Saturday, 05 Mar 2011
It is reported that Guryevsk Metallurgical Works a subsidiary of Russian steel producer ESTAR Holding, in the January to February period of the current year saw its crude steel output increase by 66.6%YoY producing 32,200 tonnes.
During the period in question, GMZ increased its commercial rolled steel product output by 15.6% to 39,600 tonnes and upped its steel grinding balls production by 17.5%YoY to 17,000 tonnes.
(sourced:steelorbis)
Showing posts with label Satuday March 05 2011. Show all posts
Showing posts with label Satuday March 05 2011. Show all posts
Saturday, March 5, 2011
ArcelorMittal Kriviy Rih VAT refunds problem unsettled
Saturday, 05 Mar 2011
It is reported that the state debt for VAT refunds for products exported by ArcelorMittal Kriviy Rih is not falling and currently remains one of the major problems for the enterprise.
Currently there is no improvement in the situation with VAT refunds and the settlement of this problem.
The company said "Nothing has changed on the issue of VAT refunds to the company. We hope for a positive solution of the problem, but nothing has changed so far. Talks are now being held."
The press service noted that when holding talks the company suspected that the tax administration does not want to include ArcelorMittal Kriviy Rih, the largest exporter of goods in Ukraine, on the list of enterprises subject to automatic VAT refunds.
(Sourced from Interfax)
Currently there is no improvement in the situation with VAT refunds and the settlement of this problem.
The company said "Nothing has changed on the issue of VAT refunds to the company. We hope for a positive solution of the problem, but nothing has changed so far. Talks are now being held."
The press service noted that when holding talks the company suspected that the tax administration does not want to include ArcelorMittal Kriviy Rih, the largest exporter of goods in Ukraine, on the list of enterprises subject to automatic VAT refunds.
Richards Bay Coal Terminal Shipments Declined 7.4% in February
Saturday, 05 March 2011
Richards Bay Coal Terminal Ltd., Africa’s largest export facility for the fuel, said shipments fell 7.4 percent last month. Shipments from the port on South Africa’s northeast coast dropped to 4.57 million metric tons in February from 4.94 million tons a year earlier,
RBCT said today on its website, without giving a reason.
RBCT, whose owners include BHP Billiton Ltd. and Anglo American Plc, said in January that first-quarter exports will be affected by train derailments following heavy rains. The reduced rail service forced coal suppliers to tap stockpiles, which shrank to 1.7 million tons at the end of 2010 from 2.98 million tons on Nov. 30.
Prices for coal traded through RBCT rose 22 percent to an average $117.84 a ton in February from a month earlier, according to IHS McCloskey data on Bloomberg. The port received 5.52 million tons during the month, and had stocks of 2.8 million tons, said RBCT, which has capacity to export 91 million tons annually.
The freight rail unit of state-owned Transnet Ltd. aims to deliver 68 million tons of coal to the port this year, up from 63 million tons last year, Mxolisi Mgojo, head of coal at mining company Exxaro Resources Ltd., said Feb. 24. Transnet Freight Rail will comment later, Sandile Simelane, a spokesman for the unit, said today by mobile phone.
RBCT, whose owners include BHP Billiton Ltd. and Anglo American Plc, said in January that first-quarter exports will be affected by train derailments following heavy rains. The reduced rail service forced coal suppliers to tap stockpiles, which shrank to 1.7 million tons at the end of 2010 from 2.98 million tons on Nov. 30.
Prices for coal traded through RBCT rose 22 percent to an average $117.84 a ton in February from a month earlier, according to IHS McCloskey data on Bloomberg. The port received 5.52 million tons during the month, and had stocks of 2.8 million tons, said RBCT, which has capacity to export 91 million tons annually.
The freight rail unit of state-owned Transnet Ltd. aims to deliver 68 million tons of coal to the port this year, up from 63 million tons last year, Mxolisi Mgojo, head of coal at mining company Exxaro Resources Ltd., said Feb. 24. Transnet Freight Rail will comment later, Sandile Simelane, a spokesman for the unit, said today by mobile phone.
Ukrainian iron ore mines up output in two months
Saturday, 05 Mar 2011
Interfax Ukraine reported that most Ukrainian mining companies raised iron ore production in January to February.
