International Media Resource Articles – Page 684

Column: India coal output will gain, but not to heroic forecasts – by Clyde Russell (Reuters India – March 9, 2015)

March 9, 2015March 9, 2015

http://in.reuters.com/

NEW DELHI – (Reuters) – It’s easy to dismiss the government’s assertion that the country will be able to more than double coal production in the next five years. But that doesn’t answer the question of how close they will get.

India will produce 1.5 billion tonnes of coal by the end of this decade, Coal Secretary Anil Swarup told the Coaltrans India conference this week in New Delhi.

Swarup, the top coal bureaucrat, presented these numbers in a relaxed and confident manner, a stark contrast to previous government presentations at Coaltrans events, which have generally been cautious and fraught with defensive justifications of past disappointments.

He still has the problem that nobody believes that state-controlled behemoth Coal India (COAL.NS) will be able to double its output to 1 billion tonnes per annum within five years.

There is perhaps some more confidence that private miners will be able to ramp up their production to 500 million tonnes, but that comes with the caveat that the laborious process for mining approvals is streamlined.

Nickel prices poised for a rebound – by Biman Mukherji (Wall Street Journal – March 9, 2015)

March 9, 2015

http://www.wsj.com/

PRICES of nickel hit their lowest levels in more than a year last week, suggesting it is just another metal suffering from weaker Chinese demand growth and a strong dollar.

But many traders and analysts think the long decline in nickel’s price is reaching an end, as China’s drive to produce more of a substitute product — nickel pig iron — shows signs of cracking. NPI is commonly used in China as a cheaper alternative to pure nickel for producing stainless steel.

China’s burgeoning output and usage of NPI has meant that the world has had plenty of spare pure nickel. That has put pressure on prices for the commodity: the benchmark three-month nickel futures contract on the London Metal Exchange is down around 30 per cent in the past year.

For more than a year, Chinese producers of nickel pig iron have countered an export ban on the nickel ore they need from their largest supplier, Indonesia, by drawing upon stockpiles of the ore they built up just before the ban was imposed in early 2014. But now China’s stockpile of nickel ore is running short: stocks in five of the country’s main ports have halved within one year, according to Commerzbank.

‘India poised to be world’s 3rd largest economy’ (Business Standard – March 9, 2015)

March 9, 2015

http://www.business-standard.com/

As India’s investment climate seems to be improving, the moment might not be far away for the country to emerge as the world’s third economy, says Jim O’Neill who is better known for coining the acronym BRIC.

“It is probably too early to say with certainty that India will soon take its place as the world’s third largest economy, behind China and the United States. But, given that India’s investment climate seems to be improving, that moment might not be too far away,” he said in a recent commentary posted on Project Syndicate website.

“By 2017, India could surpass Italy and Brazil to become the world’s seventh largest economy; by 2020, there is a reasonable chance that it will overtake France and the United Kingdom to become the fifth largest,” O’Neill, who was recently in India, said.

Way back in 2001, O’Neill, had coined the acronym BRIC — the grouping of Brazil, Russia, India and China — while mentioning about growth prospects in large emerging markets.

O’Neill, a former chairman of Goldman Sachs Asset Management, is now a Honorary Professor of Economics at Manchester University and Chairman of the Review on Antimicrobial Resistance, among other roles.

Platinum in Your Car Set to Shrink Shiny Stockpiles: Commodities – by Andre Janse Van Vuuren (Bloomberg News – March 5, 2015)

March 9, 2015

http://www.bloomberg.com/

(Bloomberg) — Shrinking platinum stockpiles, growing demand from carmakers and new uses being trotted out in the energy field are stoking producers’ expectations that prices of the metal are poised to rebound from a five-year low.

Production of the shiny metal, used for jewelry and in catalytic converters in cars, will fall short of consumption this year by about 500,000 ounces, according to a January estimate by Credit Suisse Group AG. That’s prompting industry leaders to debate how long it will take for buyers to use up reserves and start paying more for a less available product.

Platinum is “in its strongest position” in a decade, said Chris Griffith, chief executive officer of Johannesburg-based Anglo American Platinum Ltd., the industry’s largest producer. “The fundamentals are that demand is increasing.”

Griffith said he believes prices will begin trending upwards relatively soon. Meanwhile, Terence Goodlace, CEO of Impala Platinum Holdings Ltd., the second-biggest producer, sees increases further out, estimating it will be two to 2 1/2 years for excess supplies to be depleted, with prices starting to recover in the second half of next year.

