June 06, 2011 - 05:50 GMT Location: Singapore
Malaysian mills have cut their rebar prices by 50-100 ringgit ($17-33) per tonne in the past two weeks on weak demand
Malaysian mills have cut their rebar prices by 50-100 ringgit ($17-33) per tonne in the past two weeks on weak demand. Rebar traded at 2,150-2,200 ringgit per tonne this week, down from 2,200-2,300 ringgit per tonne two weeks ago, mill and sources said. "The mills couldn't......for more info...Metalbulletin
Keywords: Malaysia , steel , rebar
Monday, June 6, 2011
West Africa is the 'new Pilbara'
3Jun, 2011 13:32
By Brendan Ryan
WEST Africa is shaping up as the next Pilbara in terms of the iron ore business according to Tony Sage, executive chairperson of ASX-listed mineral investment company Cape Lambert Resources (Cape Lambert).
Cape Lambert’s strategy is to identify and acquire projects it considers promising, and then take them to the feasibility stage before selling them on to other parties for development.
“We don’t do mining. We either sell the project or spin it out. It is a completely different business model to the conventional mining development approach,” Sage said.
The company is currently working on three iron ore projects in West Africa – a region which Sage said had become a “battleground” between the Chinese and the major Western diversified mining groups.
He said: "You now have the three major iron ore producers - Rio Tinto, BHP Billiton and Vale – in there plus Xstrata, which is looking to get into the iron ore business.
“They are all competing against the four major Chinese mining groups who want to establish iron ore mines in the region, because China is extremely unhappy with the extent of the control exerted over the iron ore market by Rio Tinto, BHP Billiton and Vale.
“But those three groups still have some 150 years of life left in their operations in Brazil and the Pilbara, so you have to ask the question: why are they spending around $30bn on iron ore assets in West Africa?”
According to Sage, the answers are that the mining environment in Australia is becoming less attractive while the resource heavyweights have realised they cannot allow Chinese mining groups to become well established in West Africa.
“In Australia wage costs are becoming prohibitive, while the lack of skilled staff and the introduction of new taxes are all making the country less attractive as a mining destination.
“So far a total resource of around 200 billion tonnes (bn t) of iron ore has been identified in West Africa, of which around 80 bn t is JORC compliant. If the Chinese manage to pick up a lot of that, then in 20 to 25 years they will not be importing iron ore from Western Australia or Brazil.”
Sage acknowledged the risks inherent in operating in West Africa, and commented that the key factor for success in the region was access to rail and port infrastructure to be able to export the iron ore.
“Those projects without an infrastructural solution or which are not close to the coast will struggle,“ he said. (sourced MiningMX)
He said: "You now have the three major iron ore producers - Rio Tinto, BHP Billiton and Vale – in there plus Xstrata, which is looking to get into the iron ore business.
“They are all competing against the four major Chinese mining groups who want to establish iron ore mines in the region, because China is extremely unhappy with the extent of the control exerted over the iron ore market by Rio Tinto, BHP Billiton and Vale.
“But those three groups still have some 150 years of life left in their operations in Brazil and the Pilbara, so you have to ask the question: why are they spending around $30bn on iron ore assets in West Africa?”
According to Sage, the answers are that the mining environment in Australia is becoming less attractive while the resource heavyweights have realised they cannot allow Chinese mining groups to become well established in West Africa.
“In Australia wage costs are becoming prohibitive, while the lack of skilled staff and the introduction of new taxes are all making the country less attractive as a mining destination.
“So far a total resource of around 200 billion tonnes (bn t) of iron ore has been identified in West Africa, of which around 80 bn t is JORC compliant. If the Chinese manage to pick up a lot of that, then in 20 to 25 years they will not be importing iron ore from Western Australia or Brazil.”
Sage acknowledged the risks inherent in operating in West Africa, and commented that the key factor for success in the region was access to rail and port infrastructure to be able to export the iron ore.
“Those projects without an infrastructural solution or which are not close to the coast will struggle,“ he said. (sourced MiningMX)
Cliffs declares force majeure on coal
June3, 2011
Pittsburgh:Cliffs Natural Resources Inc. has declared force majeure to some of its coal customers.
Cliffs Natural Resources Inc. has declared force majeure to some of its coal customers. Unfavorable weather conditions at one mine and air quality problems at a second operation prompted Cliffs to reduce its metallurgical coal production estimate by 1.4 million tons this year, and the Cleveland-based miner now expects........for more info...visit..MetalBulletin
KEYWORDS: metallurgical , coal , steel , Cliffs Natural Resources , Pinnacle Mine
Pittsburgh:Cliffs Natural Resources Inc. has declared force majeure to some of its coal customers.
Cliffs Natural Resources Inc. has declared force majeure to some of its coal customers. Unfavorable weather conditions at one mine and air quality problems at a second operation prompted Cliffs to reduce its metallurgical coal production estimate by 1.4 million tons this year, and the Cleveland-based miner now expects........for more info...visit..MetalBulletin
KEYWORDS: metallurgical , coal , steel , Cliffs Natural Resources , Pinnacle Mine
Amsa 'paid' for cheap Sishen ore
Jan de Lange | 05 Jun 2011 08:05
KUMBA Iron Ore was compensated in 2001 in anticipation of lower future profits it would’ve sustained due to its iron ore supply agreement with ArcelorMittal SA (Amsa).