Poltava Mining, the core asset of the London listed Ferrexpo plc raised commercial pellet production 5.3%YoY to 1.57 million tonnes and concentrate production 2.7% to 1.807 million tonnes.
The Metinvest holding Northern Mining and Beneficiation Plant from Kriviy Rih, told Interfax that it reduced commercial pellet production 16%YoY in January-February to 1.425 million tonnes. Iron ore concentrate output rose 0.6 percent to 2.317 million tonnes.
Metinvest Central Mining, also from Kriviy Rih raised commercial pellet production 0.8%YoY to 393,000 tonnes and concentrate production grew by 9.5% to 988,000 tonnes.
Metinvest also runs Inhulets Mining, which saw iron ore concentrate output rise 7.6%YoY in January to February to 2.393 million tonnes.
Southern Mining, from Kriviy Rih which is controlled by Ukraine's Smart Holding and Lanebrook Ltd, which owns Russia Evraz Group, raised iron ore concentrate production 14.3%YoY in January to February to 1.585 million tonnes. It produced 247,000 tonnes of sinter ore up by 21.6%YoY.
Ukraine as a whole raised crude iron ore production tentatively 2%YoY in January to February to 12.501 million tonnes, the State Property Committee told Interfax. Iron ore concentrate production grew 5% to 10.434 million tonnes. Prepared ore production rose 2% to 10.034 million tonnes, including growth of 6% to 6.646 million tonnes of sinter, however pellet production fell 5 percent to 3.388 million tonnes.
The Metinvest holding Northern Mining and Beneficiation Plant from Kriviy Rih, told Interfax that it reduced commercial pellet production 16%YoY in January-February to 1.425 million tonnes. Iron ore concentrate output rose 0.6 percent to 2.317 million tonnes.
Metinvest Central Mining, also from Kriviy Rih raised commercial pellet production 0.8%YoY to 393,000 tonnes and concentrate production grew by 9.5% to 988,000 tonnes.
Metinvest also runs Inhulets Mining, which saw iron ore concentrate output rise 7.6%YoY in January to February to 2.393 million tonnes.
Southern Mining, from Kriviy Rih which is controlled by Ukraine's Smart Holding and Lanebrook Ltd, which owns Russia Evraz Group, raised iron ore concentrate production 14.3%YoY in January to February to 1.585 million tonnes. It produced 247,000 tonnes of sinter ore up by 21.6%YoY.
Ukraine as a whole raised crude iron ore production tentatively 2%YoY in January to February to 12.501 million tonnes, the State Property Committee told Interfax. Iron ore concentrate production grew 5% to 10.434 million tonnes. Prepared ore production rose 2% to 10.034 million tonnes, including growth of 6% to 6.646 million tonnes of sinter, however pellet production fell 5 percent to 3.388 million tonnes.
Ukrainian iron ore production in January to February 2011 by company
Tags :Inhulets mining, Lanebrook Ltd, crude iron ore production, sinter
China's NDRC confirms Hebei Steel will quit Caofeidian steel project
Mar 5, 2011
Hebei Province-based Chinese steelmaker Hebei Steel Group recently announced its intention to withdraw from the project for the construction of a steel production base in Caofeidian, Hebei Province, and this has now also been confirmed by China's National Development and Reform Commission (NDRC).
Hebei Steel plans give up its stake in the project, in which it holds a 49% share. Beijing-based Shougang Steel Group, which holds the other 51%, has stated that while it was intending to secure the whole stake being sold by Hebei Steel it will be unable to afford to do so.
It is now widely speculated that Kailuan Group, the largest coal enterprise in Hebei Province, will acquire part of the stake being sold by Hebei Steel, while Shougang Steel will acquire the remainder.
In 2011, Kailuan Group targets total raw coal production of 70 million tonnes and an operating revenue exceeding 100 billion yuan.
Influenced by weak demand in the market, the Caofeidian joint venture may suffer large losses, while main management positions and operations were controlled by Shougang Group. As a result, Hebei Steel Group had decided to withdraw from the joint venture, the insider stated.
Hebei Steel plans give up its stake in the project, in which it holds a 49% share. Beijing-based Shougang Steel Group, which holds the other 51%, has stated that while it was intending to secure the whole stake being sold by Hebei Steel it will be unable to afford to do so.
