Asia Mining – Page 154 – Republic of Mining

Iron ore slide to $US75 will hit Australian suppliers: analyst – by Paul Garvey (The Australian – September 3, 2014)

September 3, 2014

http://www.theaustralian.com.au/business

IRON ore prices will fall to as low as $US75 a tonne next year and begin knocking out Australian sources of supply, a leading commodities analyst has warned.

Ian Roper, a former analyst with Rio Tinto who now works out of Shanghai for CLSA, has made further cuts to his iron ore price outlook in response to a stronger than expected ramp-up in supply by Australia’s iron ore miners.

Mr Roper now expects the iron ore price to fall to $US75 a tonne by September 2015, compared to his previous forecast for prices to drop to $US80.

The benchmark iron ore price has already fallen by more than 37 per cent this year to around $US87.10 a tonne.

While smaller iron ore miners are hoping that high-cost Chinese iron ore production will put a floor under the price and stop the price slide, Mr Roper argued that prices would continue to fall and flagged closures would spread to international iron ore suppliers including Australia.

He said iron ore was likely to follow a similar path to the coal price, which has been hovering at lows for two years as marginal mines battle to stay in production. Mr Roper also argued Chinese steel mills would be reluctant to shut their own iron ore production capacity.

Indian power station coal stocks lowest since 2012 blackouts – by Krishna N Das and Douglas Busvine (Reuters India – August 29, 2014)

September 2, 2014

http://in.reuters.com/

NEW DELHI – (Reuters) – Half of India’s thermal power stations have less than a week’s supply of coal on hand, according to weekly data, the lowest level since mid-2012 when hundreds of millions of people were cut off in one of the world’s worst blackouts.

There was a sharp fall in power output on Thursday from a plant in Gujarat that left India more than 9,000 megawatts short of peak demand, according to two officials at the state grid operator.

Any grid collapse would cast doubt on the crisis management skills of the new government led by Prime Minister Narendra Modi, whose achievement in ensuring 24-hour power supplies as premier of Gujarat helped him to election victory in May.

Commenting on Thursday, Power and Coal Minister Piyush Goyal said: “I don’t know about the possibility of a breakdown … There is a problem, I think, with many of the coal supplies.”

The shortage has come about as a fall in hydroelectricty generation due to weak monsoon rains forced the government to ask coal-based power stations to raise output, an industry source said.

India suffered unprecedented power cuts on July 30-31, 2012, that affected 620 million people – nearly a tenth of the world’s population – in 22 states across the north and east of the country.

COLUMN-Indonesia plays winning hand with global miners – by Clyde Russell (Reuters U.S. – September 1, 2014)

September 2, 2014

http://www.reuters.com/

LAUNCESTON, Australia, Sept 1 (Reuters) – In the high-stakes poker game being played between the Indonesian government and mining companies, it has come as a bit of a surprise that Jakarta appears to be playing the winning hand.

So far the Indonesian government has successfully stared down two U.S. mining giants, imposed a ban on exporting some raw metal ores and is deaf to the squeals of the beleaguered coal industry as it tightens rules on what had been a cowboy sector.

When the government started down the path of changing the laws and regulations in order to ensure a greater share of the Southeast Asian nation’s mineral wealth stayed at home, it was widely assumed that it would lack the resolve and the ability to stand up to the powerful mining industry.

Previous attempts had resulted in compromises that favoured miners and the government was widely viewed as inefficient, inconsistent and largely ineffectual. But in recent weeks the government has been shown to be holding a stronger hand than its opponents, and it has been willing to call their bluffs.

First, U.S. mining major Freeport McMoRan signed a memorandum of understanding with the outgoing administration of President Susilo Bambang Yudhoyono that should result in the government getting what it wanted, without giving up much in return.

Glencore, Jinchuan frontrunners to buy BHP’s Nickel West – by Sivia Antonioli and Polly Yam (Reuters U.S. – August 27, 2014)

August 28, 2014

http://www.reuters.com/

LONDON/HONG KONG – (Reuters) – Commodities trader and miner Glencore (GLEN.L) and Chinese nickel producer Jinchuan Group are the frontrunners to buy BHP Billiton’s (BHP.AX)(BLT.L) Australian Nickel West division, two sources close to the situation said.

BHP, the world’s largest mining company, announced plans last week to spin off businesses worth an estimated $16 billion but said that Nickel West in western Australia would not be part of the demerged group.

Chief Executive Andrew Mackenzie has said the company was in talks with potential buyers for all or part of Nickel West.

