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Australia/New Caledonia/Papua New Guinea Mining

Over 1 million tonnes of iron ore leaves Port Hedland during single tide – by Vicky Validakis (Australian Mining – June 10, 2014)

 http://www.miningaustralia.com.au/home

Iron ore production is surging in the Pilbara, with Port Hedland recording a new tonnage record for the largest departure of ore on a single tide.

The new benchmark of 1,270,721 tonnes was achieved with seven capesize vessels departing on Saturday. This beat the previous record set in April by almost 160,000 tonnes.

Port Hedland Port Authority also said it was the first time seven capesize vessels have sailed on a single tide. The port, Australia’s biggest for iron ore, increased exports by 3.55 per cent between April and May, setting a monthly record of 36 million tonnes.

The news comes amid figures which show that a ramp up in iron ore production was partly to thank for a 1.1 per cent gain in Australia’s economy in the three months to March. Annual growth was a seasonally adjusted 3.5 per cent, the Australian Bureau of Statistics said.

The mining industry made up 80 per cent of this growth. The nation’s three largest iron ore miners BHP Billiton, Rio Tinto, Fortescue Metals Group have all added extra tonnages to their businesses.

It is this ramp up that is being blamed for an oversupply in seaborne supply, and a 31 per cent fall in the price of the commodity which last traded at $US94 a tonne.

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BHP Billiton to follow China on its next growth journey – by Vicky Validakis (Australian Mining – June 6, 2014)

http://www.miningaustralia.com.au/home

BHP Billiton will invest heavily in energy and food as it follows China on its transition from a construction-led economy to a consumption power-house.

Speaking to the media in Beijing where he wound up a 10-day tour of meeting BHP’s commodity customers in China, India, Japan and South Korea, BHP boss Andrew Mackenzie said while Chinese steel production would remain strong the company was also keen to meet the country’s other needs.

“We see a Chinese economy gradually shifting from construction to consumption,” he told reporters yesterday, adding “and so, will we transition.”

He said materials with high consumer demand included copper, energy and potash. “Copper is core. Coal is core. Oil and gas is core. Potash is core,” Mackenzie said.

“We’ve exited diamonds. We’ve exited arguably medium-sized ore bodies which don’t fit with our overall strategy to own the great ore bodies of uranium and copper and to some extent in oil and gas. And we reduced our exposure to liquefied natural gas.

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UPDATE 1-New Caledonia allows conditional restart of Vale nickel mine – by Cecile Lefort (Reuters U.S. – June 1, 2014)

http://www.reuters.com/

SYDNEY, June 2 (Reuters) – New Caledonia authorities said on Monday they have authorised a conditional restart of Brazil-based Vale’s nickel operations, which were suspended more than three weeks ago after acid-tainted effluent spilled into a river.

The leak sparked violent riots by young Melanesians that caused more than $20 million in damage to buildings, equipment and vehicles and left three policemen with gunshot wounds.

Police remained on alert as protesters maintained a presence near the plant. “The situation is calm and some (protesters) are still camping near the plant,” said a local government spokeswoman.

Some protesters, who have been frustrated by the lack of response from indigenous Kanak chiefs to the chemical spill, are seeking the permanent closure of the mine – something Vale said last week was not on the table. Vale could not immediately be reached for comment on when production would restart.

The Southern Province of the French-administered Pacific island noted it was Vale’s sixth major incident at the $6 billion Goro site and set hightened safety standards as a condition of the mine operations resuming.

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Under fire Australian miners look to repair their image – by Jamie Smyth (Financial Times – June 1, 2014)

 

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

Bulga, Australia – Tony Brown typically spends his days ferrying tourists to and from the Great Barrier Reef. But last month, the charter boat operator flew to Europe where he helped persuade Deutsche Bank and HSBC not to fund the expansion of a coal port that green groups claim could destroy the Unesco World Heritage-listed site.

“The dredging required to build the port is a risk to the reef and the A$6bn tourist industry that depends on it,” says Mr Brown, who has vowed to continue the fight to block what would become the world’s largest coal port at Abbot Point in Queensland.

The decision by the banks is the latest victory in a global campaign being waged against the funding of fossil fuel projects and companies by green groups, which allege they are causing catastrophic global warming.

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Rio Tinto leader Ray Ahmat cuts a trail for others – by Sarah-Jane Tasker (The Australian – May 31, 2014)

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

RAY Ahmat, the first local Aboriginal superintendent at Rio Tinto Alcan’s bauxite mine in Weipa, has outlined the opportunities to develop local talent after taking out a top award at an industry function.

Mr Ahmat received the Overall Indigenous Award at the Queensland Resources Council’s Indigenous Awards last night for his contribution as a role model in the state’s sector.

He leads a large operational team of more than 170 people at the mine, on the Western Cape of York Peninsula in Queensland, managing pre-mining and post-mining activities.

Mr Ahmat, born and bred in the region, said his parents were strong role models in his life. His father had worked at the mine for 32 years and his mother spent 28 years at the operation.

