Asia Mining – Page 178 – Republic of Mining

[Eramet] Weda Bay Nickel May Miss Tax Holiday – by Tito Summa Siahaan (Jakarta Times – June 6, 2013)

June 6, 2013

http://www.thejakartaglobe.com/

France-based mining firm Eramet has been urged to spin off the processing facility of its planned Indonesian nickel mine if it wishes to take advantage of a foreign investment tax holiday.

The company plans to invest up to $5 billion to build nickel processing facilities associated with its proposed mine at Weda Bay in North Maluku.

Because the company formed to pursue the Weda Bay mine plan pre-dates the government’s tax holiday initiative, the company may otherwise be ineligible for the incentive that it sought. A contract of work for the proposed mine was signed with the national government in 1998.

Thamrin Sihite, the director general for coal and mineral resources at the Energy and Mineral Resources Ministry, said that the regulation providing a tax holiday, issued by the Finance Ministry, may not cover investment plans such as the one by Eramet.

“The thing is, the tax holiday is only for companies [incorporated] after the regulation was issued [in 2010],” Thamrin Sihite said after a meeting with a French trade delegation lead by Trade Minister Nicole Bricq in Jakarta on Wednesday.

UPDATE 1-Kyrgyz MPs set new deadline for deal with Centerra Gold – by Olga Dzyubenko (Reuters India – June 5, 2013)

June 5, 2013

http://in.reuters.com/

BISHKEK, June 5 (Reuters) – Kyrgyzstan’s parliament has set a new Sept. 10 deadline for the government to agree an improved mining deal with Canada’s Centerra Gold or unilaterally cancel the current arrangement.

Centerra, which runs the central Asian nation’s flagship Kumtor gold mine, has come under pressure to revise a deal struck in 2009 after a state commission said it was underpaying the government and had caused “colossal” environmental damage.

Last week, hundreds of protesters forced a brief stoppage to production at the mine, hidden high in the Tien Shan mountains near the Chinese border.

In late February, the legislature gave the government three months to strike a new deal with Centerra, but the government missed a June 1 deadline, saying it needed more time for talks. These include a proposal for Kyrgyzstan to swap its stake in the Toronto-listed company for joint ownership of Kumtor.

After hours of heated debates, the new deadline was adopted by a 65-5 vote. “There are three options. The first is to redraw the 2009 agreements and start working in line with Kyrgyz laws, including taxation,” Economy Minister Temir Sariyev said before the vote.

PRESS RELEASE: China: Wood Mackenzie Says Thermal Coal Demand Will Reach Nearly 7btpa by 2030

June 5, 2013

http://www.woodmacresearch.com/

SINGAPORE/EDINBURGH/HOUSTON, 4th June 2013 – Wood Mackenzie’s report titled ‘China: The Illusion of Peak Coal’ says that despite efforts to limit coal consumption and seek alternative fuel options, China’s strong appetite for thermal coal will lead to a doubling of demand by 2030. China’s demand will grow to approximately seven billion tonnes per annum (btpa) of thermal coal which is contrary to speculation that China’s thermal coal demand may be reaching a peak in the next decade.

“It is very unlikely that demand for thermal coal in China will peak before 2030,” states Mr. William Durbin, Wood Mackenzie’s Beijing-based President of Global Markets. “Why? Because China’s aggressive investment program for nuclear, natural gas and renewables capacity is centred in the coastal region while coal-fired capacity grows in the central and western provinces. Indeed, there are also a plethora of coal-intensive conversion projects being built or planned that are significantly adding to demand.”

“Wood Mackenzie’s analysis already takes into account a rapid improvement in energy efficiency the likes of which have not been seen. We expect power demand per unit of GDP to fall by half in just 17 years, an extraordinary achievement for an economy experiencing such sustained growth. In spite of this efficiency improvement, power demand is still set to nearly triple to 15,000 Terawatt hours (TWh) by 2030. Indeed, if expected efficiency improvements do not materialise, then in the absence of alternatives, coal demand could increase further.”

Centerra mulls offering stake in Kumtor mine to Kyrgyz government amid violent protests – by Peter Koven (National Post – June 5, 2013)

June 5, 2013

The National Post is Canada’s second largest national paper.

TORONTO – As it faces a barrage of nationalization threats in Kyrgyzstan, Centerra Gold Inc. is studying a possible solution: giving the government a direct stake in its flagship mine.

