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Asia Mining

The Men Who Mine Volcanoes – by Kevin McElvaney (The Atlantic – February 25, 2015)

http://www.theatlantic.com/

Photos from two days in a sulfurous crater in Indonesia

Ijen is a quietly active volcano on the Indonesian island of East Java, and it is also a place of business. Local workers hike up the side of the mountain and down into the crater at the top to harvest its sulfur—a byproduct of the gas that escapes from the volcano’s vents and collects near the shores of an acidic lake at the crater’s center. The chemical is used in industry worldwide, from making matchsticks to vulcanizing rubber, but Ijen’s sulfur goes mostly to local factories, which use it to bleach sugar.

Ijen is one of the few volcanic sulfur mines remaining in the world: Mining an active volcano is dangerous work, and there are easier ways to get the chemical. I first became curious about the volcano after seeing it featured in the 2001 documentary War Photographer.

The film showed the protagonist James Nachtwey coughing furiously as he clicked his camera amid clouds of sulfur. Being a photographer myself, I wondered how the place would look in person and whether the conditions could be as bad as they seemed. It struck me as impossible that the slight-statured miners shown in the film could really carry heavy loads of sulfur up and down a mountain.

I left from Hamburg, Germany, and it took me three flights, one train ride, two motorcycle trips, and a long trek up the volcano before I saw the mine for the first time. A photographer I knew in Jakarta introduced me to a former miner named Imam, who served as my guide. I spent two days photographing the workers there.

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[Japan] Govt aims to commercialize seafloor mining in 2020s (The Japan News – February 22, 2015)

http://the-japan-news.com/

The Yomiuri Shimbun

The government is aiming to commercialize the mining of rich seafloor deposits around Japan of such mineral resources as copper in the 2020s, according to officials.

The nation has relied on imports to meet demand for mineral resources like copper, lead, gold and silver since many domestic mines were shut down by the end of the 1970s. Mining these resource-abundant seafloor deposits could help shake off Japan’s reputation as a nation with few resources.

At a press conference at the end of January, Tetsuro Urabe, a professor emeritus of the University of Tokyo, could hardly conceal his excitement. He was announcing the discovery of a deposit about 1,400 meters below the ocean surface off Okinawa Prefecture’s Kumejima island.

“The minerals there are of a quality I’ve never seen before,” Urabe said. “One could say this discovery is astonishing.”

The research was conducted by Japan Oil, Gas and Metals National Corporation (JOGMEC) using a remote-controlled vehicle, which retrieved six samples of ore with copper concentrations 15 to 30 times higher than those mined in South America.

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Indonesia to allow mine contract extension earlier than 2 yrs out – by Wilda Asmarini (Reuters India – February 20, 2015)

http://in.reuters.com/

JAKARTA – Feb 20 (Reuters) – Indonesia will start allowing miners to renew contracts earlier than two years before expiry, the mines minister said on Friday, a move that would favour Freeport-McMoran Inc and its expansion plans at one of the world’s largest copper mines.

Southeast Asia’s largest economy is currently in talks with miners over their plans to develop domestic smelting and processing facilities, and earlier this week indicated that it could also ease a planned 2017 export ban on copper and other mineral concentrates.

The government’s willingness to show more flexibility comes after U.S.-based Freeport pushed ahead with expansion plans at Indonesia’s sole copper smelter at Gresik and gave its support to a government-backed industrial zone in Papua.

“The government regulation for extension proposals that regulates a minimum of two years before a contract expires will be revised,” Sudirman Said, Indonesia’s energy and mineral resources minister, told reporters.

Said did not say how early mining companies would be able to propose extensions but noted that oil and gas concession holders can propose renewals up to 10 years before a contract expires.

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Hard up miners turn to Asian contractors to help fund projects – by Nicole Mordant and Sonali Paul (Reuters India – February 19, 2015)

http://in.reuters.com/

(Reuters) – Miners who can’t get financing for new projects from banks or traditional equity investors because metals prices have collapsed are turning to an alternative source: the engineering and construction companies, many from China and South Korea, who actually build their mines.

Several North American and Australian miners are in talks with engineering, procurement and construction (EPC) companies to take equity stakes or bring along banking partners to provide debt funding in projects in return for the EPC group winning a contract. China’s NFC and South Korea’s POSCO Engineering & Construction Co Ltd are among the companies pursuing these deals as they look to make up for business lost because of slowing infrastructure growth at home.

“The domestic order books of Chinese construction and equipment companies have been falling for a year, actually quite dramatically,” said Ingo Hofmaier, director at Hannam & Partners, a London-based corporate finance advisory firm. “To avoid underutilization and keep the music going, Chinese companies are now aggressively targeting foreign markets.”

