Asia Mining – Page 156 – Republic of Mining

Jim O’Neill: What Jokowi’s Win Means For Jakarta’s Market? – by Shuli Ren (Baron’s Magazine – July 23, 2014)

July 24, 2014

http://online.barrons.com/home-page

The following is a guest post by my colleague Assif Shameen:

“Jokowi’s victory is potentially as important as Modi’s was for India,” says Jim O’Neill, former Chairman of Goldman Sachs Asset Management and the man who coined the term BRICs or the world’s largest emerging markets. O’Neill has long regretted not including Indonesia among the emerging giants.

As the world’s third largest democracy, O’Neill says Indonesia can’t just be dependent on the global commodities cycle. “Indonesia has huge potential and a guy like Jokowo could just be the one to unleash it but he has to be bold and take on vested interests and those that allow corruption as well as other forms of misallocation of capital,” he says.“Indonesia needs a Modi-type figure to galvanize its young dynamic population to deliver on its potential,” O’Neil says.

But the former Goldman Sachs economist notes “expectations in Indonesia are now as high, if not higher than they are in India” in the wake of Jokowi’s victory. “India and Indonesia now need to deliver or otherwise the scope for disappointment in both places is obvious, specially in the short term. If the changes are for real in Indonesia and India then the case for further re-weighting in both those markets is huge,” he says.

Year-to-date Jakarta Composite Index is up 21.1% . The market has risen 9.1% over the past 12 months. But stocks may have gotten ahead of themselves. Sam Le Cornu, Senior Portfolio Manager at Macquarie Funds Group who co-manages the Macquarie Asia New Stars Fund in Hong Kong says while the macro picture in Indonesia looks encouraging the only problem now is valuations.

Freeport Sees Indonesia Deal ‘Imminently’ on Export Curbs – by Liezel Hill (Bloomberg News – July 23, 2014)

July 23, 2014

http://www.bloomberg.com/

Freeport-McMoRan Inc. (FCX) expects to sign a deal with the Indonesian government “imminently” to resolve a dispute that has curbed production at the world’s third-biggest copper mine.

The largest publicly traded copper producer and the government have developed a memorandum of understanding under which the company would commit to help develop a smelter, Phoenix-based Freeport said today in a statement. The agreement includes reduced export taxes and higher royalties for copper and gold.

The agreement, which would enable the immediate resumption of exports, also states that Freeport and Indonesia would start negotiations immediately on changes to the company’s contract to operate in the country.

Freeport reduced operating levels this year at its Grasberg copper and gold mine after Indonesia introduced restrictions and duties on mineral exports in a bid to increase local processing. Exports of concentrates, a semi-processed raw material, have yet to resume after months of negotiations between the company and government officials.

Freeport has been able to run Grasberg at about half of normal rates because it sends some concentrate to a domestic smelter it helped build in the 1990s.

INTERVIEW-RPT-Indonesia’s new president says he will sit down with miners – by Randy Fabi and Wilda Asmarini (Reuters India – July 23, 2014)

July 23, 2014

http://in.reuters.com/

(Reuters) – Indonesia’s new president Joko “Jokowi” Widodo said he wants to sit down with mining companies and other parties in a bid to resolve a row over mining policies that has halted $500 million of metal exports a month in Southeast Asia’s biggest economy.

The comment by the former Jakarta governor, who has a reputation for tackling entrenched interests, appeared to be a positive sign after an increasingly bitter dispute between the mining sector and the outgoing government.

Until this year, Indonesia was the world’s top exporter of nickel ore and a major supplier of copper, iron ore and bauxite. But a ban in January on exporting unprocessed ore and an escalating tax on metal concentrates have paralysed shipments.

“First, I want to sit down with stakeholders, investors, regulators and with the people to know the problem and find a good solution for them. I want to know the details,” Jokowi said in an interview at his residence in Jakarta on Saturday, before he was declared winner of the presidential election on Tuesday.

Jokowi did not say specifically how he would handle the row over the ore ban, and when pressed on the issue an aide stepped in to say “too much detail”. But mining companies will be hoping the new president can help reanimate negotiations, which had run into trouble with the administration of outgoing President Susilo Bambang Yudhyono.

RPT-COLUMN-China aluminium surplus likely to cap price rally – by Clyde Russell (Reuters India – July 22, 2014)

July 22, 2014

http://in.reuters.com/

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

LAUNCESTON, Australia, July 22 (Reuters) – Rising Chinese output is likely to act as a brake on aluminium’s 15 percent rally since May, even as the global outlook for the industrial metal improves.

