Asia Mining – Page 168 – Republic of Mining

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.

Jack Lifton refutes WSJ article: ‘How the Great Rare-Earth Metals Crisis Vanished’ – by Jack Lifton (Investor Intel – January 12, 2014)

January 13, 2014

http://investorintel.com/

The WSJ article published on January 8, 2014 How the Great Rare-Earth Metals Crisis Vanished declares that the “rare earth crisis” is over, and as support refers to the conclusions of a “leaked” Pentagon report. It glibly declares, analyses, and dismisses, as a failure, a Chinese plot to maintain control of the production and pricing of the rare earths as having been defeated by the forces of the market and capitalism.

But the real crisis is that western end-users of rare earth enabled components have proved that if you don’t capitalize the security of supply then when the market turns in your favor you are unprepared to take advantage of it. It is in the naked greed of the stock market where the real rare earth crisis was invented, fomented, sucked dry — and forgotten. The stock market flies no national flag and its players care little for apple pie or mom.

Notwithstanding what this author states there is today no nation other than China that has in place a total domestic rare earth supply chain. Thus even if you do produce rare earths outside of China you must send them to China if you want to first refine mining concentrates and then to fabricate rare earth metals and alloys for use, for example, as magnets. In particular none whatsoever today of the “critical” heavy rare earths are produced outside of China.

How the Great Rare-Earth Metals Crisis Vanished – by Joseph Sternberg (Wall Street Journal – January 8, 2014)

January 13, 2014

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

China’s attempt to control the market for materials essential to the tech industry is turning to dust.

There was a time, not so long ago, when the world feared China was going to use its dominance of the global rare-earth-element industry to crush Western economies and militaries in a strategic vise. Those were the days. Recent developments highlight how wrong those alarmist predictions were.

Rare earths are the metals at the bottom of the periodic table that are exceptionally useful in many high-tech applications, from lasers to solar panels to electric car batteries to smartphones. China is the world’s major extractor and only processor of rare-earth ores.

Beijing aroused worries in late 2010 when it apparently limited exports of the minerals to Japan amid a territorial dispute. The episode stoked fears that China would use its sole-supplier status for nefarious ends.

Except that it turns out Beijing doesn’t have the wherewithal to execute such a dastardly plan. Consider the new plan Beijing unveiled last week to consolidate its rare-earth industry into six large extraction and processing companies.

[Jade miners] Myanmar: Hell hath no fury like Hpakant – by Patrick Winn (Global Post – December 30, 2013)

January 13, 2014

http://www.globalpost.com/

Men seek to escape poverty in the jade mines. Instead, it’s the drug dealers and middlemen who get rich.

KACHIN STATE, Myanmar — An ancient Chinese proverb likens jade to the character of men. As the saying goes, “both are sharpened by bitter tools.” But in the jade mines south of China’s border — a wasteland known as Hpakant in Myanmar — men’s lives are not so much sharpened but shredded to bits.

“Hpakant,” said La Htoi, a 34-year-old jade broker and recovering heroin addict. “That is where Satan slowly called me to hell.”

Even by the standards of Myanmar — infamous for warfare, poverty and oppression — Hpakant is a dark and depraved place. Its once-verdant hills have been ground down into gaping quarries that produce jade of unparalleled quality. By the thousands, men descend into these stadium-sized pits hoping to emerge with an armload of jade, a ticket out of poverty.

But Myanmar’s multi-billion dollar jade industry instead funnels wealth to military-connected elites. Miners’ meager earnings are typically swallowed not only by middlemen but by potent, dirt-cheap heroin, traded with impunity in Hpakant’s bazaars. “You can see heroin sold on the roadside there like vegetables,” La Htoi said.

Indonesia’s ban on raw minerals exports threatens nickel shake-up – by Melanie Burton (Reuters U.S. – January 10, 2014)

January 10, 2014

http://www.reuters.com/

SYDNEY – Jan 10 (Reuters) – An Indonesian ban on raw minerals exports is set to hurt Chinese factories making stainless steel – used in everything from kitchenware to cars and buildings – in the biggest potential industry shake-up in more than five years.

