Twitter

Asia Mining

US mining giant faces fight with Indonesia – by Olivia Rondonuwu (The West Australian – December 23, 2013)

http://au.news.yahoo.com/thewest/

High in the snow-capped mountains, the sight of tribesmen roaming in loincloths contrasts sharply with that of miners using hi-tech machinery to extract gold and copper ore at a huge US-owned facility in remote Indonesia.

The heavily-guarded complex is the resource-rich Indonesia’s biggest mine and has been a controversial presence for more than five decades — accused of environmental devastation and extracting huge wealth while giving too little back to a poverty-wracked area.

On a rare visit by the foreign media to Freeport McMoRan’s Grasberg complex in Papua province, AFP saw first-hand the challenge of mining at one of the world’s biggest gold and copper mines, where thin oxygen makes it difficult for workers to breathe.

Now, the company faces a fight with the state as it looks to extend its contract at a time when emboldened politicians are taking aim at foreign miners with measures forcing them to leave more of their profits in the country.

Indonesia is transforming into a freewheeling democracy and booming economy, with mining firms among foreign companies under scrutiny in what critics say is a climate of rising economic nationalism.

Read more

Turkey imposes restriction on its biggest ferrochrome producer – by Charlotte Mathews (Business Day – December 20, 2013)

http://www.bdlive.co.za/

TURKEY has imposed power restrictions on the country’s biggest ferrochrome producer, Eti Krom, which some analysts hope will help to support prices for one of South Africa’s biggest industries. In 2012, South Africa was the world’s second-largest ferrochrome producer, having lost first place to China largely because of rising Eskom electricity tariffs and power shortages.

South Africa’s biggest ferrochrome producers are Glencore Xstrata in a joint venture with Merafe Resources; International Ferro Metals, which is listed in London; Samancor Chrome; Hernic Ferrochrome; ASA Metals; and Mogale Alloys, owned by Afarak Group (formerly Ruukki Group).

Turkey ranks among the world’s top 10 producers. Ferrochrome is mostly used in stainless steel, whose production is forecast to rise about 5.5% a year for the next few years, as it is closely correlated with global gross domestic product growth. However, ferrochrome prices have been weak recently because of a slowdown in the Chinese economy coupled with growing Chinese production.

Read more

COLUMN-China’s 2014 commodity demand subject to policy influences – by Clyde Russell (Reuters U.K. – December 19, 2013)

http://uk.reuters.com/

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

LAUNCESTON, Australia, Dec 19 (Reuters) – China’s commodity demand has been lumpy this year, with weakness in crude oil and copper being offset by robust gains in iron ore and coal, and this pattern is likely to continue into next year.

However, the relative winners may change. Much will depend on the track of economic reforms and how much success the world’s largest commodity user has in rotating its economy to be more consumer-led.

China’s official target for gross domestic product growth was 7.5 percent for 2013, and while the target for next year has not yet been announced, it’s likely to be maintained or perhaps lowered slightly. But more important than the overall target for GDP is how the growth is achieved.

The pattern for the past two years has been that China’s economy has seen momentum losses in the key industrial sector, followed by a re-acceleration in growth as policies are implemented to boost infrastructure and construction investment.

Read more

Indonesia to Study Rules for Miners With Smelters as Ban Looms – by Yoga Rusmana and Agus Suhana (Bloomberg News – December 19, 2013)

http://www.bloomberg.com/

Indonesia, the world’s largest mined nickel producer, will study rules for mining companies operating smelters as a ban on mineral-ore shipments nears, said Coordinating Minister for the Economy Hatta Rajasa.

The government will seek legal advice on the regulations as interpretations differ, Rajasa said today. The law that bans shipments must be fully implemented and companies that don’t have smelters will have to comply, he said.

Freeport-McMoRan Copper & Gold Inc. (FCX), owner of the world’s second-biggest copper mine at Grasberg, said last week it intends to abide by the terms of its contract of work, which allow it to operate the mine and export concentrate. Indonesia is seeking to boost the value of shipments by promoting local processing and is set to prohibit all ore exports after Jan. 12.

“We will look at regulations but they cannot contradict the law,” Rajasa told reporters in Jakarta. “We must pay attention to business concerns.”

Three-month nickel advanced 0.2 percent to $14,165 a metric ton on the London Metal Exchange at 8:39 p.m. in Singapore.

Read more

Flake graphite price could spike as China orders production halt – by Henry Lazenby (MiningWeekly.com – December 18, 2013)

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – One of China’s primary flake graphite producing regions had been ordered to halt production on environmental grounds, which would take about 10% of the world’s flake graphite supply off the market, the equivalent of 60 000 t/y, UK-based market research firm Industrial Minerals Data said this week.

Given that China produces almost 75% of the world’s graphite and that ‘flake’ is the most sought-after form of natural graphite for value-added, high-technology carbon products, this was a significant development.

