China Stocks: Anhui Conch, China CSSC, Maanshan Steel, Vanke

Mar 4, 2011

Shares of the following companies had unusual moves in China trading. Stock symbols are in parentheses as of the 3 p.m. close.

The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, rose 39.33, or 1.4 percent, to 2,942.31, the highest since Nov. 15. The CSI 300 Index (SHSZ300) gained 1.5 percent to 3,270.67.

Anhui Conch Cement Co. (600585 CH), China’s biggest cement maker, rose 3 percent to 35.98 yuan, the highest since February 2008. UBS AG boosted the company’s per-share earnings estimate for this year by 28 percent to 3.08 yuan and for 2012 by 30 percent to 4.18 yuan because of higher cement prices in the eastern region, Mick Mi, an analyst, wrote in a report. The share-price estimate was raised 28 percent to 61.60 yuan at UBS.

Baoshan Iron & Steel Co. (600019 CH), the listed unit of China’s second-biggest steelmaker, added 2 percent to 7.07 yuan after saying it won an anti-dumping case in the U.S. over its imports of drill pipes.

China Life Insurance Co. (601628 CH), the nation’s biggest insurer, rose 1.4 percent to 22.02 yuan. The company expects business this year to be better than in 2010, Chairman Yang Chao said in Beijing yesterday. China Life is in talks with the insurance regulator to obtain permission to invest in affordable housing, Yang said.

China CSSC Holdings Ltd. (600150) (600150 CH), the unit of the nation’s biggest shipbuilder, slid 5 percent to 75.97 yuan, the most since Jan. 25. The company said it will raise up to 4 billion yuan ($609.1 million) from selling A-shares. The shares resumed trading today after suspension starting Feb. 18.

China Vanke Co. (000002 CH), China’s largest property developer, gained 1.8 percent to 8.34 yuan, the most since Feb. 14. Vanke said sales in February rose 142 percent from a year earlier to 6.1 billion yuan, and it sold 549,000 square meters in the month, up 160 percent from a year earlier.

Maanshan Iron and Steel Co. (600019 CH) jumped 7.7 percent to 3.92 yuan, the most since Sept. 7. Shanghai Securities News reported the company will benefit from increasing production of China’s high-speed rail wheels. The wheels sell for 60,000 yuan a ton, compared with 8,000 yuan to 9,000 yuan a ton for ordinary train wheels, Shanghai Securities News reported, without citing anyone.--Zhang Shidong. Editor: Allen Wan sourced:bloomberg

BHP Billiton, Rio Tinto, Equinox, Newcrest, St. Barbara: Equity Movers

Mar4, 2011
By Monami Yui

Australia’s dollar fell, extending a weekly decline against the greenback, as signs of a recovery in the U.S. labor market reduced the yield advantage of the South Pacific nation’s bonds over Treasuries.

The so-called Aussie slid to a five-week low versus the euro on prospects the European Central Bank will raise interest rates faster than the Reserve Bank of Australia over the next year. New Zealand’s dollar headed for its biggest weekly loss in two months against the greenback as the International Monetary Fund said it will likely cut the nation’s growth forecast.

“Jobs data could be dollar bullish,” said Greg Gibbs, a strategist at Royal Bank of Scotland Group Plc in Sydney. “It will keep the Aussie from breaking higher at this stage.”

Australia’s currency weakened to $1.0131 as of 2:55 p.m. in Sydney from $1.0146 in New York yesterday. It has fallen 0.5 percent this week. The Aussie declined 0.1 percent to 72.58 euro cents, after dropping to 72.44, the weakest since Jan. 28. It slid 0.2 percent to 83.45 yen.

New Zealand’s dollar fell to 73.68 U.S. cents, the lowest since Dec. 20, before trading at 73.79 cents from 74.10 cents yesterday. The kiwi was set for a 1.8 percent weekly drop against the U.S. dollar, the worst performer among 16 major peers. The currency depreciated 0.5 percent to 60.78 yen.
U.S. Jobs

U.S. nonfarm payrolls increased by 196,000 in February, according to the median forecast in a Bloomberg News survey of economists before the Labor Department reports the figures today. The total for January was 36,000. Initial jobless-benefits claims in the U.S. unexpectedly fell last week to the lowest since May 2008 data showed yesterday.