The ban, due to come in force on Sunday, may also be a boon for battered nickel miners, dogged by prices that lost 19 percent last year and are sitting stubbornly near four-year lows.

Indonesia looks set to prohibit more than $2 billion worth of annual nickel ore and bauxite shipments as part of a plan to push miners into downstream processing and boost long-term returns from its mineral wealth.

The Southeast Asian country supplies about half the nickel ore used for stainless steel in China, the world’s biggest producer and exporter of the corrosion resistant material.

China mostly produces a lesser quality version, unlike high-end competitors in Japan, Germany and Korea, which is often used in the inside of buildings or internally in cars, where it reinforces framework.

COLUMN-Uncertainty the only certainty with Indonesia mineral export ban – by Clyde Russell (Reuters India – January 9, 2014)

January 9, 2014

http://in.reuters.com/

Jan 9 (Reuters) – The key point with any laws or regulations is not that they are on the statute book, it’s whether they are applied and enforced, and this will be the case with Indonesia’s ban on metal ore exports.

As is often the case with Indonesia and government policy, the only certainty is uncertainty and whether the prohibition on exporting unrefined ores goes ahead, and in what form, is far from clear.

In the case that the ban goes ahead as planned from Jan. 12, it seems likely that nickel ore and bauxite, with a value of up to an annual $2 billion will be the hardest hit. Indonesia is the world’s biggest exporter of nickel ore and supplies about two-thirds of top buyer China’s imported bauxite.

But Indonesia’s mining ministry is seeking to pass regulations to ease the ban and phase in the requirements for domestic processing over a longer period of time. The proposal recommends that raw mineral ores can be exported until 2017, after which all would have to undergo domestic processing.

Legal and Regulatory Environment Risk Atlas 2014 – by Maplecroft Global Risk Analytics (January 8, 2014)

January 9, 2014

http://maplecroft.com/

Myanmar has been identified as the country making the greatest improvements to its business environment for 2014. Strides have been made through reforms to address issues such as corruption; rule of law; the regulatory framework; respect for property rights; and corporate governance, reveals Maplecroft’s annual Legal and Regulatory Environment Risk Atlas (LRERA). Senegal, Guatemala, Mozambique and Rwanda, meanwhile, are among the countries with best performance over the last five years.

The fifth annual Legal and Regulatory Environment Risk Atlas includes 21 risk indices developed to enable companies and investors to monitor the ease of undertaking business in 173 countries. Since 2009 some of the biggest increases in legal and regulatory risk have been experienced by foreign investors in Argentina, Bahrain, Bangladesh and Egypt. Maplecroft states that the business environment in these countries is being curtailed by factors such as a lack of respect for the rule of law and property rights; weak investor protection; increasing regulatory burdens; and poor governance resulting from instability.

Legal mechanisms and regulatory structures are typically well entrenched features of a country that are not subject to fast change without significant political will and reform. However, over the last five years the LRERA reveals that a number of countries have made steady improvements. Senegal has risen 23 places from 28th to 51st (1st place is considered the highest risk in the LRERA), Guatemala went from 32nd to 61st, Mozambique 40th to 71st, and Rwanda 66th to 101st.

Zinc or Swim: Do Base Metals Have a Future? – by Peter Byrne (The Mining Report – January 7, 2014)

January 8, 2014

http://www.streetwisereports.com/

Joseph Gallucci of Dundee Capital Markets sees a rosy future for zinc investors. As the large zinc mines shut down, the juniors are stepping forward to meet growing demand for the industrial staple. In this interview with The Mining Report, Gallucci delivers smart tips for base metals investors on where to find opportunity when zinc prices start to climb.

The Mining Report: How are the fundamental challenges facing the global base metals markets likely to play out in 2014?

Joseph Gallucci: There are several long-term issues that impacted copper and the other base metal spaces in 2013, and those long-term issues will persist for the foreseeable future. Allow me to explain the basics via a few examples:

Indonesia recently stopped the export of intermediary products, such as pig iron nickel. The country’s leadership is increasingly practicing resource nationalism by restricting mining firms to in-house processing and to shipping only finished products. It is also unsettling that Intrepid Mines Ltd. (IAU:TSX; IAU:ASX) lost control of its project this year to an Indonesian partner!