The last time a supply shortage close to this magnitude happened in China, was in 2009, which was seen as the catalyst for flake graphite prices reaching over $2 500/t in a year.

Industrial Minerals Data manager Simon Moores said in a report published on Monday that up to 55 miners and processors of graphite in the town of Pingdu, located in the east-coast province of Shandong, had been ordered by the local government to stop production after failing to improve wastewater, dust and gas emissions.

Read more

UPDATE 2-Australia to ship more iron ore as miners shrug off China risks by James Regan (Reuters India – December 18, 2013)

http://in.reuters.com/

SYDNEY, Dec 18 (Reuters) – Australia raised its forecasts for exports of iron ore and metallurgical coal — its two top export revenue earners — reflecting massive expansion work underway to meet demand for raw materials to make steel in China.

Despite moves to curb industrial growth rates and close some ageing steel works, China continues to produce more than 2 million tonnes of crude steel daily, almost 10 times the rate in the United States.

Australia, the world’s biggest producer of iron ore, forecast a 23.3 percent rise in exports to 650 million tonnes in the 2013/14 fiscal year, data from Australia’s Bureau of Resources and Energy Economics (BREE) showed on Wednesday.

The forecast was raised from an estimate of 615 million tonnes just three months ago.

“The super cycle is not over yet,” said Keith Goode, an analyst for Eagle Mining Research in Sydney, referring to unprecedented commodity demand driven by Chinese demand. “In China, the main demand still appears to be for iron ore.”

Read more

Iron ore, chrome rates under pressure on poor demand – by Sadananda Mohapatra (Business Standard – December 17, 2013)

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

Prices of iron ore and chrome ore are witnessing downward pressure on poor demand from within the country, precipitated by stagnated consumption growth of finished steel products, traders and analysts said.

In Odisha, the major iron ore producing state, the rates have been hovering around Rs 5000 to Rs 6000 per tonne for 62 to 65 grade mineral for last one month. “The rates will stay at current levels for next one month or so. Actually it should be coming down as demand for the mineral is not so strong. But supply problems are supporting the rates,” said an official of Altrade Group, which has five iron ore mines in the state.

Major miners such as Essar and Rungta have rolled over the rates of iron ore lumps from November levels in anticipation of weak demand from sponge iron makers, a major user of the raw material.

“The iron ore rates have been trading at similar levels for past one month due to sluggish demand from sponge iron makers as steelmakers are preferring to use imported scrap instead of sponge iron.

Read more

Chinese investors warned about African mining risks – by Toh Han Shih (South China Post – December 16, 2013)

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

Resource-rich continent attractive to China, but potential investors are told to proceed cautiously

Chinese companies are keen to pour money into mining projects in Africa, but investors have received a fresh warning about the risks in the continent’s mining sector. Speakers at the recent Global Resource Investment Conference in Shenzhen told of some of the problems that can beset projects in resource-rich Africa.

“There are many potential Chinese clients who are interested in investing in mines in Africa, but there are lots of challenges,” said Cindy Pan, a lawyer at international law firm Dentons.

Pan cited poor infrastructure, political instability, corruption, cultural differences, as well as other political and legal risks. She cited the case of a Chinese company that invested in a mine in the Democratic Republic of Congo, where officials made repeated demands for bribes.

One Chinese company bought a mine in Mozambique, where the acquisition contract included a clause that allowed the government to buy 15 per cent of the mine, Pan said.

Read more

Nickel market may be missing the bigger picture – by Roskill Information Services (Mining.com – December 16, 2013)

http://www.mining.com/

With 2014 quickly approaching, all eyes in the market appear to be turned east to Indonesia.

As of the beginning of December, the Indonesian government has signalled that it would proceed with putting into effect a ban on unprocessed mineral ores.

Roskill’s nickel analyst, Thomas Hohne, answers some of the major questions related to the ban and its effect on the nickel market, and shares some of Roskill’s views of what other factors will be driving the nickel market in the years to come. What should we expect to happen come January 2014?

Shipments are set to be barred from January 12th onwards as proposals for a phased introduction of the ban have been discussed, but not adopted, as of yet. With Indonesia’s earnings from ore exports in the range of US$10 billion in 2013, much of which would evaporate overnight, pressure for some intermediate solution will remain. Because of this, however, any temporary solution is likely to be reached after the imposition of the ban, rather than before. Moreover, Indonesian officials have already indicated that even as the legislation will go ahead, implementation of the ban may allow for some amendments in practice.

Read more

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

Read more

Mining exploration not adequate, new law could bring in more funding – by Mansi Taneja (Business Standard – 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.

Read more

Mineral exploitation in Odisha [India] low despite increased mining activity – by Sadananda Mohapatra (Business Standard – 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.

Read more

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

Read more

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

Read more

The Rise of the Resource Curse – by William Pesek (Bloomberg News – 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.

Read more