Asia Mining – Page 161 – Republic of Mining

China decries Canada’s ‘negative’ investment rules – by Nathan Vanderklippe (Globe and Mail – May 8, 2014)

May 8, 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.

HONG KONG — China’s incoming ambassador, saying Beijing still does not fully trust Canada, called on the federal government to roll back “negative” new foreign investment rules and smooth the way for increased trade with China.

Luo Zhaohui, a veteran diplomat with a love of basketball, will board a plane Thursday for Ottawa, where he will take charge of an international relationship that is as vital to Canada’s economic future as it is fraught with problems.

China has become banker to Canada’s oil and gas industry and buyer of its minerals and lumber, a country whose vast market and deep pockets have stoked lust among Canadian political and business leaders alike. Annual trade has reached nearly $60-billion (U.S.), although that’s “not enough” in the opinion of Mr. Luo, who held out the promise of a China open to buying more of what Canada has to sell.

But mutual suspicion has clouded the relationship even as ties between the two counties have deepened, with Canadian anxiety over the clout of the rising superpower and China bridling at trade and investment restrictions.

Centerra Gold continues to navigate minefield of Kyrgyzstan politics – by Peter Koven (National Post – May 8, 2014)

May 8, 2014

The National Post is Canada’s second largest national paper.

Centerra Gold Inc. is so used to getting threatened by its host government in Kyrgyzstan that it scarcely blinks anymore.

Over the past couple of weeks, Centerra watched as the Kyrgyz parliament passed a law prohibiting activities (like gold mining) that affect glaciers, and as a government agency suggested the company’s flagship Kumtor mine could be suspended. On top of that, its 2014 mine plan has still not been approved by the state.

If these events happened in another country, mining investors would be running for the hills. But they are so commonplace in Kyrgyzstan that Centerra shares barely budged, remaining around the $5.50 mark so far this week. It is simply the price Centerra has to pay to operate in a country that the Fraser Institute recently deemed the worst mining jurisdiction on earth.

Yet through all the noise, the one constant is that the Kumtor mine continues to run and churn out cash. It has done so for 16 years, with only one brief interruption last year that had anything to do with politics.

“Even though the mine comes under a lot of rhetoric and is used as a political football, they do allow it to continue to operate because it’s such a key part of the country,” Centerra chief executive Ian Atkinson said in an interview.

China’s Baosteel in $1 billion bid to revive Australia iron ore project – by Sonali Paul (Reuters U.S. – May 5, 2014)

May 6, 2014

http://www.reuters.com/

SYDNEY – (Reuters) – Chinese steel giant Baosteel Resources and an Australian partner launched a $1 billion takeover bid for Australian explorer Aquila Resources in a move that could help break the grip of mega iron ore exporters Rio Tinto and BHP Billiton.

Monday’s unsolicited A$1.14 billion ($1.06 billion) offer to take over Aquila Resources Ltd (AQA.AX) could open up a new Australian iron ore export region to supply Asian steelmakers, by jumpstarting the $7 billion West Pilbara Iron Ore project (WPIO), half-owned by Aquila.

State-owned Baosteel’s move would be the biggest foray into an undeveloped iron ore project in Australia by a Chinese investor since CITIC Pacific’s (0267.HK) $10 billion Sino Iron project, which began producing last year after massive cost blowouts and delays.

Baosteel, which already has a 20 percent stake in Aquila, said it first invested in the company back in 2009 to help it fund the iron ore project and a separate coking coal mine.

“But after five years we haven’t seen any projects being started. So we have been very patient, but we’ve become frustrated,” chief financial officer Wu Yiming told reporters on a conference call from Sydney.

UPDATE 2-S.Africa’s Harmony Gold scales back Papua-New Guinea project – by Ed Stoddard (Reuters India – May 6, 2014)

May 6, 2014

http://in.reuters.com/

JOHANNESBURG, May 5 (Reuters) – South Africa’s Harmony Gold has scaled back the size and expenditure on building its Papua New Guinea Wafi-Golpu mine, enabling it to raise funding for the project, its chief executive said.

The gold and copper project, a joint venture with Newcrest Mining, sits on deposits with a metal content estimated to be worth $85 billion at current prices. The plans unveiled in 2012 called for spending of almost $6 billion to develop it.