“The above-ground stocks for us is still a very, very big thing,” Goodlace told reporters at a media round table.

Prospector of the year – by Kip Keen (Mineweb.com – March 6, 2015)

March 9, 2015

http://www.mineweb.com/

And this year’s award for ‘Amazing Exploration Genius’ goes to…Western Australia. In an industry overweight with large, usual male egos and aggressive credit-taking, we tend to celebrate the individual.

The amazing CEO. The hardened, relentless prospector. The brilliant geologist. And each year they get their awards for driving, overseeing and being lucky in making significant discoveries.

Often, the praise is well-deserved, when they have played an instrumental role in doing one of the hardest things you can do: find a major deposit. I do it myself. I sometimes profile the person who “made” the big discovery, usually the geologist who targeted the obvious discovery drillhole. It’s exciting.

So we like to celebrate the genius – a trait shared by society at large, obsessed as it is with celebrity, of all kinds. But in focusing on the individual in mining, we overlook some very important players: namely governments that expend significant financial and cerebral resources on supporting exploration.

Indeed, maybe, given what can be their driving role in discovery, it’d be worth a class of award on its own: Best government in exploration. Really.

Can Mick Davis build another Xstrata? – by Stephen Bartholomeusz (Business Spectator – March 6, 2015)

March 9, 2015

http://www.businessspectator.com.au/

Mick Davis’s announcement overnight that his X2 Resources has raised $US5.6 billion could be a signal that he is about to begin the much-anticipated reprising of the game-plan that created Xstrata. Or else it could be another false dawn.

X2 announced that it had successfully completed its “initial” capital raising, securing $US5.6 billion in equity capital from a small number of “word-class” investors to create a new “mid-tier diversified” mining and metals group.

It described the raising, which comprises $US4 billion in committed capital available for immediate drawn-down and $US1.6 billion in conditional equity, as “one of the largest ever first-time raises by a private vehicle”.

The uncertainty about what the raising foreshadows relates to three earlier announcements by X2. The first, in 2013, not long after the merger/takeover of Xstrata by Glencore that saw Davis ousted as chief executive, announced that Noble Group and TPG had agreed to invest $US500 million each in X2.

The second, in March last year, was an announcement that X2 had secured $US2.5 billion in committed capital and another $US1.25 billion in conditional capital from five investors, including Noble, TPG, sovereign wealth and pension fund investors.

Polish Coal Miners Ride Solidarity Legacy to Oblivion – by Ladka Mortkowitz and BauerovaMarek Strzelecki (Bloomberg News – March 6, 2015)

March 6, 2015

http://www.bloomberg.com/

(Bloomberg) — For decades, Polish coal miners have enjoyed benefits that are the envy of their working class countrymen: An annual bonus of two months’ pay regardless of performance, company-sponsored holidays, retirement before 50, and no weekend shifts. Today, that legacy of the communist era threatens the mostly state-owned mining sector and is digging a hole in the national budget.

To understand why reform remains elusive, take a drive through Upper Silesia, the coal-rich region in southern Poland that’s home to two dozen mines. The snowy countryside, drained of color in the feeble winter light, is framed by smoking chimney stacks and elevator towers that haul coal up from the pits.

Even as European coal prices have fallen by half in recent years and producers have struggled, powerful unions have foiled government attempts to close failing operations, cut jobs, and restore the sector to profitability. In January, the Economy Ministry cautioned that without significant restructuring Kompania Weglowa SA — the European Union’s largest coal producer — risked bankruptcy.

With their historical ties to Lech Walesa’s Solidarity, Poland’s roughly 100,000 miners are clinging to their jobs. Their unions’ links to the 1980’s movement mean they can easily forge alliances across the political spectrum — and threaten any reform-minded government with widespread strikes.

Copper faces looming supply gap – Teck Resources – by Simon Rees (MiningWeekly.com – March 5, 2015)

March 6, 2015

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – The level of new copper output will be unable to plug a supply gap that could develop as early as 2017, Canadian diversified miner Teck Resources manager for market research Michael Schwartz told an audience at the Prospectors and Developers Association of Canada 2015 convention.

Teck had calculated that the average yearly rate of copper demand growth would reach 2.7% in the coming years. This equated to about 680 000 t of new supply being required each year, a level producers would be unable to match.

