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China’s potash deal with Russia threatens Canadian profits – by Carrie Tait (Globe and Mail – September 25, 2013)

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.

CALGARY — China has bought a chunk of one of the world’s largest potash producers, giving the Asian country more control over what price it should pay for the fertilizer – a move that could drag down prices for the mineral and eat into profits for Canada’s potash companies.

China Investment Corp., Beijing’s sovereign wealth fund, agreed to acquired a 12.5-per-cent stake in Russia’s OAO Uralkali. The deal – a debt-for-equity exchange between CIC and a company owned by three Russian oligarchs – comes after Uralkali said it intends to break from Belarus Potash Co., the cartel it had with state-owned Belaruskali.

Companies controlled by Beijing have invested billions of dollars as part of an overall strategy to secure energy supplies as well as basic manufacturing and building materials. In Canada, Chinese oil and gas companies, along with CIC, are significant energy players. CIC’s deal with Uralkali fits the recent Chinese model: Invest in resources in order to secure supply and exert some control over prices.

China is the world’s most populous country and largest potash consumer, and its stake in Uralkali could hurt Canada’s fertilizer producers because they could further lose pricing power.

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COLUMN-Commodity markets sceptical of China PMI boost – by Clyde Russell (Reuters India – September 24, 2013)

http://in.reuters.com/

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

LAUNCESTON, Australia, Sept 24 (Reuters) – What does China’s factory sector growing at its strongest pace in six months have in common with the U.S. Federal Reserve’s decision to keep buying bonds? Both failed to boost commodity prices much.

The flash HSBC Purchasing Managers’ Index (PMI) rose to 51.2 in September from August’s 50.1, the highest level since March and strengthening the view that economic growth in the world’s largest commodity consumer is regaining momentum.

The PMI improvement came days after the Fed surprised market watchers by keeping its bond purchases at $85 billion a month, judging that it is still too early to taper monetary stimulus, given the nascent economic recovery in the United States.

Both developments should be positives for commodity prices, as both point to the likelihood of stronger growth in the next few months in the world’s two largest economies.

While the Fed decision did give a small boost to some commodity prices, it didn’t last, with London benchmark copper CMCU3 having given up more than half of the 2.1 percent rally on Sept. 19, the day after the Fed announcement.

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Iran to invest over 8 billion euros in aluminium sector – by Emma Farge (Reuters India – September 20, 2013)

http://in.reuters.com/

GENEVA – (Reuters) – Iran plans to invest around 8.5 billion euros ($11.4 billion) in its aluminium industry as part of plans to nearly quadruple production by 2025, an official at mining group Imidro said on Thursday.

Iran is the 20th largest producer of aluminium in the world, according to the Iranian Mines and Mining Industries Development and Renovation Organisation (Imidro), and needs the extra supplies to meet demand which is growing by 10 percent a year.

Aluminium is a lightweight metal used widely in transport, packaging and construction. It can also be used to make tubes for uranium enrichment gas centrifuges.

Iran’s economy has been hobbled by western sanctions aimed at pressuring Tehran to stop efforts to enrich uranium to levels that could be used in weapons.

Iran produced 338,000 tonnes of aluminium last year and is aiming for 770,000 tonnes in 2016 and 1.5 million tonnes by 2025, Panthea Geramishoar, senior expert in Imidro’s non-ferrous department said at a Metal Bulletin conference in Geneva.

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Afghanistan’s plan to jumpstart economy with Chinese mining investment under threat – by Lynne O’Donnell (South China Morning Post – September 20, 2013)

http://www.scmp.com/news/asia

Plan to base country’s future growth on mining may have struck a dead-end as China moves to renegotiate multi billion-dollar deal

Kabul – Afghanistan’s dream of using profits from its vast mineral resources to fund post-war development is fading after China signalled its intention to undo a multi billion-dollar agreement that had been underpinning Kabul’s plans for creating a mining industry.

Fifteen months before the international presence in Afghanistan is reduced, Kabul may have to scale back plans for attracting mining companies to exploit its mineral reserves, including copper, gold, iron ore and rare earths, worth US$1 trillion.

A combination of related factors are working against Afghanistan. As the commodities cycle turns, prices drop, mining firms scale back on new projects, and China’s economy slows, experts said that Afghanistan appears to have missed out on the resources boom for now.

