International Media Resource Articles – Page 725

Western Investors Might Not Yet Have Redeveloped An Appetite For Resources But China Certainly Has – by Tim Treadgold (Forbes Magazine – May 16, 2014)

June 10, 2014

http://www.forbes.com/

China is buying resources. The west is selling. Who’s got the timing right? That’s the $64 billion question as interest in mineral resources heats up just as some people expect it to continue cooling.

Over the past 12 months a series of deals has seen Chinese companies soak up surplus assets being offloaded by western companies or, more recently, step up their buying demands by launching unsolicited takeover offers.

The latest raid came on Tuesday when Guangdong Rising made a $1.4 billion, all-cash offer, for full control of the Australian-base copper producer, PanAust. That followed a similar $1.4 billion all-cash offer by China’s biggest steel-maker Baosteel, in conjunction with an Australian rail operator, Aurizon, for the iron ore project developer, Aquila Resources.

Buying Ahead Of A Possible Commodity-Price Recovery

Interesting as the bids are for PanAust and Aquila the more important message for investors is that they are not the only moves by Chinese companies on mining assets, nor are they the only recent examples of corporate activity in the global mining sector which seems to be developing a head of steam despite there being little evidence of a significant recovery in commodity prices.

Vale Proves Too Rich for Barclays on Iron’s 30% Plummet – by Juan Pablo Spinetto and Julia Leite (Bloomberg News – June 9, 2014)

June 9, 2014

http://www.bloomberg.com/

The biggest drop in iron-ore prices in five years is a signal to Barclays Plc and Seaport Group that Vale SA (VALE5)’s outperformance in the bond market is about to end.

The $2.25 billion of bonds due 2022 returned 9 percent in the past six months, exceeding the 7.4 percent average gain for notes from emerging-market mining companies with investment-grade ratings. The Vale bonds yield 4.06 percent, the least relative to similar securities from London-based Rio Tinto Group since September, data compiled by Bloomberg show.

Vale, which gets about 95 percent of earnings from its ferrous business, posted a bigger-than-forecast drop in first-quarter profit after selling its ore for 25 percent less than the benchmark global price, which fell to the lowest since September 2012 on May 30. Investors should sell after the bond rally as reduced demand cuts prices for iron ore, according to Michael Roche, an emerging-market strategist at Seaport Group, which this month started recommending clients buy debt from Southern Copper Corp. instead of Vale securities.

“I’m still worried about China, I’m still thinking global growth is very muted, I’m still worried about Europe,” Roche said in a telephone interview from New York. “I am going to take that superior performance over the last six months and take a profit.”

Codelco Looks to 1st Female Director After CEO Fired – by Matt Craze and Javiera Quiroga (Bloomberg News – June 9, 2014)

June 9, 2014

http://www.bloomberg.com/

The success of a $20 billion plan to revive Codelco, the world’s largest copper producer, may rely increasingly on its first appointed woman director following the firing last week of Chief Executive Officer Thomas Keller.

Laura Albornoz was named in May by Chilean President Michelle Bachelet to defuse a growing feud between executives and workers at the company created in 1971 through the nationalization of foreign-owned mines. She participated in a six-hour board meeting until 2 a.m. on June 6 that decided to fire Keller, a former Anglo American Plc executive.

Consensus-building between workers, executives and the state at Codelco, which has generated $110 billion in profit since its creation, is a top priority as the company looks to maintain its No. 1 ranking in the global copper market, while cutting costs, Albornoz said in an interview in Santiago June 3.

“Codelco has had management issues that isn’t just down to the international price of copper,” Albornoz said. “We can take the company a lot further than where we have got it to now.”

Albornoz will visit next week the century-old Chuquicamata mine in the Atacama Desert where relations between Keller and the workers were at their worst.

Pioneer Mine video: Crossing over from black and white to digital (The Ely Echo – June 8, 2014)

June 9, 2014

http://www.elyecho.com/

This week a new video on YouTube brings to life the underground world of Ely’s historic Pioneer Mine. Great photos, mainly in black and white, cross into the digital world. It’s a great step forward for presenting and preserving our mining history. Here’s why that’s important.

Today’s mining news is not about iron ore, it’s about copper, nickel, gold, platinum, palladium and other platinum group metals (PGMs). Just as iron built this country’s infrastructure and helped the United States to win two world wars, copper and other PGMs are helping us advance our digital infrastructure, from televisions to cellphones.
But in order to better understand where we’re going we need to understand where we’ve been. Thanks to volunteers with the Ely Arts and Heritage Center, that’s being done today.

UPDATE 2-Minister quits deadlocked S.African platinum strike talks – by Zandi Shabalala (Reuters India – June 9, 2014)

June 9, 2014

http://in.reuters.com/

PRETORIA, June 9 (Reuters) – Wage talks between South Africa’s AMCU union and major platinum producers were deadlocked on Monday, prompting the mining minister to abandon his mediation role and dashing hopes for an end to a strike that is pushing the economy towards recession.

The five-month strike has halted mines that normally account for 40 percent of global platinum output and has hit wider economic output in Africa’s most advanced economy, driving it into contraction in the first quarter of this year.

