Australia/New Caledonia/Papua New Guinea Mining – Page 119

Australian state approves $2 bln rail line for Adani coal project – by Sonali Paul (Reuters India – August 14, 2014)

August 14, 2014

http://in.reuters.com/

MELBOURNE – Aug 14 (Reuters) – India’s Adani Mining has won state approval to build a rail line for its $15 billion Carmichael coal project in Australia, it said on Thursday, bringing it a step closer towards making a final decision on whether to go ahead with the massive scheme.

The state of Queensland approved the A$2.2 billion ($2 billion) North Galilee Basin Rail project, a 300 kilometre (186 mile) railway to connect the Carmichael mine and potentially other mines in the untapped Galilee Basin to the east coast port of Abbot Point.

Despite analysts’ views that Adani’s project would be unprofitable at current coal prices, the company said it remained committed to pushing ahead with it to supply coal to power stations in India.

“Adani looks forward to continuing to work with our project partners and all levels of government to see this through,” Adani Mining, the Australian arm of Adani Enterprises, said in a statement.

Adani recently signed an agreement with POSCO Engineering & Construction Co Ltd to build the rail line. Costs and other details of the contract are due to be set by the end of this year.

COLUMN-Australian coal miners running out of costs to cut – by Clyde Russell (Reuters India – August 13, 2014)

August 13, 2014

http://in.reuters.com/

Aug 13 (Reuters) – Coal miners in Australia have spent the past two years desperately cutting costs in a bid to survive falling prices, but this strategy is running out of steam.

While coal miners have been successful in lowering costs, they still haven’t managed to do it anywhere near as fast as prices have declined, and now the scope for further costs reductions is limited.

It’s likely that mining costs will start to rise again in the next year or two as the current round of cost-cutting has led to under-investment and a focus on extracting the easiest, or cheapest, to mine coal.

While coal miners are by nature a tough bunch, the prevailing sentiment at this week’s Coaltrans Australia conference in Brisbane was that prices need to increase soon or more mines will have to be shut, or placed on care and maintenance.

Data from consultants CRU illustrates the problem for coal miners in Australia, which is the world’s largest exporter of coking coal used in steel-making, and number two in thermal coal used in power plants.

This shows that mining costs have fallen, but only marginally, with site costs in New South Wales state dropping from around $65 a tonne in 2012 to $63 a tonne this year, while those in the other major producing state, Queensland, fell from about $61 to $60.

Nickel’s 56% Rally Spurs Mine Restarts Amid Ore Ban – by Phoebe Sedgman and Ben Sharples (Bloomberg News – August 12, 2014)

August 12, 2014

http://www.businessweek.com/

Indonesia’s ban on nickel ore exports is resonating globally as prices climb to the highest since 2012, prompting companies from Avebury Nickel Mines Ltd. to Poseidon Nickel Ltd. to restart operations at idled mines.

Avebury, based in Perth, plans to reopen a deposit in Tasmania six years after it was mothballed. Poseidon is preparing to resume production at a mine in Western Australia, while Panoramic Resources Ltd. may restart mining at its Copernicus deposit in the same state. More producers globally may reactivate facilities as prices extend gains, according to OAO GMK Norilsk Nickel, the world’s largest supplier.

Nickel, used to make stainless steel, rallied as much as 56 percent this year to $21,625 a metric ton after Indonesia halted ore exports in January to compel investment in local processing plants. While the restarted mines such as Avebury’s will add to supplies, the additional production won’t be enough to prevent the global market from dropping into a deficit, with Goldman Sachs Group Inc. to BNP Paribas SA forecasting higher prices.

“Australia is certainly at the forefront of the potential for restarts,” said Stephen Briggs, a metal strategist at BNP Paribas in London, the second most-accurate nickel price forecaster in the eight quarters to June, according to rankings compiled by Bloomberg. “Nickel is one of my top picks,” he said in an Aug. 4 interview, describing $25,000 as plausible.

Check your optimism at the door – by Robin Bromby (The Australian – August 11, 2014)

August 11, 2014

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

WALL Street finished the week on a surge of optimism that Ukraine was looking more benign.

Yeah, sure. But, even in the unlikely event that Vladimir Putin will now pull back, there are the small matters of Gaza, Iraq and, for our miners in West Africa, the Ebola breakout. Add to that headlines wondering whether the bull run is exhausted and signs of increasing volatility among mineral commodities, and perhaps we might conclude that Wall St is clutching at straws.

Deutsche Bank doesn’t see Russia backing down, noting that even with sanctions Moscow continued to build troop numbers near the border, has signed a big oil co-operation deal with Iran and has ordered retaliatory measures against the West.