Ten-year government bond yields are about 2 percentage points higher in Australia than they are in the U.S., down from a difference of 2.12 percentage points a week ago.

The Australian dollar declined for a fifth day against the euro after European Central Bank President Jean-Claude Trichet said yesterday an “increase of interest rates in the next meeting is possible.” Europe’s central bank left its key rate at 1 percent yesterday.

“Given the ECB is very hawkish, crosses like Aussie and euro are starting to come under pressure,” said Jonathan Cavenagh, a currency strategist in Singapore at Westpac Banking Corp. “The RBA will be on hold for quite some time.”

Swaps traders are betting the Australia’s central bank will raise rates 36 basis points over the next 12 months, according to a Credit Suisse AG index.
Gillard Comment

The Australian currency also declined after Prime Minister Julia Gillard said yesterday the currency’s strength puts “burdens” on some parts of the economy. The Aussie reached as high as $1.0202 on March 1. That was 0.5 percent away from the $1.0256 peak on Dec. 31 that was the most since 1982.

New Zealand’s dollar weakened versus all of its 16 most- traded peers after the IMF said will “likely” cut its New Zealand growth forecast from the current 3 percent as a result of the two earthquakes there. IMF spokeswoman Caroline Atkinson spoke to a news conference in Washington yesterday.

The Reserve Bank of New Zealand will reduce its benchmark rate by 13 basis points over the next 12 months, compared with a prediction for an increase of 54 basis points a month ago, according to a Credit Suisse Group AG index. A separate Credit Suisse index shows traders are 100 percent certain of a rate cut at the next RBNZ meeting on March 10.

“The RBNZ will most likely cut their interest rate the coming week,” said Takuya Kawabata, a researcher in Tokyo at Gaitame.com Research Institute Ltd., a unit of Japan’s largest currency margin company. “That’s weighing on the kiwi.”

A 6.3-magnitude earthquake struck the South Island city of Christchurch on Feb. 22, the second major temblor in six months. The two quakes may have caused as much as NZ$20 billion ($15 billion) of damage, Prime Minister John Key has said. (sourced:bloomberg)

Sumitomo Metals receives prize for its blast furnace evaluation technologies

Friday, 04 March 2011

On March 3, Japanese steelmaker Sumitomo Metal Industries, Ltd. (Sumitomo Metals), a member of the diversified Sumitomo Corporation, has received the 57th Okochi Memorial Foundation Production Prize for its "development of technologies that extend the campaign life of blast furnaces."

Pointing out that the inner conditions of a blast furnace used to be a "black box", Sumitomo Metals stated that it has developed simulation technologies which enable inner conditions to be quantitatively evaluated. "Thanks to operational and repair technologies based on such evaluation, the Wakayama Steel Works' No. 4 blast furnace was commended for achieving the world's longest continuous operation of 10,001 days with 27 years and four months," the company said.

The award on this occasion has resulted in Sumitomo Metals receiving the Okochi Memorial Foundation Prize for all the processes (i.e., blast furnace, steelmaking, manufacturing mill, and products) that are related to manufacturing of seamless pipes.

The Okochi Memorial Foundation Prize recognizes notable contributions in the areas of production engineering, production technology research and development, and the implementation of high-level production methods in Japan.

Tags : production , steelmaking , East Asia and Pacific

Italy’s ARINOX installs new stainless production and finishing lines

Friday, 04 March 2011

Genoa-based steelmaker ARINOX S.p.A., a company of Italy's Arvedi Group, has recently concluded its important production development and expansion plan consisting in the installation of new production and finishing lines for precision rolled stainless thin strips in width of 1,270 mm.

ARINOX stainless steel strip is aimed mainly at sectors of application with high technological content such as the car, chemical, petrochemical, electronics, precision mechanics and biomedical industries.

SteelOrbis learns from a company release that the plan has included the installation of a new 20-hi Sundwig rolling mill, an Ebner bright annealing line with in-line tension leveller, a new Ungerer tension levelling line and new automatic packaging lines serving the new cutting lines.

ARINOX now has an annual production capacity of over 50,000 mt of precision strip and has increased its competitive edge with the widening of its size range.(By steelorbis)

Heavy rains in Pilbara adversely affect Fortescue’s iron ore operations

Friday, 04 March 2011

Australian iron ore producer Fortescue Metals Group Limited (Fortescue) has announced that continued and heavy rainfall across the Pilbara region of Western Australia is impacting the company's mining operations.