This supply/demand fundamental was in stark contrast with copper’s performance over the past 12 months, with Schwartz noting that Wood McKenzie had recorded a 300 000 t surplus for 2014. “Although we are showing a balanced market to a slight deficit,” he added.

The overhang had been reflected in the red metal’s price, which was currently hovering at around $2.65/lb, compared with a 52-week high of about $3.25/lb. Producers with cost-of-production rates above $2.50/lb would continue to struggle, Schwartz pointed out.

Disruption to output, which offered price support depending on its severity, would become an increasingly important issue as the industry mined lower-grade zones in remoter areas.

Iron Ore Sinks as China Ushers in Slower Growth – by Rhiannon Hoyle (Wall street Journal – March 6, 2015)

March 6, 2015

http://www.wsj.com/

Iron ore prices crash to six-year low after China lowers its growth forecast

SYDNEY—As China’s top officials heralded a new era of slower growth, iron ore, a resource that has powered years of breakneck expansion in the world’s second-largest economy, bore the brunt of ill sentiment in commodity markets.

The steelmaking ingredient’s value crashed to a six-year low late Thursday, after China lowered its economic growth forecast, reigniting concerns about its appetite for the raw material at a time when supplies are already outpacing demand.

Some of the world’s biggest miners, including Rio Tinto PLC and BHP Billiton Ltd. , have been aggressively expanding their operations in the Pilbara iron-ore mining hub of northwest Australia, betting that China will still need more of the commodity to make steel for its skyscrapers and for industries such as auto manufacturing.

But with China’s growth already slowing, their expansion has resulted in an emerging iron ore glut.

Beijing has now further rattled the market by lowering China’s annual growth forecast to 7%–down from last year’s goal of about 7.5%, and actual growth of 7.4%. Chinese leaders are now talking of a “new normal” for the economy.

Realizing the Indian Dream – by Jim O’Neill (Project Syndicate – March 5, 2015)

March 6, 2015

http://www.project-syndicate.org/

NEW DELHI – It is not often that I get to wear two hats at once. But that is exactly what happened earlier this month, when I spent a few days in New Delhi.

I was in India primarily as part of my current role as Chairman of a review for the British prime minister on anti-microbial resistance (AMR). But my visit coincided with the presentation of India’s 2015-2016 budget, the first under Prime Minister Narendra Modi. Given some of my other interests and experiences, I found what was presented to be very interesting.

Following recent revisions to its GDP figures, India’s economy has recently grown – in real terms – slightly faster than China’s. A key feature of my research into the BRIC economies (Brazil, Russia, India, and China) more than ten years ago was that at some point during this decade, India would start to grow faster than China and continue to do so for dozens of years.

The reasoning is straightforward. India’s demographics are considerably better than China’s, and the size and growth rate of a country’s workforce is one of the two key factors that drive long-term economic performance – the other being productivity. Between now and 2030, the growth rate of India’s workforce will add as much to the existing stock of labor as continental Europe’s four largest economies put together.

India is less urbanized than China, and it is in the early stages of benefiting from the virtuous forces that normally accompany that process.

Glencore transitioning into deficit in most commodities – Glasenberg – by Martin Creamer (MiningWeekly.com – March 3, 2015)

March 6, 2015

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – Diversified major Glencore was transitioning into deficit in most of the commodities it produced, CEO Ivan Glasenberg said on Tuesday.

Glasenberg, who has presided over returning $9.3-billion to shareholders in dividends and buybacks since 2011, told analysts and media in teleconferences in which Creamer Media’s Mining Weekly Online took part that most of the company’s commodities were free of oversupply threats.

“In most of our commodities, there’s no big supply coming into the market,” he said, adding that some of its commodities were already in deficit.

“We’re pretty comfortable we’re in the right commodities, which should bode well for the future,” he said, outlining how the company had returned $3.3-billion to shareholders during 2014.

Both a miner and a marketer, Glencore did far better than its peers in the 12 months to December 31, with earnings before interest, taxes, depreciation and amortisation (Ebitda) of $12.8-billion only 2% down on 2013.

Layoffs and empty streets as Australia’s boom towns go bust – by Rebekah Kebede (Reuters India – March 6, 2015)

March 6, 2015

http://in.reuters.com/

(Reuters) – When Probo Junio got a visa to work in Australia, he thought he had won a ticket to the good life.

