Asia Mining – Page 170 – Republic of Mining

Chinese investors looking beyond slump in mine sector – by Toh Han Shih (South China Post – December 13, 2013)

December 16, 2013

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

Despite falling prices, those with a long view and deep pockets on the mainland and in HK are buying projects worldwide, especially for gold

Despite the bearish mood in the global mining sector, participants at a conference in Shenzhen this week said mainland and Hong Kong investors are snapping up mines around the world.

One of them is Samuel Chan Wing-sun, vice-chairman of YGM Trading, a Hong Kong-listed garment firm, who acquired 59 per cent of Crater Gold Mining about 12 months ago and was appointed Crater Gold chairman in February, John Hung, an adviser to Crater Gold, said at the Global Resource Investment Conference. Crater Gold is an Australian-listed firm with gold mines in Papua New Guinea and a metals mine in Australia.

Stewart Cheng Kam-chiu, a nephew of Hong Kong tycoon Cheng Yu-tung, had agreed to co-underwrite a continuing rights issue of A$2.1 million (HK$14.8 million) for Crater Gold, Hung said.

“Before Sam came in, the company suffered from a lack of funds,” he said. “At the moment, it is very difficult to raise funding in Australia because market sentiment is very soft for gold mining companies.

Mining exploration not adequate, new law could bring in more funding – by Mansi Taneja (Business Standard – December 16, 2013)

December 16, 2013

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

Canada and Australia spend maximum on mineral exploration with 19% and 12% respectively of global share

Despite being a mineral rich country, India’s share in global exploration budget has been less than 0.5% which might explain the fact the country’s proven reserves are only 5-10% of the total resources.

Canada and Australia are the top countries who spend maximum on mineral exploration with 19% and 12% respectively of the global share.

Exploration of minerals, except petroleum, has been primarily constrained by funding crunch, which is why unproven resources in India are more than twice the proven reserves.

For instance, India has gold resources of 490 million tonnes but only 17% of it has been explored and marked as reserves. Similarly for coal, out of total resources of 280 billion tonne, 40% are available as reserves and for iron ore with 25 billion resources, 28% are reserves. India produces about 87 minerals.

Mineral exploitation in Odisha [India] low despite increased mining activity – by Sadananda Mohapatra (Business Standard – December 16, 2013)

December 16, 2013

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

The state has about 174 million tonne of nickel, which is yet to explored

Despite increased mining activity in Odisha, the mineral exploitation in the state remains low in last hundred years compared to its reserves.

Major minerals with sizeable reserves in the state include chromite, iron ore, bauxite and manganese. While only 13% of the total chromite deposits has been excavated so far, the same for iron ore and manganese are 9% each and for bauxite only three%.

Odisha currently possesses 159.40 million tonne of chrome ore that finds its usage in making stainless steel, out of 182.86 million tonne of preliminary proven reserve, according to the government statistics. About 23.50 million tonne of the mineral or 12.8% of the proven reserve has been excavated so far.

Nearly all of India’s chrome ore is found in Odisha with state-run Odisha Mining Corporation (OMC) having control over one-third of production. Few players such as Tata Steel, Indian Metal and Ferro alloys (IMFA), Ferro Alloys Corporation Limited (FACOR) and Balasore Alloys (formerly Ispat Alloys) have also their captive mines in the state.

COLUMN-Might China spoil Indonesia’s tin party? – by Andy Home (Reuters U.K. – December 11, 2013)

December 12, 2013

http://uk.finance.yahoo.com/

(Andy Home is a Reuters columnist. The opinions expressed are his own)

LONDON, Dec 11 (Reuters) – Tin has been the best relative performer of the London Metal Exchange (LME) base metals pack so far this year. And it’s a fair bet that analysts are going to pick it again as a likely out-performer next year when the annual polls are compiled.

Against a backdrop of improving metals demand, relative price performance is increasingly a reflection of each metal’s supply dynamics. Which is why tin’s bull credentials are unarguably the strongest of the lot.

THE BULL CASE

This is a market still characterised by structural supply shortfall, unlike, say copper, where heavy investment in new mine capacity is finally closing the gap with demand.

