Asia Mining – Page 152 – Republic of Mining

Iron ore rhetoric should shift from China demand to oversupply – by Clyde Russell (Reuters U.S. – November 7, 2014)

November 7, 2014

http://www.reuters.com/

LAUNCESTON, Australia, Nov 7 (Reuters) – One of the recurring themes in iron ore’s precipitous decline this year has been the weak state of Chinese demand. The problem with this is that it simply isn’t true.

It doesn’t take much of a search to find media and analyst reports that reference softness in China’s steel market as one of the major reasons for Asian spot iron ore’s 43-percent decline this year to a five-year low of $75.60 a tonne on Thursday.

“Iron ore falls further as Chinese buying interest stalls” was a Reuters headline from Oct. 17.

Just in case anybody thinks I’m picking on my own colleagues, this one is from competitor Bloomberg on Thursday: “Iron drops to lowest since 2009 as APEC curbs dent demand” – a reference to steel mills closures ahead of the upcoming meeting of the Asia-Pacific Economic Cooperation group in Beijing as part of measures to control pollution.

It’s not just news reports, analysts have also pointed to the slowing growth of China’s economy.

“In China, slowing industrial trends and deteriorating property fundamentals are having an adverse impact on bulk commodity demand – prices of iron ore and thermal coal both hit five-year lows,” said a recent research report from a major bank.

Minister promotes N.L. iron ore in China – by Ashley Fitzpatrick (St. John’s Telegram – October 30, 2014)

October 30, 2014

http://www.thetelegram.com/

Lab West waiting as Derrick Dalley presses mining sector investment

Eight months after the idling of the Scully Mine in Wabush, less than a month after putting a pin in construction of a mine-fuelling power line and facing continued, dismal pricing for iron ore, the Government of Newfoundland and Labrador is actively promoting iron mining in Labrador West.

Natural Resources Minister Derrick Dalley told The Telegram Wednesday the potential in iron ore was key to his presentations and conversations during a 10-day mission to China earlier this month.

He took to the microphone at industry gatherings in Shanghai and Beijing, at the Canada Natural Resources Forum and Canada Mineral Investment Forum. He met with the Canadian Ambassador to China, representatives for China’s National Development and Reform Commission, and Ministry of Land and Resources, and steel producers from companies including Wisco and Hebei Iron and Steel.

“From my perspective, it was a great opportunity to reinforce the relationship that we had forged in recent years, to understand the China economy, but as well to present on behalf of the province some opportunities and to encourage Chinese investment,” he said.

The province, it was noted in a statement issued earlier this month, provided $13,900 to help Mining Industry NL representatives make the trip and maintain a trade show booth at China Mining, the continent’s largest mining conference.

Shake-out of ferrochrome industry overdue – by Kunal Bose (Business Standard – October 27, 2014)

October 29, 2014

http://www.business-standard.com/ [India]

India’s ferroalloys producers have built capacity of 5.25 million tonnes (mt), including 3.2 mt of manganese alloys and 1.75 mt of chrome alloys, anticipating much faster growth in domestic production of carbon, alloys and stainless steel than is actually the case. As a result, every segment of the ferroalloys sector has considerable idle capacity. The sector’s attempt to beat overcapacity blues through exports has seen limited success in the face of oversupply of ferroalloys in the global market, thanks largely to Chinese dumping.

Ferromanganese is used for desulphurisation and strengthening of carbon steel, while ferrochrome imparts non-corrosive properties to stainless steel.

Bansidhar Panda, chairman of Indian Metals & Ferro Alloys (IMFA), says “the chromium sector is at a crossroads, buffeted by rising costs, stagnant prices” and China’s overbearing presence in both ferrochrome and stainless steel sectors. Overcapacity is hitting non-integrated producers here, without ownership of chrome and manganese ore mines and captive power plants, the hardest. Such units in the chromium segment are never sure of securing the required supplies of chromite from the Odisha government-owned Odisha Mining Corporation.

Grid power is expensive, as it is highly irregular. For ferroalloys plants without captive power, the electricity bill alone accounts for about 35 per cent of the overall production cost. Therefore, it isn’t surprising that standalone units, which have to buy chromite and electricity, are in dire straits. Only a few, with toll smelting assignments from mines-owning ferroalloys groups, are able to keep their heads above water.

China’s ‘new normal’ still global metals demand driver – by Lawrence Williams (Mineweb.com – October 29, 2014)

October 29, 2014

http://www.mineweb.com/

Although China’s growth has slipped the Asian dragon remains the key driver for metals and minerals prices and trade.