It is now widely speculated that Kailuan Group, the largest coal enterprise in Hebei Province, will acquire part of the stake being sold by Hebei Steel, while Shougang Steel will acquire the remainder.
In 2011, Kailuan Group targets total raw coal production of 70 million tonnes and an operating revenue exceeding 100 billion yuan.
Influenced by weak demand in the market, the Caofeidian joint venture may suffer large losses, while main management positions and operations were controlled by Shougang Group. As a result, Hebei Steel Group had decided to withdraw from the joint venture, the insider stated.
Teck inks new coal handling deal with Westshore
Mar5, 2011 By Mining Weekly
Canada's biggest diversified miner, Teck Resources, has signed a new four-year agreement with Westshore Terminals to ship metallurgical coal from the company's British Columbia and Alberta mines through the export facility, sources reported.
The agreement, of which the commercial terms are confidential, covers the period from Apr 1, 2012, to Mar 31, 2016.
The new agreement contemplates Teck shipping 16 million tonnes coal in the initial contract year, and larger amounts in subsequent years when Teck's production is scheduled to increase, all at fixed rates through Westshore, the company said.
In Sep 2010, Teck lowered its coal sales forecast for the year, partly because of temporary capacity constraints at the Westshore Terminals export facility in the second half of the year.
Westshore is the top coal-export facility in Canada.
Indian steel and infrastructure firms eying operations in Malaysia
Saturday, 05 Mar 2011
(Sourced from BERNAMA)
Malaysian media reported that several Indian steel makers and infrastructure companies are mulling setting up operations in Malaysia, with high level talks having been initiated on the matter.
As per report, the Essar Group, Srinathji Ispat Ltd and Sagarasia Group of Companies are seriously considering expanding their operations to Malaysia.
Indonesia’s international trade and industry minister Mr Datuk Seri Mustapa Mohamed said at least three Indian companies have approached him in Delhi to study the possibility of establishing a base in Malaysia.
Mr Mustapa said that "They like Malaysia and find it easy to do business in the country. These companies have done some research on their own and are keen to set up their business in Malaysia.
Mr Mustapa told Bernama that "But there are some issues which we need to clarify. They want to bring in skilled labour, want to know the availability of scrap iron and also the tariffs.”
He added that y diversified Essar was interested in infrastructure, power generation, oil and gas. The other two companies are keen on windmill infrastructure, aluminium ladders used in aircraft and scaffolding and steel-related products.
Mr Mustapa further said that "These companies are even interested in setting up a production base for ASEAN in Malaysia. We told them to come with their specific needs and we will assist.”
As per report, the Essar Group, Srinathji Ispat Ltd and Sagarasia Group of Companies are seriously considering expanding their operations to Malaysia.
Indonesia’s international trade and industry minister Mr Datuk Seri Mustapa Mohamed said at least three Indian companies have approached him in Delhi to study the possibility of establishing a base in Malaysia.
Mr Mustapa said that "They like Malaysia and find it easy to do business in the country. These companies have done some research on their own and are keen to set up their business in Malaysia.
Mr Mustapa told Bernama that "But there are some issues which we need to clarify. They want to bring in skilled labour, want to know the availability of scrap iron and also the tariffs.”
He added that y diversified Essar was interested in infrastructure, power generation, oil and gas. The other two companies are keen on windmill infrastructure, aluminium ladders used in aircraft and scaffolding and steel-related products.
Mr Mustapa further said that "These companies are even interested in setting up a production base for ASEAN in Malaysia. We told them to come with their specific needs and we will assist.”
(Sourced from BERNAMA)
NMDC sings pact for sinter plant
Saturday, 05 Mar 2011 By BL
National Mineral Development Corporation has concluded an agreement with a consortium comprising SVAI of Austria and Nagarjuna Construction Company for turnkey execution of a sinter plant complex, marking the first contract among the nine packages for the 3 million tonne steel plant it is setting up at Nagarnar.
The sinter plant will be catering to 80% of the ferrous feed to the blast furnace.
The schedule of the project is 33 months from the effective date of contract.
Mr Rana Som CMD of NMDC said this would be the fastest commissioned steel plant either in Greenfield or Brownfield in the country.