The mining firm is now looking at a “significantly lower capex, something that will be well within our reach to fund”, CEO Graham Briggs told Reuters on Tuesday, after Harmony released its results for the March quarter.

“August is the time when we will be able to release more information on that,” he added. Harmony has scaled back its original plans as mining investors globally have shied away from big capital expenditures on projects in the face of rising costs and falling prices.

“The timing of big builds and the raising of that sort of money, and debt levels and shareholder views changed our minds, and now we are talking about a significantly smaller mine,” Briggs said.

Nickel price rise: too much too soon says new report – by Frik Els (Mining.com – May 5, 2014)

May 6, 2014

http://www.mining.com/

Indonesia surprised the mining world in January putting into effect an outright ban on nickel ore exports.

After a relatively subdued initial reaction on nickel markets – no-one thought the Asian nation would go through with the ban and when it did, the expectation was that the rules would be water down substantially – the price of the steelmaking raw material is now up 32% in 2014.

Indonesia accounted for around a fifth of global supply at an estimated 400,000 tonnes of contained metal so the potential was there for a big impact on the price.

But record inventories around the globe (hitting 285,000 tonnes in March), massive stockpiling by China’s nickel pig iron producers ahead of the ban, and years of growing mine supply (11% per year since 2009 to 2 million tonnes), kept the price near financial crisis levels by the end of January.

Traders only really entered panic mode when supply from the world’s largest producer Norilsk was also put in danger due to the possibility of sanctions against the Russian company over the crisis in Ukraine.

Australian coal mining is entering ‘structural decline’, reports claims – by Oliver Milman (The Guardian – May 5, 2014)

May 5, 2014

http://www.theguardian.com/uk

Demand from India and China predicted to falter due to higher uptake of renewables and make huge coal mining projects commercially unattractive

Coal mining in Australia is entering a “structural decline”, with projects set to become unviable due to unrealistic expectations over the potential to export the fossil fuels to China and India, according to a new report.

The study, by the US-based Institute for Energy Economics and Financial Analysis, suggests that two huge coal mining projects in central Queensland, backed by Indian cash, “are likely to prove uncommercial” due to unfavourable market conditions.

The projects, backed by Adani and GVK, which bought its coal assets from Gina Rinehart in 2011, will attempt to open up vast deposits of coal buried in the Galilee Basin region. Clive Palmer’s China First mine is also slated for completion by 2017, removing a projected 40m tonnes of coal a year for export.

But the IEEFA analysis shows that the wholesale cost of electricity in India, a key export market, is half that of Galilee coal-fired power, making it financially unattractive for the Indian government.

Indonesia needs to tackle infrastructure hurdles to build on its youthful potential – by Jim O’Neil (Emerging Markets.org – May 2, 2014)

May 5, 2014

http://www.emergingmarkets.org/

Jim O’Neill is Visiting Research Fellow to BRUEGEL and Economic Advisor to the International Finance Corporation

Indonesians probably have the most justifiable gripe of any nation, along with Mexico, not to be included in the Bric group that I dreamt up in 2001.

Indonesia has a larger population than two of the four Bric nations, Brazil and Russia, and of course, it has a remarkably youthful population also, with demographic dynamics that give its growth potential a lot of hope in the next couple of decades.

These basic attractions are partly what led me to thinking of the notion of an additional group of emerging economies to focus on: the so-called Mint countries; Mexico, Indonesia, Nigeria and Turkey. Each of these has the potential to be a significant part of the world economy if not quite as important as the Bric economies. I define a Bric in a global context these days, as an emerging economy that if not already 3% of global GDP or more, one that has that clear potential in the next decade or two. For the Mint economies, I think of them as emerging economies that either are, or have the potential to be somewhere between 1%–2% of global GDP.

Coal to Fill China’s Nuclear Gap – (Wall Street Journal – April 28, 2014)

April 29, 2014

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

Gigawatt Buildup by 2030 Will Be Huge, but Likely Short of Goal

HONG KONG—Though China is pushing hard to promote the use of nuclear and renewable energy, coal is likely to be the fuel of the world’s most populous and polluted country into the foreseeable future.

To combat worsening greenhouse-gas emissions and pollution, China aims to raise its nuclear capacity to 200 gigawatts by 2030, from only 14.6 gigawatts last year. But it probably won’t reach that goal, energy consultancy Wood Mackenzie forecast in a report Monday—which will offer opportunities for mining companies to supply huge amounts of additional coal to make up the power shortfall.