“I got to where I am to seeing what they did,” he said. Mr Ahmat, who is a Yupungathi traditional owner, joined the miner 15 years ago as a truck driver before moving up the chain to superintendent — a path he hopes he can encourage others in his community to follow.

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China prospects forged in steel – by Barry Fitzgerald (The Australian – May 31, 2014)

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

MINERS, commodity experts and China watchers believe this year’s dramatic fall in iron ore is a short-term issue, suggesting that the price of Australia’s biggest export earner will rally to around $US110 a tonne in response to China’s ¬urbanisation and industrialisation demand imperative.

A procession of speakers at the Australia in China’s Century Conference in Melbourne yesterday cautioned against reading too much into the near 30 per cent decline in iron ore prices so far this year to $US95.70 a tonne — a price at which Australia’s highest-cost producers will be feeling the pinch.

They cited a combination of reasons for their faith in the ability of iron ore prices to rebound to around $US110 a tonne. While that would represent a 15 per cent improvement on the current price, it would nevertheless still be 18 per cent below the full-year average in 2013, which matched the year-end price of $US135 a tonne.

Fortescue chairman and major shareholder Andrew Forrest told the conference that Chinese steel production was continuing to run at record levels despite patchy economic indicators.

“The Chinese ability to manage poverty out of its country is unprecedented and their consumption of steel is still running at record rates,” Mr Forrest said.

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COLUMN-Goro nickel project is not just Vale’s problem now – by Andy Holm (Reuters India – May 29, 2014)

http://in.reuters.com/

The opinions expressed here are those of the author, a columnist for Reuters. May 29 (Reuters) – It’s hard not to have a grudging respect for Brazil’s Vale when it comes to the company’s Goro nickel project in New Caledonia. Others would surely have walked away from what must be one of the most problematic start-ups in the history of base metals.

Over-budget and years late even before the plant was first switched on in 2010, it has since been plagued by technical set-backs, unscheduled closures and, now, violent attack by locals. Vale has remained commendably undaunted throughout.

Yet each new start has swiftly been followed by new adversity. Even rebranding the operation as Vale New Caledonia (VNC), that tried-and-tested corporate exercise in drawing a line under historical problems, hasn’t worked.

Goro, using the relatively new high-pressure-acid-leach (HPAL) technology, continues to defy Vale’s boundless optimism and to drain money from its bottom line.

Until Jan. 12 this year it was, however, just Vale’s problem. But in the wake of the Indonesian nickel ore ban that kicked in on that date, Goro risks becoming a bigger problem for the entire nickel market.

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BHP, Rio warn strong Australian dollar will lead to more job losses – by Amanda Saunders (Sydney Morning Herald – May 26, 2014)

http://www.smh.com.au/

Mining giants BHP Billiton and Rio Tinto have warned the combination of high costs, high taxes and the strong Australian dollar has put a “vice-like grip” on the $60 billion coal industry that will force further mine closures and job losses this year.

About 12,000 jobs have been cut from the sector over the past two years amid a string of mine closures and delays to projects by companies ¬including BHP, Rio, Glencore, Vale and Peabody Energy.

BHP global coal president Dean Dalla Valle said there would be “difficult times ahead in a period of such oversupply”, particularly given many operators are not making money at ¬current depressed prices.

“You will see the industry adjust itself, shake itself out. You are going to see more exits from the market.” While both miners remain confident in the long-term outlook, they predict a brutal period ahead for the industry as prices remain under intense pressure.

The contract price of premium hard-coking coal has fallen to $US120 a tonne in the June quarter from $US330 a tonne in 2011, while thermal coal prices have dropped to $US74 a tonne on the spot market from $US125 in mid-2011.

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COMMENT: Riots at Goro cause $30M in damage – by Marilyn Scales (Canadian Mining Journal – May 28, 2014)

Marilyn Scales is a field editor for the Canadian Mining Journal, Canada’s first mining publication. She is one of Canada’s most senior mining commentators.

It appears that Vale SA has run into a spot of trouble at the Goro laterite nickel mine in New Caledonia. Turns out it was a rather large spot that will take $30 million to repair.

Following a 10,000-litre acid spill that ran into a nearby creek and killed thousands of fish earlier this month, Vale was ordered to suspend operations. This is reportedly the fifth such spill in as many years. The first spill occurred during plant commissioning in 2009. It was a reported 40,000 litres, 2,500 of which found its way into the local river.

The recent riots were sparked when local youths protested the reopening of the plant, even with the promise of more stringent safety precautions. There are many who would like to see the project permanently shuttered. Over 48 hours, activists torched vehicles, equipment and buildings at the mine site. They blockaded the roads near the mine, reportedly using mining equipment including excavators to keep the police at bay.

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‘We are at crossroads,’ Rio Tinto boss warns – by Sarah-Jane Tasker (The Australian – May 28, 2014)

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

MINING giant Rio Tinto’s Australian boss has warned Australia is at a “crossroads” and must engage in serious structural reform if it is to regain its competitiveness and prosperity.

Phil Edmands, managing director Australia, argued today that the alternative to structural reform was to decline into “mediocrity and obscurity”.