This is according to Amsa, which pointed out in court documents that Kumba’s debt, which it took over from the old Iscor in 2001 at the time of the unbundling, had been reduced by R2.1bn as compensation for the 6.25 million tonnes iron ore per year supply agreement at a price of cost-plus-3%.
These court documents, which included documents being used in private arbitration between Amsa and Kumba, were lodged with the North Gauteng High Court in Pretoria last week.
In the arbitration matter Kumba argued that it was no longer bound to the long-term supply agreement.
It argued the fact that Amsa allowed its mineral rights to 21.4% of Sishen to lapse meant that Kumba was no longer bound to the agreement.
But in the court documents Amsa pointed out that, before Kumba’s unbundling out of the former Iscor, both it and Kumba were jointly responsible for a large part of the debt of Saldanha Steel, a steel plant for the export market built and operated on the West Coast at an enormous loss by Iscor and the Industrial Development Corporation.
When Kumba was unbundled out of Iscor, which is Amsa today, it was decided that Iscor should always have access to iron ore. For that reason the chief executives of the two companies, Louis van Niekerk of Iscor and Con Fauconnier of Kumba, agreed that Amsa could buy 6.25m tonnes of iron ore a year from Sishen at cost-plus-3%.
Amsa said that since the price of supplying the 6.25m tonnes from Sishen would reduce the value of the mining company (Kumba) during Kumba’s listing, it had been decided to offset the reduction by having Iscor absorb a larger portion of existing debt, including that in Saldanha.
The amount of debt from which Kumba would be released was calculated as the difference between the market value of the 6.25 million tonnes a year and the cost basis at which Amsa would buy it from Kumba over the lifetime of the Sishen Mine.
The figure was then R2.1bn. In today’s terms the amount is ridiculously low, but in 2001 the price of iron ore was less than $15/tonne. On Friday in China the spot price for imported ore with a 63% iron content was $170/ton.
In 2001 the agreement had been announced in various public statements.
In its response to the allegations Kumba acknowledged that the debt apportionment for which the two companies would be responsible after the unbundling had been adjusted to provide for the difference in value resulting from Amsa’s claim to ore from Sishen at preferential prices.
However, the adjustment of the debt apportionment had not been compensation and did not represent payment for anything, said Kumba.
Also, Amsa said it could not renew its mineral rights in Sishen because the 2004 Mineral and Petroleum Resources Development Act did not provide for the subdivision of mineral rights.
The documents also contained an explanation of why Amsa failed to renew it right to 21.4% in Sishen. To date speculation has been that Amsa “forgot” to renew its rights.
But Amsa claims that in late 2004 it informed Kumba that the companies should work together to convert the mineral rights into new-order rights, which had become necessary when the 2004 Mineral and Petroleum Resources Development Act had come into force.
The two companies had met to discuss the matter in April 2005. The agreement had been that Kumba would submit a proposal for the conversion of the rights to Amsa.
Amsa also handed to the court correspondence between the two companies which indicated that they would have together applied for conversion of the mineral rights.
In June 2005 Kumba representatives had made a presentation on the matter to Davinder Chugh, Amsa’s chief executive. At that meeting Kumba had told Amsa that only one mineral right, per mineral, would be awarded for a particular piece of ground.
Amsa had even done a cost analysis of its expenses for adjusting its black economic empowerment profile in order to do the conversion of the mineral rights. This had amounted to R140m, and Amsa had paid Kumba an amount calculated to tally with the amount of iron ore that Amsa would receive from the mine in terms of the supply agreement.(sourced MiningMX)
KUMBA Iron Ore was compensated in 2001 in anticipation of lower future profits it would’ve sustained due to its iron ore supply agreement with ArcelorMittal SA (Amsa).
This is according to Amsa, which pointed out in court documents that Kumba’s debt, which it took over from the old Iscor in 2001 at the time of the unbundling, had been reduced by R2.1bn as compensation for the 6.25 million tonnes iron ore per year supply agreement at a price of cost-plus-3%.
These court documents, which included documents being used in private arbitration between Amsa and Kumba, were lodged with the North Gauteng High Court in Pretoria last week.
In the arbitration matter Kumba argued that it was no longer bound to the long-term supply agreement.
It argued the fact that Amsa allowed its mineral rights to 21.4% of Sishen to lapse meant that Kumba was no longer bound to the agreement.
But in the court documents Amsa pointed out that, before Kumba’s unbundling out of the former Iscor, both it and Kumba were jointly responsible for a large part of the debt of Saldanha Steel, a steel plant for the export market built and operated on the West Coast at an enormous loss by Iscor and the Industrial Development Corporation.
When Kumba was unbundled out of Iscor, which is Amsa today, it was decided that Iscor should always have access to iron ore. For that reason the chief executives of the two companies, Louis van Niekerk of Iscor and Con Fauconnier of Kumba, agreed that Amsa could buy 6.25m tonnes of iron ore a year from Sishen at cost-plus-3%.
Amsa said that since the price of supplying the 6.25m tonnes from Sishen would reduce the value of the mining company (Kumba) during Kumba’s listing, it had been decided to offset the reduction by having Iscor absorb a larger portion of existing debt, including that in Saldanha.
The amount of debt from which Kumba would be released was calculated as the difference between the market value of the 6.25 million tonnes a year and the cost basis at which Amsa would buy it from Kumba over the lifetime of the Sishen Mine.
The figure was then R2.1bn. In today’s terms the amount is ridiculously low, but in 2001 the price of iron ore was less than $15/tonne. On Friday in China the spot price for imported ore with a 63% iron content was $170/ton.
In 2001 the agreement had been announced in various public statements.