And the country has yet to pass its new Mining Law, which some say could be delayed further by concerns about such issues as community compensation and environment protection, industry sources said. Ministry officials, however, are confident it will pass within weeks.

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UPDATE 1-Koba Tin to seek arbitration if Indonesia scraps mining permit – by Niluksi Koswanage (Reuters India – September 19, 2013)

http://in.reuters.com/

KUALA LUMPUR, Sept 19 (Reuters) – PT Koba Tin, a subsidiary of the world’s second-biggest tin producer, will seek international arbitration if Indonesia’s government refuses to extend its permit to operate a mine, the chief executive of the Malaysian parent company said.

It is the latest corporate wrangle to raise questions over Indonesia’s openness to foreign investment. Southeast Asia’s biggest economy had pushed for more control over its natural resources, ranging from coal to gold, in the past few years but is rethinking the policy after a recent slide in its currency.

The dispute has been brewing since last year when Indonesian government officials said Koba Tin’s permit would not be renewed and that state-run PT Timah should take over the concession in the Bangka-Belitung islands off the east coast of Sumatra island. PT Timah is a minority shareholder in Koba Tin.

The government has since softened its stance, launching a review of the concession, which is eight times the size of New York’s Manhattan island. It was due to announce a decision this week.

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Japan’s JX to develop its mines, eyes stake buys in upstream copper push – by Yuka Obayashi (Reuters India – September 19, 2013)

http://in.reuters.com/

TOKYO, Sept 19 (Reuters) – JX Nippon Mining & Metals Corp will focus on development of its own copper mines in South America but may also look at buying stakes in other projects as Japan’s top smelter aims to cut its dependency on major miners for ore, a senior executive said.

Japanese copper smelters are stepping up acquisitions of upstream metal assets and development of copper mines to hedge against any increase in ore prices as their profit margins on smelting declines.

JX Nippon Mining is aiming to raise the volume of copper content coming from its own mine interests for refining to an annual 250,000 tonnes in 2015 and then to 350,000 tonnes by around 2020, its parent JX Holdings Inc had said in March. Around 100,000 tonnes of in-house copper content in concentrate was used to refine metal in 2012.

“We want to achieve our 350,000 tonnes goal first, then move further into upstream where we expect higher profit return,” Keiichi Goto, deputy chief executive officer of JX Nippon Mining, told Reuters in an interview earlier this week.

JX’s rival Sumitomo Metal Mining Co Ltd also plans to boost annual volume of copper content procured from its own mining interests to 300,000 tonnes by the 2021 business year from 120,000 tonnes now.

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COLUMN-China’s pollution steps need bite, will cost money – by Clyde Russell (Reuters U.S. – September 18, 2013)

http://www.reuters.com/

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

LAUNCESTON, Australia, Sept 18 (Reuters) – China’s new plans to cut coal use and tackle pollution have a sense of deja vu about them, being the latest in a series of measures aimed at improving air quality in the world’s second-largest economy.

But the key question, as always with environmental moves in China, is will they be enforced this time or whether once again regulation will be soft and easily side-stepped by provincial and local governments, or polluting companies.

On the face of it, the measures announced last week on the government’s website seem sensible and achievable, with the key aim to reduce consumption of fossil fuels, which in China is mainly coal, to below 65 percent of total primary energy use by 2017.

This is a relatively modest decline from the 66.8 percent share fossil fuels held in 2012, but once again the devil will be in the detail.

The announced plans include cutting coal consumption, mainly by closing polluting steel mills, factories and smelters, with a target being Hebei province, the largest steel-producing region.

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‘Price of Gold’: Mining in Mongolia [Documentary] – by Cynthia Fuchs (Pop Matters.com – September 17, 2013)

http://www.popmatters.com/

I Think It’s Like a Human Life

“Everything is difficult.” As she speaks, Aagi bends over a cook fire, preparing supper for a crew of gold prospectors. “I’m the only woman and have to cook for many men,” she goes on, “This is a tough situation, I think. I’ve never cooked so much.”

