Asia Mining – Page 139 – Republic of Mining

The Muslim Miners of Mongolia – by Saleem Ali (National Geographic – June 9, 2015)

June 10, 2015

http://www.nationalgeographic.com/

Five years ago I wrote a book called Treasures of the Earth, in which I developed an argument around how redefining our relationship with primary geological resources is the most elemental means of charting a pathway for environmental and social sustainability.

Extracting resources can bring much pain and promise to the people who are involved or impacted by the process. Nevertheless, the advent of extraction has been an essential part of the development of modern society.

The allure of mineral wealth is a common human impulse shared by most global cultures and creeds. Mining rushes are moments of convergence and nowhere is this more apparent these days than Mongolia – that vast land-locked country which once sent hordes of gallant warriors to conquer more than half of Asia.

The country is booming with mining professionals from all over the world as one of the world’s largest forecasted copper mines got approval to move forward with expansion in mid-May.

The history of mining in Mongolia, and the resulting migration of multiple cultures, is certainly not new.

COLUMN-Can Indonesia save the seaborne coal market? – by Clyde Russell (Reuters U.K. – June 10, 2015)

June 10, 2015

http://uk.reuters.com/

NUSA DUA, Indonesia, June 10 (Reuters) – The coal industry always seems to be looking for a white knight to rescue it from some crisis, and it is perhaps ironic that Indonesia, the world’s largest exporter, is the next great hope that is to save global miners from the current supply glut.

The theory is that as Indonesia ramps up domestic coal-fired power generation, it will rotate its exports to meet local demand, thereby removing millions of tonnes from the seaborne market and bringing it back into balance.

This sounds fantastic to coal producers, particularly those in Australia, South Africa and Russia, who are looking to boost exports into Asian markets.

But white knights have had a somewhat chequered recent history for coal producers and traders. China was once supposed to be the huge market that would suck up every tonne of coal that could be mined, and for a brief few years it looked like it might just work.

Chinese imports rose steadily from 2009 onwards, and by 2011, some forecasters were saying the world’s biggest producer and consumer of coal would import a billion tonnes a year.

China Commodity Appetite Weakens as Growth Seen at Risk (Bloomberg News – June 8, 2015)

June 9, 2015

http://www.bloomberg.com/

China’s imports of oil, copper and iron ore slid last month amid a broader slowdown in trade that highlights the country’s weakening economy and threatens growth targets.

Inbound shipments of oil dropped to the lowest in 15 months, overseas copper purchases retreated from the highest in a year and iron ore cargoes slid for a second month, data from the country’s General Administration of Customs showed Monday.

Weakening imports of raw materials will add to speculation that domestic demand in the world’s biggest consumer of energy, metals and grains is faltering. The Bloomberg Commodity Index of 23 commodities is extending its biggest slide since the 2008 global financial crisis amid concern the nation will fail to contain a slowdown.

“The macro economy is still weak,” Li Li, an analyst with Shanghai-based commodities researcher ICIS-China, said by phone. “Demand from the downstream heavy industrial sector, including transportation and property, have shown no signs of recovery.”

The country’s total imports shrank by the most since February while exports fell for a third month. That coincides with a slump in investment growth that’s putting Premier Li Keqiang’s 2015 expansion target of about 7 percent at risk.

Goldman Says Iron Rally on Borrowed Time as China Buys Less -by Jasmine Ng (Bloomberg News – June 7, 2015)

June 8, 2015

http://www.bloomberg.com/

Iron ore imports by China contracted in May from April and the same month a year earlier, highlighting weakening demand in the largest buyer as Goldman Sachs Group Inc. repeated a forecast for a rally in prices to reverse.

Cargoes fell 12 percent from April to 70.87 million metric tons, and were 8.4 percent lower than a year earlier, according to customs data on Monday. That’s the lowest monthly total since February. Adjusted for the number of days in the month, the imports in May were at the slowest pace since November.

