large producers include Total Coal, Optimum and Shanduka. There are also numerous smaller miners with one or two mines or projects in development. Among the five biggest producers, only three have major new projects which will supply both Eskom and export markets: Anglo American’s US$512m Zibulo mine in Mpumalanga; Exxaro’s R9bn Grootegeluk expansion in the Waterberg; and the Xstrata/African Rainbow Minerals R3,5bn joint-venture Goedgevonden mine near Witbank.
When Becsa, Exxaro, Anglo Coal and Rio Tinto recently put up for sale some of their undeveloped coal prospects, it was widely seen as a vote of no confidence in long-term growth prospects for the SA coal industry.
This is surprising, considering strong demand from India and China for SA coal and Eskom’s heavy reliance on coal- fired power stations. The utility has even expressed a desire to protect its long- term supply. The only sector of the coal industry that is showing an appetite for new projects is the junior miners, which have more appetite for risk.
Some pressures affecting investment in coal are global: fluctuations in prices, changes in SA’s target markets from Europe to Asia, and environmental pressures against burning fossil fuels. Others are shared by SA’s entire mining industry: talk of nationalisation, delays and complexities in securing mining licences and, since the global economic crisis started, limited access to financing for new projects.
Exxaro chairman Len Konar says in the group’s latest annual report that in the 16 years to 2009 SA’s mining sector actually shrank, while the global average growth in mining was 5%. He ascribes this to outside factors like the volatile rand-dollar exchange rate and the recession. He says other issues affecting the local industry are being addressed, such as infrastructural challenges, bureaucratic delays, regulatory uncertainty, the balance between productivity and cost, and the limited pool of skills .
In his medium-term budget policy statement last week, finance minister Pravin Gordhan conceded SA had lagged behind other countries, like Brazil and Australia, in growth in mining production in the past eight years. He identified six main factors: regulatory uncertainty, logistical challenges, limited electricity generation capacity, currency volatility, the debate on nationalisation and the risks of deep-level gold mining .
To this, says Frans Barker of the Chamber of Mines, should be added the high cost of services provided by parastatals, like electricity, transport and potentially water. Xavier Prevost of XMP Consulting adds that talk of nationalisation is another big issue.
“The department of mineral resources said recently it didn’t think this was deterring investment. When you talk to investors from other countries, the first question they ask is whether SA is going to nationalise the mines. Until government makes a decision on it, no-one is going to invest in mines in SA.”
The logistical problem of rail and port bottlenecks is cited repeatedly by participants in the coal industry.
Prevost says SA’s problems are not impossible to overcome but that the country is not tackling them properly.
“Certainly, the coal industry is responsible for some of them. Transnet’s inability to provide enough rail capacity to move coal from mines to ports and local users has been one of the main issues preventing many mine projects from becoming feasible .
“Mines are prepared to invest in rail, but Transnet isn’t implementing talk into action. Transnet has been discussing expansion for a long time, but nothing happens,” he says.
Slides presented by Transnet CEO Brian Molefe at the recent Coaltrans conference in Madrid showed five coal export corridors in SA: Richards Bay Coal Terminal (RBCT) , Richards Bay Navitrade Terminal and Matola (the coal terminal at Maputo) for thermal coal, while Maputo main port and Durban Bulk Connections also handle sized coal. That gives total port capacity of 99,5Mt/year against rail capacity of 75,4Mt/year .
Molefe said Transnet’s target was to build up coal freight capacity to 81Mt/year by 2014/2015.
But why isn’t Transnet targeting at least 100Mt/year, if that’s what the ports can handle? There are two main reasons: the parastatal’s own lack of funding and, possibly more important, Transnet’s belief that the coal industry cannot produce as much as it claims it will.
With changing patterns of global economic growth, the focus of SA’s coal exports has moved from its traditional European market to Asia. Indian and Chinese buyers have been actively seeking to secure coal offtake from SA in the past couple of years.
The Financial Times reported on October 17 that the European Union’s “Energy Roadmap to 2050”, being prepared for release by the end of this year, suggests European consumers’ costs of energy would double by 2050 as wind power, requiring more infrastructure, would contribute more to the energy mix than nuclear and coal. Coal and gas currently provide about half of the EU’s electricity.
The International Energy Agency’s World Energy Outlook suggests OECD countries’ coal-fired power generation will fall up to 2035 as they move away from fossil fuels, but this will be more than offset by rising demand from developing countries. China’s 600 gigawatts (GW) of new coal-fired electricity capacity exceeds the current capacity of the US, EU and Japan.
According to statistics that Lars Schernikau of coal traders HMS Bergbau presented at the recent Coaltrans Madrid conference, India’s demand for steam coal is expected to rise to 1bn t by 2017 as domestic production cannot meet the country’s needs. He says it is difficult to predict China’s production and imports but its impact on the global thermal coal market is likely to be “huge”.
Yet the 2009/2010 department of mineral resources report forecasts that SA’s coal exports will increase only “slightly” this year. It says though demand from developed countries is expected to remain weak until clean coal technology is widely used, demand from Asia could push up prices.
