Australia/New Caledonia/Papua New Guinea Mining – Page 93

China steel pullback a new blow for miners – by Scott Murdoch (The Australian – January 12, 2016)

January 12, 2016

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

One of China’s largest iron and steel-producing regions, Hebei, has announced a dramatic cut in production levels this year in a fresh blow to the Australian mining industry.

Regulators have revealed that production at Hebei, which produces a quarter of China’s iron and steel output, will be slashed this year in a bid to alleviate the nation’s worsening pollution problem. Iron production will by cut by 10 million tonnes and steel by eight million tonnes this year.

Hebei governor Zhang Qingwei said steel and cement production would be capped at 200 million tonnes as the nation attempts to reduce the overcapacity that exists in the industry across the country.

BHP Billiton and Rio Tinto deal would be bonanza for bankers – by James Thomson (Australian Financial Review – January 4, 2016)

January 5, 2016

http://www.afr.com/

There should be no shortage of buying and selling in the resources sector in 2016. Many of the world’s biggest miners have been forced to put assets up for sale as they desperately try to protect their balance sheets from falling commodity prices.

But these deals are hardly the stuff of dreams. Rather, they are yet more symbols that the mining boom has become a game of survival.

However, there is one deal that would set the market alight and that bankers would love. While a merger between industry titans BHP Billiton and Rio Tinto is incredibly unlikely, it just might make some sense given industry conditions.

Australia Approves Expansion of Barrier Reef Coal Terminal – by Rob Taylor (Wall Street Journal – December 22, 2015)

December 23, 2015

http://www.wsj.com/

CANBERRA, Australia—Australia approved the expansion of a shipping terminal close to the Great Barrier Reef on Tuesday, drawing criticism from environmentalists who say an area of outstanding natural beauty is threatened by the decision.

Environment Minister Greg Hunt said he would allow the extension the Abbot Point terminal—used to ship coal to markets in Asia—with 30 conditions to help protect the environment, including a requirement that dredge material be dumped on land instead of in water near the World Heritage-listed reef.

The expanded port will serve one of the world’s largest coal mines that is being developed by Adani Group in Queensland, a state in eastern Australia where the Great Barrier Reef Marine Park is also located. The Indian conglomerate aims to use the port to ship as much as 60 million tons of thermal coal annually to its power plants in India.

Iron ore slump halts work on Australia’s last big mine project – by James Regan (Reuters U.S. – December 22, 2015)

December 23, 2015

http://www.reuters.com/

SYDNEY – Dec 23 Slumping iron ore prices have brought down the shutters on the last of Australia’s mining boom-era projects still on the drawing board, with partners calling time on the planned $5 billion West Pilbara Iron Ore project.

The proposed mine, a four-way partnership led by two of Asia’s biggest steel companies, would have added 30 million tonnes of iron ore to an already oversupplied market facing slower-than-expected demand from China.

The partners had been due to embark on final feasibility studies for the mine before starting construction, which would have cost around $50 million.

Top Iron Ore Shipper Cuts 2016 Forecast by 19% as Glut Grows – by Jasmine Ng (Bloomberg News – December 22, 2015)

December 22, 2015

http://www.bloomberg.com/

The world’s biggest iron ore exporter cut its price forecast for next year by 19 percent as supply continues to swell and slowing growth in China hurts demand in the biggest user.

Prices will average $41.30 a metric ton in 2016 compared with $51.20 forecast in September, Australia’s Department of Industry, Innovation & Science said in a quarterly outlook Tuesday. The department cut its average price for 2015 by 4.7 percent to $50.40 a ton.

Iron ore, the country’s largest export earner, lost 43 percent this year as low-cost miners including Rio Tinto Group, BHP Billiton Ltd. and Vale SA pressed ahead with expansions to defend market share, feeding a glut as demand in China faltered.

How an Australian Mining Town Became a Solar Power Trailblazer – by James Paton (Bloomberg News – December 20, 2015)

December 21, 2015

http://www.bloomberg.com/

Broken Hill spawned the world’s largest mining company and generated more than $75 billion in wealth. Now as its minerals ebb, Australia’s longest-lived mining city is looking to tap a more abundant resource.

On the sun-baked edge of the Outback city, 700 miles west of Sydney, a solar farm the size of London’s Hyde Park shimmers like an oasis — its panels sending enough electricity to the national grid to power 17,000 homes a year. Combined with a sister plant, the AGL Energy Ltd. and First Solar Inc.project is the largest of its type in the southern hemisphere.

Clean energy advocates are counting on the 140-hectare (346-acre) development to make Broken Hill, which at one time boasted the world’s most successful silver mine, a trailblazer once again.

Boliden, Lundin Said to Weigh Final Bids for First Quantum Mine – by Dinesh Nair and Brett Foley (Bloomberg News – December 17, 2015)

December 18, 2015

http://www.bloomberg.com/

Boliden AB and Lundin Mining Corp. are among companies considering final bids for First Quantum Minerals Ltd.’s Kevitsa mine as the Canadian explorer looks for ways to cut debt, people with knowledge of the matter said.

Kevitsa, one of the largest nickel reserves in Finland, may fetch at least $1 billion in a sale, the people said, asking not to be identified as the negotiations are private. First Quantum expects to receive final bids by early next year, one of the people said.

Mining companies globally are slashing costs and selling assets to counter a drop in commodity prices. First Quantum said in October that it plans to reduce debt by $1 billion through measures such as asset sales, as well as job and capital-spending cuts.