Cooking isn’t the only difficulty Aagi faces. As revealed in the film Price of Gold, the current excursion employing her doesn’t have a schedule or even a specific goal so much as it has hope. Or, as the gold digger Khuyagaa puts it, the workers have dreams, dreams that come with a price. ““They say dreams cost nothing,” he says in voiceover as you look out on what seems the endless Gobi Desert in Mongolia “But today, you have to pay for your dreams. I think first you have to find the money, to make our dreams come true.” The frame cut to a close shot of Khuyagaa as he draws on his cigarette, backed by a pile of dirt and rocks, the result of his labor, the earth turned inside out.

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Billionaire miner Robert Friedland sounds off – by Tommy Humphreys (Mining.com – September 15, 2013)

http://www.mining.com/

I was able to catch up with billionaire Ivanhoe Mines (TSX:IVN) Executive Chairman Robert Friedland in Toronto yesterday. The Singapore-based mining legend was in Toronto this week to announce the launch of Ivanhoe Pictures, a new film and TV finance and production company, and to host the first investor presentations for his Ivanhoe Mines after a summer spent relaxing and reflecting on the Italian coast, where Mr. Friedland acquired a hotel property earlier this year.

Friedland says that the Chinese are determined to fight air pollution. “I have a home in Beijing but I’ve been avoiding it in recent years because the air pollution has become absolutely diabolical,” Friedland commented. This alone would be enough to drive the conventional Platinum market crazy, he added, noting that catalytic converters which reduce toxic emissions in automobiles use substantial amounts of platinum and palladium.

There is a revolution coming to the automobile industry via the Japanese, according to Friedland. Senior officials in Japan tell him that the Toyota Motor Company will announce hydrogen fuel cell automobiles later this year with a commercial roll out coming in 2015. “These cars will use ounces, not tenths of ounces of platinum,” Friedland said. This is why the Japanese government bought 10% of Ivanhoe’s Platreef project for $300 million, Friedland believes.

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28 miners die in Afghanistan coal mine blast – by Dorothy Kosich (Mineweb.com – September 16, 2013)

http://www.mineweb.com/

Neighbors of the Abkhorak coal mine were among the rescuers who managed to bring 100 miners to safety after 28 miners perished in a coal mine blast in northern Afghanistan.

RENO (MINEWEB) – When 57 miners were trapped after gas explosion at the Abkhorak mine in the Ruyi Du Ab District of Samangan Province in northern Afghanistan, nearby residents dug through the rubble and debris with their bare hands.

However, 28 miners were killed, while 100 of their coworkers were taken to the hospital with minor injuries.

Samangan provincial governor’s spokesman Mohammad Seddiq Azizi told the BBC that four members of the rescue teams were badly injured, while 14 men were overcome with fumes, but were brought out safely. Samangan’s Deputy Security Chief Mosadiqullah Muzafari said four rescue workers were badly injured.

Workplace safety standards are considered poor in Afghanistan and mine accidents are considered common. Javed Noorani of Integrity Watch Afghanistan told Al Jazeera that 90% of mining in the country is illegal. In December, 11 miners were killed in a mine collapse in the northern province of Baghlan.

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Media agenda: China buys newsrooms, influence in Africa – by Geoffrey York (Globe and Mail – September 12, 2013)

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.

NAIROBI — When one of South Africa’s biggest newspaper chains was sold last month, an odd name was buried in the list of new owners: China International Television Corp.

A major stake in a South African newspaper group might seem an unusual acquisition for Chinese state television, but it was no mystery to anyone who has watched the rapid expansion of China’s media empire across Africa.

From newspapers and magazines to satellite television and radio stations, China is investing heavily in African media. It’s part of a long-term campaign to bolster Beijing’s “soft power” – not just through diplomacy, but also through foreign aid, business links, scholarships, training programs, academic institutes and the media.

Its investments have allowed China to promote its own media agenda in Africa, using a formula of upbeat business and cultural stories and a deferential pro-government tone, while ignoring human-rights issues and the backlash against China’s own growing power.

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Zimbabwe to develop economy with “new friends” like China – by MacDonald Dzirutwe (Reuters India – September 11, 2013)

http://in.reuters.com/

HARARE, Sept 11 (Reuters) – Zimbabwe will increase economic ties with friendly countries like China to develop its economy as Western nations maintain their sanctions after President Robert Mugabe’s re-election, the new finance minister said on Wednesday.