It’s no secret that much of Chinese aluminium smelting capacity operates at a loss and is reliant on subsidies from local and regional governments to survive.

But the price gain in the second quarter resulted in capacity that was either idled, or about to be shut, remaining in operation, according to a July 17 report from Beijing-based consultants AZ China.

This is despite some 80 percent of Chinese smelters, representing some 20 million tonnes of annual capacity, operating at a theoretical loss, AZ China said.

The average cash cost for a Chinese aluminium smelter in the second quarter was 14,161 yuan ($2,282) a tonne, above the Shanghai Futures Exchange (SHFE) spot price of 13,435 yuan, the report said.

Still, the average cash cost for Chinese smelters was 2 percent lower in the second quarter than the first as inputs such as electricity and alumina decreased in price, allowing plants to remain in business.

Australia could start uranium sales to India – by Shivom Seth (Mineweb.com – July 22, 2014)

July 22, 2014

http://www.mineweb.com/

Australian Trade Minister Andrew Robb told newspersons that Australian uranium sales to India were very close.

MUMBAI (MINEWEB) – With the International Energy Agency forecasting a doubling of nuclear power generation out to 2035, Australia has said it could soon start exporting uranium to India.

Australia holds about a third of the world’s recoverable uranium resources, and exports nearly 7,000 tonnes a year. Energy starved India is looking to nuclear power to supplement its existing options to fuel economic growth.

Australian Trade Minister Andrew Robb told newspersons that Australian uranium sales to India were very close, after he attended a G20 trade ministers meeting in Sydney last week, and held talks with an Indian trade delegation.

Prime Minister Julia Gillard had started talks on supplying uranium to India during a three day official visit to the country in 2012. Gillard had reversed the ban in 2011.

With a new government at the helm in Canberra in 2013, India and Australia were aiming to complete negotiations on a civil nuclear agreement for uranium supplies by the end of the year.

Eastern Promise: Is Kazakhstan our new mining hotspot? – by Cole Latimer (Australian Mining – July 22, 2014)

July 22, 2014

http://www.miningaustralia.com.au/home

Mining is full of quiet achievers; be it individuals, companies, or even countries.

Globally speaking Australia, Canada, South Africa, China, India and the US are in focus every day, but what about the countries that are the quiet achievers?

What about Chile, Ghana, Kazakhstan? Kazakhstan has been touted as one of world’s best endowed states when it comes to high class deposits, if perhaps one of the world’s most overlooked.

It is the world’s largest uranium producer under IAEA standards, the fourth largest copper producer (with 40 million tonnes in proven reserves), has the world’s ninth largest proven gold reserve and almost the same levels of zinc, but often fails to rate a mention.

As Austrade states “Kazakhstan is one of the world’s most promising emerging markets for natural resources”, and importantly for Australian operators it is looking to double mineral production within the next five years. Kazakh president Nazarbayev outlined a gold production goal of 70 million tonnes per year before 2015.

This has created a high potential for Australian operators, with the potential to rate as highly as China, after it rated ahead of the major Australian trade partner, ranked at 59th according to the World Bank’s 2010 ‘Doing Business’ survey.

REFILE-Indonesia ends 6-month stoppage of metal concentrate exports – by Wilda Asmarini and Fergus Jensen (Reuters India – July 18, 2014)

July 18, 2014

http://in.reuters.com/

(Corrects company name in 5th paragraph to “Lumbung Mineral Sentosa” from “Lumbung Mineral Stocks”)

(Reuters) – Indonesia has resumed exports of metal ore concentrates, a mining ministy official said, ending a six-month stoppage resulting from a new policy to improve returns on resources shipped out of southeast Asia’s largest economy.

Indonesia in January banned unprocessed ore exports and levied an escalating tax on metal concentrate exports as part of the policy to force miners to build smelters and process minerals domestically.

Disputes and confusion over the rules halted about $500 million worth of monthly mineral ore and concentrate exports. Prior to the ban, Indonesia was the world’s top exporter of nickel or and a major supplier of iron ore and bauxite.

However, last week shipments of iron ore, lead and zinc concentrate left the country, after two firms agreed to pay a 20 percent export tax, coal and minerals director general Sukhyar told reporters late on Friday.

“There are two firms that have started to export; Sebuku Iron Lateritic Ores (SILO), and Lumbung Mineral Sentosa,” Sukhyar said, adding that SILO had sent two shipments or around 100,000 tonnes of iron ore concentrate and Lumbung had shipped around 8,000 tonnes of lead and zinc concentrate already.

