Asia Mining – Page 167 – Republic of Mining

Report: China may use influence to soften Indonesia’s nickel ore ban – Frik Els (Mining.com – January 20, 2014)

January 20, 2014

http://www.mining.com/

Indonesia surprised the mining world little over a week ago putting into effect an outright ban on nickel ore exports, against expectations of a last-minute climb down by authorities.

Indonesia accounts for around a fifth of global supply at an estimated 400,000 tonnes of contained metal and the ban was seen as a potential game changer in the market for the steelmaking raw material..

Nickel prices have reacted in a fairly subdued manner however with three-month nickel on the LME last trading at $14,650 a tonne. That’s up around 7% since the ban was implemented, but a far cry from 2013’s high of $18,700 struck in February and still near levels last seen in 2009.

Global warehouse levels have risen sharply over the past two years – hitting a record 260,000 tonnes this year according to LME data – keeping prices subdued. Ample available metal and ore combined with a 20% rise in worlwide mining output since 2011 just as the market was moving into surplus.

Jakarta mired deep in mining mess – by John McBeth (The Straits Times/Jakarta Post – January 20, 2014)

January 20, 2014

http://www.thejakartapost.com/

Giving with one hand and taking with the other, the Indonesian government has effectively enforced a blanket ban on mineral ore exports in a bizarre, nationalist-driven decision-making process that will cost the country billions and put tens of thousands out of work.

While value-added is an understandable goal for a country blessed with so many natural resources, the implementation of the signature policy has been bedevilled by weak leadership, poor conceptualising, political grandstanding and bureaucratic ineptitude.

Miners are now threatening to head to international arbitration, with copper giants Freeport Indonesia and Newmont Nusa Tenggara facing the prospect of shutting down 65 per cent of their production – a huge chunk of the US$10 billion Indonesia makes each year from mineral exports.

The move to process all mineral ore onshore within five years was foreshadowed in the 2009 Mining Law, but only given clarity – and teeth – in a ministerial regulation issued belatedly in July 2012, which laid out the required purity levels for each individual mineral.

Mining in Indonesia: Smeltdown (The Economist – January 18, 2014)

January 17, 2014

http://www.economist.com/

The government risks an export slump to boost the metals-processing industry

JAKARTA – INDONESIA’S government concedes that it will cause short-term damage; but on January 12th it went ahead and banned exports of mineral ores, at last implementing a law passed in 2009. Officials say that forcing mining firms to export only processed minerals will attract investment in smelters and refineries. After a year or so this will start to add value to the country’s exports, they say. But it is quite a gamble.

Indonesia has few smelters, and earns $5 billion a year by exporting unprocessed minerals such as copper concentrate, nickel ores and bauxite. The mining ministry had admitted that an outright ban on ore shipments would cut exports by $4 billion this year and $2.5 billion next. With the country’s current-account deficit last year hitting 3.5% of GDP, its worst since 1986, and its currency falling steeply, this is a bad time to be forgoing foreign earnings.

This may explain why the president, Susilo Bambang Yudhoyono, relaxed the moratorium at the last moment to let big copper producers keep exporting concentrate. (They will, however, have to pay stiff export taxes, rising from 25% this year to 60% in 2016.)

COLUMN-China moves to cut coal use look bearish for imports, may not be – by Clyde Russell (Reuters India – January 17, 2014)

January 17, 2014

http://in.reuters.com/

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

LAUNCESTON, Australia, Jan 17 (Reuters) – Coal miners in Australia and Indonesia could be forgiven for feeling depressed, given the plethora of news coming out from top buyer China on how it intends to cut demand for the dirty fuel.

In the past few days China’s National Energy Administration has set a target of lowering coal’s share of energy use to below 65 percent in 2014 from last year’s 65.7 percent, three years ahead of initial plans. Beijing’s mayor has urged an “all-out effort” to tackle air pollution, pledging to cut coal use by 2.5 million tonnes a year in his polluted city.

In neighbouring Hebei province, the country’s biggest steel-making region, authorities have said they will block new projects, punish officials in areas of high pollution, and cut steel output and coal use by 15 million tonnes each this year.

This all sounds bearish for coal, and the gloom of miners that export to China could be deepened by signs that domestic supply in the biggest producer and user of the fuel is rising.