Infrastructure investment in China slowed in 2014 as authorities try to re-engineer the growth model by reducing inefficient state spending and encouraging domestic consumption. Investment grew at its slowest pace in nearly 13 years between January and November 2014 at 15.8 percent, according to official figures.

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COLUMN – India coal output closer to ending years of disappointment – by Clyde Russell (Reuters India – February 18, 2015)

http://in.reuters.com/

LAUNCESTON, Australia – One of the most common assumptions among coal watchers is that India’s rising demand will translate into increasing imports, thus providing one of the few bright spots for a beleaguered industry.

While there is little doubt about the bullish demand outlook for India, the belief that imports will have to rise is predicated on the view that domestic coal output will continue to disappoint.

If history is a guide, then this is a safe bet, with state-controlled behemoth Coal India (COAL.NS) consistently failing to meet output targets and battling to supply enough fuel for the South Asian nation’s electricity generators.

India’s coal imports have steadily risen and gained 19 percent last year to 210.6 million tonnes, making the country the world’s second-biggest importer after China and ahead of Japan. But it may pay to heed a warning that accompanies financial products that past performance isn’t necessarily a guide to future outcomes.

There are signs that India is taking the right steps to boost its domestic coal industry, and while these won’t necessarily bear immediate fruit, it’s always worth watching the trend.

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U.S. “vs.” China in Africa: A Message to President Obama and Premier Li Keqiang – by André Corrêa d’Almeida and Jinglin Duan (Huffington Post – October 14, 2014)

http://www.huffingtonpost.com/theworldpost/

The U.S. and China are not actually competing in most of the African markets and sectors in which they are operational. They could in fact adopt much more official collaborative approaches and drop the political competitive rhetoric, which, regardless, economic agents are not following in practical terms.

The political rhetoric used by the U.S. and China to distinguish their respective economic policies toward Africa is misaligned with the actual strategy, investments and operations governmental agencies and companies from those same countries develop on the ground. The behavior of “real economic agents” in Africa, such as companies, follows much more closely notions and principles of complementarity, synchronization, comparative advantages, market niches and market segmentation, than principles of competition, market shares and rivalry.

While official discourse about the presence of these two countries in Africa has been inflamed with political intrigue and a competitive attitude, economic agents’ actual behavior shows a much broader propensity for collaboration. Will the competitive paradigm in geo-strategic politics hold Africa back once again?

“We don’t look to Africa simply for its natural resources. We recognize Africa for its greatest resource which is its people and its talents and its potential,” President Obama stated during the US-Africa Leaders Summit held in the White House in August. The President continued: “We don’t simply want to extract minerals from the ground for our growth. We want to build partnerships that create jobs and opportunity for all our peoples, that unleash the next era of African growth.”

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Indonesia lifts demand on Freeport to build Papua smelter -media – by Fergus Jensen (Reuters India – February 16, 2015)

http://in.reuters.com/

JAKARTA – Feb 16 (Reuters) – Indonesia has dropped its demand that Freeport-McMoran Inc build a $1.5 billion copper smelter in Papua province, saying a regionally owned enterprise would take on the project instead, website Detik.com reported, quoting the mining minister.

The ministry in December said Arizona-based Freeport, which runs the world’s fifth-largest copper mine in Indonesia, should agree to build the Papua smelter in five years if it wanted a mining contract extension beyond 2021.

The latest decision could ease pressure on Freeport, which has already agreed to a $2.3-billion expansion by 2017 of its copper smelting facility in East Java, currently the only one in the country.

The government has been pushing the company to comply with rules that force miners to process and refine minerals domestically.

“If Freeport is burdened in two locations it would be uneconomical,” Energy and Mineral Resources Minister Sudirman Said said on Sunday, according to the Detik website.

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The end battle? Big iron ore miners tighten grip on market – by Manolo Serapio Jr. and Ruby Lian (Reuters India – February 12, 2015)

http://in.reuters.com/

SINGAPORE/SHANGHAI – (Reuters) – The world’s big three iron ore miners appear to be entering the final phase of a fight to increase market share in China as massive expansions drive more high-cost rivals out of business.

The global giants have met stubborn resistance after many big Chinese miners kept producing despite weaker iron ore prices, helping push prices far lower than Rio Tinto, BHP Billiton and Vale envisaged when they began to flood the world with ore two years ago.

However, cracks are starting to appear in even China’s resilient state-mining sector, where mines can have production costs 20-50 percent above the market but also employ thousands of workers and are aligned with big steel makers.

One mine in Beijing that produces about 2 million tonnes of iron ore concentrate a year plans to suspend production for one-and-a-half months from this month, the first state-owned mine to do so, industry sources said.