According to a company release, the sustained wet weather events have caused significant flooding across the Pilbara resulting in extended access road closures and air access restrictions to Fortescue's mining operations, disrupting production.

Fortescue now estimates iron ore production of 8.5-9 million mt in the first quarter of 2011 down 500,000 mt compared to the previous guidance, assuming a return to normal weather conditions.

Fortescue is working to maximize production throughout the remainder of the quarter, the company said.

Japan-Korea partnership to buy 15 percent stake in Brazilian niobium company

Friday, 04 March 2011

A Japanese investor group consisting of JFE Steel Corporation, Nippon Steel Corporation, Sojitz Corporation and Japan Oil, Gas and Metals National Corporation and a Korean investor group consisting of major Korean steel producer POSCO and South Korea's National Pension Service have entered into an agreement with the controlling shareholders of the Brazilian niobium company Companhia Brasileira de Metalurgia e Mineração (CBMM) under which the Japan-Korea partnership will acquire a 15 percent stake in CBMM.

Niobium is a critical alloying additive in the production of high-grade steel products. As the most comprehensive supplier of niobium products in the world, CBMM is in a position to secure a continuous supply system of the metal as the need for high-grade steel products grows.

The four Japanese companies will acquire a 10 percent stake and the two Korean companies will buy a five percent stake in CBMM. The amount of the investment by the Japan consortium and the Korea consortium will be $1.3 billion and $650 million respectively, and each of the six consortium partners will indirectly hold a 2.5 percent stake in CBMM.

In addition to the acquisition of CBMM shares, JFE, Nippon Steel, POSCO and Sojitz have entered into a long-term niobium supply agreement with CBMM, assuring that the stable relationship these companies have long had with CBMM continues. (sourced:steelorbis)

Nippon Steel extends interest in Integra Coal Joint Venture in Australia

Friday, 04 March 2011

Japan's largest steelmaker Nippon Steel Corporation has announced that it has concluded a sales agreement with Toyota Tsusho concerning the purchase of 2.35 percent interests owned by Toyota Tsusho via its Australian subsidiary in the Integra Coal Joint Venture in the province of New South Wales, Australia.

Nippon Steel, already holding an interest of 3.6 percent in this JV, with this additional purchase will own an interest of 5.95 percent.

"This additional purchase of interests in this JV will add strength to Nippon Steel's capabilities and endeavors to ensure stable procurement of semi-soft coking coal for the future," reads Nippon Steel's statement.

Integra Coal Joint Venture, heretofore operated by the respective Australian subsidiaries of Vale, a global resources company, POSCO, a Korean steel company, JFE/JFE Shoji Trade, Toyota Tsusho, and Nippon Steel, produces about 3.3 million mt a year of semi-soft coking coal and steaming coal.(sourced:Thomson Reuters)

ArcelorMittal SAfrica to up product prices from April

Fri Mar 4, 2011 2:21pm GMT

JOHANNESBURG, March 4 (Reuters) - ArcelorMittal South Africa (ACLJ.J: Quote), a unit of the world's biggest steel maker (ISPA.AS: Quote), said on Friday it would raise prices for its flat and long steel products by up to 4.9 percent from the start of April.

The unit said in a statement that it would increase prices for hot rolled coil by 3.5 percent, for plate and cold rolled coil by 3.1 percent and galvanised coil by 2.83 percent.

Prices for long steel specialty products would rise by 4.9 percent, it said. (Reporting by Ruona Agbroko; editing by Jason Neely,sourced:Thomson Reuters)

Mordashov: Sale of Lucchini not realistic under current market conditions

Fri, March04, 2011

Alexey Mordashov, CEO of Russian steelmaking group Severstal, has stated that the sale of the Italian Severstal-owned Lucchini Group "does not look realistic under current market conditions." The statement by the Russian tycoon, who reached an agreement with banks last month for the restructuring of Lucchini's $770 million debt, was made during a conference call with financial analysts.