In 2013, the 45-year-old boilermaker left his hometown of Cebu in the Philippines, where he was getting paid about $10 a day, to work in Karratha in Western Australia for $30 an hour. Enough to support his relatives and build a new life Down Under.

What Junio didn’t expect was that Australia’s booming resources industry would go bust less than two years later, taking his job, and leaving him just 60 days to find work or go home.

“It’s very difficult because most of the companies don’t want 457 visa holders,” he said, referring to temporary permits for skilled workers.

Across the country, people like Junio are falling victim to downsizing. Jobs, once plentiful and well paid, are scarce. Real estate prices in boom towns are sinking and even the notoriously high coffee prices in mining capital Perth have leveled off at under $4.

Prices of iron ore and coal, the country’s two biggest export earners, have plunged during the last two years amid falling demand from China, in the wake of its economic slowdown.

Iron ore glut hits new highs – by Sarah-Jane Tasker (The Australian – March 6, 2015)

March 6, 2015

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

PORT Hedland, the world’s largest bulk-export terminal, shipped the most iron ore on a daily basis last month as suppliers increased output through the facility despite the slump in prices.

The latest statistics from the port showed monthly throughput of 48.8 million tonnes of the steelmaking commodity in February — a 6.2 million tonne, or 14.8 per cent, jump on the same period last year. Actual iron ore exports for the month hit 35.6 million tonnes, a 28 per cent hike on last February’s tally.

The push by Rio Tinto, BHP Billiton and Fortescue Metals to increase tonnes into an oversupplied market has continued at a steady pace over the past few years. But the new supply is now hitting the market at a time when the price of the steelmaking commodity continues to fall and China forecasts its slowest growth in more than a decade.

A total of 1.27 million tonnes of iron ore was shipped from Port Hedland each day in February, according to Bloomberg. That surpassed the previous high of 1.21 million tonnes a day in September.

West Australian Premier Colin Barnett has previously accused the major miners of seemingly acting in “concert” with their new supply keeping the iron ore price at record lows, which is hitting his state’s budget.

Thirty-three miners dead after pit blast in east Ukraine – by Maria Tsvetkova (Reuters U.S.A.- March 4, 2015)

March 5, 2015

http://www.reuters.com/

DONETSK, Ukraine – (Reuters) – Thirty-three miners were confirmed dead late on Wednesday after a coal mine blast in the rebel-held city of Donetsk near the battle front in eastern Ukraine, indicating no one trapped in the rubble survived.

Mine officials said the explosion was most likely caused by gas and not fighting in the war between Moscow-backed rebels and Ukraine government forces. Nevertheless, Kiev suggested the war had made the disaster worse, accusing the separatists of holding up a rescue effort by restricting access.

Outside the gates of the Zasyadko mine, about 30 relatives clamored for information about any survivors. Sergei Baldayev, a miner injured in the blast, mingled with the crowd, his face covered in scratches and one arm hanging motionless by his side, the result of a broken collarbone.

The sister of one miner who was in the pit at the time of the explosion, Alexei Novoselsky, stood in tears. “Tell me, are there survivors? Why are you concealing the truth?” she asked as a rescue worker tried to calm her. The Donetsk regional administration said 16 injured people were in hospital.

From prime rib to chips and dip: Lean times at mining’s annual conference – by Susan Taylor and Euan Rocha (Reuters U.K. – March 4, 2015)

March 5, 2015

http://uk.reuters.com/

(Reuters) – When the world’s miners head for Toronto each year to attend their industry’s annual conference, they arrive with certain expectations. They’re accustomed to finding oyster bars, rowdy parties, open bars with high-end liquor and elegant hotel suites.

But this year’s gathering of the Prospectors and Developers Association of Canada (PDAC) is a more subdued affair, with lavish spreads and grand lodgings increasingly giving way to cheese platters and Airbnb rentals.

After a years-long downturn in the mining sector – and with little relief in sight – the 2015 convention, which runs through Wednesday, has lost some of its glitz.

“We’re seeing far less prime rib, far more chips, far more salsa,” said Benjamin Cox, chief executive of explorer Aston Bay Holdings Ltd. (BAY.V). “I’m really depressed that I have to drink bourbon versus single malt scotch, it just doesn’t do it for me.”

Striking a more serious note, Cox also summed up the overall mood of the miners: “Everyone is panicked in the industry. If you are not humbled this year, whether you work for a major or a junior or anyone in-between, you are insane.”