Estimates of the value of Nickel West vary greatly, with some analysts and industry sources putting it at anything up to $1 billion and others tagging negative figures to an asset they say is burning cash. “It’s a race between Glencore and Jinchuan now,” the first source said.

Jinchuan is “very interested” in Nickel West and plans to ship about 30,000 tonnes of nickel concentrate to China if it takes over the business, said the China-based second industry source, who had been briefed about the plan but declined to be named because of the sensitive nature of the matter.

ANALYSIS-India’s coal crunch – a chance to revamp, reallocate and revive – by Krishna N Das and Abhishek Vishnoi (Reuters India – August 27, 2014)

August 28, 2014

http://in.reuters.com/

NEW DELHI/MUMBAI, Aug 27 (Reuters) – A court ruling this week that India’s decades-old method of granting coal mining concessions is illegal could herald much-needed reforms in a sector long dogged by the inability of state-run Coal India to raise output fast enough.

In declaring scores of coal block allocations made since 1993 unlawful and arbitrary, the Supreme Court has put investments worth billions of dollars at risk.

If it goes the next step and cancels the concessions after a further hearing due to start on Monday, India may have to import vast amounts of coal to keep the lights on.

In the long run, however, the decision could bring clearer rules to a sector that has failed to provide India with enough power because it has been so hamstrung by confusion and scandals over concessions allegedly handed to government cronies.

Coal India has a monopoly over coal that is mined for sale. The scandal, dubbed “Coalgate” by the media, concerns concessions sold to steel, cement and power firms to dig up coal for their own use.

The furore erupted after a federal auditor’s report in 2012 found that underpriced sales had cost the exchequer as much as $33 billion.

COLUMN-China may lose pole position as copper price driver – by Clyde Russell (Reuters U.S. – August 27, 2014)

August 28, 2014

http://www.reuters.com/

Clyde Russell is a Reuters columnist. The views expressed are his own.

LAUNCESTON, Australia, Aug 27 (Reuters) – China has in recent years been viewed as the main driver of the global copper market, and while its influence remains strong, it’s possible that the rest of the world will take over in the short term.

Copper is currently one of the more divisive commodities among analysts, with opinions split over whether the industrial metal will continue its recent rally or lose ground over the rest of 2014.

The point is that considerable uncertainty exists over copper’s direction and much of that comes down to whatever view is held about the economic outlook for China, which consumes roughly 45 percent of the world’s copper.

While this is obviously a huge chunk of the market, it still means that the other 55 percent could exert a bigger influence, especially if its demand trend is changing.

London copper prices gained 3.4 percent between Aug. 14 and Tuesday’s close of $7,054 a tonne, although they are still down 4.2 percent since the start of the year.

The recent gains have largely been attributed to an improving outlook for growth in the United States and hopes that Europe may take steps to stimulate its struggling economies.

UPDATE 1-Newmont withdraws mining arbitration case against Indonesia – minister – by Michael Taylor and Yayat Supriatna (Reuters India – August 26, 2014)

August 26, 2014

http://in.reuters.com/

Aug 26 (Reuters) – Newmont Mining Corp has withdrawn its international arbitration filing against the Indonesian government, the industry minister said on Tuesday, in a possible sign of a breakthrough over its seven-month dispute that halted exports.

Newmont’s Indonesian CEO Martiono Hadianto said the mining giant had reached a “constructive solution” over new mining rules, and expects to resume production at its copper mine soon. He declined to give additional details and a company spokesman could not be immediately reached.

U.S.-based Newmont, which declared force majeure at its Batu Hijau copper mine in June and then filed for arbitration in July, is in dispute with the Indonesian government over an export tax imposed in January that the U.S.-based miner says conflicts with its mining contract.

“I heard Newmont’s lawyer has withdrawn the case a few days ago,” Indonesia’s Industry Minister Mohamad Hidayat told Reuters, adding that investment board chief Mahendra Siregar had confirmed the news.

Indonesia’s Chief Economics Minister Chairul Tanjung is expected to make an announcement on Newmont’s arbitration on Wednesday, said Susyanto, the director of the law bureau for the mines ministry.

China steel output growth doesn’t gel with coking coal – by Clyde Russell (Reuters U.S. – August 25, 2014)

August 25, 2014

http://www.reuters.com/

Clyde Russell is a Reuters columnist. The views expressed are his own.

LAUNCESTON, Australia – Aug 25 (Reuters) – Something doesn’t quite add up with China’s rising steel production, but falling coal output and imports so far this year.

China’s raw steel output was 480.76 million tonnes in the first seven months of 2014, up 2.7 percent from the same period a year earlier, according to data from the National Bureau of Statistics.

