Asia Mining – Page 178 – Republic of Mining

UPDATE 3-Mongolia tells Rio Tinto to delay Oyu Tolgoi copper exports (Reuters India – June 21, 2013)

June 21, 2013

http://in.reuters.com/

ULAN BATOR, June 21 (Reuters) – Rio Tinto said its plan to start exporting copper from the $6.2 billion Oyu Tolgoi mine on Friday has been delayed at the request of the Mongolian government, heightening investor concerns about the risks of mining in the country.

Uncertainty over what was behind the delay sparked an exodus out of shares in other Mongolian miners on Friday, with Canadian and Australian listed miners exposed to the country sliding between 10 and 20 percent.

Journalists had been invited last week to attend a ceremony at the copper and gold mine on June 14 to mark the first exports. That was postponed to June 21, but the event was again cancelled at the last minute. Mongolia is due to hold a presidential election on June 26.

“Oyu Tolgoi is ready to start its first shipments of copper concentrate from its Mongolian mine and all necessary permits to do so have been received from relevant authorities,” Rio Tinto spokesman Bruce Tobin said on Friday.

“However, plans to start shipping on Friday 21 June have been postponed at the request of the government of Mongolia.” The company declined to comment on what was behind the latest delay.

Rio Tinto’s Oyu Tolgoi mine in Mongolia to begin shipments – by Robb M. Stewart (Dow Jones/The Australian – June 20, 2013)

June 20, 2013

http://www.theaustralian.com.au/

RIO Tinto plans to make its first shipment of copper and gold from the Oyu Tolgoi mine in Mongolia on Friday, an operation the mining company estimates will account for over 30 per cent of the country’s gross domestic product when it reaches full production in 2020, says a person familiar with the matter.

A ceremony marking the event would be held that day at the mine in the southern Gobi Desert, about 100km north of the Mongolia-China border, the person said.

The $US6.2 billion Oyu Tolgoi mine is key to Rio Tinto reducing its dependence on iron ore, which accounts for about 80 per cent of its earnings. Faced with volatile commodities markets, new Chief executive Sam Walsh is moving to simplify the company’s structure and is selling non-core and poor performing assets and targeting more than $US5bn in cost savings by the end of next year. A number of senior managers at Rio Tinto’s iron ore division in Western Australia were laid off this week.

The first copper-gold concentrate was produced at Oyu Tolgoi in January and Rio Tinto had forecast commercial output would begin by the end of June, provided it could settle a dispute with Mongolia’s government over costs and the further development of the mine.

Nickel price to weaken further as pig iron sector cuts costs (Reuters/Economic Times – June 19, 2013)

June 20, 2013

http://economictimes.indiatimes.com/

SINGAPORE/LONDON: China’s nickel pig iron producers are turning in droves to a new technology that allows them to survive at lower prices, a move that suggests nickel prices, already mired at four-year lows, could fall further.

As nickel prices near $14,000 a tonne, however, output cuts by loss-making producers with higher costs could steady the market, analysts said.

Nickel, mainly used to make stainless steel, is down 17 percent this year. It is the worst performer of a industrial metals complex hit hard by China’s slowing growth. Fed by a commodity boom, prices peaked above $50,000 a tonne in 2007.

Production of nickel pig iron in China, a cheaper substitute for pure nickel used as feedstock by stainless steel mills, has more than quadrupled to an estimated 400,000 tonnes this year from 89,000 tonnes in 2008, according to Macquarie.

At the same time, technical innovations have slashed costs, which has in turn lowered the floor for nickel prices.

The break-even cost for nickel pig iron produced by rotary kiln electric furnace (RKEF) technology is now as low as $12,500 a tonne and its market share has soared, said Dennis Zamora, senior vice president for marketing and strategic planning at Nickel Asia Corp.

Ibris Group plans $1.8 bln Indonesian nickel smelter – by Fergus Jensen (Reuters U.S. – June 19, 2013)

June 20, 2013

http://www.reuters.com/

JAKARTA – (Reuters) – Ibris Group, a Singapore-based miner, announced plans to build a $1.8 billion nickel pig iron plant in Sulawesi, the latest in a series of smelter projects after Indonesia began tightening controls on ore exports.