Accordingly, after the Mordashov announcement, Lucchini's sale now looks less likely to happen. Domestic trade unions, concerned by the situation, underline the need for a rapid sale of the company, which operates an integrated steelmaking facility in Piombino, Livorno. "The agreement reached with the banks does not award Mordashov the control of Lucchini Group," explained Luciano Gabrielli, local leader of the Fiom trade union. "The Piombino steel mill is in trouble and things are going to worsen if there is no change," he added.

Another local trade union official stated, "Mordashov's view is scarcely understandable, as it is up to the bank to set the schedule for any transaction. At this point it is necessary that Italian government meet the national and company trade unions to discuss the future of the factory".

Tags: Italy , Europe , Severstal , M&A , steelmaking , European Union , Mediterranean

Australia Newcastle Thermal Coal Falls 1.7% to $129.48 a Ton

Mar4, 2011 5:50 PM GMT+0530

By Pratish Narayanan

Power-station coal prices at Australia’s Newcastle port, an Asian benchmark, fell 1.7 percent in the week ended today.

Coal prices at the New South Wales port dropped to $129.48 a metric ton from $131.71 the previous week, according to the globalCOAL NEWC Index.

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

(sourced:bloomberg)

Xinergy Ltd. Increases Thermal Coal Reserves Via Lease Agreement of Brier Creek Property in West Virginia

March3,2011

Xinergy Ltd., a US Central Appalachian producer of high quality coal, today announces the completion of a definitive lease agreement (“the Transaction”) with Penn Virginia Operating Co., LLC. (NYSE:PVG – News) for the tract of land known as Brier Creek (the “Parcel” or the “Property”). The Parcel lies adjacent and to the north of Xinergy’s Raven Crest properties in Boone County, WV.

“We continue to execute our strategy of value accretive acquisitions in Central Appalachia, which includes developing our existing projects. Less than a month ago, we announced the acquisition of a metallurgical coal property, which is expected to prove to be a great addition to our portfolio of assets. It is anticipated that this lease agreement will significantly increase our thermal footprint at our Raven Crest property, allowing us to leverage our fixed costs and lower our overall lifting cost, it also provides us a sustainable, quality, permitted thermal project for the foreseeable future,” said Bernie Mason, Xinergy’s President.

Reserves and Production Estimates

Based on information provided by the Marshall Miller & Associates, Inc. August 17, 2007 report entitled “Reserve, Operations and Financial Evaluation of Coal and Mineral Properties of Raven Crest Mining, LLC in Boone and Kanawha Counties, West Virginia USA,” management believes the 13,000 – 14,000 acre Property contains approximately 11.9 million tons Measured Mineral Resources; 12.5 million tons Indicated Mineral Resources and 10.4 million tons Inferred Mineral Resources. The Company has begun the process to produce a reserve estimate compliant with NI43-101 standards, which it expects to be filed within 45 days.

The Transaction includes surface leases and coal subleases to the thermal coal reserves through two fully permitted deep mine areas, which have already been faced up, as well as active permits for a coal preparation plant and refuse area. The Company expects initial production at a rate of 50,000 tons per month to begin in the first half of 2012, after the completion of the preparation plant. The Company anticipates a production run rate on the Property to reach 1.2 million tons per year, subject to market conditions. The Company further anticipates total capital expenditures related to the Property to be in the range of US$40 million-$US50 million, inclusive of the preparation plant and underground equipment.

Qualified Person
Jack Hagewood, PE, Regional Manager for the Company has reviewed and confirmed the scientific and technical information within this news release relating to Brier Creek and serves as the Qualified Person as defined in National Instrument 43-101.

The press release contained above represents forecasts of production, which indicate a range of possible outcomes and are provided to assist investors with the development of future earnings estimates. While Xinergy believes these forecasts represent the best estimate of management as to future events, actual events will differ from these forecasts and such differences could be material.

Fortescue Metals Cuts Quarterly Iron Ore Output Guidance

4March 2011
By Robb M.StewartBy Dow Jones

MELBOURNE -(Dow Jones)- Fortescue Metals Group Ltd. (FMG.AU), one of Australia's largest producers of iron ore, said Friday its output in the March quarter will be dented by continued heavy rainfall in Australia's Pilbara region.

The Perth-based company said it expects iron ore production to be between 8.5 million and 9 million metric tons, a reduction of 0.5 million tons from its previous guidance.