Technology constraints, inadequate infrastructure for uranium-fuel fabrication and disposal, public opposition to inland nuclear plants, and shortages of qualified personnel all mean a more realistic nuclear capacity in 2030 will be 175 gigawatts.

“China’s nuclear capacity will account for 30% of the world’s total nuclear fleet,” said Gavin Thompson, head of Asian-Pacific natural-gas and power research at the consultancy. “Putting things into context, in 2013 China made up a mere 4.5% of the global nuclear fleet. Therefore the growth we expect in this time frame is phenomenal, even if targets are not met.”

Chinalco Mining sets sights on copper projects in Latin America – by Eric Ng (South China Morning Post – April 25, 2014)

April 25, 2014

http://www.scmp.com/business/commodities

Metal unit keen on copper projects in Peru with its huge potential and friendly environment

Chinalco Mining, the non-ferrous and non-aluminium metals unit of aluminium giant Chinalco, is seeking acquisition opportunities in Latin America for copper projects with long-term return rates of more than 10 per cent.

Chief executive Peng Huaisheng said the region presented more development potential, especially Peru, where the company has been developing the Toromocho copper project since 2007.

“Our understanding is that Peru offers greater potential within Latin America,” he said. “Peru has a strategy to catch up with Chile in metals and mining development, so it provides an overseas-investor-friendly investment environment.”

Chile is the world’s largest producer and resource holder of copper, which is used widely in the power distribution and construction sectors. China imports about 70 per cent of its raw copper ore needs. Hong Kong-listed Chinalco Mining’s US$3.5 billion Toromocho project, about 140 kilometres from Lima, started trial commercial production in December.

COLUMN-Indonesia to make it even harder for foreign miners – by Clyde Russell (Reuters India – April 23, 2014)

April 23, 2014

http://in.reuters.com/

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

LAUNCESTON, Australia, April 23 (Reuters) – Indonesia’s decision to start cancelling investment treaties with 62 countries has passed with little comment, but the move may have a greater impact than the recent banning of mineral ore exports.

Indonesia last month kick-started the process of terminating all of its bilateral treaties by notifying the Netherlands that its agreement to protect and promote investment would end in 2015, and signalling that the others would end as soon as possible.

The agreements, which are common between states, protect the rights of investors in each other’s country, and typically include clauses about fair treatment, no expropriation and guarantees that profits can be repatriated.

Most importantly for many investors in countries like Indonesia, with its patchy record on legal certainty, is the right of appeal to the Washington-based International Centre for Settlement of Investment Disputes (ICSID).

Among the countries that have treaties with Indonesia are major foreign investors including China, India, Australia, Britain, Singapore and Russia. However, the United States and Japan are among nations that don’t have agreements.

Teck Resources Ltd to cut 600 jobs, warns current coal supply is ‘uneconomic’ – by Peter Koven (National Post – April 23, 2014)

April 23, 2014

The National Post is Canada’s second largest national paper.

TORONTO – Steelmaking coal producers have started to slash production in response to lower prices, but Teck Resources Ltd. is warning that a lot more supply needs to be cut by high-cost rivals to bring the market into balance.

“Prices are currently at their lowest level since 2007, and margins are at their lowest level in 10 years,” chief executive Don Lindsay said on a conference call Tuesday. “We continue to be surprised there remains so much uneconomic coal supply on the market.”

Vancouver-based Teck announced on Tuesday that it will cut roughly 600 jobs as it tries to reduce costs and adapt to lower commodity prices, particularly for coal. The company’s realized coal price in the first quarter was US$131 a tonne; by comparison, Teck sold its steelmaking (or coking) coal for an average of US$257 a tonne in 2011.

The market has gotten even worse in recent weeks. The benchmark price for the second quarter is just US$120 a tonne, while spot prices have flirted with US$100.

Prices are falling because of concerns about rising production, slowing growth in China and the fact the Chinese government is closing some the country’s dirtiest steel mills to reduce air pollution.

COLUMN-Everybody but the curve thinks iron ore is going down – by Clyde Russell (Reuters India – April 22, 2014)

April 22, 2014

http://in.reuters.com/

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

(Reuters) – It’s hard to find any bullish predictions for iron ore prices, with the consensus being that it will drop to below $100 a tonne. Except this isn’t reflected in the financial markets.