In its response to the allegations Kumba acknowledged that the debt apportionment for which the two companies would be responsible after the unbundling had been adjusted to provide for the difference in value resulting from Amsa’s claim to ore from Sishen at preferential prices.
However, the adjustment of the debt apportionment had not been compensation and did not represent payment for anything, said Kumba.
Also, Amsa said it could not renew its mineral rights in Sishen because the 2004 Mineral and Petroleum Resources Development Act did not provide for the subdivision of mineral rights.
The documents also contained an explanation of why Amsa failed to renew it right to 21.4% in Sishen. To date speculation has been that Amsa “forgot” to renew its rights.
But Amsa claims that in late 2004 it informed Kumba that the companies should work together to convert the mineral rights into new-order rights, which had become necessary when the 2004 Mineral and Petroleum Resources Development Act had come into force.
The two companies had met to discuss the matter in April 2005. The agreement had been that Kumba would submit a proposal for the conversion of the rights to Amsa.
Amsa also handed to the court correspondence between the two companies which indicated that they would have together applied for conversion of the mineral rights.
In June 2005 Kumba representatives had made a presentation on the matter to Davinder Chugh, Amsa’s chief executive. At that meeting Kumba had told Amsa that only one mineral right, per mineral, would be awarded for a particular piece of ground.
Amsa had even done a cost analysis of its expenses for adjusting its black economic empowerment profile in order to do the conversion of the mineral rights. This had amounted to R140m, and Amsa had paid Kumba an amount calculated to tally with the amount of iron ore that Amsa would receive from the mine in terms of the supply agreement.(sourced MiningMX)
Rico Resources to start Wonmunna iron ore resource extension drilling in June
Monday, 06 Jun 2011
(sourced ProactiveInvestors)
Rico Resources has had the June 2009 scoping study on Wonmunna iron ore project updated by AMC Consultants, providing insight into small scale direct shipping ore iron ore mining in the Pilbara region of Western Australia.
The resource extension drilling program is anticipated to commence by the end of June 2011 at the project which is in close proximity to operating mines such as Rio Tinto's West Angelas and BHP's Area C.
Production schedules have been developed for 1 million tonnes per annum, 2 million tonnes per annum and 5 million tonnes per annum options and mine gate sales. There will be production of iron ore fines only, being consistent with lowering overall project risk and significantly lowering capital and operating costs.
The company said work has commenced with AMC to develop a targeted resource definition drilling program to support a feasibility study. Rico is now well advanced on key approvals processes aimed at minimizing start up time and capital costs. The updated report will provide an objective platform for discussions with third parties on development options.
Rico will kick off the Resource definition drilling as soon as possible, which is consistent with Rico's mission of completing all necessary development milestones to allow for the earliest possible time commencement of production. The fauna and flora environmental studies are underway now with the aim of expediting approvals for mining.
The company has an inferred mineral resource of 78.3 million tonnes of iron ore at the strategically located Wonmunna project in the world class iron ore rich Pilbara region.
The company is well funded to undertake further exploration to potentially increase its resource base in 2011.
The resource extension drilling program is anticipated to commence by the end of June 2011 at the project which is in close proximity to operating mines such as Rio Tinto's West Angelas and BHP's Area C.
Production schedules have been developed for 1 million tonnes per annum, 2 million tonnes per annum and 5 million tonnes per annum options and mine gate sales. There will be production of iron ore fines only, being consistent with lowering overall project risk and significantly lowering capital and operating costs.
The company said work has commenced with AMC to develop a targeted resource definition drilling program to support a feasibility study. Rico is now well advanced on key approvals processes aimed at minimizing start up time and capital costs. The updated report will provide an objective platform for discussions with third parties on development options.
Rico will kick off the Resource definition drilling as soon as possible, which is consistent with Rico's mission of completing all necessary development milestones to allow for the earliest possible time commencement of production. The fauna and flora environmental studies are underway now with the aim of expediting approvals for mining.
The company has an inferred mineral resource of 78.3 million tonnes of iron ore at the strategically located Wonmunna project in the world class iron ore rich Pilbara region.
The company is well funded to undertake further exploration to potentially increase its resource base in 2011.
(sourced ProactiveInvestors)
Adani Group eye upping coal handling capacity
Monday, 06 Jun 2011
BL reported that the Adani Group promoted Mundra Port and SEZ Limited which completed the acquisition of Abbot Point X 50 Coal Terminal in Australia plans to expand its coal handling capacity from the current 50 million tonnes per annum to 80 million tonne per annum and a decision will be taken in this regard in the next few months. Once commenced, this fresh expansion is expected to be completed in three to 4 years by when the Adanis Linc Energy mines in Australia would also start coal production, thus synergizing production and transportation.
Details of investments in this expansion would be worked out in the next few months. The Group's flagship company, Adani Enterprises Limited, India's largest coal importer, had bought the Linc Energy coal assets having 7.9 billion tonnes of reserves for INR 12,600 crore in a cash and royalty deal in August 2010. AEL would be mining nearly 100 million tonne per annum from this asset.
Mr B Ravi CFO MPSEZL said that APCT operated so far by APCT Private Limited has three fully mechanized coal terminals whose coal handling capacity was expanded from 21 million tonne per annum to 50 million tonne per annum recently. It received its first vessel just 10 days ago after the recent expansion. This capacity would be further expanded to 80 million tonne per annum with two additional berths.