Centerra revealed Tuesday that it negotiating a potential transaction with the Kyrgyz government that would convert the state’s 32.7% ownership of Centerra shares into direct ownership of the Kumtor mine through a joint venture.

The talks come amid a major crisis for Centerra. Last week, the Toronto-based miner had to temporarily shut down Kumtor after hundreds of protestors set up a roadblock near the mine and shut down a substation that was providing grid power.

The government later declared a state of emergency as hundreds of protestors clashed with riot police near Kumtor. The mine has since re-opened and the road is now clear again. “Probably by today or tomorrow, we’ll be at full capacity again,” said John Pearson, Centerra’s vice-president of investor relations.

The protestors were demanding that the government’s 2009 investment agreement with Centerra be torn up, with some calling for outright nationalization.

UPDATE 3-Beijing’s forced sale of Glencore Peru mine may play into China’s hands – by Denny Thomas (Reuters India – June 4, 2013)

June 4, 2013

http://in.reuters.com/

HONG KONG, June 4 (Reuters) – Beijing’s demand that Glencore Xstrata Plc sell a copper mine in Peru may bring rich dividends for China Inc., as two companies linked to Chinese state-backed groups are weighing rival bids for the $5 billion-plus project.

Interest from Chinese state companies in Glencore’s Peruvian mine is a rare case of an asset sale forced by a government as a condition of merger approval working in favour of its own national champions, and underscores China’s new-found clout in regulating global takeovers.

Chinalco Mining Corp International and Hong Kong-listed MMG Ltd, both linked to a Chinese state-owned enterprises, are considering offers for Glencore Xstrata’s Las Bambas mine, according to people close to the matter, less than three months after Beijing blessed Glencore’s $35 billion purchase of Xstrata.

Under the deal struck with Beijing’s Ministry of Commerce in April, Glencore has three months to begin the process of selling Las Bambas, one of the group’s biggest development projects, with the expectation of finding a buyer by the end of August 2014.

Posco’s iron ore project in Odisha still shrouded by clouds of uncertainty – by Meera Mohanty (India Times – June 2, 2013)

June 4, 2013

http://timesofindia.indiatimes.com/

After countless trips between New Delhi and Odisha over the past five years, Ho-Chan Ryu finally moved base to state capital Bhubaneswar in mid-May. The deputy managing director of Posco had good reason to do so. In the second week of May, a Supreme Court (SC) judgement took the Korean steelmaker one step closer to making the metal in India — a goal it has been steadfastly pursing against significant odds for the past eight years.

The SC set aside a 2010 order of the Orissa High Court — triggered by a petition by a rival, Geomin Minerals & Marketing — that had nullified the state’s government’s recommendation of allotting a prospecting licence for the Khandadhar iron ore mines to Posco. “This [judgement] will significantly help expedite the project. We are happy that it has come at a time when there has been significant progress on the land clearance work,” says YW Yoon, chairman and managing director of Posco India.

Burning issues

Getting rights to a virgin reserve of iron ore is clearly a shot in the arm but Yoon and his battle-weary team would know that celebrations are premature. After all, the fate of the Posco project — the largest singlecompany FDI inflow into India, at a little over Rs 50,000 crore when it was first blueprinted in 2005 — is proving to be as unpredictable as the tropical cyclones that hit Odisha.

UPDATE 2-Indonesia says Freeport accident probe may last 3 months – by Kanupriya Kapoor and Michael Taylor (Reuter India – June 3, 2013)

June 3, 2013

http://in.reuters.com/

JAKARTA, June 3 (Reuters) – Freeport McMoRan Copper and Gold Inc’s Indonesian copper mine will not be able to resume output until a probe into a deadly tunnel collapse is completed in about three months time, a government official said, adding to worries over metal supplies.

That length of stoppage would almost certainly hit Freeport’s ability to meet its contractual obligations, though the company has not said what level of stocks it has left.

Freeport suspended operations at the world’s No. 2 copper mine on May 15 a day after a training area in a tunnel, away from its main operations, caved in on 38 workers, in one of Indonesia’s worst mining disasters.

The Grasberg mine normally produces around 220,000 tonnes of concentrated ore a day, with around 140,000 tonnes coming from open-pit mining and 80,000 tonnes from underground operations. A three month stoppage at Grasberg would take an estimated 125,000 tonnes of copper out of the global supply chain.

Hundreds storm office of Canadian Centerra mine in Kyrgyzstan, 55 wounded in clashes – by Leila Saralayeva (Associated Press/National Post – June 1, 2013)

June 3, 2013

The National Post is Canada’s second largest national paper.

