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Asia Mining

The Chinese scramble to mine Africa – by Vladimir Basov (Mining.com – December 15, 2015)

http://www.mining.com/

A more than twenty-five fold jump in investment in fewer than 10 years. That’s how fast China is gaining control over Africa’s mining industry. And Beijing’s push is not ending any time soon.

China’s growing economy is thirsty for sustainable supplies of mineral resources. Despite being the number one mining nation in the world, China is facing a rapid depletion of its local mineral resources.

Reserves-to-production (R/P) ratio that represents the “burn rate” of proven reserves of mineral commodities when applying current levels of domestic mine production shows that China is in the “red zone” for future supplies of nearly all crucial minerals.

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Rio Tinto set to seal $4bn financing deal for Mongolia copper mine – by James Wilson (Financial Times – December 14, 2015)

http://www.ft.com/

Rio Tinto is set to seal a project finance deal of at least $4bn to expand one of the world’s largest copper mines in spite of a commodities downturn that has sent the price of the metal to multiyear lows.

The miner’s agreement with banks to provide funds for the Oyu Tolgoi project in Mongolia is expected to be announced this week in Ulan Bator, the capital.

It follows years of delays amid disputes between Rio and Mongolia’s government over how to share costs and profits from the project.

After Rio and Mongolia resolved their differences this year, the project finance deal with lenders is one of the last steps remaining before Rio’s board is expected to to press ahead with expansion of the mine.

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Ghana, China Address Rampant Illegal Mining – by Masahudu Kunateh (All Africa.com – December 3, 2015)

http://allafrica.com/

Accra — The influx of illegal Chinese miners in Ghana is providing a stern test to the decades-old cordial relations between the two countries.

By law, small scale mining is solely preserved for Ghanaians. However, some Chinese miners have defied legislation by extracting gold in the remote parts of the West African country.

This has continued despite ongoing engagements between the two governments to address the issue.

Most of the Asian nationals, working without permits, have been accused of extending their operations into some restricted areas much to the devastation of land, crops, and farms.

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Idle cranes, untapped mines as Afghans struggle to wean themselves off aid – by Robert Birsel (Reuters U.S. – December 2, 2015)

http://www.reuters.com/

KABUL – The Omid Gardizi construction company on the outskirts of Kabul is at the sharp end of a painful transformation Afghanistan faces, as billions of dollars in foreign spending come to an end and Taliban violence undermines a stuttering economy.

Standing in a yard crammed with 50 pieces of hulking machinery, company owner Sayed Dilagha Mossavi said for years his work depended on NATO-led forces. Now most of them have gone.

“If they’re not here, no one will use this,” he said of his fleet of cranes, diggers, graders and rollers, which he estimated cost $5 million and is now gathering dust.

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The iron ore price is in free-fall – by Frik Els (Mining.com – December 2, 2015)

http://www.mining.com/

Iron ore fell to a record low on a spot price basis on Wednesday with the Northern China 62% Fe import price including freight and insurance (CFR) dropping 2.4% to $40.60 a tonne.

After a strong recovery from its July low, the steelmaking raw material has been on a relentless decline since mid-October. Losses so so far this year come to 43% following. Today’s price compare to $190 a tonne hit February 2011 and an average of $135 a tonne in 2013 and $97 last year.

For an iron ore price below $40 you have to go back to 2007 when annual contract pricing between the Big 3 producers – Vale, Rio Tinto and BHP Billiton – and Chinese and Japanese steelmakers were still the industry norm.

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Miners: More Pain Before Gain – by Anthony Fensom (The Diplomat – December 2, 2015)

http://thediplomat.com/

Asia’s resource sector has felt the pain of falling prices in 2015, forcing job cuts from Indonesia to Australia and destroying billions of dollars of market value. Fortunately for miners, the longer-term outlook appears brighter, although more pain is expected in 2016.

A recent report by BIS Shrapnel predicts Australia’s miners will shed another 20,000 jobs over the next three years, on top of the 40,000 jobs lost since the peak in investment during the mining boom as miners adjust to the post-boom hangover.

Meanwhile in Indonesia, the coal slump has reportedly caused “the majority of coal mining companies in Indonesia to stop operating,” with up to 80 percent estimated to have ceased production as of August 2015.

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Iron ore extends slide, Shanghai rebar hits record low (Australian Financial Review/Bloomberg – December 1, 2015)

http://www.afr.com/

Spot iron ore hit a new decade low as the glut-hit market for the steelmaking ingredient continued to struggle with poor demand from top consumer China, where Shanghai steel rebar prices sank to a record low.

Stocks of iron ore at China’s ports climbed to 87.65 million tonnes on November 27, the highest since May, data from SteelHome showed. The port inventory has risen more than 10 per cent since June, reflecting slow demand from Chinese steel producers, many of whom have curbed production as falling industrial demand widens their losses.

Top global iron ore miner Vale said earlier it expected to produce between 340 million and 350 million tonnes of iron ore in 2016. That compares with guidance of 376 million tons given in December.

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Iran’s Mines Could Bring in Even More Cash Than Crude – by Ladane Nasseri (Bloomberg News – November 29, 2015)

http://www.bloomberg.com/

Iran, OPEC’s fifth-largest crude producer, has potential to generate more revenue from mining than it does from crude if the government puts more focus on developing the metals sector, according to Mojtaba Khosrowtaj, first deputy minister in charge of trade at Iran’s Ministry of Industry, Mine and Trade.