China economist warns major miners may collapse in 2016 – by Sue Lannin (Australian Broadcasting Corporation – December 17, 2015)

December 17, 2015

http://www.abc.net.au/news

A prominent China economist has predicted more mining companies could go bankrupt globally in the new year, including major second tier firms, as China’s economy slows down and commodity prices keep falling.

China based economist Andy Xie used to run Morgan Stanley’s economics team in Asia.

He has forecast that iron ore prices will trade between $US30-40 a tonne in 2016, and that means more iron ore miners could go under including in China.

“So what I see is that next year Chinese demand is likely to go down a lot more, like 20 million tonnes,” Mr Xie told the ABC in an interview.

Queensland court agrees Adani overstated benefits of Carmichael coal mine -by Lisa Cox (Brisbane Times – December 16, 2015)

December 16, 2015

http://www.brisbanetimes.com.au/

A Queensland court has found Indian mining company Adani exaggerated the economic benefits of its proposed Carmichael coal mine, including the amount of jobs and royalties the $16.5 billion project would generate.

In a judgment on Tuesday, the Queensland Land Court recommended the Queensland government grant mining leases and environmental approvals for the controversial project, which would become Australia’s largest coal mine.

But the approvals should only be given with additional environmental conditions, including regular monitoring of water bodies near the mine site in central Queensland and a more thorough assessment of the presence of threatened bird species, the black throated finch.

Here’s why Australia’s budget is still so dependent on iron ore – by Jonathan Barrett (Australian Financial Review – December 16, 2015)

December 16, 2015

http://www.afr.com/

This week, the federal government disclosed it would receive $7 billion less than anticipated over the budget years as a result of updated – and lower – iron ore price forecasts.

But how exactly does the iron ore price affect federal coffers? And how will it impact the states?

Most of the country’s iron ore deposits are in Western Australia’s Pilbara region, and, unlike gas reserves located in federal waters, the key steel-making commodity is owned by the state.

As the federal government doesn’t actually own the commodity, the obvious connection between the federal budget and iron ore price is the profitability of mining companies.

Lithium prices are soaring and Rio Tinto says it may start mining the commodity – by Peter Ker (Sydney Morning Herald – December 17, 2015)

December 16, 2015

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

It’s one of the world’s hottest commodities, and now Rio Tinto wants to join the lithium party.

Prices for lithium are soaring as traditional demand from ceramics and glass manufacturers coincides with rising demand from lithium ion battery and electric vehicle manufacturers.
Lithium prices rose from $US4900 ($6774) per tonne to $US5900 per tonne in the year to October 2015, and since then the price has almost doubled to $US10,000 per tonne.

UBS analyst Matthew Schembri said the onset of the northern winter had crimped production of lithium in China and duly created a shortage, and he predicted the price could continue rising over the next six months.

COLUMN-Should iron ore miners become an oligopoly to rescue prices? – by Clyde Russell (Reuters India – December 15, 2015)

December 15, 2015

http://in.reuters.com/

Dec 15 – One of the largely unseen side-effects of the massive increase in iron ore supply and the subsequent collapse in prices is that the industry is now one of the most concentrated in the resources sector.

As any student of economics can tell you, highly-concentrated supply tends to lead to oligopolistic behaviour, in which the major producers limit output in order to drive prices higher.

This clearly hasn’t happened, and isn’t currently happening in iron ore, despite about 75 percent of traded supply being delivered by just four producers.

Rio CEO Says Iron Ore Rivals `Hanging on by Their Fingernails’ – by Jesse Riseborough and Jonathan Ferro (Bloomberg News – December 15, 2015)

December 15, 2015

http://www.bloomberg.com/

The iron ore collapse has pushed producers to the brink of survival, according to the head of the world’s second-biggest mining company.

“There are a lot of producers that we believed would leave the market that are hanging on by their fingernails,” Sam Walsh, chief executive officer of Rio Tinto Group, said in an interview with Bloomberg Television in London. “They are burning up cash reserves of their shareholders.”

Iron ore’s 45 percent retreat this year has left the industry on the precipice of an unprecedented shake-out as higher-cost suppliers are slowly forced to exit the market. Prices are continuing to fall as the largest companies, including Vale SA, Rio Tinto and BHP Billiton Ltd., expand production and grab market share.

New Caledonia warns of violence over Palmer’s Queensland Nickel – by Paul Garvey (The Australian – December 14, 2015)

December 14, 2015

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

Clive Palmer was personally warned by the President of New Caledonia that a shutdown of the federal MP’s Townsville nickel refinery would cause “social and political disruption” and even ¬violence in the island nation.

Just days after the Queensland government formally rejected a request to bail out the refinery, sworn affidavits show Mr Palmer met New Caledonia’s Philippe Germain and other political figures last month, with the leaders expressing concerns about the ramifications of a shutdown.

The future of the refinery — which sources most of its nickel ore from New Caledonia — and the jobs of its 767 workers is under a cloud, running at a loss and struggling to meet bills.

The nickel mine that ensnared two tycoons – by Tony Koch (The Australian – December 12, 2015)

December 11, 2015

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

Several decades ago, a footballer came from the field at the end of the game and said to his coach, “How did I go?’’ The coach famously replied: “Obviously you went crap. If you had done good, you wouldn’t have to ask.’’

The same could apply to certain nouveau riche self-proclaimed “billionaire entrepreneurs’’ who, on close inspection, often possess little more than massive risky bank loans and the private jet status symbol.

It is intriguing in that context to look at the parallel lives of “billionaires’’ Clive Palmer and the late, disgraced Alan Bond, and how the fragility of their bluster was exposed by a relatively insignificant nickel mine and processing plant at Greenvale, 25km north of Townsville in north Queensland.