Riversdale to produce coal at Mozambique’s Zambeze in 2014
Mar5,2011 |Bloomberg
Riversdale Mining Ltd., an Australian mining company, will start production at its Zambeze coal project in Mozambique in 2014, said David West, its principal geologist in the southern African country.
The project has an estimated coal resource of 9 billion tonnes, more than double the Benga project that will start exporting in Sep, he said.
Riversdale will probably initially produce 45 million tonnes of coal a year from Zambeze, West said.
Riversdale Mining Ltd., an Australian mining company, will start production at its Zambeze coal project in Mozambique in 2014, said David West, its principal geologist in the southern African country.
The project has an estimated coal resource of 9 billion tonnes, more than double the Benga project that will start exporting in Sep, he said.
Riversdale will probably initially produce 45 million tonnes of coal a year from Zambeze, West said.
Ceke Feb coal imports soar 79 pct
Mar 5, 2011
Ceke border crossing, located in northern autonomous region of Inner Mongolia, witnessed a year-on-year surge of 79 percent in coal imported from Mongolia in Feb, sources learnt from local government.
The border crossing imported a total of 350,526 tonnes Mongolian coal in 15 days’ opening from Feb 11 to 28, valued US$18.01 million, showed data.
As of end-Feb, coal imported from Mongolia through Ceke border crossing amounted to 443,210 tonnes. |By en.sxcoal
Ceke border crossing, located in northern autonomous region of Inner Mongolia, witnessed a year-on-year surge of 79 percent in coal imported from Mongolia in Feb, sources learnt from local government.
The border crossing imported a total of 350,526 tonnes Mongolian coal in 15 days’ opening from Feb 11 to 28, valued US$18.01 million, showed data.
As of end-Feb, coal imported from Mongolia through Ceke border crossing amounted to 443,210 tonnes. |By en.sxcoal
Dongnan Steel Industry 1280 cubic meters BF to start production in May
Saturday, 05 Mar 2011, By steelorbis
It is reported that Xuzhou, Jiangsu based Chinese steelmaker Dongnan Steel Industry Co new 1,280 cubic meters blast furnace and associated steelmaking and rolling facilities are currently in the final phase of installation and debugging.
The new blast furnace the first blast furnace with a capacity of over 1,000 cubic meters to be built in Xuzhou city is expected to start production on May 1 this year. It will increase Dongnan Steel Industry's annual output capacity by 1.5 million tonnes to 3 million tonnes.
Construction of the new blast furnace and associated facilities commenced on March 28 last year while the total investment involved is CNY 3 billion.
Dongnan Steel Industry is now preparing to apply for official permission to construct a second 1,280 cubic meters blast furnace, in line with its plans to build two more 1,280 cubic meters blast furnaces in the coming two to three years. These new blast furnaces would increase the company annual steel output capacity to 6 million tonnes.
The new blast furnace the first blast furnace with a capacity of over 1,000 cubic meters to be built in Xuzhou city is expected to start production on May 1 this year. It will increase Dongnan Steel Industry's annual output capacity by 1.5 million tonnes to 3 million tonnes.
Construction of the new blast furnace and associated facilities commenced on March 28 last year while the total investment involved is CNY 3 billion.
Dongnan Steel Industry is now preparing to apply for official permission to construct a second 1,280 cubic meters blast furnace, in line with its plans to build two more 1,280 cubic meters blast furnaces in the coming two to three years. These new blast furnaces would increase the company annual steel output capacity to 6 million tonnes.
China country wise steel product import in Jan 2011
Saturday, 05 Mar 2011
It is reported that China country wise steel product import during January 2011 total 1,644,072 tonnes which Japan topping the table.
