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Asia Mining

Good money in mining – by Hanim Adnan and Choong En Han (Malaysia Star – July 27, 2013)

http://www.thestar.com.my/

MINING in Malaysia is not the big business it used to be. Tin mining tycoons are now corporate folklore, no thanks to the collapse of the global tin market in 1985.

The industry was then overshadowed by industrialisation and the oil palm industry. Its glorious past is manifested by the oil and gas industry which is the multi-billion ringgit industry it deserves to be due to planning and the work undertaken by Petroliam Nasional Bhd.

Apart from oil and gas, minerals are being mined by small-time miners in a rather ambiguous manner in most mineral-rich states. But that is about to change. The sector is now focusing on large-scale mining of major minerals such as gold, iron ore and coal. It’s no longer the domain of tin.

Last year, iron ore topped other major minerals in terms of production with 10.7 million tonnes mined valued at RM2.02bil. That is followed by gold with 4.6 million gm (RM700.8mil), coal at 2.95 million tonnes (RM442.2mil) and tin-in-concentrate at 3.66 million tonnes (RM236.5mil) respectively.

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POSCO’s global expansion plan hits India roadblock – by Hyunjoo Jin (Reuters India – July 25, 2013)

http://in.reuters.com/

SEOUL – (Reuters) – Some investors in South Korean steelmaker POSCO are starting to sour on a long-delayed $12 billion project for a steel mill in Odisha that was once hailed as a profit driver.

The investment is part of a global expansion spree led by POSCO Group Chairman and Chief Executive Chung Joon-yang, a nearly decade-long strategy that was intended to capitalise on rapid emerging economy growth and help reduce the company’s reliance on its domestic market.

But a series of acquisitions left POSCO with a debt burden that has more than doubled over the past three years, while slowing growth in major markets such as China has hurt steel prices and margins. Last week, the steelmaker said it will bow out of a $5.3 billion steel mill development in Karnataka.

“The steel market is not in good shape, and we share investors’ concerns about the overall market conditions,” a POSCO executive told Reuters, speaking on condition of anonymity because he was not authorised to talk to the media. “The Odisha investment would be a burden to us.”

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Financial, human toll of ‘horrific’ Big Gossan accident costs FCX dearly – by Dorothy Kosich (Mineweb.com – July 24, 2013)

http://www.mineweb.com/

28 fatalities, the loss of millions of pounds of copper and thousands of ounces of gold, as well as creating a new oil & gas subsidiary, slammed FCX’s 2Q.

RENO (MINEWEB) – The tunnel collapse in a Freeport-McMoRan Copper & Gold training facility in Indonesia “was an incredibly horrific convergence of events that came together because of the geology of the rock and the influence of water and air on our ground support facilities, and unfortunately just happened as we were having this training meeting,” CEO Richard Adkerson told analysts during a conference call Tuesday.

On May 14th, the accident occurred at PT Freeport Indonesia, which resulted in 28 fatalities and 10 injured when the rock structure above an underground ceiling for a training facility collapsed in an unprecedented and unexpected event. While the accident occurred outside of mining operations, mining and processing activities at the Grasberg complex were temporarily suspended as Indonesian government authorities also conducted inspections.

“In the quarter, we lost roughly 125 million pounds of copper and 125,000 ounces of gold,” said Adkerson. “The full year impact will be greater than that. We estimate 230 million pounds of copper and 250,000 ounces of gold.”

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INDIA HUNTS FOR COAL IN BC (Asia Pacific Post – July 23, 2013)

http://www.asianpacificpost.com/

India has announced that it is exploring options for sourcing coal from British Columbia, including equity participation in assets and acquisition of mines just as Vancouver city council voted to ban the handling, storage and trans shipment of coal at its marine terminals and berths.

The ban, mostly symbolic, was passed as Port Metro Vancouver, the No. 2 exporter of coal in North America triggered controversy over planned expansion of its facilities. Vancouver city council has no jurisdiction over the port operations.

Even before the ink was dry on the 9 to 2 vote which aims to curb greenhouse gas emissions and set the air quality target to “breath the cleanest air of any major city in the world”, a high powered delegation from India met with British Columbia Premier Christy Clark to scour for coal resources.

The Indian delegation was led by Steel Minister Beni Prasad Verma who is looking to feed India’s steel industry which is growing at a fast pace and needs additional quantities of coking coal. “The delegation held a series of discussions with the coal asset owners and various avenues for sourcing coking coal to India to meet its ever-growing requirement were discussed,” an official statement said.