Are changes in markets and fluctuating prices deterring investment in SA coal mines? Not as much as generally believed, Prevost says.
“Back in 2006/2007 SA was exporting 88% of its coal to Europe but, because it was unable to meet that demand, we lost ground, and now Colombia, which is further away, is supplying more coal to Europe than we are.
“Our main market is now Asia, but the Indians and Chinese buyers are very price-sensitive. When the price was $122/t, demand from Asia fell. Now the price is $110/t-$112/t and no-one is buying , which is why RBCT is not moving the tonnages that Transnet is delivering to the port.”
But that’s no reason for Transnet to slow down rail expansion, Prevost says.
“The general view in the market is that coal is the fuel of the future. Germany is replacing its nuclear power stations with coal-fired power stations using clean coal technology. Demand for coal will be good for 20 years or more. Clean coal technology will not remove all emissions but it will reduce them to negligible levels.”
Greenpeace SA doesn’t agree. “The assessments made by the Business Enterprises unit at the University of Pretoria show that ‘clean coal’ simply does not exist,” Greenpeace says in its report.
Hall told the Sanea conference that coal accounted for almost a third of the world’s primary energy in 2010, its highest share since 1970. The main reason is rapid demand from industrialising populations in the developing economies of China and India. The populations of the world’s cities will rise to 5,2bn by 2035 from 3,3bn at present, pushing up demand for energy and steel.
The SA Coal Road Map is to present 30-year scenarios for the industry, open these options for comment, and then move into its second phase, identifying a preferred scenario and ways to achieve this scenario.
The Fossil Fuel Foundation didn’t want to disclose its findings ahead of the general release. But Hall’s comments at the Sanea conference suggest the road map presents three scenarios.
The first assumes significant exploitation of SA’s coal resources, if government’s plans for 10GW from nuclear power stations and its renewable targets encounter capital constraints and delays. That would mean building more coal- fired power stations and developing the resources in the Waterberg, Soutpansberg and Limpopo basins, with associated rail infrastructure.
The second possibility is “moderate” use of SA’s coal, if government achieves its targets and SA fulfils its carbon emission-reduction promises. That would still see some development of rail infrastructure in the Waterberg, but slowly. Coal exports would rise until 2020, but only gradually, if at all, after that.
The third scenario is that the country’s future energy and that of the rest of the world would be sourced mainly from non fossil fuel sources, which means no new coal-fired power stations would be built and coal exports would decline.
If clean coal technology can be made to work successfully, SA should not ignore a major resource that can generate cheap electricity for economic development and continue to provide a large number of jobs.
Though there are environmental reservations about coal mining, the reality is that if SA doesn’t exploit its coal reserves, its own needs and those of the coal-hungry markets of Asia will be sourced from elsewhere.
(sourced Financial Mail)
Tuesday, November 1, 2011
NUM concludes 2 year wage deal with Exxarro Coal
Tuesday, 01 Nov 2011
The National Union of Mineworkers concluded a two year wage deal with Exxarro Coal on Monday.
Mr Lesiba Seshoka spokesperson of NUM said “The agreement entails a 10.5% wage increment for grade eight, 10% for grade seven, 9% for grade five and six, as well as 8% for grades three and four.”
At the centre of the wage disputes was the demand that four of Exxarro Coal's operations that currently do not belong to the Chamber of Mines should join it.
Seshoka said that an agreement was reached for a task team to be set up within three months to help ensure that those operations joined the Chamber of Mines by 2013.
(sourced from IOL.co.za
The National Union of Mineworkers concluded a two year wage deal with Exxarro Coal on Monday.
Mr Lesiba Seshoka spokesperson of NUM said “The agreement entails a 10.5% wage increment for grade eight, 10% for grade seven, 9% for grade five and six, as well as 8% for grades three and four.”
At the centre of the wage disputes was the demand that four of Exxarro Coal's operations that currently do not belong to the Chamber of Mines should join it.
Seshoka said that an agreement was reached for a task team to be set up within three months to help ensure that those operations joined the Chamber of Mines by 2013.
(sourced from IOL.co.za
Thursday, October 27, 2011
S.Africa's Transnet says moving RBCT coal at record
Thu,Oct 227, 2011
JOHANNESBURG (Reuters) - South Africa's logistics group Transnet has been moving coal to the Richards Bay Coal Terminal at record rates in recent months, showing the market that it may be turning the corner and reversing years of underperforming infrastructure.
Chief Executive Brian Molefe said on Wednesday that the company had recently managed to move 1.6 million tonnes of coal per week and expected to keep up the pace, while exports from the terminal had been around 1.4 million tonnes.
Coal producers in South Africa, including Anglo American, BHP Billiton, Exxaro, Optimum Coal and Xstrata, have long been eager to export more coal to meet rising demand from India and China.
"In the last three months we had record numbers of trains going to RBCT ... there are stockpiles at the terminal of around 5 million tonnes," Molefe told journalists, adding the company was exploring options to also transport coal to alternative ports around RBCT to ensure more shipments go out.
