Asia Mining – Page 166 – Republic of Mining

Vale Indonesia Targeting $112m in Profit, May Reduce Land Concession by Up to 44% – by Tito Summa Siahaan (Jakarta Globe – February 12, 2014)

February 12, 2014

http://www.thejakartaglobe.com/

Jakarta. Vale Indonesia, the country’s largest nickel producer, has set its net income target at $112 million this year, according to a document presented during a hearing with members of the House of Representatives Commission VII overseeing mineral affairs.

The local outfit of Brazil’s Vale targets production of 79,691 metric tons of nickel matte this year, a slight increase from last year’s target of 79,500 tons, which is set to be missed due to operational disruption in the fourth quarter, the document showed.

“We expect to book sales of $1 billion, assuming that the price at the London Metal Exchange averaged $16,000,” Vale Indonesia president director Nico Kanter said at the parliament building.

The company may have missed its target of $213.6 million in net income last year due to a sharp decline in nickel prices, according to Nico.

The average nickel price for last year was $15,000, down from an average of $17,374 in 2012. He said the price of nickel is projected to recover this year thanks to the government’s decision to ban exports of unprocessed nickel ore, but trends for the first few months still showed price fluctuations.

Despite good data, headwinds await Indonesia’s economic growth – by Randy Fabi and Rieka Rahadiana (Reuters U.S. – February 11, 2014)

February 12, 2014

http://www.reuters.com/

JAKARTA, Feb 12 (Reuters) – Ibris Nickel Pte Ltd has not made a shipment from its remote mine in Indonesia’s Southeast Sulawesi for six weeks and is bleeding $12 million a month, one of hundreds of small miners squeezed by a controversial mineral export ban imposed last month.

The problems at privately owned Ibris illustrate one of several headwinds facing Indonesia, Southeast Asia’s biggest economy, despite a spate of surprisingly strong economic data.

Indonesia is not only confronting a mining crisis, but also the delayed effects of the central bank’s aggressive monetary tightening, political uncertainty in an election year, a slowdown in China, and the tapering of U.S. monetary stimulus.

“We very much doubt the economy has bottomed and expect the downturn to resume form in the current quarter,” said Robert Prior-Wandesforde, an economist at Credit Suisse. Recent data has looked good: December’s trade surplus, at $1.52 billion was double the market consensus, the largest in two years and the third straight monthly surplus, the government said last week.

India rejects call to ban iron ore exports from top producing state – by Krishna N Das and Jatindra Dash (Reuters India – February 12, 2014)

February 12, 2014

http://in.reuters.com/

NEW DELHI/BHUBANESWAR, India, Feb 12 (Reuters) – India’s mines ministry has rejected suggestions by a powerful government panel to ban exports of iron ore and limit output from the eastern state of Odisha, dispelling fears the country’s top producer faced curbs similar to those imposed elsewhere.

The bans in two other producing states, Karnataka and Goa, have helped spur sales by miners from Australia, Brazil and South Africa, pushing India to ninth place last year among world exporters of the steelmaking raw material to top market China.

The panel, led by Justice M.B. Shah, asked the ministry to consider the restrictions to ensure that future generations are “not required to import iron ore” and to crack down on illegal mining, after recommending the same steps for Karnataka and Goa.

Bans in these two southern states, following the findings of the Shah Commission set up in 2010, have already slashed India’s exports of iron ore by about 85 percent, or 100 million tonnes, in the past two years, pushing the country from its 2011 ranking of No. 3 among world exporters to China.

Royal Nickel Corp: Indonesian Ore Export Ban Opens Door to the Next Generation of Nickel Mines (The Gold Report – February 11, 2014)

February 12, 2014

http://www.theaureport.com/

DISCLOSURE: Royal Nickel Corp. paid The Mining Report to conduct, produce and distribute the following interview.

Nickel prices have been weak, but the recent Indonesian government announcement banning ore shipments outside the country may be the shock that reverses the trend. In this interview with The Mining Report, Mark Selby, senior vice president of business development for Royal Nickel Corp., walks through his analysis that indicates nickel price increases and inventory reductions are imminent, while demand continues to grow and over a quarter of global mine supply is shut in.