The current capacity of 50 million tonne per annum is fully booked with nine local Australian companies. For now, MPSEZL would be only the owner of APCT which has now been renamed as Adani Abbot Point Coal Terminal. APCT will continue to be operated by the existing operator, Xstrata, for the remainder of its 5 year period of concession.
Mr Ravi said that MPSEZL paid the full amount of AUD 1,829 billion to Queensland, taking over ownership of APCT. The all cash deal was funded by State Bank of India and Standard Chartered Bank through a bridge loan. The management team from Mundra has taken over the ownership and oversight of the operations of APCT effective Wednesday. The company's nominated directors have also come on the board of the Australian company.
APCT which commenced operations in 1984, currently handles 20 million tonne per annum of coal. Abbot Point is the northern most coal export port in Queensland and was owned by North Queensland Bulk Ports Corporation Limited. Queensland had structured the sale of APCT through 99 year lease of existing coal terminal facilities and associated infrastructure. The deal takes MPSEZL into the top league with its asset base of $100 million increasing to over $3 billion in 10 years. From 2.5 million tonne per annum port in 2001, MPSEZL has now risen to cargo handling capacities of over 200 million tonne per annum. (sourced from Business Line)
Details of investments in this expansion would be worked out in the next few months. The Group's flagship company, Adani Enterprises Limited, India's largest coal importer, had bought the Linc Energy coal assets having 7.9 billion tonnes of reserves for INR 12,600 crore in a cash and royalty deal in August 2010. AEL would be mining nearly 100 million tonne per annum from this asset.
Mr B Ravi CFO MPSEZL said that APCT operated so far by APCT Private Limited has three fully mechanized coal terminals whose coal handling capacity was expanded from 21 million tonne per annum to 50 million tonne per annum recently. It received its first vessel just 10 days ago after the recent expansion. This capacity would be further expanded to 80 million tonne per annum with two additional berths.
The current capacity of 50 million tonne per annum is fully booked with nine local Australian companies. For now, MPSEZL would be only the owner of APCT which has now been renamed as Adani Abbot Point Coal Terminal. APCT will continue to be operated by the existing operator, Xstrata, for the remainder of its 5 year period of concession.
Mr Ravi said that MPSEZL paid the full amount of AUD 1,829 billion to Queensland, taking over ownership of APCT. The all cash deal was funded by State Bank of India and Standard Chartered Bank through a bridge loan. The management team from Mundra has taken over the ownership and oversight of the operations of APCT effective Wednesday. The company's nominated directors have also come on the board of the Australian company.
APCT which commenced operations in 1984, currently handles 20 million tonne per annum of coal. Abbot Point is the northern most coal export port in Queensland and was owned by North Queensland Bulk Ports Corporation Limited. Queensland had structured the sale of APCT through 99 year lease of existing coal terminal facilities and associated infrastructure. The deal takes MPSEZL into the top league with its asset base of $100 million increasing to over $3 billion in 10 years. From 2.5 million tonne per annum port in 2001, MPSEZL has now risen to cargo handling capacities of over 200 million tonne per annum. (sourced from Business Line)
Vale to haul coal by truck not railway from Moatize mine
Monday, 06 Jun 2011
Bloomberg reported that Vale SA will move coal by road and not rail from its USD 1.7 billion Moatize mine in northwestern Tete province.
Vale said that it ad planned to use rail transport but opted for trucks after the completion date for repair works to the Sena railway that serves the mine was pushed back to September from March.
Vale said on May 8th 2011 that it had started operations at the mine and will export coal through the central port of Beira.
The Indian group Rites and Ircon in 2004 won the contract to repair the Sena railway after the lines were extensively damaged during the southern African country's 16 years of civil war that ended in 1994. (sourced bloomberg)
SGX iron ore swap volume hits record in May
Monday, 06 Jun 2011
The volume of iron ore swaps cleared on the Singapore Exchange in May reached a record 6,905 contracts, up 56% on the previous record hit in April 2010.
Open interest at the end of May climbed to 5,667 contracts, more than triple a year ago.
The SGX clears around 80% of iron ore swaps globally.
Exchanges around the world are vying to become the benchmark hedging tool for the USD 100 billion seaborne iron ore market. (Sourced from Reuters)
The volume of iron ore swaps cleared on the Singapore Exchange in May reached a record 6,905 contracts, up 56% on the previous record hit in April 2010.
Open interest at the end of May climbed to 5,667 contracts, more than triple a year ago.
The SGX clears around 80% of iron ore swaps globally.
Exchanges around the world are vying to become the benchmark hedging tool for the USD 100 billion seaborne iron ore market. (Sourced from Reuters)
Rio Tinto suspends exports at Dampier port after worker death
Monday, 06 Jun 2011
Reuters reported that Rio Tinto, the world's second biggest iron ore miner, said that export operations had ceased at one of the three wharves at Dampier port in Western Australia a day after a construction worker was killed in an accident.
Police are investigating the accident on the wharf at East Intercourse Island where a contract worker was carrying out maintenance.
A company spokesman said that the wharf at East Intercourse Island is one of three jetties used to load iron ore shipments and accounts for about a third of the 145 million tonnes the company exports from Dampier each year.
It was the first fatal accident in the company's Pilbara operations since August 2003.
(sourced Reuters)
Reuters reported that Rio Tinto, the world's second biggest iron ore miner, said that export operations had ceased at one of the three wharves at Dampier port in Western Australia a day after a construction worker was killed in an accident.
Police are investigating the accident on the wharf at East Intercourse Island where a contract worker was carrying out maintenance.