"Maybe we caught them (coal exporters) by surprise. I'm sure in the next few weeks they will catch their breath and ramp up their export capacity," he said, adding that the allocation of coal export capacity to emerging miners needed to be increased.
Transnet moved 63 million tonnes of coal to RBCT last year, far below the terminal's capacity of 91 million tonnes, but the logistics firm is investing heavily to raise capacity on the rail line to 81 million tonnes by 2015.
SWAZI LINK
The group also plans to free up an additional 14 million tonnes of capacity on the coal line by moving non-coal cargo to a new line via Swaziland.
The Swazi link, expected within six years, will cost around 12.3 billion rand.
Some 7.3 billion of that will be financed by Swazi Rail, and Molefe said its counterpart in the landlocked African state was confident it would find the money to build the link, despite the impoverished country's current economic woes.
Molefe also said a planned rail link to the Waterberg coal fields would be completed within the same six-year period and would carry over 20 million tonnes of coal per year.
Waterberg is expected to become the country's next coal hub and supply domestic power plants and exports as reserves in the Witbank area near depletion.
For years Transnet and the private sector have been discussing the option of using public-private partnerships (PPPs) to up volumes on the coal, iron ore or manganese lines, but Molefe said the company should be able to do it on its own.
"I don't see much scope for PPPs on those lines because our performance is good and we are improving volumes quite rapidly. One shouldn't temper with what is not broken," he said.
The company is working to expand the capacity on the iron ore line to 60 million tonnes from 47 million, and Molefe said the company is already studying the option of expanding the line beyond that, going up to 70-80 million tonnes a year.
Molefe said Transnet had just signed a 6 billion rand loan facility with the African Development Bank, and he saw no problems in raising funds needed for future expansion.
State owned Transnet said its earnings before interest, tax, depreciation and amortisation (EBITDA) for the six months to end-September rose 27 percent to 9.4 billion rand, while revenue was up 20 percent to 22.4 billion rand.
(sourced Reuters)
JOHANNESBURG (Reuters) - South Africa's logistics group Transnet has been moving coal to the Richards Bay Coal Terminal at record rates in recent months, showing the market that it may be turning the corner and reversing years of underperforming infrastructure.
Chief Executive Brian Molefe said on Wednesday that the company had recently managed to move 1.6 million tonnes of coal per week and expected to keep up the pace, while exports from the terminal had been around 1.4 million tonnes.
Coal producers in South Africa, including Anglo American, BHP Billiton, Exxaro, Optimum Coal and Xstrata, have long been eager to export more coal to meet rising demand from India and China.
"In the last three months we had record numbers of trains going to RBCT ... there are stockpiles at the terminal of around 5 million tonnes," Molefe told journalists, adding the company was exploring options to also transport coal to alternative ports around RBCT to ensure more shipments go out.
"Maybe we caught them (coal exporters) by surprise. I'm sure in the next few weeks they will catch their breath and ramp up their export capacity," he said, adding that the allocation of coal export capacity to emerging miners needed to be increased.
Transnet moved 63 million tonnes of coal to RBCT last year, far below the terminal's capacity of 91 million tonnes, but the logistics firm is investing heavily to raise capacity on the rail line to 81 million tonnes by 2015.
SWAZI LINK
The group also plans to free up an additional 14 million tonnes of capacity on the coal line by moving non-coal cargo to a new line via Swaziland.
The Swazi link, expected within six years, will cost around 12.3 billion rand.
Some 7.3 billion of that will be financed by Swazi Rail, and Molefe said its counterpart in the landlocked African state was confident it would find the money to build the link, despite the impoverished country's current economic woes.
Molefe also said a planned rail link to the Waterberg coal fields would be completed within the same six-year period and would carry over 20 million tonnes of coal per year.
Waterberg is expected to become the country's next coal hub and supply domestic power plants and exports as reserves in the Witbank area near depletion.
For years Transnet and the private sector have been discussing the option of using public-private partnerships (PPPs) to up volumes on the coal, iron ore or manganese lines, but Molefe said the company should be able to do it on its own.
"I don't see much scope for PPPs on those lines because our performance is good and we are improving volumes quite rapidly. One shouldn't temper with what is not broken," he said.
The company is working to expand the capacity on the iron ore line to 60 million tonnes from 47 million, and Molefe said the company is already studying the option of expanding the line beyond that, going up to 70-80 million tonnes a year.
Molefe said Transnet had just signed a 6 billion rand loan facility with the African Development Bank, and he saw no problems in raising funds needed for future expansion.
State owned Transnet said its earnings before interest, tax, depreciation and amortisation (EBITDA) for the six months to end-September rose 27 percent to 9.4 billion rand, while revenue was up 20 percent to 22.4 billion rand.
(sourced Reuters)
Saturday, August 20, 2011
Africa may turn major iron ore exporter after 2020 - Analysts
Saturday, 20 Aug 2011
Reuters reported that Africa, regarded as the next iron ore frontier, is only likely to boost global supply from 2020 and only if countries overcome infrastructure and political hurdles.