In addition, says Deutsche, there has been excessive leverage during the recent equities run-up. Weak hands have been driving prices, and now these have been forced to sell.

Zinc, the supposed star at present, has shed 5 per cent since late July and copper is down 4.9 per cent on the year. BNP Paribas reports that mine capacity growth for copper is expected to rise by 31 per cent by 2017.

Goldman Sachs weighed in with a forecast of iron ore averaging $US80 a tonne in 2015, Bloomberg describing it as a potential “rout”.

BHP Billiton’s thirst triggers an outback water fight – by Sarah Martin (The Australian – August 9, 2014)

August 8, 2014

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

SHANE Oldfield kicks the red rocks on his vast, dry pastoral lease north of Marree where he raises organic Angus beef for export.

The outback Clayton Station in northern South Australia has always been marginal farming land. With an average of 10cm of rain a year the property is dependent on water from the Great Artesian Basin in dry years.

“We are living in a desert, and without the basin we are non-existent,” Mr Oldfield says. “We haven’t had a decent rainfall since February 2012, so without the Great Artesian Basin we wouldn’t be here.”

But while accustomed to battling drought, the Oldfields now have another fight on their hands. The water level of the basin is dropping dramatically, raising fears that the pastoral land will become unviable.

The culprit, they say, is BHP Billiton, which pumps all of its water from the basin to its Olympic Dam mine and the Roxby Downs township 250km away. “BHP aren’t going to own up to the fact that they are sucking the guts out of the basin,’’ he tells The Weekend Australian.

“But they are. They want the water from this country because without the water they can’t mine, and the GAB water is the cheapest water they are ever going to get.”

New Caledonia cancels vast Eramet, Vale nickel project – by AFP (August 8, 2014)

August 8, 2014

http://www.afp.com/en

New Caledonia on Friday cancelled a deal with Brazilian mining giant Vale and France’s Eramet to allow the exploration of one of the last major untapped nickel deposits in the world.

President of the southern province, Philippe Michel, said the agreement signed in April was illegal on five different counts, “each of which is enough to cancel the allocation of the resources”.

New Caledonia, off northeastern Australia, has a quarter of the world’s deposits of nickel, a key ingredient for manufacturing stainless steel.

The French overseas territory has been reviewing its mineral laws after a change of leadership and a surge in nickel prices, which have jumped a third this year after top miner Indonesia banned ore exports.

New Caledonia President Cynthia Ligeard told AFP that she “did not want to react at the moment” on the decision. Eramet also declined to comment.

The government estimates the Pernod and Prony deposits in question are estimated to hold between four million and seven million tonnes, but Michel said the amount had been understated in the deal with the miners.

Door still open for mega-merger between Newmont Mining and Barrick Gold – by Peter Ker (The Age-Business Day – August 7, 2014)

August 7, 2014

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

A $US35 billion ($37.6 billion) merger of global goldmining companies Newmont Mining and Barrick Gold may not be dead, after the chief executive of Newmont told an audience in Melbourne that he would not “close the door” on a future deal.
The two North American gold companies conducted merger talks earlier this year but the deal fell over in April amid reports they had disagreed over how to handle their respective Australian assets.

While neither company is listed in Australia, a merged entity would wholly own the nation’s biggest goldmine, Boddington, and the nation’s second-biggest goldmine, Kalgoorlie’s Super Pit, as well as other smaller assets.
When asked if he had shut the door on the proposed deal, Mr Goldberg indicated a revival of the deal was not impossible.

“I wouldn’t shut the door on it – we are focusing on running our business as effectively and efficiently as we can going forward and we will see what happens,” he said.

“Clearly we overlap and we work together, [the Super Pit] is an example, and we have a joint venture in Nevada and I wouldn’t close the door on it at all.” But he said he had not heard from Barrick since April.

During a presentation to the Melbourne Mining Club on Thursday, Mr Goldberg said the deal had failed because there were not enough “redundancies” between the two companies.

Bottom reached for coal, iron ore? – by Oliver Probert (Australian Journal of Mining – August 07, 2014)

August 7, 2014

http://www.theajmonline.com.au/

An ANZ commodities expert says iron ore and coking coal prices may have reached their bottom, and he’s singing from the same hymnbook as at least one mining executive.

A report from Mark Pervan, global head of commodity strategy for ANZ, this week said that with the stabilisation of the overall macro environment, commodity markets are entering the second half of 2014 on a positive note.

While an increase in commodity prices is likely to occur, the report says, it will be a modest one, however.