BARSKOON, Kyrgyzstan — Hundreds of stone-throwing protesters besieged a Canadian gold mine in Kyrgyzstan on Friday, clashing violently with riot police and prompting the president to declare a state of emergency.

Over 50 people were wounded and 80 detained in the clashes, authorities said. The protest also triggered widespread unrest in the southern city of Jalal-Abad, where hundreds stormed the governor’s office.

The twin developments threatened further turmoil in this impoverished Central Asian nation of five million, which hosts a U.S. base supporting military operations in nearby Afghanistan. Protesters want the northeastern Kumtor gold mine to be nationalized and the company to provide more benefits.

The mine, operated by Toronto-based Centerra Gold, is the largest foreign-owned gold mine in the former Soviet Union. It accounts for about 12% of the nation’s economy and has been at the centre of heated debate between those favouring nationalization and officials who believe that would deter much-needed foreign investment.

Kyrgyzstan protesters storm Canadian mining office – The Associated Press/CBC News World (May 31, 2013)

May 31, 2013

http://www.cbc.ca/news/world/

Centerra Gold’s electricity cut off after rioters enter transformer unit

Kyrgyzstan has imposed a state of emergency on a northern district after clashes between riot police and protesters over Centerra Gold’s Kumtor mine.

Hundreds of protesters in Barskoon stormed the office of a gold mine run by the Canadian-based company, demanding its nationalization and more social benefits.

Protests at the Kumtor mine operated by Centerra Gold have been going on for several days. Police arrested 80 people Thursday night after several hundred, some on horseback, entered a power transformer unit and cut off electricity to the mine for several hours. That effectlvely prevented the mine from shutting down.

Centerra says the protests are illegal and that it is working with the government and local authorities to resolve the situation. President Almazbek Atambayev imposed the state of emergency and a curfew on Dzhety Ohuz district of the Issyk Kul region until June 10, his office said.

Kyrgyzstan imposes state of emergency to protect Centerra mine – by Olga Dzyubenko (Reuters U.S. – May 31, 2013)

May 31, 2013

http://www.reuters.com/

BISHKEK – (Reuters) – Kyrgyzstan’s government imposed a state of emergency on a northern district on Friday to protect Centerra Gold’s Kumtor mine from protesters.

Police on Friday cleared away demonstators who had been blocking the road to Kumtor for days and arrested 92 people, Prime Minister Zhantoro Satybaldiyev told a news conference.

A few hours later police used tear gas and stun grenades in clashes with villagers who tried to seize a substation and cut power supplies to the mine, a police spokesman said. Several protesters were hurt.

Hundreds of villagers had blocked the road to Kumtor, in Dzhety Oguz district, on Tuesday afternoon and threatened to move on the mine if the government did not tear up its agreement with the company.

President Almazbek Atambayev imposed the state of emergency and a curfew on Dzhety Ohuz district of the Issyk Kul region until June 10, his office said. “Those who broke the law must be brought to justice in line with the full severity of the law,” it quoted Atambayev as saying during a meeting with security officials.

Excerpt from “An Insider’s Guide to the Mining Sector: An in-depth study of gold and mining shares”– by Michael Coulson

May 31, 2013

To order a copy of An Insider’s Guide to the Mining Sector, please click here: http://www.harriman-house.com/book/view/66/investing/michael-coulson/an-insiders-guide-to-the-mining-sector/

Madness in Mining Markets

This section looks at a few examples of the sort of madness that can infect mining share markets. Such events are sometimes loosely described as scams, although often what happens is far more an issue of wild over enthusiasm on the part of investors. However, we start with a genuine scam, and a fairly recent one at that, with plenty of lessons to teach about market navigation – Bre-X and its gold project on Kalimantan.

Bre-X Minerals

The company was incorporated in Canada in 1988. The two key personalities in Bre-X were John Felderhof and David Walsh, the former a geologist and the latter a stockbroker. Both men had been short of money in their early professional years, and in its early days Bre-X seemed infected with the same problem. Interestingly Felderhof and Walsh’s first venture together was a trip to the island of Kalimantan in Indonesia some five years before Bre-X was founded.