Indonesia, the world’s top nickel ore exporter, has been pushing for greater returns from its resource wealth. In 2009, it imposed a ban on unprocessed ore exports after January 2014.

The government, which has faced widespread criticism from miners and metal importers over the rules, has indicated it may relax the ore export ban for companies with smelter projects, however.

Singapore-based Ibris, which expects to export around 3 million tonnes of nickel ore this year, triple its 2011 level, plans to build the Rotary Kiln Electric Furnace smelter in two stages, with a total budget of around $1.8 billion.

“We will draw on our own funds as well as external investment. We have agreed with a consortium of financial investors to take a share of the project finance,” Ibris Group Chief Executive Arwan Ahimsa told reporters in Jakarta. Ibris would hold a 51 percent stake in the project.

“We have the engineering and basic design, and we are adjusting this to suit the site conditions, infrastructure requirements and support material,” Ahimsa said.

Is China backtracking on attempts to control iron ore? – by Clyde Russell (Reuters India – June 17, 2013)

June 17, 2013

http://in.reuters.com/

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

LAUNCESTON, Australia, June 17 (Reuters) – It may be too early to start beating the drums of victory for free-market capitalism, but there are signs that China is stepping back from attempts to control the iron ore market.

Just three months after accusing major iron ore producers of manipulating prices, China plans to scrap it’s decade-old import licensing system, a move that may eliminate middlemen in the market, lower costs for steel mills and improve transparency.

It also looks like a strategic retreat for the world’s biggest buyer of iron ore in its battle to win pricing control from the big three producers, Brazil’s Vale and the Anglo-Australian pair of Rio Tinto and BHP Billiton .

The planned end of the licensing system will happen in the second half of the year, according to a Reuters report on June 13 that cited a source with knowledge of the matter. The current system requires import qualification licences to be granted by government-backed industry bodies like the China Iron & Steel Association.

It was designed to eliminate speculative traders from driving up prices and force the steelmaking industry to present a united front against the producers.

Market appears too relaxed about China copper outlook – by Clyde Russell (Reuters India – June 14, 2013)

June 14, 2013

http://in.reuters.com/

(Reuters) – The market may be too sanguine about the outlook for copper prices, as import demand in top consumer China shows signs of increasing just as an anticipated global supply surplus is looking vulnerable.

Shanghai copper fell on Thursday when trading resumed after a three-day holiday, with the most active October contract dropping by as much as 3 percent to 51,350 yuan ($8,354) a tonne in early trade.

While the decline was largely a catch-up to weakness in London earlier this week, it’s indicative that traders aren’t overly concerned about the supply outlook.

The Shanghai slump came a day after Freeport-McMoRan Copper & Gold Inc declared force majeure on deliveries from its Grasberg operation in Indonesia, the world’s second-largest copper mine.

The legal clause allowing the company to miss contracted shipments comes after the mine was shut indefinitely after two accidents in May claimed the lives of 29 workers. Indonesian authorities want the mine closed until investigations into the incidents are completed, a process that may take several months.

Chinese gold miners’ hope for riches shattered by Ghana crackdown – by Kathrin Hille (Financial Times/Globe and Mail – June 9, 2013)

June 10, 2013

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.

SHANGLIN, GUANGXI PROVINCE — When Wen Haijian left home on May 20 last year to dig gold in Ghana, he promised to bring back a fortune. Those hopes were shattered when an urn with his ashes returned last month.

“A gang of armed robbers came to his mine on April 16,” says his wife, sobbing in front of two framed pictures of Wen, a serious-looking, tall man with a square mustachioed face. “When he got up at night to check on the machinery, they shot him right in the head.”

In Shanglin, a poor county in the southwestern Chinese province of Guangxi with a population of 470,000 people, most of the inhabitants are old people, women or children because so many men have gone to Ghana. The county government estimates that 12,000 people from Shanglin are still in the west African country.

In Shuitai, Wen’s remote home village where almost everyone shares his surname, 100 of the 900 inhabitants are in Ghana. “On average, they go for three years,” says Wen Ruchun, a woman whose husband is in Ghana as well. “The first year, you build up the mine and earn your investment back, the second year you start making some money, and the third year you come home.”

[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.