In tonnes (sourced from mysteel.net)
It is reported that China country wise steel product import during January 2011 total 1,644,072 tonnes which Japan topping the table.
| Country | Jan'11 | Share |
| Total | 1,644,072 | |
| Japan | 754,073 | 45.87 |
| South Korea | 455,866 | 27.73 |
| Taiwan Region | 187,654 | 11.41 |
| Germany | 44,144 | 2.69 |
| P.R.China | 27,796 | 1.69 |
| Kazakhstan | 25,393 | 1.54 |
| Viet Nam | 22,152 | 1.35 |
| Turkey | 21,216 | 1.29 |
| Russian Federation | 20,391 | 1.24 |
| France | 11,408 | 0.69 |
| Sweden | 10,727 | 0.65 |
| Italy | 9,353 | 0.57 |
| US | 8,566 | 0.52 |
| UK | 8,041 | 0.49 |
| Malaysia | 5,799 | 0.35 |
| Austria | 5,028 | 0.31 |
| Finland | 4,814 | 0.29 |
| Belgium | 2,924 | 0.18 |
| Thailand | 2,423 | 0.15 |
| Holland | 2,177 | 0.13 |
| Hong Kong | 2,120 | 0.13 |
| Spain | 1,942 | 0.12 |
| South Africa | 1,571 | 0.10 |
| Australia | 1,566 | 0.10 |
| Mexico | 1,128 | 0.07 |
| India | 967 | 0.06 |
| Singapore | 951 | 0.06 |
| Swiss | 598 | 0.04 |
| Canada | 473 | 0.03 |
| Czech | 455 | 0.03 |
| Indonesia | 399 | 0.02 |
| Luxemburg | 336 | 0.02 |
| Argentina | 301 | 0.02 |
| Norway | 286 | 0.02 |
| Romania | 252 | 0.02 |
| Slovenia | 172 | 0.01 |
| Denmark | 112 | 0.01 |
| Brazil | 111 | 0.01 |
| Poland | 94 | 0.01 |
| Slovak | 81 | 0.00 |
| New Zealand | 61 | 0.00 |
| Philippines | 58 | 0.00 |
| Ukraine | 23 | 0.00 |
| Belarus | 18 | 0.00 |
| Hungary | 10 | 0.00 |
In tonnes (sourced from mysteel.net)
Shaanxi may ration power on short coal supply
Mar 5, 2011
Northwestern China's Shaanxi province would have to cut power supply again, as the province is facing a gap of 100 kWh electricity due to badly shortage of power coal, local paper Huashang Daily reported.
Since Feb, coal stocks in the province’s 14 main power plants have been falling by 23,000 tonnes per day on average.
Each day, an average of 83,000 tonnes coal was carried to these power plants, compared to some 106,000 tonnes being used, showed data from the dispatching center of Shaanxi Power Grid.
As of Mar 2, these 14 power plants had 659,000 tonnes coal in stock, enough for use of 3.8 days on average, nine plants only enough for less than 3 days.
Shaanxi Power Grid Corp is striving to increase coal supply to 150,000 tonnes each day.
Meanwhile, Shaanxi stopped supplying power out of the province starting from Mar 1, in a bid to secure local demand.|By en.sxcoal|
Northwestern China's Shaanxi province would have to cut power supply again, as the province is facing a gap of 100 kWh electricity due to badly shortage of power coal, local paper Huashang Daily reported.
Since Feb, coal stocks in the province’s 14 main power plants have been falling by 23,000 tonnes per day on average.
Each day, an average of 83,000 tonnes coal was carried to these power plants, compared to some 106,000 tonnes being used, showed data from the dispatching center of Shaanxi Power Grid.
As of Mar 2, these 14 power plants had 659,000 tonnes coal in stock, enough for use of 3.8 days on average, nine plants only enough for less than 3 days.
Shaanxi Power Grid Corp is striving to increase coal supply to 150,000 tonnes each day.
Meanwhile, Shaanxi stopped supplying power out of the province starting from Mar 1, in a bid to secure local demand.|By en.sxcoal|
Macroeconomic indicators - Yuan rise to play role in big China economic shift
Saturday, 05 Mar 2011
Reuters reported that China is in the early stages of an economic rebalancing act that makes a stronger currency an almost inevitable part of the mix and a sustained yuan rise may come far sooner than many foreign players are expecting.
Beijing has started taking broad steps to wean itself off exports and promote greater domestic spending while trying to cope with what appears to be a sustained rise in inflation all of which point to yuan appreciation. While higher inflation in China compared with major trading partners will lead to a stronger real trade weighted exchange rate, traders believe that authorities certainly don't want inflation alone to be the driver meaning that nominal appreciation is part of the equation.