There has been no such investment splurge in tin. Nor is there likely to be any time soon. The bull case was recently spelt out by Peter Kettle, markets manager for tin industry association ITRI.

Miners warned about Indonesia, Brazil, India and South Africa investments – by Cecilia Jamasmie (Mining.com – December 12, 2013)

December 12, 2013

http://www.mining.com/

A significant increase in conflict, terrorism and regime instability in the Middle East and North Africa, along with deepened global political violence and resource nationalism, are the main risks mining investors will face in 2014, according to a report published Thursday by UK-based risk consultancy Maplecroft.

In its sixth annual Political Risk Atlas (PRA) the analysts tell investors to pay special attention to possible populist moves in Indonesia, Brazil, India and South Africa as national elections in these countries will likely boost resource nationalist rhetoric and policies.

According to Maplecroft close to 10% of the countries studied have shown a significant increase in their risks levels, with foreign investors facing more political violence, resource nationalism and expropriations.

In the last year alone, says the report, the risk of resource nationalism has increased 15% as a consequence of governments attempts to offset the risk of societal unrest through tax increases, tougher regulations or outright expropriation.

The Rise of the Resource Curse – by William Pesek (Bloomberg News – December 12, 2013)

December 12, 2013

http://www.bloomberg.com/

In many ways Mongolia is an outlier — an exotic tourist destination filled with windswept deserts, nomads and yurts. It might also be a vision of the world’s future.

With a tiny $10 billion economy and less than 3 million people, Mongolia is fantastically resource-rich. And with borders touching China, Russia and Central Asia, the landlocked nation seems to have won a geographic lottery ticket. It doesn’t need to go far to find enthusiastic customers for its immense endowment of copper, gold and other minerals.

That also means that Mongolia sits on the precipice of the so-called resources curse, in which citizens in countries such as Nigeria and Indonesia have not prospered from the treasure sitting under their land and seas. As politicians and cronies make millions, there’s little incentive to create other industries to employ the masses.

Mongolia’s challenge will soon be the world’s. That’s the upshot of a new report from Richard Dobbs and his team at McKinsey, in which they predict a $17 trillion investment bonanza by 2030 to keep up with demand for oil, gas and other materials. That’s an amount greater than the annual output of the U.S. economy and more than four times Germany’s. It’s not just the kind of money that changes people or even nations. It’s the kind that changes the world — and probably not for the better.

Indonesia’s president to weigh into mineral export confusion (Reuters U.S. – December 11, 2013)

December 11, 2013

http://www.reuters.com/

JAKARTA – Dec 11 (Reuters) – Indonesia’s president will make the final decision in a furious debate over next month’s scheduled ban on the export of unprocessed metal ore, an issue that pits nationalist-minded lawmakers against officials desperate not to lose revenue.

From next month, mining companies must process their ore before shipping it overseas, in a measure that aims to boost the value of exports from Indonesia, the world’s top exporter of nickel ore, thermal coal and refined tin. But smelting capacity is nowhere near ready, which means much of Indonesia’s output of metal ore will grind to a halt unless the processing requirements are relaxed.

And the law is kicking in just as a yawning current account deficit, exacerbated by waning global demand for commodities, is undermining investor confidence, leading to a drop this year of nearly a quarter in the rupiah’s value against the dollar.

“The president will decide it,” Trade Minister Gita Wirjawan told reporters on Wednesday, noting that Yudhoyono would make an announcement after consultations with the chief economic minister, the energy and mineral resources minister, the trade minister, the industry minister and parliament.

Miners eye Jakarta’s planned iron ore ban – by Barry Filzgerald (The Australian – December 10, 2013)

December 9, 2013

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

NO one is getting too excited just yet, but there is a chance that Indonesia of all places may be about to do Australia a big favour — more particularly, our tin, nickel and bauxite producers.

Like the rest of the mining sector, all three could do with a bit of early Christmas cheer. Apart from the broader fallout from the recent spying scandal and the ongoing tragedy of boatpeople, Indonesia has not exactly endeared itself to the local resources industry, with its regular shocks and horrors when it comes to security of tenure.