Further price falls would bring more mine closures, said analyst Zhao Chaoyue, with China Merchant Futures in Guangzhou. “That includes some state-owned mines owned by steel mills, which are likely to give up their own iron ore output and turn to cheap imported ore too,” Zhao said.

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COLUMN-China’s aluminium tug-of-war to repeat in 2015 – by Clyde Russell (Reuters India – February 12, 2015)

http://in.reuters.com/

LAUNCESTON, Australia, Feb 12 (Reuters) – Anybody looking at China’s vast aluminium sector may be struck by a sense of deja vu, as the issues of last year appear set for a repeat performance in 2015.

The sector is still plagued by overcapacity and poor profitability, but perhaps the biggest concern is the apparent lack of any willingness to deal with the issues.

China produced about 27.5 million tonnes of aluminium last year, according to consultants AZ China, a figure above the official 24.4 million tonnes, which AZ China says doesn’t include some privately-owned smelters.

This represents roughly half of global output, but is still some way short of China’s capacity to produce 36 million tonnes per annum. China will add as much as 3.5 million tonnes of new production this year, but not all of this will be fully utilised, AZ China said in a Jan. 9 briefing note.

With some additional capacity at existing plants, some planned closure of older smelters and the new plants, AZ China expects total Chinese aluminium output to reach 29 million tonnes in 2015, a gain of almost 5.5 percent on the 2014 figure.

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Uralkali Sees Potash Deal With India Possible Ahead of China – by Yuliya Fedorinova (Bloomberg News – February 11, 2015)

 http://www.bloomberg.com/

(Bloomberg) — PAO Uralkali, the largest potash supplier by volume last year, sees a possible supply deal with India taking place ahead of China for the first time since 2008, signaling a price increase.

China, with larger stockpiles, won’t rush to lock in a new deal, said Oleg Petrov, chief of sales.

“China may have around 4.5 million tons of stockpiles now,” he said in Moscow. “We saw higher levels in the past but still this is far from the 2.5 million-ton level which is seen as more comfortable for the new contract. On top of this we saw Belarus shipping four cargoes in January to China. Some of those volumes went to the market, some stay in the port, but still this is delaying the opportunity for the new deal.”

Normally China, the biggest consumer of the soil nutrient, strikes a deal first, and that contract provides the benchmark price for the year, with India paying a premium. Only once, in 2008, a contract with India came first, and China paid the premium.

China’s potash demand was 14 million metric tons last year, when the market hit a record 62 million tons, Uralkali’s press service said today, updating last-month estimates. The country last signed contracts at $305 per ton in January 2014 covering the first half of the year, later prolonging them to year-end.

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Taliban boosting ties to organized crime: U.N. report [illegal mining] (Japan Times – February 10, 2015)

http://www.japantimes.co.jp/

WASHINGTON – In a worrying development for Afghanistan’s new leaders, Taliban militants are increasing their dealings with narcotics traffickers, illegal mining rings and kidnappers for ransom, a U.N. report said Monday.

“They are increasingly acting more like ‘godfathers’ than a ‘government in waiting,’ ” a report by the U.N. panel of experts on the Taliban said.

While the Taliban’s ties to drug traffickers dates back to the 1990s, the report also details the movement’s involvement in controlling natural resources, and thus depriving the central government of revenue.

Lapis lazuli mines in northeastern Badakhshan province are controlled by the Taliban who demand around $1 million annually from miners in exchange for being allowed to mine without fear of Taliban attacks, said the report.

In addition, the Taliban earn $240,000-$360,000 per year in extortion from truckers who carry the semiprecious stone away from the mines located in a predominantly Tajik-populated area.

The Taliban also pocket two-thirds of earnings from chromite mining in southeast Paktika province and an estimated $16 million annually from ruby mining in Jagdalak, east of Kabul, the report said.

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Afghanistan’s dilemma: copper or culture – by Lynne O’Donnell (Associated Press/Regina Leader Post – February 7, 2015)

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

Mining could endanger treasures

Treasures from Afghanistan’s largely forgotten Buddhist past are buried beneath sandy hills surrounding the ancient Silk Road town of Mes Aynak – along with enough copper to make the land glow green in the morning light.

An estimated five million tonnes of copper, one of the biggest deposits in the world, could provide a major export for a war-ravaged country desperately in need of jobs and cash. But the potential bonanza could endanger rare artifacts that survived the rule of the Taliban and offer a window into Afghanistan’s rich pre-Islamic history.

“The copper mine and its extraction are very important. But more important is our national culture,” said Abdul Qadir Timor, director of archeology at Afghanistan’s Culture Ministry. “Copper is a temporary source of income. Afghanistan might benefit for five or six years after mining begins, and then the resource comes to an end.”