Several FX traders on the mainland think that this change is just starting to take shape, underscored by the yuan march to record highs and should reaffirm the consensus expectations for 5% to 6% appreciation this year contrary to the cautious pricing in the dollar/yuan NDFs.
A senior trader at a Chinese commercial bank in Shenzhen said "China has already started a process to adjust its economic structure and the previous strategy to keep the yuan value at a relatively low level so as to help boost exports will gradually phase out."
The trader said "The yuan will thus increasingly move in line with China economic fundamentals and the most important factor in the fundamentals this year will be high inflation. So the yuan exchange rate will be used in the anti-inflation campaign."
Traders have become more convinced that the People Bank of China will allow more currency strength thanks to calming currency tensions with the United States, especially after the US Treasury declined to name China a currency manipulator in a report last month.
Those currency tensions appear to have prevented China, always loath to be seen bowing to foreign pressure, from allowing as much yuan appreciation as it might have. Now that the hot button yuan has slipped off the diplomatic radar screen, Beijing is more comfortable letting the currency rise.
The PBOC's own actions have also given traders more confidence that further currency strength is in store with the central bank guiding the Chinese currency to a slew of record highs this year.
(sourced:Reuters)
Beijing has started taking broad steps to wean itself off exports and promote greater domestic spending while trying to cope with what appears to be a sustained rise in inflation all of which point to yuan appreciation. While higher inflation in China compared with major trading partners will lead to a stronger real trade weighted exchange rate, traders believe that authorities certainly don't want inflation alone to be the driver meaning that nominal appreciation is part of the equation.
Several FX traders on the mainland think that this change is just starting to take shape, underscored by the yuan march to record highs and should reaffirm the consensus expectations for 5% to 6% appreciation this year contrary to the cautious pricing in the dollar/yuan NDFs.
A senior trader at a Chinese commercial bank in Shenzhen said "China has already started a process to adjust its economic structure and the previous strategy to keep the yuan value at a relatively low level so as to help boost exports will gradually phase out."
The trader said "The yuan will thus increasingly move in line with China economic fundamentals and the most important factor in the fundamentals this year will be high inflation. So the yuan exchange rate will be used in the anti-inflation campaign."
Traders have become more convinced that the People Bank of China will allow more currency strength thanks to calming currency tensions with the United States, especially after the US Treasury declined to name China a currency manipulator in a report last month.
Those currency tensions appear to have prevented China, always loath to be seen bowing to foreign pressure, from allowing as much yuan appreciation as it might have. Now that the hot button yuan has slipped off the diplomatic radar screen, Beijing is more comfortable letting the currency rise.
The PBOC's own actions have also given traders more confidence that further currency strength is in store with the central bank guiding the Chinese currency to a slew of record highs this year.
TMK IPSCO expands pipe threading line at Ohio facility
Saturday, Mar05, 2011
Downers Grove, Illinois-based steel energy pipe manufacturer TMK IPSCO announced Friday that its Premium pipe threading facility in Brookfield, Ohio has begun a two-week commissioning phase for its second thread line, which will allow the facility to thread more and larger pipe products.
The second thread line will allow the Brookfield plant to thread pipes up to 13 5/8" in diameter, up from the previous size range of 4"-7 5/8" under the first thread line.
"What this means for the industry is that we are now able to provide an even quicker response to the growing needs of the Marcellus drilling region," said Piotr Galitzine, chairman of TMK IPSCO. "Marcellus will play a major role going forward as natural gas finds new uses in electricity generation and municipal transportation."
The second thread line will allow the Brookfield plant to thread pipes up to 13 5/8" in diameter, up from the previous size range of 4"-7 5/8" under the first thread line.
"What this means for the industry is that we are now able to provide an even quicker response to the growing needs of the Marcellus drilling region," said Piotr Galitzine, chairman of TMK IPSCO. "Marcellus will play a major role going forward as natural gas finds new uses in electricity generation and municipal transportation."
PDAC-Bull market for metals signals a spate of mining deals
Fri Mar 4, 2011 11:44pm GMT
* World's largest annual mining convention set to kick off
* Miners ebullient with metal prices near record highs
* M&A activity in sector expected to gather pace in 2011
By Euan Rocha
TORONTO, March 4 (Reuters) - This year the world's biggest mining convention could turn into a bonanza for deal makers as eager mining companies look for ways to take advantage of a raging bull market for metals.