“Overall, the backdrop looks accommodating for commodity markets in H2 2014,” Pervan’s report states. “But the upside looks limited over the next month or two until we see this supported by a pick-up in physical demand, which is expected later in the year.”

Commenting specifically on mined bulk commodities, Pervan wrote: “Supply-side issues remain, but the bottom appears to have passed for coking coal and iron ore. Seasonal drops in power demand will cap any thermal recovery.”

Pervan’s confidence in iron ore was echoed by Atlas Iron chief executive Ken Brinsden, who was referenced in a number of mainstream media outlets for his comments at the Diggers & Dealers conference in WA this week.

UPDATE 2-China’s Ramu nickel mine in PNG restarts after attacks – embassy – by Sonali Paul, Melanie Burton and Polly Yam (Reuters India – August 7, 2014)

August 7, 2014

http://in.reuters.com/

Aug 7 (Reuters) – A Chinese-owned nickel mine in Papua New Guinea has resumed production three days after an attack by armed villagers forced work to halt, a Chinese embassy official in the South Pacific country said on Thursday.

The $2.1 billion mine, forecast to produce 22,000 tonnes of nickel in 2014, is operated by Ramu NiCo, which is majority owned and run by Metallurgical Corporation of China Ltd (MCC) .

Equipment including nine excavators, a fuel truck and a lighting vehicle were burned and five Chinese workers were injured in the attack on Monday, the embassy said, confirming earlier media reports.

“The embassy strongly condemns these brutal attacks and makes urgent request to the PNG Government to take immediate and effective measures to prevent the violence from recurring and ensure the safety of the personnel and properties, and to bring those attackers to justice to deter such criminal acts,” an embassy official said in an emailed response on Thursday.

“With the assistance of the police force, now the situation is under control and the mining production has been resumed.”

Mining and energy projects are the major source of income for Papua New Guinea, but outbreaks of violence sparked by landowner disputes and environmental concerns are not uncommon.

Miners talk up big asset sales – by Paul Garvey (The Australian – August 7, 2014)

August 6, 2014

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

IT’S long been said that the juiciest stories out of Diggers & Dealers come not from the procession of speakers at the conference podium, but instead from the Hannan Street bars packed full of delegates each night (and often well into the next morning).

This year was no different. If the chatter doing the rounds in the bars of the Palace and Exchange hotels is anything to go by, we should be standing by for a flow of deals in the months ahead.

While Kalgoorlie’s infamous skimpies went about their business behind the bar — this year’s collection of scantily clad barmaids were apparently flown in from the Gold Coast specially for the event — much of the talk focused on the big asset sales said to be in the works.

The sales process around BHP Billiton’s Nickel West smelter, just down the road from the action in Kalgoorlie, was a subject of significant gossip.

Despite reports Glencore had walked away from the process, there was talk the Swiss giant was in fact still in the fray albeit frustrated by BHP’s approach to the sale. Private equity group Apollo Global Management is understood to have its offer for the assets knocked back, while China’s Jinchuan is still very much in the running.

COLUMN-Coking coal prices set for modest gains, thermal still marooned – by Clyde Russell (Reuters U.K. – July 5, 2014)

August 5, 2014

http://uk.reuters.com/

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

LAUNCESTON, Australia, Aug 5 (Reuters) – Prices for thermal and coking coal appear poised to diverge, with the power-plant fuel remaining mired in the doldrums and the steel-making ingredient posting modest gains.

The halving of thermal coal prices since early 2011 has grabbed the most attention in the beleaguered industry, but coking coal has actually performed worse, dropping by almost two-thirds since its post-2008 recession peak in mid-2011.

The 2011 high was reached after severe flooding in Queensland state, the main coking coal producer in top exporter Australia.

Both types of coal have been plagued by oversupply, which has swamped the modest increases in demand in top importers China and India.

The problem for thermal coal has been supply hasn’t significantly been cut despite weak prices. Producers in the top two exporters Indonesia and Australia have been instead trying to cut costs and increase volumes in order to boost revenues.

Australian producers have another problem, the so-called “take-or-pay” contracts that commit them to paying for transport costs whether they actually ship coal or not.

Australian plus-sized model Robyn Lawley opens up about her nude coal mining protest (News.com.au – July 31, 2014)

July 31, 2014

http://www.news.com.au/

MODEL Robyn Lawley has come clean about her revealing nude protest against coal mining, taking Prime Minister Tony Abbott to task over his green credentials.

The 25-year-old Lawley, currently in New York, posted an image on her Instagram account earlier this week showing her stomach, breasts and “Stop coal mining” scrawled across her stomach in red lipstick.