However, imports of metallurgical, or coking, coal used to make steel were down 12.6 percent to 36.01 million tonnes in the first seven months of the year, according to customs data.

Given that imports only meet roughly 10 percent of China’s coking coal needs, it’s essential to look at domestic coal output.

Total coal production in China in the first seven months of the year was 2.163 billion tonnes, a decline of 1.45 percent on the same period in 2013, with July’s output down 1.63 percent from the same month last year, according to data from the China Coal Transport and Distribution Association.

What isn’t clear is the breakdown of thermal to coking coal within those broader production figures.

Insight – Behind Indonesia mining deal, newly minted minister and U.S. mining legend – by RANDY FABI, FERGUS JENSEN AND MICHAEL TAYLOR (Reuters U.K. – August 24, 2014)

August 25, 2014

http://uk.reuters.com/

JAKARTA – (Reuters) – As negotiations to resolve an increasingly bitter dispute over Indonesian mining rules teetered on the brink of collapse, the chairman of Freeport-McMoRan Inc (FCX.N) James “Jim Bob” Moffett flew to Jakarta for last-ditch talks.

Indonesia’s chief economics minister, Chairul Tanjung, said he had got to a point where he felt only talking directly to the 76-year-old U.S. mining legend might break a deadlock in the six-month row, which had already cost Southeast Asia’s top economy more than $1 billion and put thousands of jobs at risk.

In less than two hours the two men had reached an agreement, setting the stage to resume exports and restore badly needed government revenue to the world’s fourth most populous nation.

“I just convinced him that this was the maximum the government can give,” Tanjung said in an interview. “He believed me, I believed him and we shook hands. Very simple.”

Tanjung, one of Indonesia’s richest businessmen, was appointed minister in May and made reaching a deal to get mining exports going again a priority to revive an economy suffering its sharpest slowdown since the global financial crisis.

But a looming presidential election had made it even harder to reach a politically unpopular compromise with foreign miners.

UPDATE 4-China says Australian tycoon’s attack “irrational and absurd” – by Ben Blanchard, Jane Wardell, Sonali Paul and Adam Jourdan (Reuters India – August 21, 2014)

August 21, 2014

http://in.reuters.com/

BEIJING/SYDNEY, Aug 21 (Reuters) – China’s foreign ministry has condemned a verbal attack by Australian mining mogul and politician Clive Palmer as irrational and absurd, after the businessman described China’s government as “bastards” who shoot their own people.

The Australian government has rebuked Palmer, who holds the balance of power in the parliament’s upper house. Foreign Minister Julie Bishop said she planned to contact the Chinese embassy to stress that the Australian parliament does not share Palmer’s “abusive” views.

“Palmer’s words about China in recent days are totally irrational and absurd. We strongly condemn them,” Ministry of Foreign Affairs spokesman Qin Gang said in a statement posted on the ministry’s official website late on Wednesday.

Qin’s statement came after a prominent Chinese newspaper, the state-run Global Times tabloid, said Australia should be taught a lesson. “China cannot let him off, or show petty kindness just because the Australian government has condemned him,” it said in an editorial in its Chinese and English editions.

“China must be aware that Palmer’s rampant rascality serves as a symbol that Australian society has an unfriendly attitude toward China.”

UPDATE 2-Mongolia eyes economic boost from China president’s visit – by Terrence Edwards and David Stanway (Reuters India – August 21, 2014)

August 21, 2014

http://in.reuters.com/

ULAN BATOR/BEIJING, Aug 21 (Reuters) – Chinese President Xi Jinping proposed on Thursday the expansion of bilateral trade with Mongolia to $10 billion a year by 2020 as he arrived for a two-day visit aimed at deepening economic ties between the neighbours.

Xi’s arrival marks the first Chinese presidential visit in 11 years to Mongolia which has been hit by plunging commodity prices and a rapid decline in foreign investment. It is keen to agree to new deals on transport, energy and mining investment with its dominant trading partner.

The two countries signed a joint declaration upgrading their relationship to a “comprehensive strategic partnership”. They also signed agreements to cooperate further in areas such as economics, energy, mining and finance.

“Xi proposes to expand China-Mongolia trade to $10 billion by 2020,” China’s Xinhua state news agency said. Two-way trade was worth $324 million in 2002 but rose to $6 billion in 2013, accounting for more than half of Mongolia’s total foreign trade, Xinhua said.

In an article written by Xi for Mongolian newspapers, Xi said China would do all it could to help Mongolia develop. “China hopes that both countries can push cooperation on building inter-connecting railways and roads, the development of mines and processing,” Xi wrote.