Mr Phillip Killicoat iron ore manager at Credit Suisse commodities said that the market for iron ore, used in stainless steel production, is the second biggest commodity trading market in the world, valued at some USD 150 billion.
He said that of that, Africa accounts for only about 2%, although it holds some 20% of the world's resources. He added that "Africa has enormous potential, never mind the fact that the iron industry itself is growing at a rate even faster than global GDP, driven primarily by East Asia."
Steel demand, spurred by China's economic growth, has recovered more than anticipated in 2010, with future growth expected to be powered by emerging markets to 2015 and beyond. Africa, the world's poorest continent where many countries still rely on their minerals as a key foreign currency earner, hopes to cash in on this forecast amid good prices for iron ore.
Mr Yaoyun Xin MD at independent metals consultancy SMM Information and Technology told Reuters that "China is expected to increasingly turn to Africa to satisfy its iron ore needs as more Chinese companies look to invest or partner in mines."
Top global iron miners, including Rio Tinto, Vale and ArcelorMittal, have projects either in production or at an exploration stage in Africa, with three major iron ore bearing regions identified in the west, central and southern parts of the continent.
At the moment, Australia and Brazil are the two top global producers of the material, with South Africa being the only African country recognized as a major exporter, accounting for about 80% of the continent's total output.
Mr Ian Cope, global exploration manager for iron and coal at ArcelorMittal, said that "African projects are only expected to contribute less than 5 percent of the projected 47% growth in global iron ore demand by 2020. The potential is there but there are challenges and it's not a given that this ore will get out of Africa."
Mr Cope said that most of the iron ore in Africa was of a lower grade, although top grade hematite deposits were found in South Africa, the Democratic Republic of Congo and Guinea, where the promising Simandou deposit was in the process of being mined.
Mr Ernst Venter, a manager at Exxaro, said that "By 2025 we see it is possible that Africa can supply 200 million tonnes per annum of additional iron ore into the iron ore market."
He said the forecast excludes current expansion plans for the Sishen mine owned by Kumba Iron Ore, the world's 10th largest producer and the biggest in Africa.
(Sourced from www.reuters.com)
Reuters reported that Africa, regarded as the next iron ore frontier, is only likely to boost global supply from 2020 and only if countries overcome infrastructure and political hurdles.
Mr Phillip Killicoat iron ore manager at Credit Suisse commodities said that the market for iron ore, used in stainless steel production, is the second biggest commodity trading market in the world, valued at some USD 150 billion.
He said that of that, Africa accounts for only about 2%, although it holds some 20% of the world's resources. He added that "Africa has enormous potential, never mind the fact that the iron industry itself is growing at a rate even faster than global GDP, driven primarily by East Asia."
Steel demand, spurred by China's economic growth, has recovered more than anticipated in 2010, with future growth expected to be powered by emerging markets to 2015 and beyond. Africa, the world's poorest continent where many countries still rely on their minerals as a key foreign currency earner, hopes to cash in on this forecast amid good prices for iron ore.
Mr Yaoyun Xin MD at independent metals consultancy SMM Information and Technology told Reuters that "China is expected to increasingly turn to Africa to satisfy its iron ore needs as more Chinese companies look to invest or partner in mines."
Top global iron miners, including Rio Tinto, Vale and ArcelorMittal, have projects either in production or at an exploration stage in Africa, with three major iron ore bearing regions identified in the west, central and southern parts of the continent.
At the moment, Australia and Brazil are the two top global producers of the material, with South Africa being the only African country recognized as a major exporter, accounting for about 80% of the continent's total output.
Mr Ian Cope, global exploration manager for iron and coal at ArcelorMittal, said that "African projects are only expected to contribute less than 5 percent of the projected 47% growth in global iron ore demand by 2020. The potential is there but there are challenges and it's not a given that this ore will get out of Africa."
Mr Cope said that most of the iron ore in Africa was of a lower grade, although top grade hematite deposits were found in South Africa, the Democratic Republic of Congo and Guinea, where the promising Simandou deposit was in the process of being mined.
Mr Ernst Venter, a manager at Exxaro, said that "By 2025 we see it is possible that Africa can supply 200 million tonnes per annum of additional iron ore into the iron ore market."
He said the forecast excludes current expansion plans for the Sishen mine owned by Kumba Iron Ore, the world's 10th largest producer and the biggest in Africa.
(Sourced from www.reuters.com)
Thursday, August 18, 2011
Exxaro H1 profit up 53 pct on strong coal unit
Thu Aug 18, 2011
* H1 headline EPS up 53 pct to 1,045 cts
* H1 revenue up 22 pct to 9.6 bln rand
JOHANNESBURG Aug 18 (Reuters) - South African diversified miner Exxaro on Thursday reported a 53 percent rise in first-half profit, boosted by higher sales and prices at its coal business.
Exxaro, South Africa's second-largest coal producer and a major supplier to power utility Eskom, said headline earnings per share for the six months to the end of June rose to 1,045 cents compared with 683 cents the previous year.
