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Eramet Seeks New Partners for Indonesia’s Weda Bay Nickel Project: CEO (Reuters/Jakarta Globe – July 7, 2016)

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Tokyo. French mining and metals group Eramet said on Thursday (07/07) it was seeking new partners for its Weda Bay nickel project in Indonesia after two Japanese partners left.

“We are seeking partners. We’ve contacted some other groups including Japanese companies,” Eramet chairman and chief executive Patrick Buffet told a news conference in Tokyo. “We think there are very few deposits of this quality,” he said.

Mitsubishi Corp and Pacific Metals said in April that they will sell their stakes in the Weda Bay project to Eramet for about 11 billion yen ($108.94 million) due to slumping prices.

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Can You Spare a Nickel, Mr. Duterte? – by David Fickling (Bloomberg News – July 5, 2016)

http://www.bloomberg.com/

Nickel has been the worst performer of the London Metal Exchange’s six major metals over the past year. The key ingredient in stainless steel, which topped $50,000 a metric ton in 2007, has barely risen above $10,000 in eight months.

Between 60 percent and 70 percent of producers are losing money at current prices, Ivan Glasenberg, chief executive of the fourth-biggest producer, Glencore, told an investor call in December.

In trying to deal a blow to a mining industry he accuses of “spoiling the land,” Philippine President Rodrigo Duterte, also known as the “Punisher,” may have just done global producers a favor.

Nickel traded on the LME rose at the fastest pace in more than eight months Monday.

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Copper’s Political Risks Lie in Wait – by David Fickling (Bloomberg News – July 3, 2016)

http://www.bloomberg.com/

Chief executives of global companies still lose sleep over political risks, but since the heyday of the British East India Company not many businesses can claim to have played a part in a country’s descent into civil war.

Rio Tinto is one. Protests by landowners about its Panguna mine on the Papua New Guinean island of Bougainville were among the triggers for a decade-long conflict in which as many as 15,000 people died between 1988 and 1998, according to an Australian parliamentary inquiry.

The company’s plan to give away its stake in the mine to landowners and Papua New Guinea’s government shows how times have changed. While the risk of violence has kept the site out of action for a generation, Panguna has about $51 billion of copper in its rock. It would probably count as one of the world’s biggest pits, if only it could be mined.

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China commodities rally on hopes of stimulus to boost economy – by Manolo Serapio Jr. (Reuters U.S. – July 4, 2016)

http://www.reuters.com/

MANILA – Chinese commodities from nickel to cotton surged on Monday on hopes Beijing will unleash more stimulus to prop up a sluggish economy, brightening the outlook for raw material demand.

An official survey on Friday pointed to China’s weak manufacturing sector in June with export orders and inventories falling and factories shedding more workers.

“There are headwinds in the domestic market and exports and for the government to achieve its macroeconomic targets they need to focus on more stimulus in the second half of the year,” said Helen Lau, an analyst at Argonaut Securities in Hong Kong. “That will be good for commodity demand.”

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Barrick Gold’s Thornton Named Silk Road Finance Corp. Chairman – by Cathy Kit Ching Chan (Boomberg News – July 2, 2016)

http://www.bloomberg.com/

Barrick Gold Corporation chairman John Thornton has been named chairman of Asian investment firm Silk Road Finance Corp., as the company seeks to tap the veteran banker’s global experience and boost its reach across Asia and Europe.

Thornton, 62, was one of the founding partners advising the establishment of Silk Road and will oversee the company’s strategy, said chief executive officer Li Shan by phone. “He is one of the best bankers in the world,” Li said. “He helped build Goldman Sachs’ Asia and its European business and has a very good understanding of the belt and road environment.”

Chinese President Xi Jinping launched the “One Belt, One Road” infrastructure program in 2013, aiming to deepen China’s economic ties across Asia. The program includes plans to build a “New Silk Road” network of roads, railways, pipelines and ports from Asia to Europe, and will include providing legal services, facilitating capital flows and promoting the Chinese yuan’s internationalization along the route.

