Asia Mining – Page 180 – Republic of Mining

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.

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.