The meeting on Monday was crucial as the government had said it would pull out of its mediation role if a deal was not struck then – and, after the talks ended at an impasse, it duly announced that the mining minister would no longer take part in negotiations.

“No agreement was reached today,” Joseph Mathunjwa, president of the Association of Mineworkers and Construction Union (AMCU), told reporters as he left the talks in Pretoria.

“AMCU made many concessions. We actually moved twice to make employers move closer to us,” he said, but added that the union did not compromise its demand for a 12,500 rand ($1,200) a month basic wage, which excludes allowances.

SA’s mining problem is one that runs deep – by Ray Hartley (Business Day Live- June 8, 2014)

June 9, 2014

http://www.bdlive.co.za/

THREE-and-a-half kilometres underground, no one can hear you scream, I tell myself as the drills hammer their way through solid rock. I am at the deepest point of Driefontein’s No 5 shaft, west of Johannesburg.

It is a work environment like no other. A rock-drill operator named Whitey is king. His kingdom is a jagged tunnel known as a panel, blasted out of the battleship-grey rock where the gold lies.

The panel’s low roof forces you into a crouch. The inclined floor is covered with loose rock, the detritus of previous advances into the earth. The rockface temperature approaches 60°C, and although mines are required to cool the stopes to about 28°C, humidity approaching 100% causes continuous and heavy perspiration. It is a cramped, claustrophobic space shared by stripped-down workers, rusted drilling machines and rock fragments.

Around Whitey, helmeted mineworkers toil in a strange, slow silence. Some spray-paint red dots on the rockface where holes must be drilled for blasting. Others attach air and water hoses to his rust-brown drilling machine, which has “AK47” as a nickname.

Earplugs seem a pathetic defence against the screaming, grinding and crunching of the drill bit as it fights its way into the rock, and water sprays from the stuttering machine.

Semiconductors: The Conflict Over Conflict-Free Minerals – by Ian King (Bloomberg News – June 05, 2014)

June 6, 2014

http://www.businessweek.com/

Like most advanced chips these days, Intel’s (INTC) contain tantalum, gold, tin, and tungsten—elements that can be mined on the cheap in war-torn parts of the Democratic Republic of Congo. Carolyn Duran’s job is to make sure the company doesn’t use so-called conflict minerals.

For the past five years, Duran, Intel’s supply-chain director, has paid for independent audits and led the company’s own audits of metal producers to determine if their ore comes from mines controlled by militias in the DRC, where a decades-long civil war has claimed millions of lives. It’s as tough as it sounds, she says: “Every single member of Intel’s conflict team has felt, at some point, that we’ve hit an insurmountable task.”

By June 2, U.S. companies with products that may contain conflict minerals were supposed to send reports to the Securities and Exchange Commission detailing their efforts to discover whether their metals originated in the DRC. The rule, designed to starve militias in the central African country of revenue by discouraging companies from dealing with them, dates to 2010’s Dodd-Frank Act.

In April a federal appellate court struck down the part of the rule that would have compelled companies to disclose the possible use of DRC-sourced conflict minerals on their websites. But businesses must still prove to the SEC that they’ve performed their due diligence, either by auditing their suppliers or hiring an accredited third party to do so. Besides Intel, Apple (AAPL) and Hewlett-Packard (HPQ), few companies put in the work before the deadline to trace their components from mine to factory.

Indonesia considers new restrictions on coal output, exports – by Fergus Jensen (Reuters India – June 6, 2014)

June 6, 2014

http://in.reuters.com/

JAKARTA, June 6 (Reuters) – Indonesia, the world’s top exporter of thermal coal, is considering new regulations to limit coal production and tighten controls on exports, government officials said on Friday, and could introduce the rules by early next month.

The country currently exports around 70 percent of its coal production, much of it to China and India, but the government says output must be capped as domestic demand for the power station fuel is expected to rise by 13 percent this year and next.

“Technically we are already restricting (coal production) through discussions on companies’ work plans and budgets, but formally we need a ministerial regulation on mines,” Coal Enterprise Director Edi Prasodjo told Reuters, referring to an output cap for producers his team is working to release soon.

In March, Prasodjo said Indonesia hoped coal production would remain at or below 421 million tonnes this year, but the government’s ability to restrict output has yet to be proven.

Many of Indonesia’s biggest coal mines, such as Bumi Resources and Toba Bara Sejahtera, are owned by politically connected figures, and with presidential elections fast approaching in July the government may face difficulties imposing new rules on the sector.

UPDATE 2-Board of Chile’s state-run Codelco removes CEO Keller (Reuters India – June 6, 2014)

June 6, 2014

http://in.reuters.com/

SANTIAGO, June 6 (Reuters) – Chilean state-run copper miner Codelco said it was removing Chief Executive Officer Thomas Keller to seek new leadership at a pivotal time for the company, but opponents said the decision was politically motivated.

Keller, a former retail executive, has earned plaudits for his efforts to overhaul old mines and cut costs at the world’s No. 1 copper producer, but his tough style triggered tensions with Codelco’s powerful unions and the new center-left government.