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UPDATE 2-ArcelorMittal abandons dormant Indian project – by Krishna N Das (Reuters India – July 17, 2013)

http://in.reuters.com/

NEW DELHI, July 17 (Reuters) – ArcelorMittal, the world’s top steelmaker, said it would scrap a planned steel plant in India due to delays in acquiring land and an iron ore mine, obstacles that have also caused South Korea’s POSCO to abandon plans.

The decision to scrap the planned 12 million-tonnes-a-year (MTA) plant in the eastern state of Odisha, comes a day after the world’s fifth biggest steelmaker, POSCO, said it was ditching a 6 MTA plant in the southern Karnataka state because of delays in receiving iron ore mining rights and opposition from residents which had held back land acquisition.

The failed projects will be a blow to India’s federal government, which on Tuesday relaxed foreign investment rules to draw in funds needed to turn around slowing economic growth and support a weak rupee.

ArcelorMittal India and China Chief Executive Vijay Bhatnagar said the company’s other two projects in mineral-rich states of Jharkhand and Karnataka were making “steady progress” and it would continue to pursue them.

The Jharkhand plant is expected to have an annual capacity of 12 million tonnes, while the one in Karnataka is expected to have capacity of 6 million tonnes.

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Gold Imports by India Seen Shrinking as Curbs Increase Costs – by Swansy Afonso & Pratik Parija (Bloomberg News – July 17, 2013)

http://www.bloomberg.com/

Gold imports by India, the world’s biggest consumer last year, may tumble in the second half as the government curbs shipments to contain a record current-account deficit and stem a slide in the currency.

Inbound shipments may drop 22 percent to 372.5 metric tons in the six months through December from 478 tons a year earlier, according to a median of estimates from 10 importers, jewelers, analysts and trade groups compiled by Bloomberg.

That may still boost full-year imports to about 902 tons from 860 tons in 2012, according to Bloomberg calculations based on data from the World Gold Council and the All India Gem & Jewellery Trade Federation.

Falling Indian demand for physical gold may deepen a bear market in bullion as some investors sell the metal amid signs of an improving U.S. economy. Shoppers from India to China and Turkey crowded retail outlets to buy jewelry, coins and bars in April after the precious metal posted the biggest two-day loss in three decades. Goldman Sachs Group Inc. says that gold will reach $1,050 by the end of 2014, while Credit Suisse Group AG forecasts $1,150 in about a year.

“I see no reason to buy more gold,” said Bharti Chandra, a 38-year-old housewife, dressed in a salwar, who was selling an old necklace in Mumbai’s Zaveri Bazaar, the largest bullion market in the country.

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Special report: In tax case, Mongolia is the mouse that roared – By Anthony Deutsch and Terrence Edwards (Reuters India – July 16, 2013)

http://in.reuters.com/

AMSTERDAM/ULAN BATOR – (Reuters) – Turquoise Hill Netherlands is a little-known Amsterdam-based company with three employees, no office, and not even its own mailbox. To the government of Mongolia, though, the company represents billions in taxes that it will never see.

Turquoise Hill was created in 2009, five years after Mongolia and the Netherlands signed a tax treaty to avoid double taxation and boost investment in Mongolia. But in 2011, Mongolia decided to cancel the pact, arguing that it would cost the country income from one of the most lucrative gold and copper mines in the world.

The move was rare – tax experts say only a handful of such deals between countries have ever been cancelled – and it highlights a big contradiction.

The Netherlands, which has more than 90 such treaties globally, spent roughly 13 million euros ($17 million) on three aid programs to Mongolia in 2009 and 2010. Globally its aid budget is about $5.5 billion – the fifth most-generous rate among rich nations at 0.71 percent of Gross National Income, according to the OECD.

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UPDATE 3-POSCO drops $5.3 bln Indian steel mill, keeps main project alive – by Hyunjoo Jin (Reuters India – July 16, 2013)

http://in.reuters.com/

SEOUL, July 16 (Reuters) – South Korea’s POSCO said on Tuesday it will pull out of a $5.3 billion steel mill development in India’s Karnataka state, but will proceed with another $12 billion project billed as the country’s largest foreign direct investment.