"The coal and mineral sands business were the main contributors to the increase," said Sipho Nkosi, Exxaro's chief executive officer.
Headline EPS are the main profit gauge in South Africa and strip out certain one-time items.
The earnings exclude an impairment charge of 439 million rand ($62 million) for its Zincor refinery, which the company plans to close. Exxaro has said it plans to exit the zinc business and focus on growing other, more lucrative, parts of its operations, especially coal and iron ore.
The company said the outlook for both coal and mineral sands remained strong.
"The positive market recovery for coal in terms of price and demand are set to continue in the second half of 2011," it said, but added that constraints on the rail line leading to the export terminal remained.
"Market conditions on the mineral sands business are favourable and the demand for all products is strong."
First-half revenue rose 22 percent to 9.6 billion rand ($1.36 billion).
The company declared an interim dividend of 300 cents.
Shares in Exxaro are up nearly 30 percent so far this year, compared with a 6.6 percent fall in Johannesburg's Top-40 index of blue chips . ($1 = 7.073 South African Rand)
Wednesday, August 3, 2011
Coal miners strike ends
The wage settlement with NUM, United Association of SA (Uasa) and Solidarity, ranges between 8% and 10.5%
Wed, August03, 2011 |I-Net Bridge
Workers in the coal sector are expected to return to their posts on Tuesday after the unions and the Chamber of Mines signed a two-year wage agreement, ending an eight-day strike.
Frans Barker, negotiator on behalf of coal mines, told I-Net Bridge that the wage settlement with Nation Union of Mineworkers, United Association of SA (Uasa) and Solidarity, ranged between 8% and 10.5% in the first year. Unions will receive 7.5% and 10% in the second year.
The NUM, Uasa and Solidarity downed tools in the coal sector a little more than a week ago over salary increases.
NUM, which collectively represents 150,000 workers, and Uasa were demanding a 14% pay rise. Solidarity was demanding a 12% increase.
The coal mining companies involved are Anglo American Thermal Coal, Delmas Coal, Exxaro Coal Mpumalanga, Kangra Coal, Optimum Coal and Xstrata Coal. (Business Day)
Wed, August03, 2011 |I-Net Bridge
Workers in the coal sector are expected to return to their posts on Tuesday after the unions and the Chamber of Mines signed a two-year wage agreement, ending an eight-day strike.
Frans Barker, negotiator on behalf of coal mines, told I-Net Bridge that the wage settlement with Nation Union of Mineworkers, United Association of SA (Uasa) and Solidarity, ranged between 8% and 10.5% in the first year. Unions will receive 7.5% and 10% in the second year.
The NUM, Uasa and Solidarity downed tools in the coal sector a little more than a week ago over salary increases.
NUM, which collectively represents 150,000 workers, and Uasa were demanding a 14% pay rise. Solidarity was demanding a 12% increase.
The coal mining companies involved are Anglo American Thermal Coal, Delmas Coal, Exxaro Coal Mpumalanga, Kangra Coal, Optimum Coal and Xstrata Coal. (Business Day)
Tuesday, July 26, 2011
Coal strike will test SA during big freeze on the way
Eskom, which relies on coal for most of its power generation, says the strike will only have an effect if it becomes protracted
26 July, 2011
By Alistair Anderson, Business Day
SA’s ability to manage the cold weather predicted to sweep most of the country in the next few days will be severely tested by the continuing strikes in the coal and fuel sectors.
Thousands of workers at coal companies including Xstrata, Anglo American, Exxaro Resources and Optimum Coal went on strike on Sunday evening demanding wage increases of 12%-14%.
WeatherSA yesterday warned that the snowfall over the Western Cape and Eastern Cape could reach Gauteng today. Several roads in the Eastern Cape have been closed since Sunday due to heavy snowfall.
Gauteng’s emergency services yesterday issued a warning to residents to keep warm and avoid hypothermia when the snow reached the province. But Gauteng consumers have been battling for weeks to secure gas for heaters and diesel for their generators.
This has fuelled fears that Eskom’s electricity supply may be hit by the coal strike.
Afrox , SA’s biggest supplier of liquefied petroleum gas, earlier this month said it expected to receive a consignment of imported gas at the end of the month to ease shortages. The company blamed the cold weather for the scarcity.
The coal industry strike has placed electricity supply under pressure. But Eskom, which relies on coal for most of its power generation, said the strike would have an effect only if it became protracted.
"We’ve got, on average, 38 days of coal stockpiles at the power stations," Eskom spokesman Tony Stott said yesterday.
"If the strike goes on for a long time and demand goes up due to cold weather, it would put the system under severe strain."
National Union of Mineworkers spokesman Lesiba Seshoka said yesterday that Eskom would not "be able to function" for longer than three weeks without coal miners. He warned that the strike would have "serious negative ramifications. Our members are working underground in the coal mine industry — they play the most important part in the coal chain. The entire economy depends on electricity."
WeatherSA said the intense low temperatures were expected to last at least until Thursday. With Sapa.