Excerpt from “An Insider’s Guide to the Mining Sector: An in-depth study of gold and mining shares”– by Michael Coulson

May 28, 2013

United Kingdom: Little mining activity left

One of the most interesting business developments in recent years has been the relocation to and re-incorporation in the UK of a number of major mining companies. This has meant that four of the largest mining companies in the world – Rio Tinto, Anglo American, Xstrata and BHP Billiton – have UK incorporation; all are part of the FTSE100 share index. It is important to appreciate, however, that any UK mining operations that these companies have are very small. Indeed, mining in the UK is itself confined to speciality minerals such as china clay, sand and gravel and a rapidly contracting (though once powerful) coal mining industry.

The financial attractions of London

Therefore, with little mining activity in the UK the reasons for the presence of these companies in London is primarily financial. The banking system is seen as sophisticated and experienced in financing mining developments. Operating as a UK company means that the cost of capital can be much lower than in countries like South Africa. The historic links between the City of London and the mining industry mean that there is understanding of the risks and rewards of financing mining companies.

Afghan archaeology site faces rocky future – Jennifer Glasse (Aljazeera.com – May 20, 2013)

May 21, 2013

http://www.aljazeera.com/

Ancient ruins of Mes Aynak threatened by planned Chinese mining project.

Mes Aynak, Afghanistan – Ruins dot each hilltop in mountainous Mes Aynak, an hour’s drive south of the capital Kabul. Buddhist monasteries stood here for hundreds of years, and Afghan workers under the supervision of archaeologists are racing to uncover remnants of the past.

The four-square-kilometre site contains the remains of 2,000-year-old villages, but archaeologists say they believe the area has likely been inhabited for 5,000 years. Green-tinged rocks are everywhere: in the ancient walls, jutting out of the ground. That’s because this is one of the most copper-rich spots in the world.

It’s also why archaeologists have a sense of urgency to uncover Mes Aynak. The mining rights to the area have been sold to a Chinese company in a $3bn deal, Afghanistan’s largest commercial contract.

The prospect of mining threatens the ancient site.

The fall of HKMEx and what it means for Hong Kong’s commodities dreams – by Lydia Guo (Financial Post – May 20, 2013)

May 21, 2013

http://blogs.ft.com/beyond-brics/#axzz2Tw94az00

The sudden blow-up of the Hong Kong Mercantile Exchange (HKMEx) not only represents the collapse of a commercial proposition. It is also a warning call to Hong Kong’s ambition to develop itself as a commodities trading centre.

After three years in preparation and exactly two years of operation, HKMEx said on May 18 its trading revenues were insufficient to support its operating expenses and it would surrender its authorisation to provide automated trading services to the regulator, the Hong Kong Securities and Futures Commission, with immediate effect. Since all HKMEx’s trading is by ATS, it is effectively shut down.

The SFC confirmed that it had withdrawn HKMEx’s ATS authorisation.

HKMEx offers only two products, a gold futures contract and a silver futures contract, both denominated in US dollars. It began operating on May 18, 2011; until the end of April this year, trading volume for the two products added up to less than 2.4m contracts. HKMEx does not reveal it revenues but, since it charges a fee of 50 US cents a contract (and assuming it charges only sellers), its total revenues for the past two years were probably about $1.2m.

Not much. But things got worse this year: trading volume dropped more than 70 per cent in the first four months, from 455,527 to 135,699 contracts, or an average of about 34,000 contracts a month.

Freeport Death Toll Reaches 28 as Indonesia Reviews Mines – by Madelene Pearson & Yoga Rusmana (Bloomberg News – May 21, 2013)

May 21, 2013

http://www.bloomberg.com/

The death toll from a collapsed tunnel at Freeport-McMoRan Copper & Gold Inc.’s (FCX) Grasberg complex reached 28 as Indonesia said it would review all mining operations following one of its worst mining accidents.

The rescue team recovered the remaining bodies that were buried at the accident site of the world’s second-largest copper mine, Thamrin Sihite, director general of coal and minerals at the Energy and Mineral Resources Ministry, told reporters today in Jakarta. Operations at the mine in Mimika, Papua province, about 3,120 kilometers (1,940 miles) east of Jakarta, will remain suspended until after an investigation is concluded, the government said.

President Susilo Bambang Yudhoyono ordered related ministries to review safety at all mines in Indonesia, Sihite said earlier. Phoenix, Arizona-based Freeport, which got 20 percent of its operating income from Indonesia last year, was still shipping material produced from the mine as of May 17, its local unit said last week.

Ten workers have been rescued from the site, Freeport said today. The “Freeport accident is one of the worst mining accidents in Indonesia,” Sihite told reporters in Jakarta today. “I don’t want this to happen again.”