RPT-COLUMN-Reliance on cost-cutting the real BHP story – by Clyde Russell (Reuters India – August 20, 2014)

August 20, 2014

http://in.reuters.com/

Clyde Russell is a Reuters columnist. The views expressed are his own.

LAUNCESTON, Australia, Aug 20 (Reuters) – BHP Billiton’s plans to spin-off unwanted assets may have received a tepid welcome from investors, but the real news from the mining giant’s results is the limits to cost-cutting.

Delving into BHP’s results presentation on Tuesday shows the company has been successful in cutting expenses, with a 12 percent cut in cash costs at the flagship Western Australian iron ore operations, while the Queensland coal business recorded a 24 percent drop.

BHP said its productivity-led volume and cost efficiencies were $2.9 billion in the year to end June 2014, beating its target by $1.1 billion. Given the company’s net income for the period was $13.4 billion, the $2.9 billion in savings represents about 22 percent of the profit, which certainly looks impressive.

The problem comes when you start to look at the savings achieved, the potential for further cost-cutting and the likely trajectory of commodity prices.

BHP said it produced a record 225 million tonnes of iron ore in the 2014 financial year, which resulted in revenue of just under $23 billion, or roughly 34 percent of the group’s total revenue.

Canadian sues Silvercorp over ‘false imprisonment’ in China – by Nathan Vanderklippe (Globe and Mail – August 20,2014)

August 20, 2014

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.

BEIJING — A Canadian man who spent years behind bars in China has filed a lawsuit accusing a mining company of conspiring with Chinese authorities to have him arrested and detained.

Kun Huang was an investigator for a hedge fund manager who in September, 2011, claimed that ore estimates at a Chinese mine owned by Vancouver-based Silvercorp Metals Inc. were too good to be true. Three months later, Chinese officials detained Mr. Huang at the Beijing airport, strip-searched him, seized his computer and placed him in a lengthy detention that culminated in a single-day closed-door trial and a two-year sentence for criminal defamation.

He was released on July 17, and returned to Canada the next day. Now, in a lawsuit filed Tuesday in the Supreme Court of British Columbia, Mr. Huang claims that Silvercorp masterminded his detention as a reprisal for his research, whose publication prompted a steep decline in the company’s share price.

Silvercorp, his court filing claims, effectively enlisted the local Chinese police as its “agent,” giving them money, encouragement and guidance “to falsely imprison and then later knowingly bring baseless criminal charges against Mr. Huang.”

Australia rebukes mining tycoon over abusive attack on China – by Jane Wardell and Ben Blanchard (Reuters India – August 19, 2014)

August 19, 2014

http://in.reuters.com/

Aug 19 (Reuters) – Australian mining mogul and politician Clive Palmer was rebuked by the government on Tuesday for a tirade against China, in which he described its government as “bastards” who shoot their own people and want to take over the country’s resources.

Treasurer Joe Hockey said the remarks aired on Australian television on Monday were “hugely damaging”, noting that Palmer had benefited personally from doing business with China.

“Do not bring down the rest of Australia because of your biases,” he said. “They are a business partner for Australia, they’re our biggest trading partner, they buy a lot of our produce, and in doing so they help to lift the quality of life for everyday Australians.”

China is Australia’s biggest trade partner with two-way trade approaching $150 billion, representing more than 20 percent of Australia’s total trade.

Palmer, who holds the balance of power in the Australian parliament’s upper house, is currently locked in a legal battle with Chinese firm CITIC Pacific over cost blowouts and disputed royalty payments at an iron ore port in Cape Preston in Western Australia.

Rio and BHP tighten grip on world iron ore – by John Addis (Sydney Morning Herald – August 18, 2014)

August 19, 2014

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

Mexican drug cartels have been diversifying into the iron ore business, smuggling ore worth about $US1 billion a year into China. But it’s the emergence of a more legitimate cartel – one run largely by Australians – that should worry China more.

Rio’s latest result shows how powerful the big three global producers have become. The company’s results for the six months to June 30, with underlying earnings rising 21 per cent to $US5.1 billion ($5.47 billion), are remarkable given that iron ore prices actually fell 20 per cent over the period.

After slashing costs, capital expenditure and debt, management hinted at higher dividends and more buybacks. If the mining boom is supposed to be over, no one told Rio Tinto.

The really interesting element to the result concerned production increases. Although lower iron ore and coal prices stripped $US1.4 billion from underlying earnings, volume increases, particularly in iron ore, offset that fall by more than $US900 million. All up, iron ore contributed more than 90 per cent of total profit.

With China slowing and the country’s government frantically shifting spending away from capital expenditure towards consumption, which dampens demand for ore, Rio Tinto and BHP are expanding output.