Thousands of workers at coal companies including Xstrata, Anglo American, Exxaro Resources and Optimum Coal went on strike on Sunday evening demanding wage increases of 12%-14%.
WeatherSA yesterday warned that the snowfall over the Western Cape and Eastern Cape could reach Gauteng today. Several roads in the Eastern Cape have been closed since Sunday due to heavy snowfall.
Gauteng’s emergency services yesterday issued a warning to residents to keep warm and avoid hypothermia when the snow reached the province. But Gauteng consumers have been battling for weeks to secure gas for heaters and diesel for their generators.
This has fuelled fears that Eskom’s electricity supply may be hit by the coal strike.
Afrox , SA’s biggest supplier of liquefied petroleum gas, earlier this month said it expected to receive a consignment of imported gas at the end of the month to ease shortages. The company blamed the cold weather for the scarcity.
The coal industry strike has placed electricity supply under pressure. But Eskom, which relies on coal for most of its power generation, said the strike would have an effect only if it became protracted.
"We’ve got, on average, 38 days of coal stockpiles at the power stations," Eskom spokesman Tony Stott said yesterday.
"If the strike goes on for a long time and demand goes up due to cold weather, it would put the system under severe strain."
National Union of Mineworkers spokesman Lesiba Seshoka said yesterday that Eskom would not "be able to function" for longer than three weeks without coal miners. He warned that the strike would have "serious negative ramifications. Our members are working underground in the coal mine industry — they play the most important part in the coal chain. The entire economy depends on electricity."
WeatherSA said the intense low temperatures were expected to last at least until Thursday. With Sapa.
Monday, July 25, 2011
South Africa coal miners start strike
Mon Jul 25, 2011
* Eskom sees no immediate impact from coal strike
* Above inflation wage deals hurting economy, analysts
By Agnieszka Flak and Olivia Kumwenda
JOHANNESBURG, July 25 - Tens of thousands of South African coal workers went on strike on Monday seeking inflation-busting 14 percent wage increases, but power utility Eskom said the
stoppage would not have an immediate impact on plants providing electricity to Africa's largest economy.
Hundreds of thousands of workers across the country have downed tools in recent weeks, or are threatening to do so, seeking raises double or triple the 5 percent inflation rate in the mid-year bargaining session known locally as "strike season".
State-run Eskom , which relies on coal for most of its power generation, said the latest strike would only have an impact if it became protracted.
"We've got on average 38 days of coal stockpiles at the power stations," spokesman Tony Stott said.
Lesiba Seshoka, spokesman for the powerful National Union of Mineworkers (NUM), said about 150,000 were on strike and employers have offered pay rises of 7 to 8.5 percent.
The chamber of mines said there are about 30,000 unionised workers in the coal sector and it was unclear how many were striking.
Employers over the past two years have struck wage deals averaging about 8 percent with many firms seeing the above-inflation settlements as a necessary cost of doing business in South Africa. They have also slashed jobs over the period to make up for the higher personnel costs.
Independent coal analyst Xavier Prevost said: "If there is no compromise and they continue like this, it's going to be serious and the damage to the economy will be big."
"If we don't produce coal, the first to be affected will be exports. Our (export) stockpiles will probably not last longer than 15 days".
The Richards Bay Coal Terminal, which ships most of South Africa's coal abroad, said stocks stood at a healthy 2.99 million tonnes at the end of June.
Eskom has been under pressure to build new plants to avoid a repeat of the power shortage that brought the economy to its knees in 2008, forcing mines to shut down for days and costing
the country billions of dollars in lost output.
It plans steep increases in electricity prices to pay for much-needed new power stations, adding to inflationary pressures and taking more money out of middle-class paychecks.
But Eskom is facing political pressure to settle with workers. The country's ruling African National Congress is allied with organised labour and wants to placate its millions of voters.
The Chamber of Mines is negotiating on behalf of several coal mining groups, including Anglo Thermal Coal SA , Exxaro , Optimum Coal and Xstrata Coal.
Read more
Why Coal Prices Will Soar in the Coming Years
Lontoh Coal Limited of South Africa has planned to open up China’s market
Coal prices area at US$ 120 a tonne
Mozambi Coal to acquire Mozambican coal concession
Newcastle steam coal price rises by 1pct
S.Africa's June coal exports rise to 4.78 mln T
Coal of Africa shares up almost 20%
* Eskom sees no immediate impact from coal strike
* Above inflation wage deals hurting economy, analysts
By Agnieszka Flak and Olivia Kumwenda
JOHANNESBURG, July 25 - Tens of thousands of South African coal workers went on strike on Monday seeking inflation-busting 14 percent wage increases, but power utility Eskom said the
stoppage would not have an immediate impact on plants providing electricity to Africa's largest economy.
Hundreds of thousands of workers across the country have downed tools in recent weeks, or are threatening to do so, seeking raises double or triple the 5 percent inflation rate in the mid-year bargaining session known locally as "strike season".
State-run Eskom , which relies on coal for most of its power generation, said the latest strike would only have an impact if it became protracted.