LONDON (MINEWEB) – Consensus opinion at last week’s Bloomberg East meets West seminar in London was that the latest growth figures from China, which have been considerably lower than those of the previous few years, are indeed the ‘new normal’ rather than just a downwards blip.

Government policy now seems to have abandoned the growth-at-any-costs scenario, which saw double digit GDP growth, to a more sustainable level which seems more likely to encompass annual growth figures of between 5% and 8%.

But even so, because of the size of its metallurgical processing and manufacturing sector China will remain the principal demand driver for global metals and minerals. This point was ably put by Bloomberg Intelligence’s global head of metals and mining, Ken Hoffman, in his introductory remarks, and was a point picked up by several other speakers and panel participants too.

Bloomberg notes that part of the problem facing the global resource sector is that perhaps the West did not understand the Eastern drive for growth over the past decade and its subsequent slowdown.

COLUMN-Chinese stockpiles mean bauxite may not be a sure bet – by Clyde Russell (Reuters India – October 29, 2014)

October 29, 2014

http://in.reuters.com/

LAUNCESTON, Australia, Oct 29 (Reuters) – Bauxite is one of the few natural resources to attract positive commentary amid the sharp falls in many commodities in the past few months.

Certainly the outlook appears quite constructive for the mineral used to make alumina, which in turn is the primary ingredient for aluminium.

Indonesia produced about 12 percent of the world’s output and was the top supplier to China prior to Jakarta imposing a ban on exporting raw mineral ores in January.

The Ebola outbreak in West Africa appears to have had a limited impact on shipments from Guinea, so far, but the risk of disruption rises as long as the deadly disease remains prevalent in the region.

Also, much of the planned new supply is in West Africa, including major projects in Mali, and the longer the Ebola crisis endures, the more likely delays and cost overruns become.

Throw in signs that, excluding China, aluminium demand is rising as the U.S. and other economies recover, while Chinese aluminium output remains robust, and it’s not hard to see bauxite as a shining light in the commodity firmament.

COLUMN-Why China blurs the global aluminium picture – by Andy Home (Reuters U.S. – October 27, 2014)

October 28, 2014

http://www.reuters.com/

Oct 27 (Reuters) – Is the world aluminium market in a supply-demand deficit or surplus? It’s a simple enough question but an extraordinarily difficult one to answer.

That much was clear at last week’s LME Seminar. Two respected bank analysts, Citi’s David Wilson and Natixis’ Nic Brown, offered diametrically different views.

Deficit, according to Brown, and one that will steadily increase over the next two years. Surplus, according to Wilson, with no sign of deficit until 2017 at the earliest.

Calculating supply-demand balances in any industrial metal is a tricky business, but the problems are compounded in aluminium.

There is, for example, no aluminium equivalent to the International Study Groups that do so much of the statistical leg-work in the copper, zinc, lead and nickel markets. The International Aluminium Institute (IAI) releases monthly production figures but only for primary metal, leaving the secondary scrap component of the supply chain shrouded in statistical darkness.

Column – India, Indonesia take different, but similar coal paths – by Clyde Russell (Reuters India – October 27, 2014)

October 27, 2014

http://in.reuters.com/

LAUNCESTON, Australia – India, poised to become the world’s largest importer of thermal coal, appears to be opening up its domestic mining sector to foreign competition just as Indonesia, its biggest supplier, is making it harder for exporters.

On a superficial level it appears that India and Indonesia are choosing different paths for their coal sectors, but the policies being pursued by the countries’ new, reform-minded leaders may have more in common than first appearances suggest.

India may allow foreign companies to mine coal, as long as they set up units in the country, Reuters reported on Oct. 22, citing a source familiar with the matter.

This would be a major change for the South Asian nation, which has the world’s fifth-largest coal reserves but suffers from ongoing shortages because of inefficiencies across the mining, transportation and distribution chains.

Coal mining has been dominated by state-controlled Coal India, which consistently fails to meet targets for production and supply. What private mining existed in India was thrown into chaos recently by court rulings that found the allocation of coal blocks by the previous government had been illegal, and that these areas would be returned to the state and Coal India.

A Kingdom of riches: Saudi Arabia looks to strike it rich with mining sector – by Adam Leach (Mining Technology – October 23, 2014)

October 27, 2014

http://www.mining-technology.com/

While Saudi Arabia remains the world’s largest petroleum producer, the prospect of US shale gas eating into its dominance of the energy export market has highlighted a need for it to diversify its economy. Having already established itself in the gold market, the kingdom is now setting its sights on ruling the copper, zinc and phosphate markets.