UPDATE 3-Indonesia threatens to take over Newmont mine if output stays shut – by Wilda Asmarini and Fergus Jensen (Reuters India – July 18, 2014)

July 17, 2014

http://in.reuters.com/

JAKARTA, July 17 (Reuters) – Newmont Mining Corp risks its Indonesian mining licence being taken over by a state-owned firm if the U.S. miner does not resume copper production, the Southeast Asian nation warned, escalating a six-month dispute over export rules.

The move represents a hardening of the stance of Indonesia’s outgoing government. The mining ministry earlier this week said it could terminate Newmont’s mining contract in response to the miner stopping production and filing legal arbitration over the export rules.

The developments mark the latest twist in the dispute between Indonesia and U.S. miners Newmont and Freeport-McMoRan Inc that has led to a halt in copper concentrate shipments from Southeast Asia’s biggest economy.

Indonesia plans to soon send a letter to Newmont saying that the company has defaulted on its contract, said Sukhyar, director general of coal and minerals at the mining ministry. “The default is due to the stopping of production, so we can say they are negligent,” Sukhyar told reporters on Thursday.

A Newmont spokesman did not comment on the risk of the company losing its mining licence at its Batu Hijau copper mine but said in an email that the company is eager to resume production as soon as the government issues it an export permit.

India’s coal shortage a boon for Australian miners – by Vicky Validakis (Australian Mining – July 15, 2014)

July 15, 2014

http://www.miningaustralia.com.au/home

In what could be good news for Australia’s coal industry, India’s power plants are running out of stock, forcing the country to increase its import levels.

India already imports 20 per cent of its coal requirements and shipped in 152 million tonnes of coal last year.

However rising electricity demands are putting an increasing strain on local production, with state-run Coal India Limited (CIL) asked to up its output by importing more of the commodity to mix with domestic supply.

A source told The Economic Times that India’s power plants were not running at optimum levels, with more coal required to help in a ramp-up.

There are currently 65,000 MW of power generation projects out of action. Although pooling will raise the cost of coal, it is seen as a way to help underperforming plants generate more electricity.

The demand for coal in India is expected to come in at 551.60 million mt in 2015, however supplies are predicted to amount to just 466.89 million mt, leaving an 84.71 million mt shortfall.

Barrick teams with Saudi Arabian miner on copper project – Rachelle Younglai (Globe and Mail – July 14, 2014)

July 14, 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.

Barrick Gold Corp. will work with a prominent Saudi Arabian miner to develop its copper mine in the country, a partnership that the Canadian company aims to replicate with other projects such as its mothballed Pascua Lama in the Andes.

The Saudi Arabian Mining Company (Ma’aden) will pay $210 million (U.S.) to own half of Barrick’s Jabal Sayid copper asset, which has been delayed due to regulatory hurdles in the Kingdom.

Barrick, the world’s largest gold producer, said the state-owned Ma’aden’s “extensive experience in the Saudi Arabian mining sector,” would help move the project to completion.

Jabal Sayid is expected to start operating in 2015 with annual production of about 100-130 million pounds of the red metal during its first five years of operation, according to Barrick.

The joint venture marks the first partnership the company has formed since John Thornton became Barrick’s executive chairman earlier this year. Mr. Thornton has spoken to media about developing a long-lasting relationship with China, currently the world’s biggest gold producer and consumer.

Five hours’ flying time winds clock back to the beginning – by Paul Garvey (The Australian – July 10, 2014)

July 10, 2014

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

THE economic growth of China in the past decade has generated tens of billions of dollars in profits for Australia’s mining companies, but it was all about Japan in the heart of the company’s Pilbara iron ore operations yesterday.

Shinzo Abe made a flying two-hour visit to the West Angelas mine in the remote pocket of Western Australia, following through on an invitation made by Rio Tinto chief executive Sam Walsh in Tokyo last year.

The five-hour journey across the country from Canberra to the Pilbara left its mark on Mr Abe, giving him more time to talk with Tony Abbott.

“I was extremely impressed that I could take a five-hour flight and still be in Australia. I’m really amazed by how big this country is,” he said through an interpreter, addressing a gathering on the edge of the gaping West Angelas open-pit as huge trucks rumbled past hauling iron ore bound for Asia.

“The flight took twice as long as the summit meeting we had yesterday, but I actually believe that we had deeper discussions on the flight and we will really be able to deepen our relationship as well.”

