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

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.

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

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COLUMN-Uncertainty the only certainty with Indonesia mineral export ban – by Clyde Russell (Reuters India – 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.

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

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

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

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

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

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‘Confiscate wealth of mining mafia’ (The Times of India – 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.”

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

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

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.

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

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[Indonesian] Ore Export Ban Is Definitive, Official Says – by Muhammad Al Azhari (Jakarta Globe – January 2, 2014)

http://www.thejakartaglobe.com/

Indonesia will be consistent in banning mineral-ore exports this year, as mandated by the 2009 Mining Law, and the government regulation would set processing and purification requirements before companies can export, a senior government official said.

R. Sukhyar, the newly appointed director general of coal and mineral resources at the Energy and Mineral Resources Ministry talked with the Jakarta Globe on Tuesday, almost two weeks before the Jan. 12 deadline, to clarify the government’s stance about the mineral-ore export ban.

Reports last month said the government would set exemptions, but that is not the case, according to Sukhyar. “The law says mineral ore mined from Indonesian soil must be processed [domestically] and be purified. That’s clear, that means no more mineral-ore exports. That’s non-negotiable,” said Sukhyar, a veteran bureaucrat, who officially started his new position on Dec. 20.

The government regulation, he said, will regulate technicalities about the smelting and purification level for metals including copper, nickel, bauxite, tin, iron ore, manganese, gold, copper. It will also regulate the adding of value to non-metals, such as limestone, quartz and marble, before they can be exported.

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Small-Scale Gold Mining Pollutes Indonesian Lands – by Joe Cochrane (New York Times – January 3, 2014)

http://www.nytimes.com/

CISITU, Indonesia — In the remote mountains of West Java, workers like 15-year-old David Mario Chandra are an integral part of Indonesia’s gold industry.

A workshop next to his family’s house in Cisitu, in Banten Province, contains machinery that turns gold ore into usable nuggets. The procedure seems simple enough: The crushed ore is tumbled with other ingredients in cylinders called balls until the valuable stuff is amalgamated. But there is a crucial material — and a final step — that alarms environmental and health experts around the world.

“We put 15 kilograms of gold ore and water into each ball, and we use 100 grams of mercury per ball,” or 3.5 ounces for 33 pounds of ore, said David, who runs the family’s workshop. Workers then purify the nuggets using an open flame, burning off the mercury in sites among residential areas throughout the village.

Yuyun Ismawati, an environmental campaigner based in Britain, says the scope of the problem is evident in the amount of mercury being exported from around the world to Indonesia, her home country. Most of it, she says, is brought in illegally.

According to the Indonesian Ministry of Trade, the country imported slightly less than one metric ton of mercury in 2012 through two local companies, primarily for commercial manufacturing, including the production of light bulbs and batteries, and for use in hospital equipment.

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Steel consortium slashes Afghan ore plant plan – by Krishna N Das and Jessica Donati (Reuters India – December 31, 2013)

http://in.reuters.com/

NEW DELHI/KABUL – (Reuters) – An Indian consortium has slashed a planned $10.8 billion iron ore investment in Afghanistan by 80 percent because it has been unable to get funding for the project.

The consortium has proposed new terms which would see just 130.57 billion rupees invested, according to figures released on Tuesday in India’s steel ministry year-end report.

Led by state-owned Steel Authority of India Ltd (SAIL) (SAIL.NS), the group was forced to renegotiate the terms of the deal with the Afghan government after India’s finance ministry refused to fund the project.

The original proposal called for investment in three iron ore blocks at Hajigak in Afghanistan and in a 6 million-tonne-per-year (MTPA) steel plant.

But the finance ministry told the consortium, according to an official involved, to draw up a fresh viability study. Under the new proposed terms, the size of the plant would fall to 1.2 MTPA.

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