He considers nickel in 2014 one of the best commodity trades in a generation. To capitalize on this unique set of circumstances, Royal Nickel’s Dumont Nickel Project follows the path of other large-reserve, large-scale mines in the copper and gold sectors that have changed the mining industry and made early investors fortunes.

The Mining Report: The nickel industry has been through tectonic changes in the last 10 years, including large corporate takeovers and fundamental changes in supply available to the market. Can you summarize where the nickel industry has been and where it is going?

Mark Selby: Over the past five years, we’ve seen continued robust growth in nickel demand. Over that period, global nickel demand grew in the high single-digits, while Chinese nickel demand grew at double-digit rates.

How to kill an industry in Indonesia -by John McBeth (Asia Times – February 10, 2014)

February 10, 2014

http://www.atimes.com/

JAKARTA – Indonesia’s exports of mineral ore are now at a standstill, with unprocessed bauxite and nickel the target of an outright ban and mining companies either refusing or unable to pay the draconian new export duty on copper and the other concentrates that were given a 12th-hour three-year extension.

That’s only half of the story. Far from clear is whether enforced on-shore processing of mineral ores will actually work when there are serious doubts about the economic viability of building smelters and hydrometallurgical processors in an already over-supplied global market.

The dysfunctional way in which the government has implemented the new value-added policy, with unrealistic deadlines and a clear lack of preparation or understanding of its own contracts of work (COW), has shaken the Indonesian mining industry to its core.

A government regulation extending the January 12 ban for copper giants Freeport Indonesia and Newmont Nusa Tenggara and 66 other, mostly Indonesian, mining companies was undercut the next day by the export tax, which rises from an already daunting 20-25% in the first year to a prohibitive 60% in the second half of 2016.

Sweeping change across China’s Inner Mongolia – by Martin Patience (BBC News – February 5, 2014)

February 10, 2014

http://www.bbc.co.uk/news/

Inner Mongolia, China – Traditional music floated across the freezing grasslands that stretched far into the distance. Inner Mongolia is China’s strategic frontier and home to its Mongolian ethnic minority.

They are the descendants of the Mongol warrior, Genghis Khan, who on horseback eight centuries ago swept across much of Asia, creating one of the world’s greatest empires. Today, the Mongolians still celebrate their traditions at nadaams – or traditional games.

Hundreds watched as a train of camels swept into a small stadium on the grasslands, their hooves kicking up the snow. Some of the animals pulled wooden sleighs with children sitting in them.

They were ridden by Mongolian herdsmen wearing traditional blue, green and red lambskin outfits to protect them from the bitter winter cold. Throughout the day, the crowd watched camel racing, archery on horseback, and traditional wrestling. But most of this was for show. The nomadic way of life is fast disappearing.

China returns to hunt for African mine assets – by Andrew England and Javier Blas (Financial Times – February 7, 2014)

February 7, 2014

http://www.ft.com/home/us

Cape Town – China is making a return to African mining after a hiatus of nearly two years – seeking out new copper, iron ore and uranium deposits in a sign that Beijing is still a keen investor in the continent’s industry.

However, executives and bankers attending the annual Mining Indaba conference in Cape Town – the biggest of its kind in Africa – have warned that China is unlikely to spend large sums solely to secure a flow of commodities, as it did until 2012. Instead, they said Beijing was more likely to buy smaller assets offering strong financial returns and raw materials.

“Selectively, yes, they [the Chinese] are coming,” said Michael Rawlinson, co-head of mining and metals at Barclays. “Some of their acquisition vehicles are on the hunt.” Since the beginning of the year, deals have started to flow: China National Nuclear Corporation has taken a large stake in one of Africa’s largest uranium mines in Namibia for nearly $200m, and China National Gold is in final talks to buy a copper mine in Congo.

Rajat Kohli, head of mining and metals at Standard Bank, which is 20 per cent owned by ICBC, China’s largest bank, said: “The clear message . . . from state-owned enterprises and some of the better established private companies is that they are open for business to Africa.”

Indonesia miners must pay smelter cash guarantee -govt officials – by Wilda Asmarini (Reuters India – February 7, 2014)

February 7, 2014

http://in.reuters.com/

JAKARTA – Feb 7 (Reuters) – Miners with smelter plans in Indonesia will have to pay a financial guarantee to prove they are serious about building domestic metal-processing plants, said mining ministry officials.