Canadian nickel producers hope to benefit from Indonesia’s export ban – by Rachelle Younglai (Globe and Mail – January 17, 2014)

January 17, 2014January 17, 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.

Indonesia’s ban on raw mineral exports has the potential to rejuvenate a nickel industry that is suffering from a plunge in metal prices.

The ban, which started on Sunday, has pushed nickel prices up on fears that there will be a shortage of the silvery white metal used to make stainless steel. That would help Canadian producers Sherritt International Corp., Lundin Mining Corp. and First Quantum Minerals Ltd.

Toronto-based Sherritt, which runs the Moa nickel mine in Cuba and is developing a giant nickel mine in Madagascar, could see benefits immediately. “Any improvement in the nickel prices will go straight to our revenue,” said Sherritt’s chief executive officer David Pathe.

Shares of Sherritt and other producers gained about 5 per cent on Thursday. Shares of tiny Canadian nickel companies First Nickel Inc. and Royal Nickel Corp. also made gains.

Although nickel is trading at two-month highs of $6.50 (U.S.) a pound, the metal is down 70 per cent from its record high of $24 reached in 2007 when supplies were scarce.

Mining industry confused by mysterious China Gold Stone firm – by Peter Koven (National Post – January 16, 2014)

January 16, 2014

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

TORONTO – Across the mining world, one question is on everyone’s lips this week: Who is China Gold Stone Mining Development Ltd.?

The mystery began with a press release issued Tuesday morning. The statement claimed a company called China Gold Stone has launched a $780-million hostile offer for Toronto-listed miner Allied Nevada Gold Corp. The press release was retracted hours later, with the sender saying that it was issued “in error and without the advice of counsel.”

Investors and analysts had never heard of China Gold Stone, and this debacle made them take a closer look at it. Before long, they were questioning if the company exists.

The press release calls China Gold Stone a “large-scale mining company” that owns three gold mines in China worth roughly US$15-billion. It also said China Gold Stone is registered in Hong Kong and that it is working with China National Gold Corp. (China’s largest producer) to invest in global mining markets.

While there are an enormous number of little-known mining companies strewn across China, any company with such enormous mineral wealth should be well known.

UPDATE 1-India PM: POSCO to start work on steel plant in coming weeks – by Krishna N Das (Reuters India – January 16, 2014)

January 16, 2014

http://in.reuters.com/

NEW DELHI, Jan 16 (Reuters) – South Korea’s POSCO will be able to start work on its planned $12-billion Indian steel plant over the coming weeks, India’s prime minister said on Thursday, ending an eight year delay for environmental and legal clearances.

Manmohan Singh said the firm’s request for an iron ore mining licence – the final regulatory hurdle for the project which would be the biggest foreign direct investment in India – was at an “advanced stage of processing”.

The 12 million-tonnes-per-year plant in the eastern state of Odisha, formerly Orissa, will help world No.4 steel producer India to expand output.

India produced 77.6 million tonnes of crude steel in the past fiscal year, a fraction of top producer China’s nearly 800 million last year. India’s total iron ore reserve was estimated at 28 billion tonnes as of 2010 by the Indian Bureau of Mines.

India’s new Environment and Forest Minister Veerappa Moily last week gave approval to the plant but asked POSCO to spend 5 percent of the total investment on social commitments, which would raise the project’s cost to $12.6 billion.

Afghanistan’s rare earth element bonanza – by Alan Dowd – Fraser Institute (Mining.com – January 15, 2014)

January 16, 2014

http://www.mining.com/

After more than a decade of war and nation building, members of the International Security Assistance Force (ISAF) in Afghanistan are heading for the exits. Although what ISAF will leave behind is better than what was there in 2001, Afghanistan remains a battered land. However, the resources Afghanistan’s land holds — copper, cobalt, iron, barite, sulfur, lead, silver, zinc, niobium, and 1.4 million metric tons of rare-earth elements (REEs) — may be a silver lining.

U.S. agencies estimate Afghanistan’s mineral deposits to be worth upwards of $1 trillion. In fact, a classified Pentagon memo called Afghanistan the “Saudi Arabia of lithium.” (Although lithium is technically not a rare earth element, it serves some of the same purposes.)