While prices posted the biggest monthly advance in almost two years in May as China’s port stockpiles fell by a record, Goldman Sachs is among banks predicting that the rally won’t last as global supplies are set to expand further amid a glut. In many commodity markets, recently installed low-cost supply can now be stretched to meet demand, BHP Billiton Ltd. Chief Executive Officer Andrew Mackenzie said last week.

“This rally is living on borrowed time,” Goldman analysts Christian Lelong and Amber Cai said in a note on Monday, targeting a drop back below $50 a ton. While higher prices may last in the short term, rates need to drop again to force the closure of higher-cost mines to balance the market, they said. Last month, Goldman said iron ore’s jump offered investors an opportunity to bet on renewed declines.

Retaining Posco in India-a challenge for Centre? – by Ashok B Sharma (The Echo of India -June 5, 2015)

June 8, 2015

http://echoofindia.com/

Prime Minister Narendra Modi’s hopes for mobilising foreign direct investments (FDIs) for bolstering growth and job creation may meet with the first casualty if the South Korean steel major POSCO takes a firm stand on withdrawing from its proposed project in Odisha. The main reason for this sorry episode would be not providing mining lease on out-of-turn basis in the spirit of the Bilateral Investment Promotion and Protection Agreement signed between the two countries way in 1996.

South Korean investments in India surged after signing of this agreement and touched $ 3.8 billion by December 2014. South Korean companies forayed into India much before the Make in India programme was officially launched by PM Modi. South Korean companies sources large parts of local contentment, thereby facilitating indigenisation.

From its manufacturing base in Chennai, Hyundai Motor India has exported about 2.2 million cars to 123 countries in five continents. Its success story is that with a total investment of $2.7 billion, its yearly turnover is about $5 billion and it has created about 1,50,000 direct and indirect employment including dealers and vendors.

COLUMN-Indonesia, not Australia, doing heavy lifting on cutting coal output – by Clyde Russell (Reuters U.S. – June 5, 2015)

June 5, 2015

http://www.reuters.com/

LAUNCESTON, Australia, June 5 (Reuters) – Indonesia appears to be doing more of the heavy lifting than Australia when it comes to cutting coal output and exports in the face of persistently weak prices.

Coal production in Indonesia, the world’s largest exporter of the fuel used in power stations, dropped 21 percent year-on-year in the first quarter to 97 million tonnes.

This put the country on track for 2015 output of about 388 million tonnes, which is near the mid-point of the 350-400 million tonnes forecast by Pandu Sjahrir, the chairman of the Indonesian Coal Mining Association.

The low end of Sjahrir’s forecast would mean a decline of 24 percent in coal output in 2015 from 2014, and would also be 75 million tonnes below the 425 million forecast by the government.

In contrast, Australia’s official forecaster expects thermal coal output to be largely steady in the 2014/15 fiscal year.

Odisha’s story about pollution, mining and the environment – by Priya Ranjan Sahu (Hindustan Times – June 5, 2015)

June 5, 2015

http://www.hindustantimes.com/

Bhubaneshwar – Odisha’s resource-rich Sukinda valley acquired infamy as the fourth most polluted place in the world in 2007, ranked by the Blacksmith Institute of the US.

The finding was vigorously contested by the state pollution control board as vastly exaggerated, but it did manage to cause a constructive debate on environmental issues in the region.

The valley in Odisha’s Jajpur district has around 97% of the country’s reserves of chromite ore, a vital component in the production of stainless steel, leather and alloys.

The downside to the heavy tapping of mineral resources from a dozen open cast mines in the area over 70 years has been the utter degradation of Sukinda’s landscape. Water in the region has been severely contaminated, the soil polluted with toxic substances, the forests almost wiped out and farms laid waste.

Locals say half the mines now stand closed but the damage has already been done, thanks largely to the improper disposal of waste in river water by the miners.

UBS suing Western Potash over Chinese investment (Regina Leader-Post – June 3, 2015)

June 5, 2015

http://www.leaderpost.com/index.html

Western Potash Corp. has confirmed that UBS Securities Canada Inc. has filed a lawsuit against the company before the Ontario Superior Court of Justice, the Vancouver-based junior mining company said in a press release Wednesday.

