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Largest Philippine Coal Miner Plans $400 Million Plant Boost – by Cecilia Yap (Bloomberg News – June 24, 2014)

 http://www.bloomberg.com/

Semirara Mining Corp. (SCC), the Philippines’ largest coal producer, plans to spend $400 million to boost power plant capacity, forecasting that two-thirds of profit will come from generation in three years.

The company may sign a syndicated loan for 70 percent of the cost of the expansion as early as next quarter, Chief Executive Officer Isidro Consunji said in an interview.

Fresh supply is being added as the Southeast Asian nation saw power demand rise by 50 percent in the 10 years to 2012, more than three times the 16 percent increase in generation capacity over the same period, according to government data.

“It’s more logical to grow the power business,” Consunji said in a June 20 interview. “It’s simpler to run and is more profitable. We do what’s easy for us and we forget what’s not.” Semirara fell 1.3 percent in Manila yesterday. The stock has risen 27 percent this year, overtaking the benchmark stock index’s 15 percent advance.

The expansion will increase the Calaca coal-fired power plant’s capacity by 350 megawatts to 1,200 megawatts, Consunji said. It bought the plant from the government in 2009 for $362 million.

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UPDATE 2-Australia cuts 2015 iron ore, met coal price forecasts – by James Regan (Reuters India – June 25, 2014)

http://in.reuters.com/

SYDNEY, June 25 (Reuters) – Australia revised down its 2015 iron ore and metallurgical coal price forecasts as rising output of two of the country’s biggest export earners outstrips demand, raising concerns for mining companies already struggling with shrinking profit margins.

Robust growth in export tonnages meant Australia would still post an 11 percent rise in total export earnings for mineral and energy comodities in 2013-14, the Bureau of Resource and Energy Economics (BREE) said in a quarterly update.

Analysts warn, though, that Australia’s powerful mining industry is facing a prolonged stretch where commodities will fetch prices well below those of the now-defunct mining boom years. BREE lowered its price forecast for iron ore to an average $94.60 a tonne in 2015 from a previous forecast of $100.80, citing growing competition to sell into China’s steel market.

Although steel production in China is forecast to increase in 2015, competition among iron ore exporters to sell their additional production is expected to intensify, it said, while a strong Australian dollar would also drag on local miners.

“This will draw a sharp focus towards managing costs and enhancing productivity in the sector,” said Wayne Calder, deputy executive director of BREE.

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South Africa miners return to work after longest platinum strike – by Ed Stoddard (Reuters U.S. – June 25, 2014)

 http://www.reuters.com/

MARIKANA South Africa – (Reuters) – Tens of thousands of South African platinum miners returned to work on Wednesday after wage deals ended the longest and most damaging strike in the country’s history.

The five-month strike hit 40 percent of global production of the precious metal and has cost Lonmin LMI.J, Anglo American Platinum (AMSJ.J) and Impala Platinum (IMPJ.J) a combined 24 billion rand ($2.25 billion) in lost revenue.

Industry and union officials said miners were streaming back to work and Reuters reporters saw thousands trudging to Marikana before sunrise on a cold winter’s morning. A supervisor at the Marikana operations of London-listed Lonmin told Reuters it could be a week or more before any workers went back underground. A return to full production could still take three months.

“Viva AMCU! Viva Lonmin!” one worker shouted on his way to a Lonmin processing plant. Miners in a bus danced and sang in jubilation as it drove up to the gates. Lonmin had set up huge canvas tents in a nearby stadium where miners underwent medical and other checks.

Calling for a “living wage” for its members, many of whom live in poverty, the Association of Mineworkers and Construction Union (AMCU) had demanded an immediate doubling of basic wages to 12,500 rand ($1,200) a month.

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Gold Euphoria Won’t Last With Yellen’s Rally Fading – by Debarati Roy, Nicholas Larkin and Fareeha Ali (Bloomberg News – June 24, 2014)

 http://www.bloomberg.com/

After the biggest gold slump in three decades left investors heartbroken, they’re following Taylor Swift’s advice and never, ever getting back together.

Janet Yellen, the one person able to make the lovers reconcile, did her best. Prices surged the most since September the day after the Fed chair signaled last week that low interest rates are here to stay. Traders and analysts surveyed by Bloomberg News aren’t expecting the euphoria to last. Volatility in futures is near a four-year low, at a time when trading volumes and open interest in Comex contracts are waning.