A company spokesman said that the wharf at East Intercourse Island is one of three jetties used to load iron ore shipments and accounts for about a third of the 145 million tonnes the company exports from Dampier each year.
It was the first fatal accident in the company's Pilbara operations since August 2003.
(sourced Reuters)
Vale confident in Chinese iron ore appetite
Monday, 06 Jun 2011
The Australian reported that Brazilian mining company Vale's top finance executive said that the company aimed to invest as fast as possible to forge ahead with its plan to double production capacity over the next five to six years.
Mr Guilherme Cavalcanti CFO of Vale said that global prices for iron ore, the company's main product, are today about USD 170 per tonne on the spot market way higher than our production costs and would remain at current high levels.
Mr Cavalcanti said that "Twenty two new cities are being built every year in China. This will keep iron ore prices up. That commitment to Vale's USD 24 billion investment program for this year, reinforced by the company's newly installed chief executive Mr Murilo Ferreira had helped Vale's shares start to recover.”
He said that Vale's shares suffered with the changeover of president. Foreign investors were frightened off but Mr Murilo's arrival was an excellent sign that there was no government interference.
Mr Cavalcanti noted that Mr Ferreira knows Vale well as he worked for the company, mainly in the aluminum and nickel areas, from 1998 until 2008 when he left to work in a consultancy with Mr Gabriel Stoliar former Vale executive director.(sourced TheAustralian)
The Australian reported that Brazilian mining company Vale's top finance executive said that the company aimed to invest as fast as possible to forge ahead with its plan to double production capacity over the next five to six years.
Mr Guilherme Cavalcanti CFO of Vale said that global prices for iron ore, the company's main product, are today about USD 170 per tonne on the spot market way higher than our production costs and would remain at current high levels.
Mr Cavalcanti said that "Twenty two new cities are being built every year in China. This will keep iron ore prices up. That commitment to Vale's USD 24 billion investment program for this year, reinforced by the company's newly installed chief executive Mr Murilo Ferreira had helped Vale's shares start to recover.”
He said that Vale's shares suffered with the changeover of president. Foreign investors were frightened off but Mr Murilo's arrival was an excellent sign that there was no government interference.
Mr Cavalcanti noted that Mr Ferreira knows Vale well as he worked for the company, mainly in the aluminum and nickel areas, from 1998 until 2008 when he left to work in a consultancy with Mr Gabriel Stoliar former Vale executive director.(sourced TheAustralian)
Moody's sounds alarm over U.S. debt limit, deficits
Jun3, 2011 1:28pm IST
NEW YORK/WASHINGTON (Reuters) - Ratings agency Moody's warned on Thursday it would consider cutting the United States' coveted top-notch credit rating if the White House and Congress do not make progress by mid-July in talks to raise the U.S. debt limit.
Treasury Secretary Timothy Geithner, seeking to convince Congress to increase his borrowing authority and prevent a government default, went to Capitol Hill to press his case in a 45-minute meeting with first-term lawmakers.
"I am confident that two things are going to happen this summer," Geithner told reporters after the meeting. "One is that we are going to avoid a default crisis and we are going to reach agreement on a long-term fiscal plan."
The meeting occurred just hours after Moody's Investors warned that slow-moving deficit talks led by Vice President Joe Biden, hindered by entrenched positions on both sides, had increased the odds of a short-lived default by Washington.
Moody's warning increases pressure on President Barack Obama and House of Representatives Speaker John Boehner, the top Republican in the U.S. Congress, to strike a deal soon or risk upsetting global financial markets.
Geithner has predicted a financial catastrophe if Congress fails to increase the current $14.3 trillion borrowing cap by Aug. 2, when his department will exhaust the extraordinary cash management measures it has been using since reaching the debt limit on May 16.
Geithner said he had a "good meeting" with the first-term lawmakers, but some of the skeptical Republicans, who oppose increasing the debt limit without implementing deep spending cuts, were less pleased.
"It is frustrating when the secretary talks in circles and that is very unfortunate," said Representative Stephen Lee Fincher. "We are all big boys and girls. We need a framework put forward and we are not seeing that out of this administration, only seeing talk, talk and talk."
Representative Kristi Noem, a favorite of the fiscally conservative Tea Party movement, said the freshmen Republicans made it clear to Geithner that they would not "give this administration a blank check to spend even more."
"Secretary Geithner doesn't get it," said Noem, one of the "mama grizzlies" touted by ex-Alaska Governor Sarah Palin.
But a Treasury official characterized the talks with lawmakers as friendly and constructive.
POLITICAL GRANDSTANDING
Saying the risk of "continuing stalemate" between the two sides had grown, Moody's urged progress on deficit reduction soon before politics takes over in the run-up to the November 2012 presidential election.
"We think this is an opportunity," Steven Hess, sovereign credit analyst for Moody's, told Reuters. "If this opportunity goes by without them realizing a serious long-term debt/deficit reduction program, then we think that until the presidential election, the chances of such an agreement are really much reduced."
Mary Miller, a top Treasury official, said the Moody's statement underscored the need for Congress to move quickly to make sure the United States could meet all its debt obligations while working to reach a long-term fiscal deal.
A U.S. default would roil global financial markets, but few investors are rattled just yet. Wall Street, in large part, expects the debt and deficit negotiations to go down to the wire, as did talks over tax cuts and the 2011 budget.
"We've been through this political grandstanding before," said Jim Kochan, chief fixed-income strategist at Wells Fargo Advantage Funds.
