Asia Mining – Page 155 – Republic of Mining

Miners face threat of coal ban – by Sarah-Jane Tasker (The Australian – September 15, 2014)

September 15, 2014

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

AUSTRALIA’S thermal coal miners, already struggling to turn a profit, could be further hit with an import ban on lower quality coal by China.

The price of thermal coal has come under renewed pressure amid fears that the economic powerhouse would implement quality-based restrictions on coal imports, which could impact almost half of Australia’s exports to the Asian giant.

Macquarie analyst Stefan Ljubisavljevic has outlined that while he remained sceptical that the proposed ban on high-ash, high-sulphur material would be enacted, on a “worst-case-scenario” basis it was Australia’s miners that would suffer.

The ban, proposed by the China National Coal Association and being scrutinised by the National Development and Reform Commission, would prohibit all coal imports above 15 per cent ash and 0.6 per cent sulphur.

“Based on Wood Mackenzie data, almost half of all Australian exportable thermal coal would not meet a 15 per cent ash and 0.6 per cent sulphur cut-off. As a result, implementation of this draft ban would, in our opinion, put at risk about 40 million tonnes per annum of Australian coal volume,” Mr Ljubisavljevic said.

The Macquarie analyst said that if the ban was enacted, the best-case scenario for the thermal coal market would be that exports from Russia and Indonesia would simply be redirected to China from other destinations.

China’s coal proposals leave some hope for exporters – by Clyde Russell (Reuters U.S. – September 11, 2014)

September 12, 2014

http://www.reuters.com/

LAUNCESTON, Australia – (Reuters) – When the best thing you can say about new policies is that they aren’t as bad as they could have been, then you know your industry is in deep trouble.

China’s proposed cap on coal consumption and ban on low-quality imports won’t have sparked celebrations among export-focused coal miners, but may have given them some hope that the world’s top importer of the fuel will remain open for business.

The State Council, China’s cabinet, on Tuesday published a draft version of a law to tighten air pollution control by cutting the use of coal, which is used to generate about 80 percent of the nation’s electricity.

The draft didn’t spell out exactly what the consumption cap would be, nor the quality standards that would be imposed on imported fuel.

However, industry sources say the recommendation from the National Energy Administration is that coal with a sulfur content of more than 0.6 percent and ash content of more than 15 percent be banned.

What is also interesting to note is that the proposed import ban doesn’t specify heating value, meaning low-calorific coal could still be shipped in as long as it has low ash and sulfur.

Philippine lawmaker sees five-year grace period before ore export ban – by Enrico Dela Cruz (Reuters U.S. – September 9, 2014)

September 10, 2014

http://www.reuters.com/

MANILA – (Reuters) – A proposed Indonesia-style ban on exports of unprocessed metal ores from the Philippines may not be implemented for about seven years, the proponent of a bill before Congress said on Tuesday, potentially easing pressure on nickel prices.

Congressman Erlpe John Amante said a law aimed at forcing miners to process raw minerals before export could take two years to be enacted, while miners deserved a five-year grace period before mandatory domestic processing took effect.

News last week of the proposed legislation has unsettled the nickel market, which was caught off guard when Indonesia banned nickel ore exports in January. Nickel jumped 7 percent in four sessions to Monday’s close and is up 41 percent this year.

The Philippines currently supplies China with virtually all of the nickel ore that it uses to make nickel pig iron, a raw material used by steelmakers, following the Indonesian ban.

Amante said the Philippines could triple its revenue from mineral exports if his bill, which was filed in July and has been approved at the committee stage in the lower chamber of Congress, becomes law. A matching bill was filed in the upper house Senate in late August.

“We’ve started the ball rolling so I’m very hopeful with the timeline,” he said in an interview with Reuters in his office in Congress, adding that he hoped the bill would become law within two years.

COLUMN-Proposed Philippines minerals ban spooks nickel – by Andy Home (Reuters India – September 10, 2014)

September 10, 2014

http://in.reuters.com/

The opinions expressed here are those of the author, a columnist for Reuters.

(Reuters) – News that the Philippines was preparing to follow Indonesia in banning exports of unprocessed minerals caused panic in the London nickel market last week.