UBS is “claiming fees, disbursements and damages in connection with a strategic investment in the company by China BlueChemical Ltd., and GUOXIN International Investment Corp. Ltd., through a wholly owned subsidiary, CBC (Canada) Holding Corp., which closed in June 2013,” the release said.

The company believes that the “UBS lawsuit is unfounded and entirely without merit, and intends to vigorously defend itself against the lawsuit,’’ said Patricio Varas, president and CEO of Western Potash.

Two years ago, Western Potash Corp. announced the closing of a $32-million investment by China Blue Chemical Ltd., and Benewood Holdings Corp. through a joint venture company, CBC (Canada) Holding Corp. (CBCHC), for a 20 per cent ownership stake in Western, which is traded on the TSX under the symbol WPX.

COLUMN-Big iron ore miners’ plan to displace everybody else losing steam – by Clyde Russell (Reuters U.S. – June 3, 2015)

June 3, 2015

http://www.reuters.com/

LAUNCESTON, Australia, June 3 (Reuters) – How well is the plan by big iron ore miners to displace high-cost iron ore from the seaborne and Chinese domestic markets going? Maybe just OK, certainly not great.

Much has been written about how the big three global iron ore miners will use their low-cost, high-output mines to muscle competitors out of the market, thus restoring the supply-demand balance and ultimately justifying the billions of dollars they spent boosting capacity well in excess of demand.

The problem for Brazil’s Vale and the Anglo-Australian pair of Rio Tinto and BHP Billiton <BHP Billiton> is that the signs are this isn’t working perhaps as well as they may have hoped.

Certainly Chinese trade numbers show that Australia in particular has increased market share in iron ore imports, but the momentum may be stalling.

In the first four months of the year, Chinese imports of the steel-making ingredient from Australia were 195.845 million tonnes, or 63.7 percent of the total 307.282 million tonnes.

Japan’s nuclear plan is bad news for LNG, coal – by Clyde Russell (Reuters U.S. – June 2, 2015)

June 2, 2015

http://www.reuters.com/

LAUNCESTON, Australia, June 2 (Reuters) – The rise of China and India as energy importers has largely consigned Japan to the sidelines, but the world’s third-largest economy still exerts significant influence in some markets.

That’s why Japan’s long-term energy vision is too important to be ignored, given it is the world’s top importer of liquefied natural gas (LNG), number three in coal and four in crude oil.

A consultative committee on Monday endorsed the government’s blueprint for the energy mix it hopes to achieve by 2030, with the proposal now open for public comment for a month ahead of a likely formal approval by the trade ministry mid-July.

While the proposal has attracted controversy over a plan for nuclear energy to generate 20-22 percent of the nation’s electricity, it’s also worth noting how it sees the rest of the generating mix.

Renewables are set at 22-24 percent, LNG at 27 percent and coal at 26 percent. This represents a decline in nuclear’s share of electricity generation from the 30 percent it held before the Fukushima disaster following the March 2011 earthquake and tsunami.

China Inc circling Australian iron ore – by Tess Ingram (Sydney Morning Herald – June 1, 2015)

June 1, 2015

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

The sustained lull in iron ore prices has put iron ore miners under considerable pressure, with Chinese investors circling distressed Australian companies.

Chinese investors are circling distressed Australian iron ore miners, according to local dealmakers fielding growing interest in the commodity’s struggling mid-tier ranks.

The sustained lull in iron ore prices has put iron ore miners under considerable pressure, causing market values to plummet and a handful of Australian producers to suspend operations.

The price of iron ore has slumped close to 50 per cent in the past 12 months to hover at around $US63 a tonne, after slumping as low as $US47 a tonne in April.

Against this backdrop, an increasing number of Chinese entities had expressed interest in providing debt or equity to iron ore miners, acquiring an asset or attempting a takeover, Minter Ellison West Australian managing partner Adam Handley said.