"We always go right down to the day on debt ceiling targets being raised. No congressman and no president wants to be responsible for Social Security payments not going out. This is a minimal risk. We've seen this so many times."
Obama has tasked Biden to lead negotiations with Republican and Democratic lawmakers to find a deficit-reduction deal that would be palatable to Congress and pave the way for the debt limit to be raised. Their talks are due to resume on June 9.
But Republicans refuse to consider tax increases as part of a deal, while Democrats are opposed to Republican proposals to scale back the popular government-run Medicare healthcare program for future retirees.
Republicans seized on the announcement by Moody's, which comes two months after Standard & Poor's revised down its credit outlook on the U.S. rating, as proof of the need to make some sharp spending cuts.
"This report makes clear that if we let this opportunity pass without real deficit reduction, America's financial standing will be at risk," said Boehner. "A credible agreement means the spending cuts must exceed the debt limit increase.
Senator Charles Schumer, a top Democrat, said a compromise that prevents a "catastrophic default on our obligations and significantly reduces the debt is within reach."
(Additional reporting by Rachelle Younglai, Alister Bull and Thomas Ferraro; Writing by Deborah Charles; Editing by Ross Colvin, David Lawder and Eric Walsh, sourced Reuters)
NEW YORK/WASHINGTON (Reuters) - Ratings agency Moody's warned on Thursday it would consider cutting the United States' coveted top-notch credit rating if the White House and Congress do not make progress by mid-July in talks to raise the U.S. debt limit.
Treasury Secretary Timothy Geithner, seeking to convince Congress to increase his borrowing authority and prevent a government default, went to Capitol Hill to press his case in a 45-minute meeting with first-term lawmakers.
"I am confident that two things are going to happen this summer," Geithner told reporters after the meeting. "One is that we are going to avoid a default crisis and we are going to reach agreement on a long-term fiscal plan."
The meeting occurred just hours after Moody's Investors warned that slow-moving deficit talks led by Vice President Joe Biden, hindered by entrenched positions on both sides, had increased the odds of a short-lived default by Washington.
Moody's warning increases pressure on President Barack Obama and House of Representatives Speaker John Boehner, the top Republican in the U.S. Congress, to strike a deal soon or risk upsetting global financial markets.
Geithner has predicted a financial catastrophe if Congress fails to increase the current $14.3 trillion borrowing cap by Aug. 2, when his department will exhaust the extraordinary cash management measures it has been using since reaching the debt limit on May 16.
Geithner said he had a "good meeting" with the first-term lawmakers, but some of the skeptical Republicans, who oppose increasing the debt limit without implementing deep spending cuts, were less pleased.
"It is frustrating when the secretary talks in circles and that is very unfortunate," said Representative Stephen Lee Fincher. "We are all big boys and girls. We need a framework put forward and we are not seeing that out of this administration, only seeing talk, talk and talk."
Representative Kristi Noem, a favorite of the fiscally conservative Tea Party movement, said the freshmen Republicans made it clear to Geithner that they would not "give this administration a blank check to spend even more."
"Secretary Geithner doesn't get it," said Noem, one of the "mama grizzlies" touted by ex-Alaska Governor Sarah Palin.
But a Treasury official characterized the talks with lawmakers as friendly and constructive.
POLITICAL GRANDSTANDING
Saying the risk of "continuing stalemate" between the two sides had grown, Moody's urged progress on deficit reduction soon before politics takes over in the run-up to the November 2012 presidential election.
"We think this is an opportunity," Steven Hess, sovereign credit analyst for Moody's, told Reuters. "If this opportunity goes by without them realizing a serious long-term debt/deficit reduction program, then we think that until the presidential election, the chances of such an agreement are really much reduced."
Mary Miller, a top Treasury official, said the Moody's statement underscored the need for Congress to move quickly to make sure the United States could meet all its debt obligations while working to reach a long-term fiscal deal.
A U.S. default would roil global financial markets, but few investors are rattled just yet. Wall Street, in large part, expects the debt and deficit negotiations to go down to the wire, as did talks over tax cuts and the 2011 budget.
"We've been through this political grandstanding before," said Jim Kochan, chief fixed-income strategist at Wells Fargo Advantage Funds.
"We always go right down to the day on debt ceiling targets being raised. No congressman and no president wants to be responsible for Social Security payments not going out. This is a minimal risk. We've seen this so many times."
Obama has tasked Biden to lead negotiations with Republican and Democratic lawmakers to find a deficit-reduction deal that would be palatable to Congress and pave the way for the debt limit to be raised. Their talks are due to resume on June 9.
But Republicans refuse to consider tax increases as part of a deal, while Democrats are opposed to Republican proposals to scale back the popular government-run Medicare healthcare program for future retirees.
Republicans seized on the announcement by Moody's, which comes two months after Standard & Poor's revised down its credit outlook on the U.S. rating, as proof of the need to make some sharp spending cuts.
"This report makes clear that if we let this opportunity pass without real deficit reduction, America's financial standing will be at risk," said Boehner. "A credible agreement means the spending cuts must exceed the debt limit increase.
Senator Charles Schumer, a top Democrat, said a compromise that prevents a "catastrophic default on our obligations and significantly reduces the debt is within reach."
(Additional reporting by Rachelle Younglai, Alister Bull and Thomas Ferraro; Writing by Deborah Charles; Editing by Ross Colvin, David Lawder and Eric Walsh, sourced Reuters)
Anglo American plans to sell stake in major iron ore mine in Brazil
Monday, 06 Jun 2011
It is reported that Anglo American is considering selling a stake in a major iron ore mine in Brazil to prove the value of the company's key assets.