The Philippines has emerged as the main supplier of nickel ore to China’s massive nickel pig iron (NPI) sector after the cessation of exports from Indonesia. The threat that this flow too would be cut off appeared to represent a dramatic acceleration of an already bullish story.

Until it emerged on Tuesday that any Philippines ban is several years away. On the London Metal Exchange (LME) benchmark three-month nickel collapsed by $1,000 per tonne to $18,925 on Tuesday, wiping out the gains notched up over the previous days.

However, the market might be overly complacent about the apparently extended time-line before any Philippines ore ban, if it’s collectively assuming that events in that country will mirror those in Indonesia.

What is less in doubt is what the recent price roller coaster says about the bullish mindset in this market, particularly its responsiveness to supply-side news.

Nickel price rally still has a long way to go – by Frik Els (Mining.com – September 9, 2014)

September 10, 2014

http://www.mining.com/

Indonesia, supplying more than a fifth of global exports, surprised the mining world in January by putting into effect an outright ban on nickel ore exports.

Initially record warehouse inventories, massive stockpiling by Chinese pig iron producers and growing mine supply kept a lid on the price which was languishing at near five-year lows below $14,000 a tonne at the start of the year.

But the Asian nation, against expectations, stuck to its guns and the ban, in combination with fears that tensions with Russia could affect supply from top miner Norilsk, sent the price of the steelmaking ingredient above $20,000 in May.

The price subsequently pulled back from those levels, but last week saw nickel take another stab at $20,000 a tonne after the Philippines – the only other source in the region of high-grade laterite ore required by China and responsible for 9% of global mine supply – hinted that it may follow Indonesia’s playbook.

Even before suggestions of an ore export ban Philippine supply has been sketchy

Nickel was last trading at $18,750 and is up 35% in 2014, but expectations are for the price to appreciate sharply this year and next. Capital Economics, a research house, says Chinese pig iron makers are likely to have run down their stocks by the first half of next year.

Odisha [India] to ensure long-term [chrome, iron] ore supply to industries (Times of India – September 9, 2014)

September 10, 2014

http://timesofindia.indiatimes.com/defaultinterstitial_int.cms

BHUBANESWAR: The Odisha government on Monday decided to put in place a long-term raw material linkage policy to supply iron ore and chrome ore to industries that have signed MoUs with it.

The decision, taken at a meeting of the state cabinet headed by chief minister Naveen Patnaik, aims at encouraging establishment of mineral-based industries in the state, official sources said.

It follows repeated demands from different industrial houses for assured raw material supply. “The Odisha Mining Corporation will enter into five-year contracts with industries having MoUs with the state government,” chief secretary Gokul Chandra Pati said, briefing mediapersons.

The state-owned corporation will provide half of its production or iron ore to such industries while it would sell the rest in the open market. “The industries will get assured supply, but will have to pay the market price,” the chief secretary noted.

Official sources said the OMC will have a sales agreement with such industries akin to central PSUs National Mineral Development Corporation and Mahanadi Coalfields Limited. “We will consider supplying bauxite and manganese through similar arrangements in future,” a senior officer said.

Philippine committee approves bill banning mineral ore exports – by Erik dela Cruz and Rosemarie Francisco (Reuters India – September 8, 2014)

September 8, 2014

http://in.reuters.com/

(Reuters) – A Philippine bill seeking a halt to exports of unprocessed mineral ores has been approved at the committee stage in the lower chamber of Congress, one of two bills aimed at extracting more value from the country’s mineral resources.

The measure will go next to a full session of the lower house of Congress for discussion and voting, but no schedule has yet been set, said Ronald Madrigal, staff to Congressman Erlpe John Amante who introduced the bill in July.

A counterpart bill has also been introduced in the upper house Senate by Senator Paolo Benigno Aquino, a first cousin of President Benigno Aquino. (To read the bill in full, click bit.ly/1pGeIoV)

The bills, which would require domestic processing of all minerals extracted in the country prior to export, have raised concern at the possibility of a halt to exports of nickel ore from the Philippines, in line with similar action by Indonesia.

London Metal Exchange nickel rose 1.7 percent in early European trade on Monday and have risen more than 7 percent since news of the potential Philippines ban was revealed last week.