Mugabe, Africa’s oldest leader at 89 who won a fresh five-year term in a July 31 vote his opponents say was rigged, on Wednesday swore in his cabinet, including Finance Minister Patrick Chinamasa who was named on Tuesday.

Pointing to multiple flaws in last month’s election cited by domestic vote observers, Western governments, especially the United States, have questioned the credibility of the outcome and are considering whether to prolong sanctions against Mugabe.

However, African election observers broadly endorsed the voting and its result as peaceful and free.

Chinamasa told reporters the ZANU-PF party government had accepted the reality that the West would not remove financial and travel sanctions on Mugabe and his senior allies and would not release any direct financial assistance.

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CORRECTED-Asia stainless steel mills to benefit from Chinese nickel-pig-iron from Indonesia – by Polly Yam (Reuters U.S. – September 11, 2013)

http://www.reuters.com/

HONG KONG, Sept 11 (Reuters) – Chinese firms operating nickel mines in Indonesia are likely to step up plans to build nickel-pig-iron plants in the Southeast Asian country in order to continue shipping ores back home, which would help support higher production in China next year.

The move could mean Chinese firms’ supply of nickel-pig-iron, a low-grade ferro-nickel used in stainless steel production, would rise in Asia in 2 to 3 years time, helping regional mills such as POSCO and Nippon Steel & Sumitomo Metal to cut costs, industry sources said.

China is the dominant producer of nickel-pig-iron in the world and the output accounts for about a quarter of the global nickel production. But the production relies on imports of raw material nickel laterite ores, with Indonesia and the Philippines providing most ores.

Indonesia had planned to ban the export of ores from 2014 to push miners to build smelters at home to benefit the local economy. But in a policy reversal, it may now relax the ban in order to help support the rupiah currency and miners with smelters under construction will be allowed to continue to export ores.

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Insight – Changing China set to shake world economy, again – by Kevin Yao and Alan Wheatley (Reuters India – September 11, 2013)

http://in.reuters.com/

BEIJING/LONDON – (Reuters) – Long after concerns about tightening U.S. monetary policy have faded, a more profound issue will still dog global policymakers: how to handle the second stage of China’s economic revolution.

The first phase, industrialisation, shook the world. Commodity-producing countries boomed as they fed China’s endless appetite for natural resources. Six of the 10 fastest-growing economies last decade were in Africa.

China’s flood of keenly priced manufactured goods hollowed out jobs in advanced and emerging nations alike but also helped cap inflation and made an array of consumer goods affordable for tens of millions of people for the first time.

The second stage of China’s development promises to be no less momentous. Consumption will take over the growth baton from investment. Services will grow as a share of the economy, while industry shrinks. Commodity-intensive mass manufacturing based on cheap labour will give way to greener, cleaner ways of making things.

More of the value added by a better-educated, more productive workforce harnessing new technologies will stay in China instead of going to multinational companies.

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Guest post: can China help Kazakhstan to diversify? – by Usen Suleimen and Xiaojiang Yu (Financial Times/Beyond -BRICS – September 9, 2013)

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

http://blogs.ft.com/beyond-brics/

Dr Usen Suleimen is ambassador at large, Ministry of Foreign Affairs, Kazakhstan. Dr Xiaojiang Yu is associate professor in the department of geography at the Hong Kong Baptist University.

The visit of Xi Jinping, China’s president, to Kazakhstan last weekend and the signing of $30bn of new agreements is another symbol of the growing closeness between two of the world’s largest countries. It is a relationship built on mutual challenges, geographic proximity and energy, as China increasingly looks to central Asia to power its growing economy.

But these links have also raised alarm bells in the west. Kazakhstan and Turkmenistan, the region’s main producers of oil and gas, have been warned against letting China dominate their economies. China has found itself accused of a modern colonialism as part of a new ‘Great Game’ and of plundering the natural resources of poorer, weaker countries.

From Kazakhstan’s perspective, such fears are badly misplaced. Our two countries have had warm relations for more than 20 years, fostered by close links at senior government level. We cooperate on a range of foreign policy issues, including through the Shanghai Co-operation Organization and the Conference on Interaction and Confidence-Building Measures in Asia.

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