The history of mining in the Kingdom of Saudi Arabia stretches back thousands of years. The first record of it has been dated to 2100 BC, while carbon dating has shown that operations at Madh Ad Dahab mine were underway at around 1000 BC. Archaelogists have claimed that a copper mine was generating revenue for King Solomon in the 10th century BC. But despite its early rising in the development of mineral extraction, resources in Saudi Arabia have remained relatively untapped.

Controlling around a quarter of the world’s reported petroleum reserves, Saudi Arabia has been under little pressure to exploit other resources it may have access to, with the ever growing global demand for oil enabling the country to get richer and richer.

However, over the past decade the globalisation of oil exploration, an increase in climate change pressure and an influx of US shale gas and oil to the market have served to slightly ease the monopoly of Saudi Arabia and its fellow OPEC members. In response to recent reports that US exports would reduce demand for Saudi oil, the kingdom announced that it would be cutting production to 400,000 barrels per day, the lowest since 2011, in order to preserve the current price of $100 per barrel.

Doomsay away, it’s still China’s century – by David Olive (Toronto Star – October 25, 2014)

October 27, 2014

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Why China matters, even as alarms are sounding about a looming debt crisis in the People’s Republic.

More signs that this century is destined to be recalled as China’s century as much as America’s have appeared in recent weeks, even as alarms have recently been sounded about a looming debt crisis in the People’s Republic, and an alarmist but influential report this week forecasts plunging growth rates in China’s economy through to 2025.

China matters, of course, as a long-time exporter of affordable goods that have increased the standard of living, and reduced the cost of living, for hundreds of millions of North Americans and Europeans. China is also an increasingly important customer for imports. It is now the world’s biggest buyer of industrial robots, for instance. And Beijing long ago assigned to Montreal-based Bombardier Inc. the megaproject of building China’s state-of-the-art intercity commuter rail network.

China has also rapidly created industries that generate vast amounts of electric power and manufacture cars and trucks, jetliners and advanced environmental-protection goods, gaining an early lead on the U.S. in, for instance, solar panels.

“China shouldn’t be underestimated,” economics columnist John Cassidy wrote this week in The New Yorker. “Whatever one thinks of (China’s) authoritarian state-capitalism model, its success in building industries from scratch cannot be denied.”

Coal, Climate and Orangutans in Indonesia – by Daniel Stiles (The Epoche Times – October 24, 2014)

October 27, 2014

http://www.theepochtimes.com/

What do the climate and orangutans have in common? They are both threatened by coal – the first by burning it, and the second by mining it.

At the recent United Nations Climate Summit in New York, world leaders and multinational corporations pledged a variety of actions to reduce greenhouse gas emissions and deforestation to avert a looming disaster caused by global warming.

Indonesia, home to most of the world’s orangutans, is a major player in both emissions and deforestation, with the third largest tropical forest area in the world, after the Amazon and the Congo Basin. In 2012, Indonesia surpassed Brazil as the country with the highest annual rate of primary forest loss. The country is also ranked the fourth top emitter of greenhouse gases in the world (after China, the U.S., and the European Union) during some years, largely due to high deforestation rates and peatland fires.

The New York Declaration on Forests, announced at the UN Climate Summit, called on partners to work to at least halve the rate of natural forest loss globally by 2020 and strive to end natural forest loss by 2030. It also targeted achieving a reduction in deforestation-related emissions by 4.5-8.8 billion tons per year by 2030.

The now-former Indonesia president, Susilo Bambang Yudhoyono, announced in 2009 a voluntary commitment to reduce the country’s carbon footprint by 26 percent.

Yukon mining project partners with China (CBC News North – October 22, 2014)

October 23, 2014

http://www.cbc.ca/news/canada/north

Collaboration with Beijing institute could ‘reduce costs by 40%’ says Canadian CEO

A mining project in Yukon is hiring Chinese engineers. Copper North Mining is planning for work in the Carmacks area. The company has announced a firm in Beijing will help design a process to help it recover copper, gold and silver.

The project is at the feasibility study stage but Chinese workers will help design the mine and ship equipment to Canada.

Harlan Meade is President and CEO of Copper North Mining. He says this approach could reduce costs by as much as 40 per cent.

“What (Copper North Mining) is doing is getting them to do the detailed design engineering. We oversee it here in Canada then we get the procured equipment in China. We have it delivered and then our Canadian engineering firm, JDS Energy and Mining Inc, does the construction management, mining, earth works, and the other parts of the project.”

Meade says Chinese engineers would provide “about half” of the work at the feasibility stage with Canadian engineers hired to do the rest.

The project would see also savings as it would obtain its equipment directly from Chinese suppliers.