The move indicates the Southeast Asian nation may be unwilling to significantly roll back or make major concessions in its mining policy that have ground ore and concentrate exports to a complete halt.

President Susilo Bambang Yudhoyono last month imposed new mining rules, including a controversial mineral ore export ban and progressive export taxes on concentrates, aimed at forcing miners to build smelters and process their raw materials in Indonesia.

The policies have forced U.S. miners Freeport-McMoRan Copper & Gold and Newmont Mining Corp to halt all exports, as both firms say the export tax breaches their mining contracts and it is not economically viable to make such large smelter investments in Indonesia.

High level executives from both companies have been involved in talks with the government over the tax and building of smelters, and a breakthrough now looks a distant prospect.

Mitsui Mining Boosts Zinc Fee 70% as China Demand Rises – by Jae Hur and Ichiro Suzuki (Bloomberg News – February 5, 2014)

February 5, 2014

http://www.bloomberg.com/

Mitsui Mining & Smelting Co. (5706), Japan’s biggest zinc producer, raised annual charges to overseas buyers by as much as 70 percent as consumption increases in China. Futures in London snapped a 10-day losing streak.

The higher fee compares with a 15 percent gain for special high-grade metal last year, said Osamu Saito, a general manager in the Tokyo-based company’s business department. He declined to disclose any dollar values.

Zinc stockpiles monitored by the London Metal Exchange shrank 31 percent since the start of 2013, with inventories in Asia contracting 68 percent. Morgan Stanley forecasts cash prices to average $2,127 a metric ton in 2014, a 10 percent increase on last year as the zinc deficit widens sixfold.

“The market’s been waiting for a turnaround in zinc,” said Gavin Wendt, the founder and senior resource analyst at Sydney-based Mine Life Pty. “There are a lot of people, including myself, that think that 2014 could be the year.”

The metal for delivery in three months in London climbed 0.8 percent to $1,967 a ton at 2:16 p.m.

NEWSMAKER-Indonesian minister tried but couldn’t block his own law – by Wilda Asmarini and Kanupriya Kapoor (Reuters India – February 4, 2014)

February 4, 2014

http://in.reuters.com/

Feb 4 (Reuters) – Indonesia’s mines minister, Jero Wacik, has been on an unusual mission in recent months: finding a way out of implementing his own government’s policy.

A smiling, well-rehearsed politician, Wacik was earlier tourism minister, pushing the charms of his native Bali island and other Indonesian attractions. In 2011, he was given the role of supervising the country’s $6 billion-a-year mining sector despite having no experience of the industry.

At the time, part of his job was to enforce a law President Susilo Bambang Yudhoyono had pushed through, a bold ultimatum to the mining industry: process your ores in Indonesia by 2014 or stop exporting.

But around the middle of last year, the government came to the conclusion that a ban on the export of ore would hurt the economy and lead to job losses that would be damaging in the 2014 election year. Wacik tried postponing the law, but parliament, already tired of the administration’s ambiguities, wouldn’t play ball. He then tried to water it down, but was not successful.

Indonesian govt must offer incentives to build smelters-PT Indosmelt – by Michael Taylor and Wilda Asmarini (Reuters India – February 4, 2014)

February 4, 2014

http://in.reuters.com/

JAKARTA, Feb 4 (Reuters) – Indonesia’s government must provide tax holidays and other financial incentives to convince companies to invest hundreds of millions of dollars to build copper smelters amid weak global prices, said the head of smelting firm PT Indosmelt.

President Susilo Bambang Yudhoyono last month imposed new mining policies, including a controversial mineral ore export ban and progressive export taxes, aimed at forcing miners to build smelters and process their raw materials in Indonesia.

The policies have forced U.S. miners Freeport-McMoRan Copper & Gold and Newmont Mining Corp, which together produce 97 percent of Indonesia’s copper, to halt all exports. The two firms have yet to commit to building smelters, saying it was not economically viable to make such large investments.

“The margins for smelters are small, very small,” Natsir Mansyur, president director of privately owned and unlisted PT Indosmelt told Reuters. “There must be incentives from the government. To build (a smelter), this business should be protected by the government.”