Prices will average $1,250 an ounce next quarter, about 5 percent less than now, according to the median of 15 estimates. The analysts were surveyed before and after the Fed’s June 18 outlook, and the forecast was unchanged. Even after a 28 percent plunge in 2013, the bears are emboldened by this year’s records in equity markets, and gold assets in exchange-traded products have shrunk to the smallest since 2009.

“The surge in gold can’t sustain itself,” Donald Selkin, who helps manage about $3 billion of assets as chief market strategist at National Securities Corp. in New York, said June 20. “It was a temporary spike because of a confluence of events: Iraq and Yellen. People will be looking at other areas for excitement. Holdings are down, so people are leaving gold in search of something better.”

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Coal mines in Ukraine could close as fighting continues – by Sam Dodson (World Coal – June 24, 2014)

http://www.worldcoal.com/

As fighting continues between Ukrainian military forces and pro-Russian separatists, coal mines in the country face possible shutdowns, according to DTEK, Ukraine’s largest mining and power group.

Months of hard fighting

The insurgency in the largely Russian-speaking east erupted in April after street protests in the capital Kiev toppled the Moscow-backed leader Viktor Yanukovich. Russia subsequently annexed Ukraine’s Crimean peninsula and the West has accused Russia of supporting the insurgency.

Following months of hard fighting, on Monday 23 June, pro-Russian rebel leader Alexander Borodai said the separatists would observe a ceasefire for five days. However, attacks on both Ukrainian military forces – and on civilians – were reported as recently as the 22 June.

With the continued fighting, the country’s resources have been threatened repeatedly. DTEK issued a statement a day after the separatists attacked its Komsomolets Donbassa, one of the largest coalmines in Ukraine, detaining the coal mine’s top management and confiscating assets, including coalminers’ monthly pay, 22 vehicles and office equipment.

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BHP looks to cut thousands of jobs from its iron ore division in WA – by Graeme Powell (Australian Broadcasting Corporation – June 24, 2014)

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

Mining company BHP Billiton is looking at cutting thousands of jobs from its iron ore operations in WA. The miner has already announced the loss of 500 jobs in recent months, including 100 at its headquarters in Perth.

The ABC understands up to 3,000 jobs could go from BHP’s iron ore division, which currently employs 16,000 people. A BHP spokeswoman said external consultants have been employed to conduct a review in order to cut costs.

The ABC understands many of the jobs losses will involve contractors whose positions are coming to an end and their contracts will not be renewed.

BHP says it has been open about the review and holds regular meeting with workers to keep them updated. The spokeswoman says the job cuts are necessary to ensure BHP Billiton remains a competitive, world-class operation.

In a statement released to the ABC this morning, BHP defended the proposed job cuts. “BHP Billiton Iron Ore regularly undertakes improvement initiatives and organisational reviews. We have engaged external consultants to assist with this process.

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Paralysed mining sector waits on fresh faces in Jakarta – by Peter Alford (The Australian – June 25, 2014)

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

ANOTHER large piece of its unfinished business the outgoing Indonesian government will gift to the next administration is the 2009 Mining Law, which five months after implementation has idled most of the non-coal export minerals sector.

Shipping of copper concentrates, zinc ore, bauxite and some other bulk commodities are at a standstill; exploration activity, never robust despite Indonesia’s high prospectivity, has dried; and foreign investor interest is suspended until a new administration clarifies its intentions on the Mining Law.

No significant issue that was in contention when the law was activated in January, four years after the deceptively simple legislation was passed, has been settled.

Both presidential candidates, Prabowo Subianto and Joko Widodo, have endorsed the Yudhoyono administration’s principle of compulsory domestic secondary processing of non-coal mine ­exports. (Coal, which usually ­accounts for more than 85 per cent of Indonesia’s mineral commodity export revenues, was excluded from processing requirements during tortuous negotiations over regulations to give the law teeth.)

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Rinehart family feud risks iron ore project, says daughter Bianca – by Andrew Burrell (The Australian – June 24, 2014)

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

GINA Rinehart and her warring children risk losing control of their most valuable asset — a $10 billion stake in the Hope Downs iron ore project — to mining giant Rio Tinto as part of the long-running legal battle that has engulfed the family.

In a hearing to begin today, Mrs Rinehart’s eldest daughter Bianca, 37, will attempt to convince NSW Supreme Court judge Paul Brereton that she is the best choice to replace her mother as trustee of the family trust, which holds 23.4 per cent of the family company Hancock Prospecting.