The sustained wet weather has caused significant flooding in the iron ore-rich Pilbara, which has closed roads and restricted air access to Fortescue's mining operations and disrupted production, it said.

The company said it working to maximize output throughout the remainder of the quarter.

Rio Tinto PLC (RIO) and BHP Billiton Ltd. (BHP) are the country's biggest producers of iron ore.

-Newswire

India's Lanco finalises Australia's Griffin coal purchase

Fri Mar 4, 2011 5:54am GMT

PERTH, March 4 (Reuters) - India's Lanco Infratech has finalized its acquisition of Australia's Griffin Coal assets for A$750 million ($760 million), in what it said was the largest investment in Australia by an Indian company.

"We are focused on growing the Griffin coal business, and further developing the mining and infrastructure (rail and port) facilities in the region," Lanco Chairman L. Madhusudan Rao said on Friday.

Previous estimates has put the value of the deal at $800 million to $850 million.

Western Australia-based Griffin Coal's assets included thermal coal mines with a production of more than 4 million tonnes per annum, which Lanco plans to boost almost four-fold to over 15 million tonnes per annum, in addition to adding rail linkages, and expanding facilities at Bunbury port.

The coal from the thermal coal mines will feed Lanco's rapidly expanding power plants-- the company plans to expand to 9,500 MW by 2014 from 2,100 MW at present, and is developing eight new projects, with a combined capacity of about 10,500 MW.

The assets had attracted bidders like Reliance Power , Adani Power and GMR from India, apart from interested parties from Australia and China.

The company has said it will seek more acquisitions in Australia, Africa and Indonesia. ($1 = 0.986 Australian Dollars) (Reporting by Rebekah Kebede; Editing by Ed Davies,sourced:Thomson Reuters)

Tags : Reliance Power, Adani Power, GMR, raw mat

India's NTPC to issue import tender for 4 mln T coal

Fri Mar 4, 2011 4:31am GMT

* State-run utility's first tender to directly import coal
* Says FY12 coal import seen at 16 mlnT vs 12.5 mlnT in FY11
* Aims to add over 5,000 MW in FY12 vs 3,150 MW in FY11

NEW DELHI, March 4 (Reuters) - India's largest power producer, NTPC Ltd (NTPC.BO: Quote), will this month float its first tender to directly import 4 million tonnes of coal to feed its expanding capacity, its chairman said on Friday.

Arup Roy Choudhury said the state-run utility, which had relied on government trading firms such as MMTC Ltd (MMTC.BO: Quote) and State Trading Corp of India (STC) (STCI.BO: Quote) for imports, would consume 12.5 million tones of imported coal in the current year ending on March 31.

"Next fiscal we plan to import 16 million tones. Of this 12 million tonnes have already been arranged by STC, and remaining we will do directly. By March 31 we will float the coal import tender for 4 million tonnes," he said.

NTPC would be seeking 5,700-6,300 gross calorific value coal through the tender and would want sellers to deliver coal at its plants, Roy Choudhury said.

India has 10 percent of the world's coal reserves, the biggest after the United States, Russia and China, but imports have grown rapidly and the country plans to import 84 million tonnes in the current financial year.

Coal-fired plants account for about half of India 168 gigawatts installed capacity.

NTPC aims to add more than 5,000 megawatts (MW) generation capacity in the next fiscal year versus about 3,150 MW in the current fiscal, Roy Choudhury said.

India needs to significantly raise its power generation capacity to reduce peak hour power shortages and provide electricity to millions of rural households.

NTPC's coal import requirement is set to rise further as it aims to have 75,000 MW generation capacity by March 2017, as against 33,000 MW now, Roy Choudhury said. (Reporting by Nidhi Verma; Editing by Ranjit Gangadharan,sourced:Thomson Reuters)

GVK, JSW unit may submit fresh bids for Hancock's coal assets

4 Mar,2011
By Sameer Hashmi,ET

JSW Energy and GVK Power and Infrastructure will have to submit fresh bids for acquiring two coal assets put on the block by Hancock Coal as the Australian firm now wants joint bids for the assets, sources said.

Hancock Coal is selling Kevin's Corner and Alpha Coal, both located in Australia's Queensland province, as it expects good valuation for the assets.

Some Chinese and Japanese power generation companies are also among the shortlisted bidders.