Japan loosens China’s grip on rare earths supplies – by Sonali Paul and Yuka Obayashi (Reuters U.S. – September 4, 2014)

September 5, 2014

http://www.reuters.com/

MELBOURNE/TOKYO – (Reuters) – Japan is pushing to secure at least 60 percent of its rare earth needs from outside China within four years, as it bolsters efforts to curb its dependence on the world’s biggest producer of elements crucial in smart phones, computers and cars.

Japan aims to sign a deal as early as this month that would give it four types of light rare earths from India, and has helped fund an Australian rare earths mine and Malaysian processing plant built by Australia’s Lynas Corp.

Its search for supply security has also led to a joint venture in Kazakhstan, recycling rare earths from batteries and motor magnets, and even exploring for rare earths in the Pacific Ocean seabed. China currently produces about 90 percent of the world’s rare earths.

Japan, which sources virtually all its rare earths from China, either directly or indirectly, has been trying to find new sources of supply since its neighbor held back shipments in 2010 during a row over disputed islands and then curbed global exports to preserve its own resources.

“It is critically important for Japan to secure sources of rare earths outside of China,” said Akira Terakawa, deputy director at mineral and natural resources division of Ministry of Economy, Trade and Industry.

The Indian deal would provide 15 percent of Japan’s needs. If Lynas is able to ramp up production as agreed, Japan could be sourcing more than 60 percent of its expected rare earths demand from outside China by 2018, based on Reuters calculations from Japanese demand data and growth figures provided by a trading house which deals with rare earths.

Tsingshan eyes first Indonesian nickel pig iron output in Jan – by Fergus Jensen and Melanie Burton (Reuters U.S. – September 4, 2014)

September 4, 2014

http://www.reuters.com/

JAKARTA/SYDNEY – (Reuters) – China’s Tsingshan Group expects to start production at its Indonesian nickel pig iron smelter as soon as January, becoming the second plant to ramp up since the country’s new mineral processing laws came into force at the start of the year.

“Hopefully by October or November we will have started commissioning,” said Slamet Panggabean, finance manger of Tsingshan’s local joint venture partner Bintang Delapan Mineral, referring to the firm’s pilot smelter project in Morowali on the Indonesian island of Sulawesi.

“The plan is for production (to begin) in January or February.” As part of a strategy to reap more value from its mineral wealth, Indonesia banned ore exports in January as it pushed its nickel and copper miners to set up metal processing plants. The move has driven up London Metal Exchange nickel prices by a third so far this year.

Stocks of nickel pig iron at China’s stainless steel makers are running down, leaving them exposed to a supply gap next year and fuelling the need to build smelters in Indonesia as quickly as possible.

Tsingshan, China’s second largest stainless steel company, was one of the few firms to act when the law was enacted in 2009 and is well ahead of other nickel pig iron producers, many of which held back on hopes the ban would be rolled back.

UPDATE 1-Philippines Senator files bill to ban mineral ore exports – by Rosemarie Francisco, Erik dela Cruz and Melanie Burton (Reuters India – September 3, 2014)

September 3, 2014

http://in.reuters.com/

(Reuters) – A Philippine senator has filed a bill urging a halt to exports of unprocessed mineral ores, similar to a ban introduced by Indonesia that led to a sharp spike in nickel prices and cut exports of other ores.

The Philippines, which has vast but largely untapped mineral resources, has been looking at ways to raise the contribution of mining to its economy.

The bill, filed in late August by Senator Paolo Benigno Aquino, a first cousin of President Benigno Aquino, would require domestic processing of all minerals extracted in the country prior to export if passed into law.

This may require nickel miners, for example, to build more smelters to process the ore before shipment. Some ores are shipped directly to China and Japan for processing.

The Philippines currently has two processing plants for nickel, both owned by the country’s top producer Nickel Asia Corp, two for gold, and one for copper, according to the Mines and Geosciences Bureau.

Paolo Benigno Aquino is one of 24 members of the upper house Senate, which is dominated by allies of the president. “This measure seeks to generate more domestic income, attract more investments, and lead to more jobs and livelihood for the Filipino people,” the bill said in its explanatory note.

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.