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China is running out of time to cure its steel problems – by Andy Home (Reuters U.S. – June 28, 2016)

http://www.reuters.com/

China is frantically trying to apply the brakes to its runaway steel juggernaut. Targets are being set for capacity closures, 45 million tons nationally this year and 100-150 million tons over the next three to five years.

Regional governments are heeding Beijing’s call. Yunnan province, for example, has committed to eliminate 4.5 million tons of capacity by 2018. Local authorities are being urged to crack down on energy usage in the sector with those that fail to meet efficiency targets facing forced closure if they cannot improve.

A drive to consolidate the country’s fractured steel production landscape has begun with Baosteel, the second-largest Chinese operator, being pushed into a forced marriage with its smaller and financially weaker peer Wuhan Iron and Steel.

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Indonesia faces environmental time bomb after coal bust – by Fergus Jensen (Reuters U.S. – June 29, 2016)

http://www.reuters.com/

SAMARINDA, INDONESIA – Thousands of mines are closing in Indonesia’s tropical coal belt as prices languish and seams run dry. But almost none of the companies have paid their share of billions of dollars owed to repair the badly scarred landscape they have left behind.

Abandoned mine pits dot the bare, treeless hillsides in Samarinda, the capital of East Kalimantan province on Indonesia’s part of Borneo island. It is ground zero for a coal boom that made Indonesia the world’s biggest exporter of the mineral that fuels power plants. Abandoned mining pits have now become death traps for children who swim in them, and their acidic water is killing nearby rice paddies.

Indonesia has tried, mostly in vain, to get mining companies to keep their promises to clean up the ravaged landscape. But it doesn’t even have basic data on who holds the many thousands of mining licenses that were handed out during the boom days, officials say.

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India expects potash miners to offer decade-low price after Belarus deal – by Rajendra Jadhav (Reuters India – June 28, 2016)

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MUMBAI – Leading global potash producers, including Russia’s Uralkali, are likely to supply the crop nutrient to India at the same price Belarus agreed, a key Indian negotiator with overseas suppliers told Reuters.

Belarus on Monday agreed to sell 700,000 tonnes of potash to Indian Potash Limited (IPL) at $227 per tonne, the lowest price in a decade. “Uralkali has very good relations with Indian buyers. We are hopeful that it will agree to $227,” said P.S. Gahlaut, managing director of IPL, the country’s biggest importer.

The contract price with Belarus is too low, and Uralkali, the world’s biggest potash producer, is not yet ready to sign a potash supply contract with India, said a company spokesman. “We cannot offer a higher price to any supplier. If they insist, then we can postpone purchases,” Gahlaut said.

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China Eyes Steel Merger to Create Rival to ArcelorMittal (Bloomberg News – June 27, 2016)

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China’s second- and sixth-largest steelmakers by output have entered restructuring talks, which analysts say could presage a merger that would create the nation’s biggest mill, and a company with the scale to rival the likes of ArcelorMittal SA.

Trading was suspended in the listed units of state-run Shanghai Baosteel Group Corp. and Wuhan Iron & Steel Group Corp. as their parents discuss “strategic restructuring,” the companies said in statements on Sunday, without elaborating.

The two companies had a combined market value of $16.3 billion as of Friday’s close, and capacity of more than 70 million metric tons. Analysts including those at Citigroup Inc. and Mysteel Research cited the news as heralding a potential merger of the companies.

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COLUMN-A new threat to China’s nickel pig iron producers? – by Andy Home (Reuters U.S. – June 27, 2016)

http://www.reuters.com/

LONDON, June 27 What sort of threat does the election of a new government in the Philippines pose to China’s nickel pig iron (NPI) sector? Incoming President Rodrigo Duterte has already fired several warning shots at the country’s mining sector, calling on local operators to “shape up” and stop “the spoiling of the land”.

His actions speak as loud as his words. He has just appointed a committed environmentalist, Gina Lopez, as Secretary of the Department of Environment and Natural Resources, a position with broad oversight of the mining sector.

The Philippines produces a wide range of minerals but the immediate focus is on the huge amounts of nickel ore it ships every month to Chinese producers of nickel pig iron (NPI).