The two Indian firms, however, declined to comment on the development.

"We have been looking at various assets and Hancock is one of them," GVK's vice chairman Sanjay Reddy told ET NOW. "Unfortunately we are subject to confidentiality with Hancock, so I won't be able to comment."

GVK has been scouting for coal mines for the past two years as it wants to secure fuel for its power projects, but it has so far failed to clinch a single deal due to weak financial bids.

"For us, at this point of time, CIC is the main focus," JSW Energy's joint managing director and chief executive L K Gupta said.

Sajjan Jindal-led JSW Energy is in the process of buying out UK-based power and coal mining firm CIC Energy Corporation. The deal was supposed to close on February 28, but the date for completing the acquisition was extended after CIC announced a dispute with GCL Botswana.

Hancock is expected to finalise one buyer by the end of this month. Kevin's Corner and Alpha Coal are located close to the mine that Adani Enterprises acquired last year from Linc Energy.

"The valuation could go over $4 billion considering the asset size," a source said. "There is a possibility that some players may exit the race since the valuations is so high." The two mines have an estimated 7.9 billion tonnes of thermal coal, according to the company's website.

Tags: Australia Queensland, Chinese power company, Japanese power co., bidders,

Indonesia thermal coal export ban proposal worries India

Fri, Mar04,2011

Indonesia may be looking to ban the exports of low-grade thermal coal by 2014, a move, which if undertaken, could have an impact on the domestic power sector that is dependent on the Southeast Asian country to bridge the coal supply shortfall in India.

"There are domestic market obligations, as we need coal for our own power producers. From 2014 onwards, we will only export value-added coal of more than 5,600 kilocalories (kcal)," Djunaedi, deputy director of oil, gas and mine products at Indonesia’s Ministry of Trade, said on the sidelines of the ninth Annual Coal Markets Conference.

As the world’s largest thermal coal exporter, Indonesia has often found it difficult to procure enough supplies for domestic consumption. Earlier this year, it implemented a series of measures to ensure that a portion of production was allocated to local industry.

However, the proposed ban on exports of coal under the 5,600-kcal mark stands to change the dynamics of the global thermal coal market, which has seen spiraling demand from Asian economies such as China and India. The latter, for instance, is currently the world’s fastest-growing coal importer.

"Such a ban will have a substantial impact on the thermal coal market, as large amounts of low-quality coal from Indonesia are exported to India and China," said Mark Pervan, global head of commodity research at ANZ.

Low-quality coal, of between 4,800 and 5,800 kcal, constitutes a significant portion of exports out of Indonesia and, considering the country accounts for about 30 per cent of the global thermal coal supply, an export ban could reduce worldwide supplies by at least 10 per cent, Pervan added.

But Indonesia’s local mining industry is pushing hard to stop the move. "We are in discussions with the government and are trying to postpone the ban. If this measure is implemented, it will hit 60 per cent of our exports and we don’t have the technology to undertake value-addition. The government must give us the technology if this is what it wants," said Bob Kamandanu, chairman of the Indonesian Coal Producers Association.

India Impact

India is already among the largest buyers of coal from Indonesia, and is expected to maintain this position considering the growth in domestic demand and stagnating production of major miners such as Coal India. Earlier this month, Coal Minister Sriprakash Jaiswal said India might have to import 142 million tonnes (mt) of the fuel in the next financial year, up from the earlier estimates of 104 mt.

"There will be an overall impact on the Indian power sector, as currently about 60 per cent of the total thermal coal imports are coming from Indonesia. If the ban comes in, it could also affect domestic coal prices, apart from influencing global thermal coal prices," said Rupesh Sankhe, an analyst at Angel Broking.

Moreover, Indian firms have considerable interests in Indonesia’s coal sector. Tata Power holds a 30 per cent stake in two of the country’s largest coal mines and the Adani Group, India’s biggest coal importer, last year committed $1.6 billion to build mining-related infrastructure in that country.

"It is a draft law at present, and there will be consultations with interested parties before finalisation," a spokesperson for the Adani Group said, adding that the group was already evaluating the possibility of setting up a power plant in Indonesia that would run on locally-mined coal.(sourced:BS)

S.Africa tumbles as mining investment destination

New Fraser Institute survey puts Zimbabwe just four places lower

Mar03, 2011
By Allan Seccombe, Business Day

SA SLID further down the country rankings in the prestigious Fraser Institute’s latest survey measuring the attractiveness of governments’ mining policies.