POSCO said in a regulatory filing that it had agreed to cancel the project with the government of southern Karnataka state because of delays in receiving iron ore mining rights and opposition from residents which had held back land acquisition.

The move could provide fresh impetus to POSCO’s main steel project in the eastern state of Odisha. Already eight years in the making, it has recently gained momentum with the clearing of legal obstacles to the granting of an iron ore exploration licence.

“We will proceed with a steel mill project in Odisha, which is making progress. The latest move will make us more focused on the project,” POSCO spokeswoman Kim Ji-young said. POSCO, the world’s fifth-biggest steelmaker, had pursued three steel mills in India as a way of hedging its bets on the slow-moving Odisha project.

In 2010, POSCO signed a preliminary agreement with the Karnataka state government to construct a mill capable of producing 6 million tonnes of steel a year. A year earlier it signed a separate steel mill deal with state-run Steel Authority of India Ltd (SAIL).

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Bruised by purity rule, Indonesia tin exporters face trading overhaul – by Michael Taylor and Yayat Supriatna (Reuters India – July 12, 2013)

http://in.reuters.com/

JAKARTA, July 12 (Reuters) – Indonesia’s plans to force tin producers to trade through a domestic exchange could be a new source of disruption for shipments by the world’s top exporter, coming just as firms are trying to meet new tin purity rules, industry sources said.

The Southeast Asian nation has been trying to boost its profile in commodities markets in the hope of setting its own price benchmarks, but so far has faced an uphill task to attract enough liquidity to challenge benchmarks on overseas exchanges.

Under the new rules, all 51 registered tin exporters must trade on a domestic exchange after August 29. The trading plan is in addition to new rules brought in this month to raise minimum purity levels for tin exports to 99.9 percent, which are already expected to slash exports over the next few months, potentially lifting tin prices.

The Indonesia Commodity and Derivatives Exchange (ICDX) launched the country’s only physical tin contract last year, although it has struggled to challenge the dominant London Metal Exchange (LME) contract. “The new trading rules will promote sustainable tin mining, (and) will be good for producers and Indonesia,” said Megain Widjaja, ICDX’s chief executive, assuring there could be a transparent market with a fair price for producers and buyers.

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POSCO may soon get iron ore licence for Odisha plant – by Krishna N Das (Reuters India – July 10, 2013)

http://in.reuters.com/

REUTERS – India is expected to grant an iron ore exploration licence to POSCO(005490.KS) for its planned $12 billion steel plant in the country, two government officials told Reuters, in a step that should speed up the project stuck for eight years.

The Supreme Court in May handed a decision on a licence to the government, raising the South Korean firm’s chances of getting access to iron ore for the project billed as India’s largest foreign direct investment.

“POSCO India should get the license in a month or so,” said a senior government official involved with the decision-making. “The government is looking at it positively.”

Another official directly involved in the matter said the government was speeding up the process given that the Supreme Court has already ruled against a lower court order declining a prospecting licence for POSCO. Prospecting licences are generally valid for three years, after which a prospector has to apply for a mining lease.

Access to iron ore, the main raw material in making steel, is the most important factor in POSCO deciding to set up the plant in India, experts have said.

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The Guangxi miners in Ghana gold rush – by Anna Healy Fenton (South China Morning Post – June 4, 2013)

http://www.scmp.com/

Chinese President Xi Jinping ended his six-day visit to Africa on a high note, leaving behind signed deals and warm pledges. The Republic of Congo was his final stop, after Tanzania and South Africa. He’s committed to a river port in Oyo, Congolese President Denis Sassou Nguesso’s hometown, and a sea port in Pointe-Noire for exporting mineral ore.

Congo is already an established oil producer and China is already its biggest trading partner. Xi announced he wanted to raise ties with Congo “to a new and higher level”.

“We expect to work together with our African friends to seize upon historic opportunities and deepen cooperation … in order to bring greater benefit to the Chinese and African peoples,” he said in Brazzaville.

Fine words indeed. One place he did not go was Ghana, in West Africa, where he could have seen Chinese and African co-operation in action. This is the scene of the gold rush 2013 style, where about 50,000 migrants from Shanglin in southern Guangxi, have received welcomes a little less warm than Xi’s.

Natives of Shanglin, famous for producing and exporting gold miners, started heading to Ghana’s goldfields eight years ago.