It is understood that the board, led by Ms Cynthia Carroll, is frustrated that the iron ore project, which requires more than USD 5 billion of capital expenditure and, to a lesser extent, Anglo is undervalued by the market. Over the past 18 months, Anglo has sold off a series of assets to streamline the group and show that it will develop its core holdings.
By selling a minority stake of 25% to 49% in Minas Rio, Anglo can show, in effect, what the asset is worth. It is thought that Japanese commodities players have asked about purchasing the stake.
Anglo is understood to be trying to decide whether it has impressed the market enough with its existing divestment program. If not, Ms Carroll will press ahead with a stake sale.
It is believed that Anglo's regular advisers, UBS and Goldman Sachs, are considering the merits of the sale, which would fetch several billion dollars. Nomura, the Japanese investment bank, is also thought to be involved.
A spokeswoman for Anglo said that "We have discussed the option to introduce a partner into the Minas Rio project on many occasions over the past few years and we continue to explore a range of options for the project that are in the best interests of our shareholders."
The mining sector is under the spotlight at the moment, due to last month's flotation of the commodities giant Glencore. Last week some analysts criticized the Swiss based group as already being overvalued. Nomura said it was expensive relative to its peers.
(sourced Independent)
It is understood that the board, led by Ms Cynthia Carroll, is frustrated that the iron ore project, which requires more than USD 5 billion of capital expenditure and, to a lesser extent, Anglo is undervalued by the market. Over the past 18 months, Anglo has sold off a series of assets to streamline the group and show that it will develop its core holdings.
By selling a minority stake of 25% to 49% in Minas Rio, Anglo can show, in effect, what the asset is worth. It is thought that Japanese commodities players have asked about purchasing the stake.
Anglo is understood to be trying to decide whether it has impressed the market enough with its existing divestment program. If not, Ms Carroll will press ahead with a stake sale.
It is believed that Anglo's regular advisers, UBS and Goldman Sachs, are considering the merits of the sale, which would fetch several billion dollars. Nomura, the Japanese investment bank, is also thought to be involved.
A spokeswoman for Anglo said that "We have discussed the option to introduce a partner into the Minas Rio project on many occasions over the past few years and we continue to explore a range of options for the project that are in the best interests of our shareholders."
The mining sector is under the spotlight at the moment, due to last month's flotation of the commodities giant Glencore. Last week some analysts criticized the Swiss based group as already being overvalued. Nomura said it was expensive relative to its peers.
NDRC warns coal producers against price hikes
Monday, 06 Jun 2011
Xinhua reported that China's top economic planner and price regulator the National Development and Reform Commission has vowed to punish thermal coal producers for price hikes amid the country's current electricity shortage.
The NDRC warned that punishments could include heavy fines of up to five times the amount of revenues generated by the hikes. The NDRC warning came after it raised prices of electricity for industrial, commercial and agricultural use across the country's 15 provinces and municipalities last month to encourage thermal power plants to generate more electricity.
The NDRC said it will strengthen its supervision of coal prices and launch a special inspection campaign for major coal producing provinces and regions.
Beginning June 1st 2011, prices of electricity for industrial, commercial and agricultural uses in 15 provinces and municipalities were raised by CNY 16.7 per 1,000 kilowatt hours.
State controlled contract prices for thermal coal, which is sold directly to power plants by coal producers, have remained almost unchanged since last year. Prices currently stand at CNY 570 per tonne.
Prices for regular coal, however, have risen to CNY 837 per tonne, creating great pressure for coal producers to raise the prices of thermal coal. In addition, imported coal prices also soared this year, adding pressure to the domestic coal market, where many analysts predict further hikes amid increasing electricity demands and decreased supplies of hydropower due to a lingering drought in the middle and lower reaches of the Yangtze River.
The NDRC has urged coal producers to increase production while strengthening its inspection of coal prices. NDRC and the Ministry of Railways sent a joint inspection team to review contracts related to thermal coal supplies to China's key coal producing regions of Shanxi, Shaanxi and Inner Mongolia.
China's top economic planner also met with managers of major coal companies, including the country's largest coal producers China Shenhua and China Coal, and instructed them to stabilize the thermal coal market. (sourced from Xinhua)
Sarda Energy gets approval to operate coal washery plant
Monday, 06 Jun 2011
Sarda Energy & Minerals has announced that the company has received consent from Chhattisgarh Environment Conservation Board under section 25/26 of Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of Air (Prevention & Control of Pollution) Act, 1982 to operate Coal Washery Plant of 0.96 Million Tonne per Annum at Raigarh). (sourced steelguru)
Sarda Energy & Minerals has announced that the company has received consent from Chhattisgarh Environment Conservation Board under section 25/26 of Water (Prevention & Control of Pollution) Act, 1974 and under section 21 of Air (Prevention & Control of Pollution) Act, 1982 to operate Coal Washery Plant of 0.96 Million Tonne per Annum at Raigarh). (sourced steelguru)
Brazil's CSN unlikely to join Usiminas board -report
Jun5, 2011 5:12pm GMT
* Usiminas denies contacts with rivals for merger -report
* Brumer says CSN board seat bid unlikely to succeed
* CSN is Usiminas' biggest rival in Brazil flat steels
SAO PAULO, June 5 (Reuters) - The controlling shareholders of Brazilian steelmaker Usiminas (USIM3.SA: Quote)(USIM5.SA: Quote) are unlikely to give a board seat to rival CSN (CSNA3.SA: Quote), which has been increasing its stake in the former through a series of stock purchases, O Estado de S. Paulo said on Sunday.