Indonesia Mineral output plummets;new govt urged to lay out policies – by Raras Cahyafitri (Jakarta Post – October 20, 2014)

October 21, 2014

http://www.thejakartapost.com/

The national output of a number of commodities has dropped significantly this year, as expected, on account of the government’s mineral ore export ban.

The incoming administration, led by president-elect Joko “Jokowi” Widodo, is expected to soon lay out clear policies in the mineral sector, which has been severely impacted by the ban.

Only a few million tons of ore were produced during the January to August period this year, most likely only to meet domestic demand, figures from the Energy and Mineral Resources Ministry’s directorate general of mineral and coal showed.

The production of bauxite, for example, was a mere 2.8 million tons during the January-August period, compared to almost 60 million tons throughout last year. This year’s output is expected to see a few additional tons by year-end.

“The production of several minerals was from newly established smelters, such as nickel pig iron products,” mineral and coal director general R. Sukhyar said.

Indonesia’s Choice: Coal vs. Environment – by David Fogarty (Epoch Times – October 19, 2014)

October 21, 2014

http://www.theepochtimes.com/

Indonesia cannot build power stations fast enough. And neither can most of its Asian neighbors. Rapid economic and population growth are driving equally rapid demands for electricity as the region builds out power grids to connect up millions of people to fuel prosperity.

Electricity generation is forecast to nearly triple in Southeast Asia between 2011 and 2035, the International Energy Agency says, with fossil fuels providing most of the energy.

With a population of 600 million, nearly twice that of the United States, and about 130 million people without electricity, Southeast Asia faces an immense challenge to meet that demand in a cost-efficient manner that doesn’t cause serious air and water pollution and drive up health costs.

For Indonesia, the Asia energy story is a blessing worth untold riches in terms of royalties, money it needs to develop its economy and provide jobs. The IEA says demand for coal in Southeast Asia will rise 4.8 percent per year, with Indonesia in the geographic sweet spot to be the region’s main supplier.

In the wider Asia-Pacific, demand for coal will increase by 52.8 percent from 2010 to 2035, according to the Asian Development Bank.

RPT-UPDATE 3-India’s Modi steps up economic reforms, eyes privatisation [coal sector] – by By Manoj Kumar and Krishna N Das (Reuters India – October 21, 2014)

October 21, 2014

http://in.reuters.com/

NEW DELHI, Oct 20 (Reuters) – India promised on Monday to open up the coal industry to private players and moved closer to selling a stake in a state-run oil company, as Prime Minister Narendra Modi picked up the pace on economic reform days after relaxing fuel price controls.

Using an executive order, the cabinet agreed to allow private Indian companies to mine and sell coal at an unspecified future date, Finance Minister Arun Jaitley said. That sets the stage for the biggest liberalisation of the industry in more than 40 years.

The ruling party’s success in two state elections last week capped several days of action on the economic front and has given Modi more room to cut through a thicket of regulations and state controls he says holds back Asia’s third-largest economy.

“Reform is the art of the possible,” Jaitley earlier told TV network ET Now, hinting that more was to come. “In the first year, when people expect lot of reforms and there is lot of popular support behind the reform process, it is more easily possible.

Modi was elected in May on promises he would create jobs and rejuvenate the Indian economy, but investors and economists were disappointed by his first budget and a lack of early progress on fixing structural economic problems. In the last week, he has gone some way towards quelling those concerns, putting in a reform-minded team at the finance ministry that includes prominent economist Arvind Subramanian to help formulate the budget and policy.

Is the global commodity supercycle over? – by Niranjan Rajadhyaksha (Live Mint – October 17, 2014)

October 17, 2014

http://www.livemint.com/

It is too early to say whether the current decline in global commodity prices is temporary or structural

The sharp drop in global oil prices to their lowest level in four years has provided unexpected relief to the Indian economy. A barrel of the benchmark Brent crude cost around $114 in the middle of June.

It has slipped below $90 four months later. The impact is already becoming apparent. Petrol prices paid by motorists were cut in September.

One reason the Indian financial markets have held up better in the ongoing emerging markets sell-off is that India is a commodity importer that gains from a decline in prices. There is also greater confidence that the government will keep its fuel subsidy bill within the budgeted limit since global prices are well below the $110 a barrel that had been assumed in July.

And it is interesting that Indian monetary policy authorities are projecting inflation using a baseline assumption that oil will remain below $100 for the rest of the year.

The impact of lower global commodity prices on the Indian economy has been quantified. For example, economists at Nomura Financial Advisory and Securities (India) have estimated the likely impact of the fall in global crude prices on important macroeconomic numbers.