In terms of supply chain disruptions in 2013, Grasberg and Bingham Canyon were two of the biggest issues, but we are still well below the annual average of a 5% supply disruption.

UPDATE 3-Indonesia’s mining ministry looks to ease mineral export ban – by Wilda Asmarini and Fergus Jensen (Reuters U.S. – January 8, 2014)

January 8, 2014

http://www.reuters.com/

Jan 8 (Reuters) – Indonesia’s mining ministry sought to ease a controversial mineral export ban before its Sunday deadline, but still looked set to prohibit more than $2 billion worth of annual nickel ore and bauxite shipments.

Indonesian government officials are scrambling to pass regulations to ease a ban on unprocessed mineral ore exports from Jan. 12.

The ban aims to boost Indonesia’s long-term return from its mineral wealth, but officials fear a short-term cut in foreign revenue could widen the current account deficit, which has undermined investor confidence and battered the rupiah.

“The (mining) ministry proposed that miners will be given flexibility to export concentrate or processed minerals until 2017,” Sukhyar, director general of coal and minerals at the ministry, told reporters.

“After 2017, they will only be allowed to export metal or refined mineral,” he said. The mineral ban is one of Indonesian President Susilo Bambang Yudhoyono’s biggest economic policy moves in his nearly 10 years in office.

China approves massive new coal capacity despite pollution fears – by David Stanway (Reuters U.S. – January 7, 2014)

January 8, 2014

http://www.reuters.com/

BEIJING, Jan 8 (Reuters) – China approved the construction of more than 100 million tonnes of new coal production capacity in 2013 – six times more than a year earlier and equal to 10 percent of U.S. annual usage – flying in the face of plans to tackle choking air pollution.

The scale of the increase, which only includes major mines, reflects Beijing’s aim to put 860 million tonnes of new coal production capacity into operation over the five years to 2015, more than the entire annual output of India.

While efforts to curb pollution mean coal’s share of the country’s energy mix is set to dip, the total amount of the cheap and plentiful fuel burned will still rise.

According to data compiled by Reuters, the National Development and Reform Commission (NDRC), China’s top planning authority, approved the construction of 15 new large-scale coal mines with 101.3 million tonnes of annual capacity in 2013.

“Given that China’s total energy consumption is still growing along with the economy, then coal production will continue to grow,” said Helen Lau, senior commodities analyst with UOB Kay Hian in Hong Kong.

UPDATE 2-Indonesia mineral export ban uncertainty starts to bite – by Fergus Jensen and Wilda Asmarini (Reuters U.S. – January 7, 2014)

January 7, 2014

http://www.reuters.com/

Jan 7 (Reuters) – Indonesia’s planned mineral export ban – a policy designed to force miners to process their ores domestically – is sending shudders through the economy, with a Singapore-owned nickel miner suspending operations ahead of the Jan. 12 ban.

Indonesia is the world’s top exporter of nickel ore, thermal coal and refined tin, but also has significant exports of iron ore and bauxite, both of which are likely to be stopped after Sunday.

An increase in shipments of processed minerals would bolster the country’s foreign revenue and help narrow a current account deficit, which has undermined investor confidence and battered the rupiah.

However, the move has drawn protests from small mining companies, which say they can’t afford to build smelters, as well as from international majors, including U.S. giants Freeport-McMoRan Copper & Gold and Newmont Mining Corp .

The plan has also raised fears that export earnings could be slashed in the short term as miners scramble to meet the new regulation. Mining contributes about 12 percent of gross domestic product to Southeast Asia’s largest economy.

‘Confiscate wealth of mining mafia’ (The Times of India – January 6, 2014)

January 6, 2014

http://timesofindia.indiatimes.com/international-home

BHUBANESWAR: Reiterating his demand for a CBI probe into the multi-thousand crore mining scam, senior Congress leader Niranjan Patnaik on Sunday said the inquiry must go beyond the Justice M B Shah Commission report and sought an ordinance to confiscate wealth of the mining mafia.