The government is determined to develop Afghanistan’s estimated $3-trillion worth of minerals and petroleum, an untapped source of revenue that could transform the country. The withdrawal of U.S.-led combat forces at the end of 2014 and a parallel drop in foreign aid have left the government strapped for cash. It hopes to attract global firms to exploit oil, natural gas and minerals, ranging from gold and silver to the blue lapis lazuli for which the country has been known since ancient times.

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Methodology change sees Indian economy grow faster than China’s – by Rajesh Kumar Singh and Manoj Kumar (Reuters India – February 9, 2015)

http://in.reuters.com/

NEW DELHI – (Reuters) – Taken at face value, India on Monday became the fastest growing major economy in the world after its statisticians changed the way they measure Asia’s third-largest economy and showed it clocked faster growth than China in the December quarter.

It marks a dramatic turnaround for an economy that a fortnight ago was assumed to be struggling to gain momentum under Prime Minister Narendra Modi’s reform-minded government. Prior to Modi’s election last May, the economy had endured its weakest phase of growth since the 1980s.

The statistical recovery is in large measure due to changes both in the way authorities calculate gross domestic product (GDP) and the base year. Under the new method, the economy expanded 7.5 percent year-on-year during the last quarter, higher than 7.3 percent growth recorded by China in the latest quarter.

New Delhi also revised up growth for the first half of fiscal 2014/15 to 7.4 percent from the 5.5 percent reported earlier and forecast the full-year GDP growth to accelerate to 7.4 percent from a revised 6.9 percent a year earlier.

The new estimate is sharply higher than the Reserve Bank of India’s (RBI) growth projection of around 5.5 percent for the year under the old method.

The reading has left economists confounded as it is at odds with other indicators such as industrial production, trade and tax collection figures, which suggest the economy is still suffering from slack.

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Kazakhstan and the Emerging Market Gold Rush – by Paolo Sorbello (The Diplomat- February 4, 2015)

http://thediplomat.com/

Kazakhstan produces around 22 tons of gold each year, a figure comparable to neighboring Kyrgyzstan (18 tons), but only a quarter of Uzbekistan’s production (92 tons). Gold is not a major feature of Kazakhstan’s mining industry, which is dominated by chromium, copper, zinc, and uranium, but it is becoming a key asset for the country’s central bank.

All of the gold produced in Kazakhstan for the last two years has been bought out by the central bank, both under the supervision of former chairman Grigori Marchenko and through the orders of his successor, Kairat Kelimbetov. Albert Rau, Kazakhstan’s minister for investments, said that “given the turbulent global economy condition, the National [Central] Bank has been buying out all the fine gold produced.” The reason for this gold rush can be explained by a spiral of financial decisions by central banks across the world.

Gold prices suffered a hit as the U.S. Federal Reserve (Fed) was rumored to increase rates this year for the first time in nearly a decade. Apart from short-term fluctuations, however, the precious metal is still priced at just below $1,300 per ounce. The eurozone instability and the Swiss franc’s decoupling from a single-currency peg have turned gold into a more palatable commodity for investors.

Contextually, China, Russia, Belarus, Malaysia, Iran, Azerbaijan, and Kazakhstan have hoarded gold to diversify their portfolios and avoid excessive competition for the dollar that would only strengthen the greenback against their own currencies. Only countries that are financially stable – or that are trying to recover from shocks, like Russia and other oil-exporters – are in the market for gold. Financially weaker countries, such as Mozambique, Ukraine, and Tajikistan, had to reduce gold reserves to fuel their national economies.

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South Korea’s POSCO faces another setback in India – by Krishna N. Das and Jatindra Dash (Reuters India – February 5, 2015)

http://in.reuters.com/

(Reuters) – South Korea’s POSCO (005490.KS) will have to bid for an iron ore licence to feed its planned $12 billion steel plant in India, a minister said, in a setback for the company that was expecting the government to allocate it a mine without any competition.

The project to be set up by the world’s sixth-largest steelmaker has been caught up in a regulatory maze for the past decade, but the company had waited in the hope of getting preferential access to iron ore in Odisha.

But steel and mines minister Narendra Singh Tomar on Thursday ruled out an exception to an executive order mandating auctions for all new mines. This will mean POSCO’s costs will likely rise if it does manage to win a mine.

“Even I’ll have to bid for a mine if I want one,” Tomar said, as the government looks to overhaul the past practice of handing over mines and reduce chances of corruption. The government’s decision, however, goes against the recommendation of Odisha to grant POSCO a mine without an auction.

“It was an international commitment and we had recommended on the basis of the request made by the (previous) central government,” Odisha’s steel and mines minister Prafulla Kumar Mallik told Reuters. “If POSCO will have to bid, it will be a setback for the project.”

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