The Australian understands she will also argue that Mrs Rinehart’s bid to install a corporate trustee, rather than allowing Bianca to manage the trust, could jeopardise Hancock Prospecting’s ownership of its 50 per cent stake in the Hope Downs mine in the Pilbara.

This is because such a move might trigger a change-of-control provision in an agreement between Hancock Pro­spect­ing and Rio Tinto, which stipulates that the family company must be owned and controlled by direct descendants of Mrs Rinehart.

It is understood that lawyers for Bianca will argue that Rio Tinto could contend that change of control could occur, which would lead to complex litigation or the forced sale of the Hope Downs asset.

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UPDATE 1-“King Coal” in Australia faces rising investment backlash – by James Regan (Reuters India – June 24, 2014)

http://in.reuters.com/

MAULES CREEK, Australia, June 24 (Reuters) – A farmer’s habit of rising before dawn finds Cliff Wallace alone most mornings while a rag-tag army of anti-coal activists camped in tents and tee-pees on his land catch a few more hours sleep.

When the protest camp finally awakens, talk around a makeshift mess hall over coal’s impact on global warming competes with analysis of plunging coal prices or the latest bank to come out against investing in fossil fuel extraction.

“It’s a diverse group we’ve got here and in their own way they all want to save our trees from the coal companies,” says Wallace, 62, who grows wheat on land bordering the Leard State Forest, where bulldozing of endangered Box-Gum Woodland trees to develop an open pit coal mine has drawn national attention.

Wallace is happy to host the anti-coal protesters as he is concerned about the impact the mine will have on his farm’s groundwater and says he is “deeply saddened” by the disruption to the region’s animal habitats.

Taking on Australia’s powerful coal sector was once left to environmentalists like Greenpeace and the World Wildlife Fund, but now the anti-coal movement is attracting wider support, from farmers to banks and investment funds striving to be seen as ethical investors and not contributing to global pollution.

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Rio Disputes Mongolia Claim Over Unpaid Taxes – by Jesse Riseborough and Michael Kohn (Bloomberg News – June 23, 2014)

http://www.bloomberg.com/

Mongolia’s Tax Authority claims a Rio Tinto Group unit operating in the country has unpaid taxes, penalties and disallowed entitlements associated with the $6.6 billion Oyu Tolgoi copper mine development.

Rio’s Turquoise Hill Resources Ltd. (TRQ) says it has paid all taxes and charges required under its accord with the government and has complied with the country’s laws, the Vancouver-based unit said yesterday in a statement. The disputed amount is about $130 million, Ganbold Davaadorj, a director of the mine’s operating unit Oyu Tolgoi LLC, said yesterday in an interview.

“We strongly disagree with the claims in the audit report and are currently reviewing all options to resolve this matter,” Kay Priestly, Turquoise Hill’s chief executive officer, said in the statement. The company may need to seek resolution through international arbitration, it said.

The fresh dispute is evidence of further strains on London-based Rio’s relationship with Mongolia. Recent discord has centered on funding for a second-stage expansion of the mine, delaying the $5.1 billion proposed development.

A feasibility study into the underground expansion is likely to be delayed if the tax dispute isn’t resolved by June 30, Turquoise said yesterday. Missing the study’s deadline would heap pressure on negotiations between Mongolia and Rio to finalize a $4 billion financing package. Commitments from the participating banks are set to expire on Sept. 30.

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UPDATE 4-Platinum union declares end to South Africa’s longest strike – by Zandi Shabalala (Reuters U.S. – June 23, 2014)

http://www.reuters.com/

RUSTENBURG, South Africa, June 23 (Reuters) – South Africa’s AMCU union declared a five-month platinum strike “officially over” on Monday as thousands of miners roared their approval when leader Joseph Mathunjwa asked if they wanted to end the longest work stoppage in the country’s history.

“Yes! Yes!” the miners chorused as the union boss asked whether they wanted to accept the wage offers from producers.

“The strike is officially over,” Mathunjwa then shouted back, to unrestrained jubilation from the tens of thousands of workers packed into Rustenburg’s Royal Bafokeng Stadium, one of the venues for the 2010 soccer World Cup.

The spot price of platinum fell 1 percent, the rand firmed nearly 1 percent against the dollar to two-week highs and the London-listed shares of number three producer Lonmin rose as much as 7 percent.

The precious metal’s two biggest producers, Anglo American Platinum and Impala Platinum, are listed on the Johannesburg stock market. It had closed by the time Mathunjwa finished his two-hour-long speech, but their shares closed up 1.6 percent and 1.1 percent respectively.