Robyn said the protest was in response to the Federal Government’s approval of the Carmichael Coal Mine in Queensland.
Today she has taken another swipe at Prime Minister Tony Abbott, criticising his scrapping of the carbon tax earlier this month.

“After running a campaign that bewildered the public and convinced citizens they would have to pay said tax through increased energy bills, our leaders were able to shut the (carbon price) system down,” Lawley said.

“What’s the big deal? That scheme was meant to be a powerful incentive for all businesses to cut their pollution and by investing the tax dollars in clean technology and solutions.”

The popular model also raised her concerns about the government’s support for the expansion of the massive Abbott Point Coal Terminal in north Queensland.

High costs hurting mine investment, says Gina Rinehart – by Clive Mathieson (The Australian – July 29, 2014)

July 30, 2014

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

MINING magnate Gina Rinehart says the high cost of doing business in Australia is driving some multinational companies to pursue overseas projects that have the potential to further damage the country’s export revenue.

Mrs Rinehart, the chairwoman of the privately owned Hancock Prospecting and the nation’s richest person, lamented the decision by some companies to invest in lower-cost offshore projects that could drive down commodity prices and undercut Australian projects. “Sadly, too many multinational companies, even Australian companies, are focusing and preferring to invest in overseas countries with lower costs,” she told The Australian.

“For instance, Rio Tinto, which has been in Australia for decades, and made most of its revenue from Australia, is now arranging multi-billions of dollars of investment for a major resource project with substantial infrastructure in Guinea in Africa.

“When that’s operating, it will bring billions of tonnes of ore on to the market to compete against Australia, and push down commodity prices. Too few seem to recognise the impact this will have when we are competing with lower-cost countries and how it will hurt Australia for decades.”

Mrs Rinehart said Rio Tinto, Hancock’s partner in the giant Hope Downs iron ore project in Western Australia, should not be singled out, saying the nation must do more “to lower its costs and compete for investment”.

Coal comfort: faster to start mine in Indonesia than here – by Andrew Fraser (The Australian – July 30, 2014)

July 29, 2014

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

PETER Lynch can tell you exactly the difference between setting up a mine in Indonesia and Australia — the former takes four years; the latter somewhere between seven and 10. And the cost of producing coal from Indonesia is about two-thirds that from Australia.

Mr Lynch is in a position to know. A veteran mining figure who worked for MIM and other companies, he was the first to realise the potential of the Galilee Basin in central Queensland in 2006. He pegged out 13 exploration permits covering 250sq km. In 2010, Clive Palmer made him an offer he couldn’t refuse, paying $130 million for Waratah Coal and control of the project.

Now chief executive of mining company Cokal, Mr Lynch saw potential in Indonesia, and in early 2011 started digging exploratory holes in a remote part of Central Kalimantan. Three years later, he has all his key approvals in place and is finalising his financial backing, with the aim of starting production in September next year — a bit over four years from when he first eyed the area. By contrast, the earliest date for coal to come out of the Galilee Basin is 2017, despite the approvals process starting several years earlier.

Mr Lynch’s tale illustrates the concerns the Business Council of Australia and Hancock Prospecting chairman Gina Rinehart have raised this week about Australia losing its competitive edge because of high labour costs and red tape.

On Monday, Environment Minister Greg Hunt approved Adani’s proposed Carmichael mine in the Galilee Basin, but the Indian company still needs to get approval for the construction of a proposed railway line to Abbot Point.

COLUMN-Big 3 iron ore miners in volume, price sweet spot – by Clyde Russell (Reuters India – July 28, 2014)

July 28, 2014

http://in.reuters.com/

LAUNCESTON, Australia, July 28 (Reuters) – One thing has become clear from the latest production reports from the big three iron ore miners: They appear intent on ensuring their dominance by boosting low-cost output.

BHP Billiton mined a record 225 million tonnes of the steelmaking ingredient in the year to end-June, beating its own forecast by 4 percent. BHP said in its latest production report that it expects to increase output further, to 245 million tonnes in the 2014-15 financial year.

Fellow Anglo-Australian miner Rio Tinto boosted output 23 percent in the second quarter from the same period last year to 75.7 million tonnes. It also is forecasting higher annual output, with the quarterly report released on July 16 pointing to 2014 production of 295 million tonnes, up 11 percent from 266 million in 2013.

The world’s biggest iron ore miner, Brazil’s Vale , also had record output in the second quarter, posting a 12.6 percent gain to 79.45 million tonnes. The company is planning to boost its annual output to 450 million tonnes by 2018 from 306 million last year.

The three global iron ore giants have effectively gambled that they can continue to boost production and grab bigger slices of global demand, given that they can withstand lower prices due to their low-cost mines and economies of scale.