Indonesia Ore Ban to Remain Should Widodo Win Poll – by Jake Lloyd-Smith and Yoga Rusmana (Bloomberg News – July 10, 2014)

July 10, 2014

http://www.businessweek.com/

Indonesia’s ban on ore exports will probably remain in place and speculation that the curb may be relaxed if Joko Widodo becomes the country’s next president is misplaced, said Australia & New Zealand Banking Group Ltd.

Nickel fell as much as 2 percent in London yesterday as unofficial counts showed Jakarta Governor Widodo won the most votes in the world’s third-biggest democracy, putting him ahead of Suharto-era general Prabowo Subianto. While the market perceives Widodo’s market-friendly policies as an indication that the ban will be lifted or at least watered down, that’s unlikely, analysts including Mark Pervan wrote in a note.

The ban in the biggest mined nickel producer, which was implemented in January to induce investment in processing plants, spurred forecasts for global shortages of the metal used in stainless steel. Nickel rallied in May to the highest level since 2012, and outperformed all other base metals this year. Widodo, who’s known as Jokowi, would probably relax the ore ban, Mike Dragosits, senior commodity strategist at TD Securities in Toronto, said yesterday as prices retreated.

That decision is unlikely “given the upside to revenue is substantial, and the fact that the policy has been in place for six months already and appears to be encouraging investment in processing facilities,” Pervan said.

India needs to restructure Coal India to raise output -govt report – by Krishna N Das (Reuters India – July 9, 2014)

July 9, 2014

http://in.reuters.com/

(Reuters) – India needs to restructure state behemoth Coal India Ltd quickly to raise output to feed fuel-starved power plants, the finance ministry said in a report, as the country grapples with rising imports amid a push for electricity to all.

Coal India (CIL), the world’s largest coal miner, accounts for about 80 percent of India’s production of the black rock but has failed to meet its output targets for years due to delays in obtaining environmental approvals to expand mines and what critics say are inefficiencies owing to its size.

Millions go without power in India and blackouts are common. “The process of restructuring CIL needs to be pushed through swiftly to boost coal production,” said the finance ministry in the Economic Survey report presented to parliament on Wednesday.

The report – submitted a day before Finance Minister Arun Jaitley delivers his maiden budget – did not say what kind of restructuring it was recommending for CIL.

Reuters reported in May that newly elected Prime Minister Narendra Modi could explore breaking up some of CIL’s eight local units and making state governments equity holders to help speed land acquisition and other such processes.

The government should also allow commercial mining by private companies, said the ministry’s report.

Copper miners’ paths diverge over Indonesia export tax – by Michael Taylor and Allison Martell (Reuters India – July 8, 2014)

July 8, 2014

http://in.reuters.com/

JAKARTA/TORONTO – (Reuters) – Six months into a dispute with Indonesia’s government that has halted copper exports, two U.S. mining giants are using very different tactics in a bid to resume shipments – behind the scenes talks or raising the stakes with an arbitration claim.

Freeport-McMoRan Copper & Gold Inc and Newmont Mining Corp account for 97 percent of Indonesia’s copper production, exporting tens of thousands of tonnes of concentrate a month before a row over a new export tax halted shipments.

As the latest bid to broker a deal runs up against Indonesia’s presidential election, Freeport is pushing on with government-led talks, with chief executive Richard Adkerson in Jakarta again last week.

Newmont, however, has filed for international arbitration, pushing to uphold the letter of the law on its contract but drawing a rebuke from the government which has questioned its “good will” in talks.

“Freeport is using the carrot and I guess Newmont is using the stick,” said Chris Mancini, analyst at Gabelli Gold Fund. Gabelli Funds holds stakes in both companies.

In an effort to push miners to build domestic smelters and processing plants, Indonesia introduced new mining export rules in January.

NEWS RELEASE: BHP BILLITON SHIPS ONE BILLION TONNES OF IRON ORE TO JAPAN – July 2, 2014

July 7, 2014

BHP Billiton today celebrated the shipment of its one billionth tonne of iron ore to Japan with customers, joint venture participants and employees in Port Hedland, Western Australia.

BHP Billiton President Iron Ore Jimmy Wilson and BHP Billiton President HSE, Marketing and Technology Mike Henry were joined by joint venture participants ITOCHU Corporation (ITOCHU) and Mitsui & Co., Ltd (Mitsui) to mark the milestone in front of the Saiko bound for Japan.

Mr Henry acknowledged Japan’s industrial transformation and the importance of two-way trade in driving economic growth.

“In the late 1960s and through the 1970s, Japan grew to become an economic powerhouse through its expertise in steel manufacturing, heavy industry, technology and electronics,” he said.