"We've got on average 38 days of coal stockpiles at the power stations," spokesman Tony Stott said.
Lesiba Seshoka, spokesman for the powerful National Union of Mineworkers (NUM), said about 150,000 were on strike and employers have offered pay rises of 7 to 8.5 percent.
The chamber of mines said there are about 30,000 unionised workers in the coal sector and it was unclear how many were striking.
Employers over the past two years have struck wage deals averaging about 8 percent with many firms seeing the above-inflation settlements as a necessary cost of doing business in South Africa. They have also slashed jobs over the period to make up for the higher personnel costs.
Independent coal analyst Xavier Prevost said: "If there is no compromise and they continue like this, it's going to be serious and the damage to the economy will be big."
"If we don't produce coal, the first to be affected will be exports. Our (export) stockpiles will probably not last longer than 15 days".
The Richards Bay Coal Terminal, which ships most of South Africa's coal abroad, said stocks stood at a healthy 2.99 million tonnes at the end of June.
Eskom has been under pressure to build new plants to avoid a repeat of the power shortage that brought the economy to its knees in 2008, forcing mines to shut down for days and costing
the country billions of dollars in lost output.
It plans steep increases in electricity prices to pay for much-needed new power stations, adding to inflationary pressures and taking more money out of middle-class paychecks.
But Eskom is facing political pressure to settle with workers. The country's ruling African National Congress is allied with organised labour and wants to placate its millions of voters.
The Chamber of Mines is negotiating on behalf of several coal mining groups, including Anglo Thermal Coal SA , Exxaro , Optimum Coal and Xstrata Coal.
Read more
Why Coal Prices Will Soar in the Coming Years
Lontoh Coal Limited of South Africa has planned to open up China’s market
Coal prices area at US$ 120 a tonne
Mozambi Coal to acquire Mozambican coal concession
Newcastle steam coal price rises by 1pct
S.Africa's June coal exports rise to 4.78 mln T
Coal of Africa shares up almost 20%
Friday, July 22, 2011
Anglo, Xstrata Coal Miners in S.Africa Plan Strike Over Pay
July21, 2011
By Jana Marais, Bloomberg
Anglo American Plc (AAL), Xstrata Plc (XTA) and Exxaro Resources Ltd. (EXX) expect workers at their coal mines in South Africa to start striking over pay on the night of July 24, the Chamber of Mines said.
The National Union of Mineworkers, South Africa’s biggest, is yet to serve notice of its intention to strike, Frans Barker, the lead negotiator on behalf of the coal producers, said in an e-mailed response to questions. An estimated 30,000 workers are affected, he said.
The union is demanding a pay increase of 14 percent, while coal companies are offering 7 percent, and 8.5 percent to entry- level employees. Annual inflation in the country is currently 5 percent, the highest in 15 months.
The pay dispute is one of several affecting South Africa’s mining and energy industries as workers push for above-inflation wage gains that they say are needed to address the inequalities caused by apartheid, a system of institutionalized racial discrimination that ended in 1994. South Africa is the biggest supplier of power-plant coal to some European countries and is selling an increasing amount of the fuel to India.
Gold miners at companies including AngloGold Ashanti Ltd. (ANG) may walk out if talks with employers scheduled for July 25 fail, the NUM said, while miners at diamond producer De Beers plan to start a strike tomorrow, and oil company workers have been on strike for more than a week. Engineering workers ended a strike after winning a pay rise of double the inflation rate.
Coal supplies
There’s no “immediate short-term danger” to coal exports or supplies to national power utility Eskom Holdings SOC Ltd., Barker said yesterday in a telephone interview.
“Eskom’s stocks are relatively high and the companies themselves also have stockpiles,” Barker said. Eskom is involved in its own wage talks and the NUM has rejected a 5.5 percent pay rise offer made by the company, it said today.
Other coal companies involved in the talks are Optimum Coal Holdings (OPT) Ltd., Kangra Coal Ltd. and Delmas Coal Ltd. Delmas Coal, a closely held company, has made a lower offer of 7.5 percent for entry level workers and 6 percent for other miners.
Exxaro shares were little changed at 186.38 rand at 3:47 p.m. in Johannesburg trading while Optimum declined 1.9 percent to 25.51 rand. In London, Anglo was little changed at 2,979.5 pence while Xstrata dropped 1.2 percent to 1,348 pence.
Exxaro is based in Pretoria while Optimum has its headquarters in Johannesburg. Xstrata is based in Zug, Switzerland, and Anglo is based in London.
By Jana Marais, Bloomberg
Anglo American Plc (AAL), Xstrata Plc (XTA) and Exxaro Resources Ltd. (EXX) expect workers at their coal mines in South Africa to start striking over pay on the night of July 24, the Chamber of Mines said.
The National Union of Mineworkers, South Africa’s biggest, is yet to serve notice of its intention to strike, Frans Barker, the lead negotiator on behalf of the coal producers, said in an e-mailed response to questions. An estimated 30,000 workers are affected, he said.