The latest bearish signal for iron ore is the decision by an Indian court to allow the mining of 20 million tonnes per annum in the state of Goa, most of which will end up on the export markets.

While this isn’t enough ore to cause prices to slump, it adds to the overall growth in supply, which is widely expected to overwhelm growth in demand, especially as top buyer China’s economy loses some momentum. But despite the bearish outlook, the actual pricing for iron ore, both in the spot and futures markets, is holding up well.

Asian spot prices .IO62-CNI=SI were $113.30 a tonne on Monday, down 15.6 percent so far this year. But they are up 8.2 percent from the year low of $104.70 on March 10 and 31 percent above the 2012 low of $86.70, which was the weakest price for three years.

But more importantly than the spot market, the main paper markets are also showing pricing resilience. The curve for Singapore iron ore swaps <0#SGXIOS:> has a good track record of pointing to turns in market pricing.

Rio’s Oyu Tolgoi woes deepen – by Matt Chambers (The Australian – April 22, 2014)

April 22, 2014

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

MONGOLIA has stepped up criticism of Rio Tinto over continuing delays to expansion of the pair’s $US11.5 billion ($12.3bn) Oyu Tolgoi copper and gold mine, revealing a big divide still stands in the way of the profitable second stage of the giant mine.

In a letter to Rio chief Sam Walsh leaked to the Mongolian press at the weekend, Prime Minister Norov Altankhuyag chided Rio over behind-the-scenes moves to declare it was seeking an end-of-year extension to project financing for the $US5.1bn underground expansion of Oyu Tolgoi.

Lenders’ commitments for a $US3.6bn financing package for the stalled expansion expired last month because Rio and the government could not agree on Mongolia’s take from the project, access to water, and a $US2bn cost blowout on the first-stage expansion.

The disagreement threatens to derail the underground expansion of the project, which is where most of the value is set to be realised. The March 27 letter from Mr Altankhuyag, who has declared Mongolia is ready to wrap up the funding, shows the government is unhappy with Rio’s public statements on the project.

Indonesian ban on unprocessed ore exports may help Vale – (CBC News Sudbury – April 17, 2014)

April 22, 2014

http://www.cbc.ca/sudbury/

A new commodities report projects a boost in the price of nickel over the next three years — and that will have an impact on mining companies in Sudbury.

The projected price hike is connected to what’s happening overseas in Indonesia, where that country recently put a ban on exports of unprocessed ore—an effort to encourage foreign investment in domestic refining activity.

The country produces about 28 per cent of the world’s nickel, so its withdrawal from the global market marks a significant drop in supply. Recent nickel prices have reflected this new reality, as it reached a six-month high this week at $8.11/lb.

“I have revised upward my price forecast for 2015 to $9 a pound,” said Patricia Mohr, a commodities specialist with Scotiabank. “We started this year at prices just a little above $6, so it does represent quite an improvement.”

Miner Vale has operations in Indonesia, but spokesperson Cory McPhee said the company won’t be affected by the ban. “We’re a company that actually produces a refined nickel product in Indonesia,” he said.

Nickel Prices Hit 14-Month High – by Ira Iosebashvili (Wall Street Journal – April 18, 2014)

April 22, 2014

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

Indonesia Ban, Russia-Ukraine Tensions Stoke Concerns Over Supply

Nickel prices are soaring amid growing concern about the availability of supply from Indonesia and Russia, the top two producers of the metal.

The price of the industrial metal, which is used to make steel stronger and more resistant to corrosion and extreme temperatures, hit a 14-month high on Thursday, bringing year-to-date gains to 29%.

Driving up prices in the $25 billion nickel futures market is a supply shortfall caused by a recently introduced export ban in No. 1 producer Indonesia, analysts and investors say. Further adding to the worry about global supplies is the situation in Ukraine: Some traders fear that nickel miners in Russia, which ranks second in terms of output, could face sanctions if tensions escalate. Together, the two countries account for more than a third of world nickel output.

If the export ban isn’t quickly resolved, analysts and investors expect supplies of the metal to fall short of global demand for the first time since 2010. Tensions regarding Indonesia and Russia have put the nickel market on a different footing than that of many other industrial metals, such as aluminum, where supplies are more plentiful.