The event, organized by the Prospectors and Developers Association of Canada (PDAC), brings together nearly everyone who is anyone in the world of mining -- and it gives miners an unparalleled opportunity to talk shop and strike deals.
The dealmaking that PDAC could stir up this year may very well shift into overdrive, according to many of those who will attend, as the industry responds to a number of powerful, intersecting trends.
Prices of base metals are near record highs, while surging demand is only expected to accelerate, fueled by the building booms of China, India and Latin America. At the same time, major producers are expecting their production to contract unless replacements can be found.
Gold and silver miners are benefiting from one of the biggest sustained rallies in modern history, driven by inflation concerns, political turmoil, an uneven U.S. economic recovery and the European sovereign debt crisis.
That means junior miners and explorers -- those with assets that are close to going into production -- have never had it so good. Established miners are motivated buyers willing to pay top dollar for high-quality properties that can be developed quickly.
"I think deal activity is going to intensify, because companies' cash flows are enormous and lots of companies aren't replacing their production," said Donald Coxe one of Canada's most influential money managers.
The solution for many is to find attractive junior miners and explorers with projects that require little lead time before they can begin producing. For a major producer shopping around or a junior looking to sell, the PDAC convention in Toronto is a must-attend showcase.
"There are a lot of deals done during the convention. If you have a property you want to get rid of, or put into a company, or if you are a company looking for properties it is the best place you can go," said Terry Schorn an adviser to exploration company Eagle Hill (EAG.V: Quote).
"For me the best part of it is meeting people, it's a great place for contacts ... Quite often a deal does not happen at the convention, but you meet somebody and follow up and deals get done later," said Schorn, a veteran geologist who has attended the PDAC event since 1953.
With record cash flows, many miners have opted to initiate or raise dividends, while others are opting to use their new wealth to buy assets and secure long-term supplies. Exploration companies at the event are eager to show off their wares.
"We'll be looking at other opportunities, other companies that are (at PDAC)," said Chief Executive Robert Quartermain of gold explorer Pretium (PVG.TO: Quote). "We'll be meeting with majors so they fully understand the opportunity that we have."
The annual PDAC event attracted more than 22,000 attendees last year, and with metal prices soaring, an even larger audience is expected this year.
Canada is a natural home for the event, as the Toronto Stock Exchange and the small-cap TSX Venture Exchange are home to close to 60 percent of the world's publicly listed mining companies. In fact, miners and exploration companies account for more than 40 percent of the roughly 3,700 companies listed on both exchanges. John Nyholt, who heads PwC's M&A services team, notes that the conference started off with miners coming out of the bush looking to raise finances and show off their finds. "They still have all these booths and tables, where you can go and invest in a small mining deal..
Today there is a strong technical aspect to the program, but the fund-raising stuff, it still happens," said Nyholt. In a report published on the eve of the convention, PwC predicts that deal activity is only expected to gather pace this year, as the prices of metals rise even further. "We are definitely going to see a strong pace in 2011 in terms of volume and we also believe we will see more mega deals," said John Nyholt, who co-authored the PwC report. With the ongoing political turmoil in the Middle East and North Africa, Donald Coxe argues that gold prices are likely to rise even further. Gold rose above $1,430 an ounce on Friday, while silver surged 3 percent to 31-year highs, as soaring oil prices fueled by widening unrest in Libya prompted investors to pile into safe havens.
Bullion already hit a record high of $1,440.10 an ounce on Wednesday and is on track to rise further on fears that Libya's escalating violence could spread across the Arab world. Coxe believes these record prices are only going to fuel further M&A activity among precious metals miners. "Mining companies have a choice between paying out more money in dividends, or expanding their ore reserves and I think we are going to have more M&A," said Coxe, a former Bank of Montreal strategist who now heads Chicago-based Coxe Advisors.
"The greatest amount of activity is going to be in the precious metals group, because the companies having gotten out of their hedging programs a couple of years ago are now making a lot of money, so I think there's going to be lots of takeovers of gold companies," he said. (Reporting by Euan Rocha, Pav Jordan, Julie Gordon and Cameron French; Editing by Frank McGurty and Rob Wilson, sourced:Thomson Reuters)
The event, organized by the Prospectors and Developers Association of Canada (PDAC), brings together nearly everyone who is anyone in the world of mining -- and it gives miners an unparalleled opportunity to talk shop and strike deals.