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Ghana’s Crackdown on Chinese Gold Miners Hits One Rural Area Hard – by Dan Levin (New York Times – June 29, 2013)

http://www.nytimes.com/

MINGLIANG, China — To the people of Shanglin County, gold is a curse. For nearly a decade, thousands of peasants from this rural speck in southern China’s Guangxi Autonomous Region borrowed heavily before boarding flights for Ghana, Africa’s second-largest gold producer, with glinting ambitions and no backup plan.

The Chinese found their gold, though trouble soon found them, in the form of crooked police officers and armed bandits who prowled the mining camps. Then, this month, the Ghanaian authorities declared the mines illegal and arrested more than 200 Chinese miners, accusing them of polluting the land and abusing local workers. Countless others fled as local residents armed with guns and machetes attacked the camps, robbing miners of their possessions and killing some who fought back.

After the crackdown, images of violent deaths and vandalized mining camps blazed across Chinese social media, fueling national anger and soul searching. But here in Shanglin, a mountainous county of 470,000 in one of China’s poorest regions, it is despair over financial ruin that is most pronounced.

“My son might be killed in Ghana, but if he comes back he’s dead anyway,” said Shen Aiquan, 65, whose family borrowed 3 million renminbi, or $489,000, to build a mining operation, though from whom exactly she did not know. All she could do was wait for her son, and the debt collectors who would surely follow.

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Canadian potash deal shows trend among Chinese – by Eddy Lok (China Daily U.S.A. – July 5, 2013)

sa.chinadaily.com.cn/index.

Chinese investment in a potash project in the Canadian province of Saskatchewan bodes well for junior mining companies in search of international financing, analysts say.

Vancouver-based Western Potash Corp, recently closed what it called was a strategic equity investment in the company by China BlueChemical Ltd and Guoxin International Investment Corporation.

Under the joint-venture deal, CBC (Canada) Holding Corp will make a strategic equity investment of $32 million in Western Potash at a price of 71 cents a share, according to a company news release.

As a result of this transaction CBC (Canada) Holding will hold a 19.9 percent ownership stake in the company on a non-diluted basis.

CBC (Canada) Holding is jointly owned by China BlueChemical Ltd and Benewood Holdings Corp Ltd. China BlueChemical is a majority-owned subsidiary of China National Offshore Oil Corporation, while Benewood is a wholly-owned subsidiary of Hong Kong registered Guoxin International Investment Corporation Limited.

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China’s exploration spend is world’s largest – by Natalie Greve (MiningWeekly.com – July 4, 2013)

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

Amid a global trend of increasing exploration expenditure, China has emerged as the country that spends more on exploration activities than any other country in the world, MinEx Consulting MD Richard Schodde said on Wednesday.

“To be fair, however, around half of this is for bulk minerals,” he said during an address at the Geological Society of South Africa’s 2013 GeoForum conference.

This came as Canada, Australia and the US’s market shares had halved in the last 20 years, despite global exploration expenditure hitting an all-time high of $29.4-billion in 2012 alone. China’s spend accounted for around 14% of this amount.

While gold remained the primary target, Schodde had observed a major increase in spending associated with bulk minerals, which had accompanied a shift from exploration in developed countries to developing ones.

He added that growing exploration spend was driven by commodity prices, emphasising that there was a strong correlation between the gold price and exploration spend.

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Export income dispute holds up Rio’s Oyu Tolgoi mine – Mongolia – by Terrence Edwards (Reuters India – July 4, 2013)

http://in.reuters.com/

ULAN BATOR, July 4 (Reuters) – The Mongolian government and Rio Tinto have not yet reached an agreement on whether the miner can repatriate earnings from the $6.2 billion Oyu Tolgoi mine, the country’s mining minister said, delaying first copper shipments.

The dispute could heighten investor concerns about the risks of mining in Mongolia and threaten Rio Tinto’s plans to grow its copper portfolio to ease dependence on iron ore.

Metals traders have been closely watching whether Rio gets official approval to export concentrate from Oyu Tolgoi amid a shortfall in shipments from the Grasberg mine in Indonesia, run by Freeport McMoRan Copper & Gold. The unlocking of ore shipments would increase supply in top copper consumer China and boost treatment and refining charges charged by smelters there.

Exports from the copper and gold mine were initially due to start on June 14, but were then postponed to June 21, before the Mongolian government told Rio to delay them again without setting a date. Uncertainty over the reasons for the delay has slashed the share price of other Mongolian miners.

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