The iron ore price equation that makes Fortescue attractive for China – – by Anne Hyland (Australian Financial Review – May 29, 2015)

May 29, 2015

http://www.afr.com/

CITIC Group and Baosteel Group, which are said to be interested in Fortescue Metals Group, are two of the most politicised companies in China. Baosteel is China’s leader in the steel industry and CITIC was anointed to make significant investments outside China, such as the $10 billion Sino Iron project, which has been described as the worst mining investment in Australia in the past decade.

What is almost certain is that CITIC and Baosteel, which is developing an iron ore project with Aurizon, won’t bid against each other for Fortescue or other resource companies. It would be politically unpalatable in China and it’s typically not what China Inc does.

While there would be a dozen companies in China capable of taking out Fortescue, only one would get the green light, say veteran China observers.

At the Stockbrokers Association conference on Thursday, Li Xinchuang, president of the China Metallurgical Industry Planning Association, firmed up speculation with comments that Fortescue would benefit from a Chinese investor, while saying he didn’t believe the argument that there was a global oversupply of iron ore.

China plans to create US$16 billion gold stockpile to help drive new Silk Road – by Andrew Critchlow (The Telegraph/Financial Post – May 27, 2015)

May 29, 2015

The National Post is Canada’s second largest national paper.

China plans to establish a US$16 billion gold fund to stockpile the precious metal, in a move expected to provide a jolt to flagging prices.

State-endorsed media in China has reported that Shandong Gold Group and Shaanxi Gold Group will take stakes of 35 per cent and 25 per cent respectively in the new fund alongside other investors, as part of a scheme known as the “Silk Road” initiative aimed at boosting trade.

The new entity, which may include an exchange-traded fund for gold and investments in miners of the precious metal, aims to raise the US$16 billion in three tranches, according to the report.

News of the fund could restore some impetus to the gold market, which has been struggling to offset the growing strength of the US dollar. Gold fell below the psychologically important $1,200 per ounce level at the start of the week as traders bet on the timing of an expected rate rise by the US Federal Reserve this summer.

China is the largest producer and consumer of the precious metal, playing a significant role in determining the overall direction of the gold market. According to the World Gold Council’s latest market analysis, jewellery demand in China fell by 10 per cent year-on-year in the first quarter as slowing economic growth hit consumer sentiment in the world’s second-largest economy.

China Dotes on South American Infrastructure – by Tim Maverick (Wall Street Daily – May 28, 2015)

May 29, 2015

http://www.wallstreetdaily.com/

In April, I told readers about the billions of dollars China was pumping into the New Silk Road, connecting Pakistan to China. But China isn’t stopping there. It seems the economic powerhouse has also set its sights on South America.

Chinese Premier Li Keqiang just completed an extensive nine-day tour of Brazil, Peru, Chile, and Colombia. These four countries account for 57% of China’s quickly increasing trade with South America.

In January, Li promised $250 billion in investment into South America over the next decade. As of the end of 2014, China had already invested nearly $100 billion into its favorite countries.

On his current tour, Li is lavishing billions more on a number of deals, most of which center around infrastructure, such as rail.

You see, China is unflinching in its quest for power and security. Meaning the Chinese want to ensure speedy delivery of the precious commodities produced in South America.

Chinese President’s new Silk Road plan will fail unless ideas are free to travel – by Carl Mortished (Globe and Mail – May 29, 2015)

May 29, 2015

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

“One Belt, One Road” is China’s slogan for a 21st-century revival of the ancient trading routes that linked Han Dynasty silk merchants with Central Asia and the Mediterranean. President Xi Jinping’s big idea is investment in roads, railways, ports and pipelines that will link China to the world.

However, the ancient Silk Road was more than a caravan of camels loaded with stuff. It was also a convoy of ideas, and this may be where the Chinese Communist Party’s great ambition comes a cropper.

The first question you have to ask is why China needs such a vision of a new Silk Road.

The Chinese President sought to give a romantic gloss to his plan when he first mentioned it in 2013 on a visit to Kazakhstan, noting the thousands of years of trade between the two nations on the Silk Road. Last year, he announced a $40-billion (U.S.) infrastructure fund to build roads, railways, ports and airports across central and south Asia, and this year China reaffirmed its political ties to Pakistan with a promise of $45-billion of infrastructure investment.