Metals such as copper and lead and higher-priced rare earth elements could be worth “much more” than the nation’s oil industry revenue of about $30 billion, assuming crude at $40 a barrel and exports of 2 million barrels a day, Khosrowtaj said in an interview.

Iran is opening $30 billion of energy projects and $29 billion of mining deals to investors once international sanctions are lifted.

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Can India revive the iron ore market? – by Nyshka Chandran (CNBC.com – November 27, 2015)

http://www.cnbc.com/

As India embarks on an aggressive drive to become a manufacturing powerhouse and revamp its ailing infrastructure, Asia’s third-largest economy may emerge as bright spot for iron ore demand.

“India comes up as an alternative buyer. It is a country growing in terms of steel and iron ore demand so that might be an area to keep an eye on,” Annalisa Jeffries, associate editorial director for Asia metals at Platts, told CNBC on Friday.

The nation’s potential growth could be the long-awaited catalyst to knock beleaguered iron ore prices out of their bear market. Prices of the commodity, a vital ingredient for steelmaking, tumbled to $43.4 a ton this week, according to the Steel Index—the weakest reading on record.

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UPDATE 1-Rio Tinto set to decide on expansion of Mongolia copper mine – by James Regan (Reuters U.S. – November 26, 2015)

http://www.reuters.com/

SYDNEY, Nov 26 Rio Tinto is lining up project financing for a $4 billion expansion of its long-delayed Oyu Tolgoi copper mine in Mongolia and will make a final investment decision early next year, a senior executive said on Thursday.

The mine, which started producing from an open pit over two years ago, is the biggest single foreign investment in Mongolia, and resolution of disputes over its second phase in May revived hopes for a string of other stalled mining projects.

“At the end of the day, what we need is consistency and stability and we believe we have the right environment today,” Rio Tinto copper and coal chief executive Jean-Sebastien Jacques said at a Bloomberg News-sponsored forum.

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Nickel’s hiatus may be brief without output cuts, stronger demand – by Pratima Desai (Reuters U.S. – November 27, 2015)

http://www.reuters.com/

LONDON, Nov 27 Nickel’s spectacular fall since the middle of last year may have come to a halt, but without significant, enduring output cuts and stronger demand from China’s stainless steel mills the reprieve could be brief.

Benchmark nickel on the London Metal Exchange fell to $8,145 a tonne earlier this week, less than half the level seen in May last year and its lowest since the middle of 2003.

Funds reversing their bets on lower prices on the expectation that Chinese producers may cut output since then pushed prices back up to near $9,000 a tonne.

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China’s Nickel Smelters Agree 20% Production Cut for 2016 (Bloomberg News – November 27, 2015)

http://www.bloomberg.com/

Nickel smelters in China, the largest producer, plan to cut output next year by at least 20 percent in a bid to shore up prices after the metal plunged to its lowest in 12 years.

Eight producers, including the largest refined metal supplier Jinchuan Group Co. and nickel pig iron maker Tsingshan Holding Group Co., also agreed to cut output next month by 15,000 metric tons, according to a statement circulated by the group on Wechat.

The smelters didn’t say how much of China’s total supply the 20 percent reduction would account for, but their statement suggests cuts of about 120,000 tons next year, according to Celia Wang, general manager at Tianjin Zhongwei Group Co.’s investment department.

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[Mining Potential] Shifting Afghan Gears: Build, Don’t Blast – by Edward Corcoran (Huffington Post – November 25, 2015)

http://www.huffingtonpost.com/

Ret. Strategic Analyst, U.S. Army War College.

Afghanistan has enormous economic potential as outlined in a recent US Army review; developing this is the key to stability. Despite fourteen years of US military support, the situation has deteriorated to the point that the senior US officer has stated flatly, “we have to provide our senior leadership options different than the current plan.”

This plan focuses on building up the capacity of the forces; it ignores the underlying reality that security simply cannot be achieved without development. No wonder Americans want out. Over 3,000 US service members and civilians have been killed and more than 20,000 wounded; direct, short-term costs come close to a trillion dollars.

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Former Rio Tinto boss Tom Albanese says India iron ore industry ‘complicated’ – by Amanda Saunders (Sydney Morning Herald – November 24, 2015)

http://www.smh.com.au/

Oversupply might have helped push the iron ore price down to near decade lows but Australian miners can breath easy on former Rio Tinto boss Tom Albanese’s call that former industry heavyweight India is unlikely to emerge as a major exporter any time soon.

Iron ore fell to $US44.10 on Monday night, within 10¢ of the 10-year low of $US44.10 it hit in July.

India is one of the great unknowns in iron ore. What is clear is that steel demand in India, while maybe not holding the same trajectory as China, is on the rise, Delhi-based Mr Albanese said.

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Myanmar Continues Search After Deadly Landslide at Jade Mine – by Thomas Fuller (New York Times – November 23, 2015)

http://www.nytimes.com/

BANGKOK — It was known locally as Plastic Village, a sprawling encampment made from tarps and scraps of trash and inhabited by workers who scavenged for jade in the rugged hills of northern Myanmar.

Rescue workers on Monday continued to dig through the remnants of the encampment after a landslide over the weekend buried it along with at least 120 people.

The landslide was Myanmar’s worst jade mining disaster in recent years, highlighting the primitive conditions of an industry that is highly lucrative but notorious for its secrecy and hazardous working conditions.

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