Of course, the fact that Afghanistan is rich in minerals is not necessarily new information. The Soviets identified mineral deposits in Afghanistan during their decade-long occupation. What is new is the volume and precision of mineral-related information. Afghanistan has been mapped using what is known as “broad-scale hyper-spectral data” — highly precise technologies deployed by aircraft that, in effect, allow U.S. military and geological experts to peer beneath Afghanistan’s skin and paint a picture of its vast mineral wealth. According to Jim Bullion, who heads a Pentagon task force on postwar development, these maps reveal that Afghanistan could “become a world leader in the minerals sector.”

COLUMN-Indonesia bauxite ban slow-burn issue for aluminium – by Clyde Russell (Reuters U.S. – January 14, 2014)

January 15, 2014

http://www.reuters.com/

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

LAUNCESTON, Australia, Jan 15 (Reuters) – The immediate impact of Indonesia’s ban on exporting unprocessed mineral ores has been felt in nickel markets, but the slow burn, and potentially larger, may be in aluminium.

London Metal Exchange three-month nickel jumped 7.4 percent between the close on Jan. 9 and Jan. 14, when it ended at $14,340 a tonne. In contrast, London aluminium futures barely nudged up 0.6 percent over the same three-day trading period, and the benchmark contract in Shanghai weakened by 0.6 percent.

It may well be that the market is accurately reflecting more immediate concern over the supply of nickel, since Indonesia supplies about 13 percent of the world’s mined nickel.

But the likelihood is that any loss of Indonesian cargoes will act merely to lower the available surplus of nickel, suggesting that the current rally may not be sustained. However, the story with aluminium may be slightly different, at least over the medium to long term.

Shrugging off China risks, Australia miners dig deep for more iron ore – by James Regan (Reuters India – January 15, 2014)

January 15, 2014

http://in.reuters.com/

SYDNEY, Jan 15 (Reuters) – Australian miners shoveled record tonnages of iron ore in the December quarter, supported by billions of dollars worth of expansion plans coming on stream and despite signs of weakening demand from top consumer China.

Iron ore continues to generate big returns even as prices fall, and miners in Australia – the world’s biggest supplier – are counting on economies of scale to maintain profits for the steel making material.

Production data from Rio Tinto, BHP Billiton and Fortescue Metals Group will be released over the next two weeks, but port data already shows record tonnages were shipped in the last quarter even as Chinese demand lost steam.

Chinese iron ore purchases fell 5.6 percent to 73.4 million tonnes in December, down from a record 77.8 million in November and ore prices have dipped to a six-month low.

And weaker steel prices have prompted some mills to reduce production, putting China’s average daily crude steel output at 1.961 million tonnes in late December, the first time the pace fell below 2 million tonnes since last February.

Indonesia to China: Stop Buying Our Stuff – by Bruce Einhorn, Yoga Rusmana, and Eko Listiyorini (Bloomberg News – January 13, 2014)

January 14, 2014

http://www.businessweek.com/

Indonesian mines account for about 20 percent of the world’s nickel supply and a hefty chunk of the bauxite (used to make aluminum). China has been importing ever-larger amounts of these and other minerals from its Asian neighbor. Ironically, the more the Chinese buy, the angrier Indonesians become: Rather than purchasing refined minerals from Indonesia, China imports the raw rocks and does the processing itself, thus depriving Indonesians of jobs and tax revenue.

Miners took more than 250,000 tons of nickel out of Indonesian mines last year but processed only about 16,000 tons in-country, exporting the rest. Meanwhile, China refined more than half a million tons.

To make matters worse, through much of last year, China stockpiled Indonesian ore to hedge against any action the government in Jakarta might take to encourage more of the value-added work to stay home. The stockpiling makes Indonesian officials even more irritated. “I just returned from China, and I saw with my own eyes there are 3 million tons of bauxite and 20 million tons of nickel over there,” Industry Minister M.S. Hidayat told reporters on Jan. 8. “That’s what we want to stop.”

Indonesian President Susilo Bambang Yudhoyono is taking action do just that.

NEWS RELEASE: Minister Oliver Announces Enhanced Cooperation Between Canada and India

January 14, 2014

DELHI, INDIA–(Marketwired – Jan. 13, 2014) – Natural Resources Canada

Canada’s Natural Resources Minister, the Honourable Joe Oliver, today announced enhanced cooperation between Canada and India in the fields of mining and earth sciences and in the iron and steel industries.