The dealmaking that PDAC could stir up this year may very well shift into overdrive, according to many of those who will attend, as the industry responds to a number of powerful, intersecting trends.
Prices of base metals are near record highs, while surging demand is only expected to accelerate, fueled by the building booms of China, India and Latin America. At the same time, major producers are expecting their production to contract unless replacements can be found.
Gold and silver miners are benefiting from one of the biggest sustained rallies in modern history, driven by inflation concerns, political turmoil, an uneven U.S. economic recovery and the European sovereign debt crisis.
That means junior miners and explorers -- those with assets that are close to going into production -- have never had it so good. Established miners are motivated buyers willing to pay top dollar for high-quality properties that can be developed quickly.
"I think deal activity is going to intensify, because companies' cash flows are enormous and lots of companies aren't replacing their production," said Donald Coxe one of Canada's most influential money managers.
The solution for many is to find attractive junior miners and explorers with projects that require little lead time before they can begin producing. For a major producer shopping around or a junior looking to sell, the PDAC convention in Toronto is a must-attend showcase.
"There are a lot of deals done during the convention. If you have a property you want to get rid of, or put into a company, or if you are a company looking for properties it is the best place you can go," said Terry Schorn an adviser to exploration company Eagle Hill (EAG.V: Quote).
"For me the best part of it is meeting people, it's a great place for contacts ... Quite often a deal does not happen at the convention, but you meet somebody and follow up and deals get done later," said Schorn, a veteran geologist who has attended the PDAC event since 1953.
With record cash flows, many miners have opted to initiate or raise dividends, while others are opting to use their new wealth to buy assets and secure long-term supplies. Exploration companies at the event are eager to show off their wares.
"We'll be looking at other opportunities, other companies that are (at PDAC)," said Chief Executive Robert Quartermain of gold explorer Pretium (PVG.TO: Quote). "We'll be meeting with majors so they fully understand the opportunity that we have."
The annual PDAC event attracted more than 22,000 attendees last year, and with metal prices soaring, an even larger audience is expected this year.
Canada is a natural home for the event, as the Toronto Stock Exchange and the small-cap TSX Venture Exchange are home to close to 60 percent of the world's publicly listed mining companies. In fact, miners and exploration companies account for more than 40 percent of the roughly 3,700 companies listed on both exchanges. John Nyholt, who heads PwC's M&A services team, notes that the conference started off with miners coming out of the bush looking to raise finances and show off their finds. "They still have all these booths and tables, where you can go and invest in a small mining deal..
Today there is a strong technical aspect to the program, but the fund-raising stuff, it still happens," said Nyholt. In a report published on the eve of the convention, PwC predicts that deal activity is only expected to gather pace this year, as the prices of metals rise even further. "We are definitely going to see a strong pace in 2011 in terms of volume and we also believe we will see more mega deals," said John Nyholt, who co-authored the PwC report. With the ongoing political turmoil in the Middle East and North Africa, Donald Coxe argues that gold prices are likely to rise even further. Gold rose above $1,430 an ounce on Friday, while silver surged 3 percent to 31-year highs, as soaring oil prices fueled by widening unrest in Libya prompted investors to pile into safe havens.
Bullion already hit a record high of $1,440.10 an ounce on Wednesday and is on track to rise further on fears that Libya's escalating violence could spread across the Arab world. Coxe believes these record prices are only going to fuel further M&A activity among precious metals miners. "Mining companies have a choice between paying out more money in dividends, or expanding their ore reserves and I think we are going to have more M&A," said Coxe, a former Bank of Montreal strategist who now heads Chicago-based Coxe Advisors.
"The greatest amount of activity is going to be in the precious metals group, because the companies having gotten out of their hedging programs a couple of years ago are now making a lot of money, so I think there's going to be lots of takeovers of gold companies," he said. (Reporting by Euan Rocha, Pav Jordan, Julie Gordon and Cameron French; Editing by Frank McGurty and Rob Wilson, sourced:Thomson Reuters)
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