Usiminas Chief Executive Wilson Brumer told Estado in an interview that "he sees no reason" why CSN CEO Benjamin Steinbruch should join the board of embattled Usiminas. Brumer also told Estado that Usiminas is not in talks with rivals about a possible combination.
"I see that situation as a peculiar one -- a competitor sitting on our board of directors," Brumer told Estado. "If that happens, we would have to adjust to the new reality."
"But I see no reason why the controlling shareholders (of Usiminas) should welcome him (Steinbruch) as a new member of the bloc," he added.
Brumer's interview comes amid the worst crisis for the Brazilian steel mills in years, caused mainly by a strengthening currency, a flurry of cheap imports and rising raw materials costs.
The crisis has been further aggravated by growing opposition among some industry players to CSN's aggressive expansion plans into steel and cement -- the latter thwarted in the past by bitter rivals and Usiminas shareholders Votorantim and Camargo Correa.
CSN hinted last month that it wanted to enter Usiminas' controlling bloc, formed by Nippon Steel (5401.T: Quote), Camargo Correa, Votorantim, and Usiminas' employee pension fund. By raising its voting stake in the company, CSN assures that it will be treated equally as majority shareholders in the event of a change of control in Usiminas.
Sao Paulo-based CSN raised its holdings of Usiminas' voting stock to 9.45 percent of the total, according to a regulatory filing in April. CSN also owned around 5 percent of Usiminas' nonvoting shares at the end of the first quarter.
Calls made by Reuters to CSN spokesmen in Sao Paulo and Volta Redonda, where Brazil's most profitable steelmaker has a mill compound, seeking comment on the Estado report were not answered. A spokeswoman for Usiminas in Belo Horizonte, where the company is based, did not answer calls to her mobile phone seeking comment.
CSN's stock purchases could be relevant from an operational standpoint if both companies were to combine, Brumer told Estado. From a strategic point of view, CSN and Usiminas have too many overlaps, he told the newspaper.
Local media has reported that Porto Alegre-based Gerdau (GGBR4.SA: Quote), also Brazil's largest steelmaker, was in talks to acquire the combined 13 percent stake that Votorantim and Camargo Correa have in Usiminas. Gerdau have said repeatedly the reports were unfounded.
A combination of Usiminas' operations with those of Gerdau's Acominas could generate cost savings, Brumer said. (sourced Thomson Reuters)
* Usiminas denies contacts with rivals for merger -report
* Brumer says CSN board seat bid unlikely to succeed
* CSN is Usiminas' biggest rival in Brazil flat steels
SAO PAULO, June 5 (Reuters) - The controlling shareholders of Brazilian steelmaker Usiminas (USIM3.SA: Quote)(USIM5.SA: Quote) are unlikely to give a board seat to rival CSN (CSNA3.SA: Quote), which has been increasing its stake in the former through a series of stock purchases, O Estado de S. Paulo said on Sunday.
Usiminas Chief Executive Wilson Brumer told Estado in an interview that "he sees no reason" why CSN CEO Benjamin Steinbruch should join the board of embattled Usiminas. Brumer also told Estado that Usiminas is not in talks with rivals about a possible combination.
"I see that situation as a peculiar one -- a competitor sitting on our board of directors," Brumer told Estado. "If that happens, we would have to adjust to the new reality."
"But I see no reason why the controlling shareholders (of Usiminas) should welcome him (Steinbruch) as a new member of the bloc," he added.
Brumer's interview comes amid the worst crisis for the Brazilian steel mills in years, caused mainly by a strengthening currency, a flurry of cheap imports and rising raw materials costs.
The crisis has been further aggravated by growing opposition among some industry players to CSN's aggressive expansion plans into steel and cement -- the latter thwarted in the past by bitter rivals and Usiminas shareholders Votorantim and Camargo Correa.
CSN hinted last month that it wanted to enter Usiminas' controlling bloc, formed by Nippon Steel (5401.T: Quote), Camargo Correa, Votorantim, and Usiminas' employee pension fund. By raising its voting stake in the company, CSN assures that it will be treated equally as majority shareholders in the event of a change of control in Usiminas.
Sao Paulo-based CSN raised its holdings of Usiminas' voting stock to 9.45 percent of the total, according to a regulatory filing in April. CSN also owned around 5 percent of Usiminas' nonvoting shares at the end of the first quarter.
Calls made by Reuters to CSN spokesmen in Sao Paulo and Volta Redonda, where Brazil's most profitable steelmaker has a mill compound, seeking comment on the Estado report were not answered. A spokeswoman for Usiminas in Belo Horizonte, where the company is based, did not answer calls to her mobile phone seeking comment.
CSN's stock purchases could be relevant from an operational standpoint if both companies were to combine, Brumer told Estado. From a strategic point of view, CSN and Usiminas have too many overlaps, he told the newspaper.
Local media has reported that Porto Alegre-based Gerdau (GGBR4.SA: Quote), also Brazil's largest steelmaker, was in talks to acquire the combined 13 percent stake that Votorantim and Camargo Correa have in Usiminas. Gerdau have said repeatedly the reports were unfounded.
A combination of Usiminas' operations with those of Gerdau's Acominas could generate cost savings, Brumer said. (sourced Thomson Reuters)
Subscribe to:
Posts (Atom)
Posts