The Department of Mineral Resources has set its sights on correcting perceptions about SA as an investment destination. But the country’s rankings in the survey published yesterday dropped to 67 out of 79 countries from last year’s position of 61 out of 72 .

SA was ranked this year only four places higher than Zimbabwe. In 2008, SA ranked 49 out of 71 countries.

The Vancouver-based institute based its findings on responses from 494 exploration, development and mining-related companies around the world .

While a surge in metal prices has made miners optimistic about business prospects, many respondents are concerned about a growing trend of resource nationalism and new mining taxes .

The institute described its policy index as a "report card to governments on how attractive their policies are from the point of view of an exploration manager".

"For virtually every jurisdiction there is a feeling that things are getting worse, as opposed to better," said Fred McMahon, co- author of the report.

In June, Mineral Resources Minister Susan Shabangu said: "We have set a target for SA to improve the negative perceptions of its regulatory framework, from the current Fraser Institute level of 61 out of 72 countries to feature within the top quartile by 2014."

The Department of Mineral Resources yesterday declined to comment on the latest survey.

"We’ve not seen the complete report and we need to analyse it before we can comment," said department spokeswoman Zingaphi Jakuja. "We are not privy to their methodology."

In June, the government, labour and mining companies agreed on a strategy to grow and transform the mining sector.

They set up the Mining Industry Growth, Development and Employment Task Team (Migdett) to identify the bottlenecks that caused SA to miss out on the commodity boom that ended in late 2008 and to devise strategies to ensure it does not miss the next boom.

The strategy has begun unfolding, with the department ending a moratorium it placed on accepting prospecting rights until it completed an audit of licences granted since May 2004 and cleaned up its database.

An online system to lodge and monitor mining and prospecting rights was unveiled last month and Ms Shabangu said amendments to the Mineral and Petroleum Resources Development Act aimed at weeding out ambiguities would be finalised this year.

The mining sector grew 6% last year, albeit off a low base set in 2008, when electricity constraints battered the industry, and 2009, when the effects of the global financial crisis were felt.

"I think there is a very definite timing mismatch between the survey and the things that are taking place in the Migdett process," said Roger Baxter, chief economist at the Chamber of Mines and a member of the task team.

"The survey has come at a time when a lot of work is being done to turn the sector around. There’s constructive discussion going on to resolve constraints.

"We’ll start seeing some good progress in the next six months to a year. Hopefully in the next Fraser rankings we’ll be a bit higher up the pecking order."

MOC: Chinese steel prices down 0.6 percent week on week

Friday, Mar04, 2011

According to the report published on March 2 by China's Ministry of Commerce (MOC), due to weak demand from downstream buyers finished steel prices dropped slightly on week-on-week basis in the past week. In the coming period, as supplies increase, finished steel product inventories will also continue to increase. Thus, the MOC foresees that finished steel product prices in China will drop slightly in the short-term future.

According to the data from the MOC, during the past week domestic finished steel prices in China dropped in the past week by an average of 0.6 percent week on week. Prices of 3 mm common carbon sheet, 10 mm common carbon medium plate and 6.5 mm high speed wire rod dropped by 1.5 percent, 1.2 percent and 1 percent respectively on week-on-week basis.

Meanwhile, data from the China Iron and Steel Association (CISA) have revealed that as of February 20 the finished steel inventories of the 77 medium-sized and large Chinese steelmakers which are members of the CISA had increased to 9.46 million mt, compared to 7.57 million mt at the end of January. In addition, the Indian government has increased the export duty on iron ore fines and lump ore to 20 percent, with the CISA calculating that this adjustment will increase the cost to Chinese steelmakers per each ton of steel by $25, and this could push Chinese finished steel prices upward and also reduce the profit margins of Chinese steelmakers