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China’s nuclear war on coal – by Frik Els (Mining.com – June 23, 2016)

http://www.mining.com/

Beijing’s already cut coal miners working hours by 16% and plans to eliminate 500 million tonnes of coal capacity within just 3–5 years

After 13 years of rapid growth, China burns more coal than the rest of the world combined. The country was responsible for more than 80% of global growth in coal usage since the start of the century.

Even these numbers were upped in a recent study by the US Energy Information Administration (EIA) that showed energy-content-based coal consumption from 2000 to 2013 was up to 14% higher than previously reported at nearly 4.5 billion tonnes, while coal production was up to 7% higher.

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Duterte Environment Chief Decries Mining’s ‘Pathetic’ Record – by Clarissa Batino and Siegfrid Alegado (Bloomberg News – June 22, 2016)

http://www.bloomberg.com/

“Any kind of mining here puts our farmers and fishermen at risk; for
whom, for what, is this worth it?” Lopez asked. “We’ve been doing it
for a hundred years and usually, you do something and you know if
it’s good by track record. Well, mining has a pathetic track record.
Wherever there’s mining the people are poor.”

The Philippines will have an anti-mining crusader running the environment department, after Philippine President-elect Rodrigo Duterte’s choice accepted the post this week. Shares of resources companies plunged a second day.

Regina “Gina” Lopez, 61, managing director of ABS-CBN Lingkod Kapamilya Foundation Inc., said Tuesday that she accepts the offer to head the environment and natural resources department. The Philippine stock exchange’s mining and oil index fell 7.3 percent on Wednesday, the steepest drop in 10 months, after closing 4.1 percent lower in the previous session. Duterte offered the post to Lopez on Monday.

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India’s changing coal imports show quality over quantity – by Clyde Russell (Reuters U.K. – June 21, 2016)

http://uk.reuters.com/

India’s coal imports are in a declining trend, but the energy value is dropping at a far slower pace than the physical volumes as the South Asian nation switches to higher quality fuel.

This is likely as important a trend as the drop in imports as it indicates that major supplier Indonesia is in danger of surrendering more of the Indian market to rivals such as South Africa, Colombia and Russia.

It also shows that India’s thermal coal importers are taking the view that it’s better to pay more for higher grade cargoes than to merely take the cheapest on offer, which shows a rising sophistication in how they are adapting their fuel mixes.

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Philippines’ Duterte to review projects as environmentalist gets mining post – by Karen Lema (Reuters U.S. – June 21, 2016)

http://www.reuters.com/

DAVAO, PHILIPPINES – Incoming Philippine President Rodrigo Duterte on Tuesday warned he would cancel mining projects causing environmental harm as an anti-mining advocate accepted his offer to head the agency overseeing the country’s natural resources.

Environmentalist Gina Lopez said she had accepted Duterte’s offer to be the Secretary of the Department of Environment and Natural Resources, a day after the president-elect asked her to lead the agency, broadcaster ABS-CBN reported.

The Southeast Asian nation has among the largest untapped mineral resources in the region. However, years of opposition from the Catholic Church and a strong anti-mining lobby, as well as insurgency and widespread corruption, have stalled many projects including the $5.9 billion gold-copper Tampakan project in the southern Mindanao island discovered in 1991.

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Chinese stake in Vale could help or hinder BHP Billiton – by John Kehoe (Australian Financial Review – June 22, 2016)

http://www.afr.com/

The prospect of a cashed-up Asian investor taking a minority equity stake in the iron ore assets of indebted Brazilian mining giant Vale would not have gone unnoticed by BHP Billiton and its shareholders.

The key question for those with an interest in BHP is what are the possible ramifications for Australia’s mining juggernaut from a potential partnership between competitor Vale and China Inc?

In a world where the economic and strategic motivations of China’s state-owned investors can overlap, the answer seems to be a double-edged sword for BHP. On the potential positive side, a more robust Vale balance sheet topped up with Asian – most likely Chinese – cash would probably be welcomed by the Big Australian.

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