Outlining that Australia faces a serious fiscal challenge, Mr Edmands, in a speech in Canberra to mark Minerals Week, said that there was a gap between Commonwealth spending and tax receipts which, without action, will only get larger given Australia’s demographic challenges.

“Restraining expenditure is certainly a necessary part of the answer — but equally important is the need for a far more efficient, less complex and better targeted tax system,” he said in his first speech since taking over from David Peever in April.

Mr Edmands also attacked Australia’s high company tax rate, saying it remained above the OECD average, adding that Australia had been pushed out of the top 20 in the latest global competitiveness report from the World Economic Forum.

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UPDATE 1-Australia’s opposition leader concedes carbon, mining taxes to go – by James Regan (Reuters India – May 28, 2014)

http://in.reuters.com/

CANBERRA, May 28 (Reuters) – Australia’s opposition Labor Party on Wednesday said two contentious taxes on mining and carbon emissions introduced during its years in power would likely be repealed this year.

Before being elected prime minister last September, Tony Abbott made abolishing the taxes a centrepiece of his campaign.

But there have been questions over Abbott’s ability to meet his promises, given signs of opposition from independent lawmakers including billionaire Clive Palmer’s party, which will hold the balance of power in the upper house from July.

“The mining tax, I suspect will be repealed despite Labor’s position,” opposition leader Bill Shorten said in response to questions at a meeting of mining executives in Canberra. Shorten also said that he believed the carbon tax would go this year, after a new upper house senate is sworn in July.

Opponents of the carbon tax say it has added to the costs facing industry and the public and done little to cut emissions, something disputed by its supporters.

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COLUMN-Pain of low coal prices finally too much for Australian miners – by Clyde Russell (Reuters U.S. – May 27, 2014)

http://www.reuters.com/

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

LAUNCESTON, Australia, May 27 (Reuters) – Like a pot of water being slowly brought to boil, it’s taken a long time for Australian coal miners to reach the point where the pain becomes too much to bear.

In recent weeks a slew of announcements of mine closures, production cuts and job losses has served to underscore that ultimately the sustained low-price environment would have to result in lower output from the world’s largest coal exporter.

So far the announced closures have been modest, but the chances are increasing that they are merely the harbinger of more cutbacks in the beleaguered coal industry. The cost of producing about half of Australia’s thermal coal and about 45 percent of its coking coal is above the prevailing prices, Morgan Stanley said in a report on Monday.

The spot price of thermal coal at Newcastle Port , an Asian benchmark, was $74.33 a tonne in the week to May 23, close to a 4-1/2 year low of $72.98 hit in March. It has lost 45 percent since the post-2008 recession high of $136.30 reached in January 2011.

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Rio, Guinea Agree on Terms for $20 Billion Iron-Ore Mine – by Jesse Riseborough (Bloomberg News – May 27, 2014)

http://www.businessweek.com/

Rio Tinto Group (RIO), the world’s second-biggest mining company, agreed financial terms with the government of Guinea for a potential $20 billion iron-ore mine, port and rail project that may start by the end of this decade.

The accord will underpin talks with new investors for the rail and port component of developing the Simandou resource, Rio and its project partners Aluminum Corp. of China Ltd., International Finance Corp. and the government of Guinea said yesterday in a joint statement. The parties gave no commitment on when production will start.

Simandou is the world’s largest untapped iron-ore resource and Rio has estimated the mine could produce 100 million tons of the steelmaking ingredient a year. The project could double the West African nation’s current gross domestic product and add 45,000 jobs in the country, according to the statement.

The accord doesn’t commit Rio to building the project and analysts have said a legal dispute over the ownership of adjacent ground at Simandou could delay first production into the next decade. The agreement signed yesterday covers two of four mining permits for an ore-rich area in the southeast of Guinea.

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Protesters burn vehicles, buildings at New Caledonia nickel mine – by Cecile Lefort and Melanie Burton (Reuters U.S. – May 26, 2014)

http://www.reuters.com/

SYDNEY – (Reuters) – Dozens of protesters caused tens of millions of dollars in damage to vehicles, equipment and buildings at Vale’s nickel mining site in New Caledonia, as anger boiled over at a chemical spill into a local river.

The $6 billion Vale plant at Goro in southern New Caledonia was closed earlier this month after some 100,000 liters of acid-tainted effluent spilled, killing about 1,000 fish and sparking protests at the mine site.

The Vale plant had been expected to produce about 40,000 metric tons of nickel this year, out of global supply of around 2 million metric tons. But it has been beset by problems in recent years, including several chemical spills and violent protests.

Tensions between the local population and Brazil-based Vale escalated over the weekend with young protesters frustrated at the latest spill by the Brazilian-based giant and a lack of response from indigenous Kanak chiefs, according to local media reports. Television footage showed images of burnt mining vehicles and equipment.

“There was damage at the site, but no damage to the plant. We had burned vehicles, one administration building was damaged, but no damage to the plant itself,” Vale spokesman Corey McPhee told Reuters.

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