Iron ore from India has been quit

Friday, 04 March 11

Handy

Activity has been gradually rising in the Atlantic but it is mostly confined to the USG market. Short period basis redelivery Atlantic has been reportedly done at usd 24,000 pd delivery USG. The Cont/Bsea remain quiet with little activity which is forcing tonnage to ballast towards Gib. Many Owners are still reluctant to trade Suez or Aden. A 50kdwt blt 03 was reportedly fixed at around usd 20k pd dely Cont via CGH to FEast. Mkt remained firm in Pac. Supras in North China are fixed at close to 15k for trips via Indo to India with coal. Iron ore from India has been quiet with recent 20% export tax and mkt looks uncertain. Supras on WCI and ECI close to 17k for trips to China. On Richards Bay rnds supras now seeing around mid-teens. Red Sea, ferts on hmax/ supras are fixed at very high 20´s pmt on voy bss to WCIndia. Owns have been rating close to mid 30s due to increased piracy threat and bunker prices. Not much seen on short period as rates are seen rising and now around usd 17k.

Panamax
With lack of fresh grain business from USG or ECSA the sentiment is looking bit toppish leading to a slow decline in rates and interest for period. In the USG/ECSA area a majority of March cargoes seems to be fixed adding pressure to the Fronthaul rates. Mid week fixtures for same in the 25,000 + 600,000 GBB area. Atlantic business after a fairly steady week also under pressure with oversupply of spot tonnage still levels hovering around 15,000/Day. In the Pacific rounds fixed at USD 13,500 levels and some healthy fixtures for ECSA rounds still reported at high teens basis India-SE Asia delivery. Short Period fixed at 17,500, and 1 yr at 16,000 prompt delivery Far East.

Capesize
Two months into 2011 and we see the full effect of the sad reality describing the cape market. Last week bunker prices made a big jump,resulting in slightly improved rates but even more ships at anchor. West australia round is presently between USD 6.50 and 7 pmt, whilst fronthaul remaining steady around low USD 18. A lack of cargoes around and more tonnage coming suggesting the present poor market to continue for some time. (sourced:Fearnbul)

Fears for industry recovery as 75% of Queensland coal mines still pumping rainwater

Mar03, 2011

Perth, Australia(Platts) - Three-quarters of Queensland, Australia's coal mines are still pumping rainwater from their open-cut pits and coal producers are growing concerned at the effect more forecast rainfall could have on the industry's recovery, coal industry body the Queensland Resources Council said Thursday.

"Three-out-of-four coal mines are still working to remove water from their properties under special environmental discharge approvals from the state government," QRC chief executive Michael Roche said in a statement.

There are 57 operational coal mines in Queensland including export and non-export mines, according to the QRC an industry body that represents coal miners in the Australian state including Anglo American, BHP Biliton, Macarthur Coal and Rio Tinto. Three-quarters of the total means 42 or 43 coal mines being out of action.

"These special discharge approvals are of limited benefit without the right rainfall pattern, and there is growing concern over the outlook for continuing rain in the coal regions and the possible formation of another tropical cyclone," Roche said.

He said the prospect of more heavy rainfall in central Queensland's coal producing area could hamper existing efforts to pump out rainwater that had collected in open-cut pits.

"What can be pumped off a site can be replaced just as quickly by such rainfall, and your flooded coal pit is then right back to square one of the business recovery phase," added Roche.

Queensland's Department of Environment and Resource Management has taken a strict approach to the discharge of rainwater that has collected in open-cut mines in the state.

The department received 41 applications during December 2010 and January 2011 for new or amended Transitional Environmental Programs enabling mines to safely discharge water, and a further 16 applications were under assessment, DERM said in a February 11 statement issued to Platts.

DERM said it was aware of "31 potential breaches of environmental authority conditions for mines across the state this wet season" and pledged to investigate every one of these cases "with particular attention to whether the situation could have been avoided or minimized through better on site preparation or water management infrastructure."

QRC said in its statement that latest coal export data for the month of February 2011, two months after the state received its heaviest rainfall, revealed that the Queensland coal industry was presently operating at around two-thirds of its production capacity compared with 12 months ago.

The industry figures show that 8 million mt of coal exports were shipped from Queensland in February 2011, compared with 12 million mt of exports in February 2010.

"This is only one month's worth of exports, but the numbers are consistent with company reports and the QRC's own estimates of a 30 million mt downturn in coal production in 2010-11 caused by wet season floods," said Roche.

Production losses stemming from the recent flooding event in the Australian state are forecast to reach "at least A$5 billion (US$5 billion) this financial year" the QRC said in its statement. (By Platts)