Asia Mining – Page 168 – Republic of Mining

UPDATE 2-Indonesia’s mining exports at standstill after new rules -govt officials – by Yayat Supriatna (Reuters U.S. – January 24, 2014)

January 24, 2014

http://www.reuters.com/

JAKARTA, Jan 24 (Reuters) – Indonesia’s metal ore and concentrate exports have ground to a complete halt, government officials said on Friday, signalling the turmoil in the mining sector after a ban on ore shipments and an export tax were imposed nearly two weeks ago.

Southeast Asia’s biggest economy introduced a controversial ore export ban on Jan. 12, although last-minute amendments aimed to ease the impact of the export ban on miners like Freeport-McMoRan Copper & Gold and Newmont Mining Corp . They now face a progressive export tax on concentrates.

“There has been no concentrate export since January 12,” Bachrul Chairi, director general of foreign trade at the trade ministry told Reuters. “As of now, no miners or companies have requested export approval for concentrate or processed ore from the trade ministry.”

Freeport Indonesia and Newmont are in talks with the government over the new rules and are yet to resume exports since the new tax was introduced, while the Mineral Entrepreneurs Association has filed a legal challenge against the ore export ban.

Freeport, Newmont Say Indonesian Rules Infringe on Pacts – by Liezel Hill (Bloomberg News – January 23, 2014)

January 23, 2014

http://www.bloomberg.com/

Freeport-McMoRan Copper & Gold Inc. (FCX) and Newmont Mining Corp. (NEM), the largest U.S. miners, said new Indonesian rules on metal export duties infringe on contracts they have with the government.

Indonesia issued regulations on metal exports this month that curbed the shipping of unprocessed ore and placed duties on exports of copper concentrate, a semi-processed ore that’s shipped from mines to smelters. The rules have resulted in delays to obtain export permits, and Freeport plans to defer some production, according to the Phoenix-based company, the world’s biggest publicly traded copper producer.

The duties on copper, which begin at 25 percent and will rise to 60 percent by mid-2016, took Freeport by surprise, Chief Executive Officer Richard Adkerson said yesterday on a conference call with analysts. Indonesia, where the company operates its biggest mine, the Grasberg copper and gold operation, accounted for 19 percent of its third-quarter revenue, according to data compiled by Bloomberg. Newmont’s Batu Hijau mine in the country contributed 6.8 percent of the miner’s total sales, the data show.

“It would get pretty rough for Freeport if Indonesia stuck to its guns on this,” Dan Rohr, an analyst at Morningstar Inc. in Chicago, said yesterday in a phone interview.

US miners hit out at Indonesia copper tax – by Ben Bland (Financial Times – January 23, 2014)

January 23, 2014

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

Jakarta – US mining majors Freeport McMoRan and Newmont have hit out at Indonesia’s new tax on the export of copper concentrate, saying it is in breach of their long-standing contracts of work with the government.

Both companies, which employ thousands of people at their vast copper and gold mines in Indonesia, said on Wednesday they were in talks with the government to resolve the situation. Newmont said it was considering other remedies including “possible legal action”.

Indonesia, a major global exporter of metals such as bauxite, copper, and nickel, implemented a hotly-contested ban on the export of unprocessed mineral ores on January 12 as part of a drive to promote the development of a refining industry. Freeport and Newmont, which together contribute well over $1bn a year in taxes and royalties to the Indonesian government, initially won a reprieve, getting permission to export their partially processed copper concentrate until 2017.

But the finance ministry delivered a sting in the tail when it announced shortly afterwards that the companies would have to pay a progressive export tax that will start at 25 per cent and rise to 60 per cent by 2017.

Essar comes under Greenpeace attack (Business Standard – January 22, 2014)

January 22, 2014

http://www.business-standard.com/ [Mumbai]

Greenpeace activists scale Essar’s 21-storey headquarters in Mumbai to protest against the company’s proposed mine in Mahan forest, Singrauli, Madhya Pradesh

After taking on the Tatas, the Adanis and the Vedanta group, activists of pro-environment body Greenpeace took on the Essar group on Wednesday regarding the Mahan coal mining project in Madhya Pradesh. It organised demonstrations outside the Essar offices here and in London.

An Essar spokesperson said Greenpeace activists, masquerading as building cleaning agents, gained access to the company’s office in Mumbai. “In this illegal act, the trespassers misused the office premises to spread anti-corporate, misleading and false propaganda,” the spokesperson said. “These people suspended themselves from the top of the building. In doing so, they endangered lives of those working in the building and disrupted normal working of the employees,” he said. The police later arrested all activists for trespassing, the official said.

The Supreme Court had last year allowed gram sabhas (village councils) in Odisha to decide the fate of Vedanta’s Lanjigarh plant, meant to make aluminium by excavating bauxite from the Niyamgiri hills, the latter revered by the villagers as a sacred place.

UPDATE 1-Indonesian mining group challenges ore export ban in court – by Fergus Jensen (Reuters India – January 22, 2014)

January 22, 2014

http://in.reuters.com/

Jan 22 (Reuters) – Indonesia’s Mineral Entrepreneurs Association (APEMINDO) has filed a legal challenge against a ban on ore exports introduced less than two weeks ago.

President Susilo Bambang Yudhoyono signed off on the controversial ore export ban on Jan. 12, although last-minute amendments eased the impact of the export ban on mining giants Freeport McMoRan Copper & Gold and Newmont Mining Corp which are now subject to an export tax.

Indonesia is the world’s biggest exporter of nickel ore, refined tin and thermal coal and is an important producer of copper and gold. It is seeking to increase added value from its mineral wealth but has been widely criticised for the ore export ban, seen by many as unfeasible.

“If this policy is carried out it will kill mining businesses,” Revly Harun, a lawyer for APEMINDO, told Reuters on Wednesday. “If they want to make smelters they need money for that. We don’t think this ore export ban is realistic.”

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.

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.