The union is demanding a pay increase of 14 percent, while coal companies are offering 7 percent, and 8.5 percent to entry- level employees. Annual inflation in the country is currently 5 percent, the highest in 15 months.
The pay dispute is one of several affecting South Africa’s mining and energy industries as workers push for above-inflation wage gains that they say are needed to address the inequalities caused by apartheid, a system of institutionalized racial discrimination that ended in 1994. South Africa is the biggest supplier of power-plant coal to some European countries and is selling an increasing amount of the fuel to India.
Gold miners at companies including AngloGold Ashanti Ltd. (ANG) may walk out if talks with employers scheduled for July 25 fail, the NUM said, while miners at diamond producer De Beers plan to start a strike tomorrow, and oil company workers have been on strike for more than a week. Engineering workers ended a strike after winning a pay rise of double the inflation rate.
Coal supplies
There’s no “immediate short-term danger” to coal exports or supplies to national power utility Eskom Holdings SOC Ltd., Barker said yesterday in a telephone interview.
“Eskom’s stocks are relatively high and the companies themselves also have stockpiles,” Barker said. Eskom is involved in its own wage talks and the NUM has rejected a 5.5 percent pay rise offer made by the company, it said today.
Other coal companies involved in the talks are Optimum Coal Holdings (OPT) Ltd., Kangra Coal Ltd. and Delmas Coal Ltd. Delmas Coal, a closely held company, has made a lower offer of 7.5 percent for entry level workers and 6 percent for other miners.
Exxaro shares were little changed at 186.38 rand at 3:47 p.m. in Johannesburg trading while Optimum declined 1.9 percent to 25.51 rand. In London, Anglo was little changed at 2,979.5 pence while Xstrata dropped 1.2 percent to 1,348 pence.
Exxaro is based in Pretoria while Optimum has its headquarters in Johannesburg. Xstrata is based in Zug, Switzerland, and Anglo is based in London.
Tuesday, January 25, 2011
Australian mine software company opens office in South Africa
Oniqua opens up office in Sandton and offers competition to Barloworld Logistics as it targets African mining operations with its analytics softwareDES LATHAM
Published: 25 Janurary, 2011
Australian analytics software company Oniqua has opened an office in Johannesburg to service the local and sub-Saharan region.
According to Oniqua Africa Vice President, Neil Pollock, the expansion into Africa comes on the back of a rollout of BHP Billiton ’s global implementation of Oniqua Analytics solutions.
The company has plans to increase investments in Africa, but Pollock said the amount would be kept confidential.
"I’m not sure if can divulge how much money we expect to spend in investments, probably at this stage I can’t answer that," he told Business Day.
"We want to ensure that the South African and the African market are going to be well resourced, and we are going to be picking up quite quickly with that process," he said.
Oniqua is an analytics solution which is used by mining groups to assess maintenance, inventory and procurement needs and works along side software systems such as SAP and Oracle.
Onique has operations in Australia, Asia and the Americas and serves mining, oil and gas and utilities companies in more than 25 countries around the world.
Clients in Africa include Rio Tinto, Exxaro , Goldfields, Newmont Gold and BHP Billiton.
While Pollock would not be drawn into comments about expected returns, he said the company is producing good results.
"In terms of the mining industry, the return on investment is expected to be between 1 and 1.5% on the asset value of that mine - which is significant," he told Business Day.
Oniqua is targeting African commodities and in particular, mining says President, Chris Wright.
"This expansion recognizes the growing size and importance of the mining and oil and gas industries throughout the African continent, and gives Oniqua the capability to better service our existing customers in the region and provide customer support globally across all time zones."
Local competitors include Barloworld Logistics.
According to Oniqua Africa Vice President, Neil Pollock, the expansion into Africa comes on the back of a rollout of BHP Billiton ’s global implementation of Oniqua Analytics solutions.
The company has plans to increase investments in Africa, but Pollock said the amount would be kept confidential.
"I’m not sure if can divulge how much money we expect to spend in investments, probably at this stage I can’t answer that," he told Business Day.
"We want to ensure that the South African and the African market are going to be well resourced, and we are going to be picking up quite quickly with that process," he said.
Oniqua is an analytics solution which is used by mining groups to assess maintenance, inventory and procurement needs and works along side software systems such as SAP and Oracle.
Onique has operations in Australia, Asia and the Americas and serves mining, oil and gas and utilities companies in more than 25 countries around the world.
Clients in Africa include Rio Tinto, Exxaro , Goldfields, Newmont Gold and BHP Billiton.
While Pollock would not be drawn into comments about expected returns, he said the company is producing good results.
"In terms of the mining industry, the return on investment is expected to be between 1 and 1.5% on the asset value of that mine - which is significant," he told Business Day.
Oniqua is targeting African commodities and in particular, mining says President, Chris Wright.
"This expansion recognizes the growing size and importance of the mining and oil and gas industries throughout the African continent, and gives Oniqua the capability to better service our existing customers in the region and provide customer support globally across all time zones."
Local competitors include Barloworld Logistics.
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