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COLUMN-China metals probe likely a short-term problem – by Clyde Russell (Reuters U.S. – June 23, 2014)

http://www.reuters.com/

LAUNCESTON, Australia, June 23 (Reuters) – The brouhaha over suspected metal financing fraud at China’s Qingdao port is likely to cause short-term angst, but longer-term gains.

Banks and authorities are now probing allegations of whether a private Chinese metals trading firm was duplicating warehouse certificates in order to use a cargo several times to raise financing.

The immediate impact is likely to be a sharp tightening of lending practices to China-based metals traders, thereby limiting their ability to participate in the market.

Longer-term, it’s likely that China’s massive warehousing sector will come under further scrutiny and may eventually be forced to adopt tighter rules, such as those at facilities regulated by the London Metal Exchange (LME).

While the issue has so far been limited to Qingdao port and to deals involving copper and aluminium, there are concerns the issue may be more widespread and linked to more commodities, such as iron ore and soybeans. While the potential ramifications from the Qingdao warehousing issues are significant, the impact on market pricing hasn’t been so clear as yet.

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The World’s Deepest Working Mine (South Africa) – Tau Tona (City of Gold) (Mining Global.com – March 2014)

http://www.miningglobal.com/

Tau Tona is an astounding feat of engineering, and is the deepest and largest gold mine on the planet. The TauTona Mine or Western Deep No.3 Shaft, is a gold mine in South Africa. At 3.9 kilometers (2.4 mi) deep it is currently home to the world’s deepest mining operations.

The mine is one of the three Western Deep Levels mines of the West Wits gold field west of Johannesburg. The mine is near the town of Carletonville. TauTona neighbours the Mponeng and Savuka mines, and TauTona and Savuka share processing facilities. All three are owned by AngloGold Ashanti. The mine was originally built by the Anglo American Corporation with its 2 km (1.2 mi) deep main shaft being sunk in 1957.

The name TauTona means “great lion” in the Setswana language. The mine began operation in 1962. It is one of the most efficient mines in South Africa and remains in continuous operation even during periods when the price of gold is low. Since its construction two secondary shafts have been added bringing the mine to its current depth. The mine today has some 800 km (500 mi) of tunnels and employs some 5,600 miners.

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Have You Hugged a Concrete Pillar Today? – by Bill Gates (June 12, 2014)

 

http://www.gatesnotes.com/ – The Blog of Bill Gates

The car I drive to work is made of around 2,600 pounds of steel, 800 pounds of plastic, and 400 pounds of light metal alloys. The trip from my house to the office is roughly four miles long, all surface streets, which means I travel over some 15,000 tons of concrete each morning.

Once I’m at the office, I usually open a can of Diet Coke. Over the course of the day I might drink three or four. All those cans also add up to something like 35 pounds of aluminum a year.

I got to thinking about all this after reading Making the Modern World: Materials and Dematerialization, by my favorite author, the historian Vaclav Smil. Not only did I learn some mind-blowing facts, but I also gained a new appreciation for all the materials that make modern life possible.

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COLUMN-Can we really do without coal? – by John Kemp (Reuters India – June 23, 2014)

http://in.reuters.com/

John Kemp is a Reuters market analyst. The views expressed are his own.

(Reuters) – Two-thirds of the world’s already discovered reserves of oil, coal and natural gas must remain unburned if the rise in average global temperatures is to be limited to 2 degrees Celsius by 2050, according to the International Energy Agency.

But coal miners and oil and gas companies round the world allocated $674 billion to finding even more reserves and new ways of extracting them in 2012/13. Much of this investment risks being wasted, according to the Carbon Tracker Initiative, which is campaigning to get investors to think again. (“Unburnable carbon 2013: wasted assets and stranded capital”)

“It is possible that much of this additional spending would prove fruitless. At worst, these assets might be ‘stranded’ forever,” Martin Wolf, the celebrated chief economics commentator of the Financial Times, wrote in a sympathetic review recently. (“A climate fix would ruin investors” June 17)

Carbon Tracker Initiative is part of a broader divestment movement pressing universities, pension funds and other socially responsible investors to boycott shares and loans in fossil fuel companies to force them to leave the oil, gas and coal “down there”. (“Stranded assets and the fossil fuel divestment campaign: what does divestment mean for the valuation of fossil fuel assets?” Oct 2013)

The divestment campaign has drawn a swift response. Major oil and gas companies such as Exxon and Shell reject the claim that their exploration and development spending is being wasted.

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