Minister Oliver and India’s Minister of Steel, Beni Prasad Verma, signed a Letter of Intent (LOI) on cooperation concerning the iron and steel sector and allied industries. Minister Oliver also witnessed the signing of a Letter of Renewal (LOR) to extend a Memorandum of Understanding (MOU) on Cooperation in the Fields of Earth Sciences and Mining between Natural Resources Canada and India’s Ministry of Mines to advance bilateral cooperation and encourage cooperation in earth sciences and mining with the industrial sectors. The MOU was set to expire by June 2014.

This ongoing collaboration between the two countries underlines the Government of Canada’s commitment to expand engagement through long-term commercial investments, joint partnerships, technological cooperation and exchange of best practices in the earth sciences, mining and energy sectors.

Japan nickel users face higher costs, supply hunt after Indonesia ban – by Yuka Obayashi (Reuters U.S. – January 13, 2014)

January 14, 2014

http://www.reuters.com/

TOKYO – Jan 13 (Reuters) – Japan, home to some of the world’s biggest stainless steel producers, will face higher costs and a scramble to find new nickel supply after Indonesia enforced an export ban on the raw material.

Global nickel prices and mining shares rallied a day after Indonesia banned unprocessed exports of nickel and bauxite, in a move aimed at getting higher returns for its resources by forcing companies to refine the minerals on Indonesian soil.

The law was first announced in 2009 but only a handful of firms made the downstream investments needed, betting on Indonesia backing down on the policy. Jakarta tweaked its rules on Saturday to allow copper, zinc, lead, manganese and iron ore concentrate shipments to continue.

Japan’s biggest nickel smelter, Sumitomo Metal Mining Co Ltd (SCM), said it had enough nickel ore to maintain its current production level of ferro-nickel only till May.

Philippines Sees Nickel Boon on Indonesia’s Ban: Southeast Asia – by Cecilia Yap (Bloomberg News – January 13, 2014)

January 13, 2014

http://www.bloomberg.com/

The ban on mineral-ore exports from Indonesia, the world’s biggest nickel producer, is poised to benefit neighboring miners in the Philippines, which are predicting an increase in sales. Shares of Nickel Asia (NIKL) Corp. advanced to the highest level since July.

The ban is positive as demand and prices for Philippine supplies will increase, according to Emmanuel Samson, chief financial officer at Nickel Asia. The Taguig City-based company accounts for about a third of Philippine output, Samson said in a telephone interview.

While the Indonesian ban is intended to encourage local processing and boost the value of commodity shipments from Southeast’s Asia’s largest economy, the curbs may hand an advantage to rival producers such as Nickel Asia. Buyers in China, the top user, stockpiled ore before the ban and it may take as long as six months to work off that extra inventory, according to Samson. Producers in China also need to adjust to the lower grade of ore that comes from the Philippines, he said.

“If they do that, it would be very easy for us to ramp up production,” Samson said in an interview Jan. 9. “We think the increase is not going to be until such time that the inventory level will come down,” he said, referring to prices.

Refined-nickel futures jumped as much as 2.4 percent to $14,190 a ton today on the London Metal Exchange, the highest level in two weeks, on concern supplies will be reduced.

UPDATE 4-Indonesia export ban leaves mining in turmoil, nickel prices rally – by Wilda Asmarini and Michael Taylor (Reuters India – January 13, 2014)

January 13, 2014

http://in.reuters.com/

JAKARTA, Jan 13 (Reuters) – Indonesia’s mining sector was left in turmoil on Monday after the government pushed through a controversial ban on exporting unprocessed mineral exports.

Global nickel prices and mining shares rallied in the first trading day after the ban in the world’s top nickel ore exporter. The ban on a range of mineral ores took effect on Sunday, five years after a law was passed to force miners to build processing plants. The government provided a last-minute reprieve for exporters to keep shipping some minerals, although U.S. miner Freeport McMoRan Copper & Gold was waiting for confirmation so that it could continue to ship copper.

The policy aims to reduce reliance on raw material exports, but many firms failed to invest in enough smelter capacity to process all of Indonesia’s mining output — meaning that a total ban would have forced extensive shut downs of output and cost the economy billions of dollars.

Late changes approved by President Susilo Bambang Yudhoyono — to ease any short-term economic pain — should allow copper exports by Freeport and Newmont Mining Corp.