But if the Indonesians deliver on their big commodities threat of early 2014, much of that will be quickly forgiven. The big threat is to follow through on the government’s plans to proceed with a mineral ore export ban from January 12 — a drastic attempt to force through value-adding processing of minerals with all the attendant jobs and investment creation.

Until the recent backing of parliament, few if any observers thought the ban would see the light of day. But the fact the parliament followed through — presumably after intense lobbying by those interests opposed to the move — means mineral export market watchers are beginning to factor in the potential for the Indonesians to do what they say they are going to do.

China nickel importers strike term deals with eye on Indonesia ore ban – by Polly Yam (Reuters U.S. – December 5, 2013)

December 5, 2013

http://www.reuters.com/

HONG KONG, Dec 5 (Reuters) – China’s refined nickel importers are negotiating 2014 term deals with suppliers that give them the flexibility of adjusting shipment volumes depending on how Indonesia’s proposed ban on ore exports turns out.

The Southeast Asian nation has said it will ban unprocessed ore exports from January 2014, but is rethinking it in order to keep export revenues flowing in. On Thursday lawmakers rejected a government bid to water down the planned ban.

A ban on ore exports from next month will boost China’s demand for refined metal by hurting output of cheaper substitute nickel-pig-iron. Higher imports of spot refined nickel by the world’s biggest user of the metal could support global prices that have fallen nearly 20 percent this year.

Some 60 percent of nickel consumption in China is covered by nickel-pig-iron, a low-grade ferro-nickel used for stainless steel production. So widespread is its use now that China has become the world’s biggest and dominant producer of nickel-pig-iron.

Coal rush ravages Indonesian Borneo (Malaysian Insider – December 5, 2013)

December 5, 2013

http://www.themalaysianinsider.com/

Barges loaded with mountains of coal glide down the polluted Mahakam River on Indonesian Borneo every few minutes. Viewed from above, they form a dotted black line as far as the eye can see, destined for power stations in China and India.

A coal rush that has drawn international miners to East Kalimantan province has ravaged the capital, Samarinda, which risks being swallowed up by mining if the exploitation of its deposits expands any further.

Mines occupy more than 70% of Samarinda, government data show, forcing entire villages and schools to move away from toxic mudslides and contaminated water sources. The destruction of forest around the city to make way for mines has also removed a natural buffer against floods, leading to frequent waist-high deluges during the six-month rainy season.

And despite the 200 million tonnes of coal dug and shipped out of East Kalimantan each year, its capital is crippled by frequent hours-long blackouts as the city’s ageing power plant suffers constant problems.

Vale Hopes to Sign Contract Soon – by Francezka Nangoy (Jakarta Globe – November 27, 2013)

November 29, 2013

http://www.thejakartaglobe.com/

Vale Indonesia, the largest nickel matte producer in the country, remains optimistic it will conclude its mining contract renegotiation with the government sooner rather than later, ahead of heated national elections next year.

Nico Kanter, president director of the company, told reporters on Tuesday that in the past two months “there has been good progress” in talks with the government.

Mining companies are required to renegotiate mining contracts as the government aims for more benefit from the mining sector as well as creating downstream industries.

“We maintain our belief that we can be the first multinational company to conclude this renegotiation,” Kanter said. “There is an opportunity to finish before the April election.” Vale Indonesia is 59 percent owned by Vale Canada, a unit of Brazil’s Vale.

Indonesia is set to hold legislative and presidential elections in April and July respectively. Kanter said that if a new contract could not be concluded before the election, there was possibility that it may be stretched into 2015.

Opinion: Finding ways to cure the Indonesia natural resource curse – Edi Suhardi (Malaysian Insider – November 23, 2013)

November 22, 2013

http://www.themalaysianinsider.com/

Indonesia’s vast natural resource wealth has been the backbone of its economic growth for years. It started with the oil bonanza in 1970-1980s, followed by timber and forest extraction in the 1980-1990s, mining spree in the 2000s and palm oil windfall in the last 10 years.

Such diversity of valuable resources if managed under prudent governance would indeed be a viable driver to propel the country to prosperity. However, as in any third world country, Indonesia is also plagued with the “resource curse” or the paradox of plenty that the resource-rich countries have less economic growth compared with countries which have less natural resources.