The former state Congress president, in a press statement, said CBI investigation must go beyond leaseholders.

“The leaseholders are known legal entities and irregularities committed by them can be computed and accountability fixed, as has been rightly done by the Shah Commission,” he said. The Shah panel has recommended recovery of around Rs 60,000 crore from miners for illegalities committed by them.

On mining outside leasehold areas and abandoned mines, Niranjan said, “All entities involved in such illegal mining, as juxtaposed to irregular mining by known legal leaseholders, are remaining nameless and faceless. They have neither paid any royalty nor any income tax and there is no way they can be held accountable.”

S. Korea’s Former Miners Dig Up Nation-Building Past – by Agence France-Presse/Jakarta Globe (January 3, 2014)

January 6, 2014

http://www.thejakartaglobe.com/

Fifty years ago, several hundred South Koreans went to work in German mines in the first wave of a flood of Korean migrants whose remittances helped jumpstart one of the great economic transformations of the modern age.

The experience was often lonely, and for some their contribution was tainted on their return by the social stigma attached to a job that was tough, filthy and dangerous in a society that looked down on manual labour.

As a result, they feel their role in South Korean history has been largely overlooked, despite helping to seed South Korea’s economic growth and rapid industrialisation by sending funds home.

Mostly in their 20s, the miners — the first South Koreans to work overseas since the peninsula split into the capitalist South and a communist North in 1945 — were part of Seoul’s strategy to solve a high jobless rate and earn hard foreign currency. Bae Jung-Hwan left his homeland in 1970 to work at a German mine before returning a few years later. He says he only recently told his wife and children about his past.

Paucity Amidst Plenty [India Mining Problems] – by N. Madhavan, K.R. Balasubramanyam and Anilesh S. Mahajan (Business Today – December 22, 2013)

January 6, 2014

http://businesstoday.intoday.in/ [India]

Why a country flush with natural resources finds itself grappling with their shortage.

Billionaire Lakshmi Niwas Mittal has the uncanny ability to work successfully with governments of all kinds across the globe. That, and his unbridled ambition, have enabled him to set up or acquire steel factories in 20 countries. But the man who created the world’s largest steel empire from scratch tasted the bitter fruit of failure when he decided to invest in his country of birth – India.

In a bid to capitalise on India’s huge iron ore deposits and rising steel consumption, Mittal in 2005 announced plans to set up a steel project in Jharkhand that year and in Orissa the next. Later, he proposed another mill in Karnataka. The total intended investment was $30 billion.

In July this year, ArcelorMittal, Mittal’s company, scrapped its $12-billion mill in Orissa after having failed to acquire land and iron ore mines for seven years. Its other projects have not yet been called off, but are also facing delays. Mittal’s decision came just a day after South Korean steelmaker Posco, the world’s fifth-largest, abandoned a $5.3-billion project in Karnataka for similar reasons.

[India] Bullion smuggling outstrips narcotics to feed gold habit – by A. ANANTHALAKSHMI AND SIDDESH MAYENKAR (Reuters India – December 4, 2014)

January 6, 2014

http://in.reuters.com/

SINGAPORE/MUMBAI – (Reuters) – Indian gold smugglers are adopting the methods of drug couriers to sidestep a government crackdown on imports of the precious metal, stashing gold in imported vehicles and even using mules who swallow nuggets to try to get them past airport security.

Stung by rules imposed this year to cut a high trade deficit and a record duty on imports, dealers and individual customers are fanning out across Asia to buy gold and sneak it back into the country.

Sri Lanka, Thailand and Singapore are the latest hotspots as authorities crack down on travellers from Dubai, the traditional source of smuggled gold. In a sign of the times, whistleblowers who help bust illegal gold shipments can get a bigger reward in India than those who help catch cocaine and heroin smugglers.

“Gold and narcotics operate as two different syndicates but gold smuggling has become more profitable and fashionable,” said Kiran Kumar Karlapu, an official at Mumbai’s Air Intelligence Unit.