In mid-2012, government officials said they planned to offer financial incentives to help firms build smelters to comply with the new mining regulations, although the details have yet to be announced and talks are still ongoing.

COLUMN-Indonesian minerals ban bites as well as barks – by Andy Home (Reuters India – February 3, 2014)

February 3, 2014

http://in.reuters.com/

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

Feb 3 (Reuters) – Indonesian minerals policy is rarely a straightforward affair and so it proved again in the run-up to the Jan. 12 ban on exports of unprocessed ores.

There was plenty of last-minute drama, particularly concerning the treatment of copper concentrates. These were first unexpectedly included in the ban and then granted an eleventh-hour presidential exemption, but with an equally unexpected caveat of rising export taxes.

And there will surely be more twists and turns in the story in the weeks and months ahead. Both of the major copper producers operating in the country, Freeport McMoRan and Newmont Mining, are challenging the government’s right to change existing contracts of work governing their operations at Grasberg and Batu Hijau respectively.

A local mining association, meanwhile, has wasted no time in filing a legal challenge to the ban. The really big surprise, though, is just how total the ban is.

Indonesia’s export ban to curb China aluminium expansion – by Melanie Burton (Reuters India – January 31, 2014)

January 31, 2014

http://in.reuters.com/

SYDNEY, Jan 31 (Reuters) – China has found an inadvertent ally in its efforts to slim down a bloated aluminium sector, with Indonesia’s ban on exporting metal ores set to boost costs of the raw material bauxite and pile more pressure on struggling smelters.

Beijing has been issuing broadbrush rules aimed at reining in overcapacity in sectors such as aluminium and steel for about a decade, but plans have usually been thwarted by resistance from local governments anxious to boost growth.

In the aluminium sector, ageing and inefficient smelters are already grappling with rising power prices, but now face potential bauxite shortages after Indonesia halted ore shipments on Jan. 12, as part of efforts to make miners process minerals at home.

China is the world’s biggest aluminium producer and curbing expansion could ease a global surplus of the metal and even lead to the country resuming sizeable imports of refined aluminium. It is also likely to provide support to the price of a metal that has been depressed for years.

“(Indonesia’s ban) will have a huge impact on the Chinese aluminium industry in the medium term,” said Citi China commodities analyst Ivan Szpakowski.

COLUMN-China may not be commodity market driver in 2014 – by Clyde Russell (Reuters U.K. – January 30, 2014)

January 30, 2014

http://uk.reuters.com/

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

LAUNCESTON, Australia, Jan 30 (Reuters) – While it’s probably going too far to say the China HSBC Purchasing Managers’ Index can be discounted, there are good reasons to be cautious about the weak January reading.

The final HSBC PMI dropped to 49.5 from December’s 50.5, falling below the 50-mark that separates expansion from contraction for the first time in six months.

The soft start to the year in global industrial powerhouse has raised investor concerns that growth in China, the world’s biggest commodity consumer, may disappoint and struggle to reach 7.5 percent, which is widely expected to be announced as the official target.

Hongbin Qu, chief economist for China at HSBC, said in a statement that the weakness in the PMI was led by weaker new export orders and “slower domestic business activities”. But is this really such a surprise? Export orders are always likely to come off post the year-end holiday season in the West and domestic business would already have been tailing off ahead of the Lunar New Year holidays, which start on Jan. 31.

COLUMN-Gold rallies won’t sustain without more China, India buying – by Clyde Russell (Reuters U.S. – January 29, 2014)

January 29, 2014

http://www.reuters.com/

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

LAUNCESTON, Australia, Jan 29 (Reuters) – Gold’s positive start to the year seems to be based more on hope than any real change to the factors that saw the precious metal shed 28 percent last year.

Spot bullion has gained 4.25 percent since the start of the year to the close of $1,256.09 an ounce on Jan. 28, with China and India factors helping to drive the rally.

The optimistic view for gold is that top buyer China will continue to buy record amounts and that India, which was supplanted by its Asian neighbour last year, will ease the restrictions that crimped its demand last year.

Taking India first, and the gold bulls have taken heart from comments on Jan. 27 by finance ministry officials that the curbs on gold imports will be reviewed by the end of March. India progressively hiked import taxes to a record 10 percent last year and imposed a requirement that 20 percent of imported gold must be fabricated and exported.