The country has failed to capitalise on the abundance of resource wealth to spur sustained economic growth due to poor governance and mismanagement. As a result, the contribution of natural resource development to the country’s economic growth has been disproportionately minimal.

A number of studies show that Indonesia is one of the most resourceful countries in term of mining potential and cultivation land. However, its resource mismanagement and poor governance regime have failed to make the country attractive for investment and instead choked the otherwise effective engine for the economic growth.

Japan’s nickel smelters to be hit hard by Indonesia export ban (Reuters U.S. – November 21, 2013)

November 21, 2013

http://www.reuters.com/

TOKYO – Nov 21 (Reuters) – Japanese nickel smelters will be severely impacted by Indonesian bans on exports of unprocessed mineral ores due in January as Japan imports 43 percent of ferro-nickel materials from Indonesia, the head of mining industry body said on Thursday.

With a current account deficit at a near-record high, the Indonesian government is scrambling to ease nationalistic resource rules that were passed more than a year ago, including a ban on mineral ore exports from January 2014.

Southeast Asia’s largest economy is the world’s top exporter of nickel ore, thermal coal and refined tin, and home to the world second-biggest copper mine.

“So far, Indonesia has not come up with any specific actions to ease its new mining law. We are worried about it,” Hiroshi Yao, Chairman of Japan Mining Industry Association (JMIA), told a news conference. “If Indonesia’s export restrictions of unprocessed mineral ore go into effect next year, an impact on Japanese nickel smelters will be big,” he said.

China’s $100,000 aid ‘measly,’ judged by its Philippine mining take – by Jarius Bondoc (The Philippine Star – November 20, 2013)

November 20, 2013

http://www.philstar.com/

Talk about fair-weather friend. “As hundreds of thousands of Filipinos struggled to find food, water, shelter and the bodies of loved ones in the wake of Typhoon Haiyan, China quickly dipped into its world-leading $3.7 trillion of currency reserves and came up with … all of $100,000.” That Bloomberg news lead captured the general recoil at how the world’s second-largest economy treats an Asian neighbor. Other headlines stated “cheapskate,” “paltry,” “miserly” and, in one mainland-Chinese daily, “ungenerous.”

Beijing could not have missed the effects of history’s strongest ever typhoon to make landfall. Global networks had tracked Haiyan’s ruin of the Philippines, where three-fourths of families have Chinese blood. Undeterred by Philippine mountain ranges, the storm crossed over the sea to hit China. One drowned and seven went missing in Hainan, and many areas were flooded in Guangxi provinces. Beijing came upon a chance to show amity and soft power. Yet it chose to be petty, due to sea disputes with Manila. With trade overshooting $36 billion in 2012, China often calls the Philippines “partner.”

In the first hours of Filipinos’ distress, the world sprang to the rescue. The US rushed in an aircraft carrier group laden with emergency crews and $20-million relief. Britain, Japan, and Korea sent trucks, food, and cash of, in turn, $16 million, $10 million, and $5 million. Donations poured in from Australia, $28 million; European Union, $17 million; Vatican, $4 million; Indonesia, $2 million; and Taiwan, which China labels its province, $200,000.

Mongolia’s Central Bank Predicts Economic Rebound – by Simon Hall (Wall Street Journal – November 19, 2013)

November 20, 2013

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

Oyu Tolgoi Mine Project Is Crucial to Driving Growth

HONG KONG—Mongolia’s economy is set to rebound in 2014, the country’s central bank governor said Tuesday, even though foreign investment flows have slowed because of the continuing weakness in coal and copper prices.

Central bank head Naidansuren Zoljargal said gross domestic product could expand as much as 17% next year from around 11% this year. Though the forecast is upbeat, it is well below levels predicted by the World Bank, which in an early November report revised its 2013 Mongolia growth figure to 12.5% from its April prediction of 13%.

“I am pretty confident [this year] it will be around 11ish percent. And for next year we are a bit more optimistic than in 2013,” Mr. Naidansuren told The Wall Street Journal in an interview. “I’m pretty sure the [2014] number can go higher than 11%, somewhere between 11% and 17%.”

Mongolia’s economy expanded 12.2% last year and 17% in 2011, when it topped world growth rankings, according to World Bank data.