The board stressed the removal of Keller, seen as close to the right, was not politically motivated, while the conservative opposition decried what it said was meddling that could harm the miner in the midst of an ambitious investment plan.

“We asked Thomas Keller to tender his resignation as CEO as a result of the company’s move towards a new phase with new challenges that require new leadership,” new board head Oscar Landerretche told journalists after a more than five-hour meeting that ended early Friday morning.

The board voted 5-3, with one abstention, to remove Keller. “There were no arbitrary political motivations, though there were motivations surrounding the company’s politics, the politics of what Codelco should be in the future,” Landerretche said. ” … There was no single factor that formed board members’ opinion.”

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

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.

Anglo Says Platinum Pay Fight Inevitable on Productivity – by Firat Kayakiran (Bloomberg News – June 6, 2014)

June 6, 2014

http://www.bloomberg.com/

Anglo American Plc (AAL)’s four-month battle with a labor union at its South African platinum mines was inevitable because the requests by workers are unsustainable, Chief Executive Officer Mark Cutifani said.

“It’s the fight we had to have,” Cutifani said yesterday in a speech in London. “What’s being asked, for us is unsustainable. And at the same time, the productivity in the platinum sector is one tenth the productivity in the Australian mining sector and we are paying one fifth of the wages.”

Anglo controls the world’s largest platinum producer, which has been disrupted by a strike in South Africa since January. The Association of Mineworkers and Construction Union has called more than 70,000 miners out, including employees at Anglo American Platinum Ltd. (AMS)

Union members are on strike over a demand for basic monthly pay excluding benefits for entry-level underground employees to be more than doubled to 12,500 rand ($1,168) by 2017. The producers have said increases of that order would cost too much.

Minister of Mineral Resources Ngoako Ramatlhodi is coordinating talks between the union and Anglo American Platinum, Lonmin Plc (LMI) and Impala Platinum Holdings Ltd. (IMP), which continue in the South African capital, Pretoria, for a third day today.

UPDATE 2-Newmont says declares force majeure at Indonesian copper mine – by Michael Taylor and Fergus Jensen (Reuters India – June 5, 2014)

June 5, 2014

http://in.reuters.com/

(Reuters) – Newmont Mining Corp said on Thursday it has notified the Indonesian government that it is invoking force majeure at its Batu Hijau copper mine and plans to put most of the mine’s employees on leave with reduced pay.

Newmont and fellow miner Freeport-McMoRan Copper & Gold Inc – accounting for 97 percent of Indonesia’s copper output – are in dispute with the government over an export tax imposed in January.

“Despite our best efforts, we have not been able to export copper concentrate since January, and we still do not have an export permit,” Martiono Hadianto, CEO of Newmont’s Indonesian operations, said in a statement. “We are left with no option but to declare force majeure.”

A declaration of force majeure, which literally means “higher power”, allows certain terms of an otherwise legally binding contractual agreement to be ignored. Newmont’s move came after the Indonesian government launched a drive this week to force a breakthrough in the dispute, which has contributed to slower economic growth.

Both Freeport and Newmont have previously argued that they should be exempt from the tax, which kicks in at 25 percent and rises to 60 percent in the second half of 2016, before a total concentrate export ban in 2017.

Diversity back in vogue for miners as iron ore price tumbles – by STEPHEN EISENHAMMER, SONALI PAUL AND SILVIA ANTONIOLI (Reuters U.K. – June 5, 2014)

June 5, 2014

http://uk.reuters.com/

(Reuters) – After pouring billions of dollars into producing more iron ore to feed China’s construction boom, the world’s mega miners now face a self-induced price slump and are counting on other commodities to revive their allure to investors.

Base metals copper and nickel, oil and gas, as well as more offbeat commodities such as fertilizer potash, are increasingly important differentiators between the kings of iron – Vale , Rio Tinto and BHP Billiton – and could be welcome sources of growth this year as iron ore languishes near two-year lows.

BHP’s oil and gas portfolio and Vale’s nickel production have attracted positive attention. Glencore Chief Executive Ivan Glasenberg, meanwhile, has spoken of the advantage of smaller exposure to iron ore, saying it provided an “opportunity against our peers.”

Lack of diversity has not been an issue in recent years as Chinese demand for steel to build cities, railways and ports tripled iron ore prices from 2008 to 2011 – a windfall for the “big three” who produce 70 percent of the world’s seaborne iron ore.

But in May the price fell below the $100 mark for only the second time in four years, as production jumps just as Chinese demand growth appears to be slowing. Although many analysts see the price perking up again later this year, the fundamentals are worsening and the trend is downward.

Ferro giants- the world’s biggest iron ore producers (Mining-Technology.com – May 29, 2014)

June 5, 2014

http://www.mining-technology.com/

The top ten iron ore producers account for over 90% of the world’s total iron ore output. Mining-technology.com profiles the ten biggest iron ore producing countries based on latest production and reserve data.

China

China, the largest producer, consumer and importer of iron ore, produced 1.3 billion tonne (bt) of iron ore in 2012, accounting for about 44% of the world’s output. The country’s crude ore reserves as of 2013 stood at 23bt containing 7.3bt of iron – the fourth largest in the world. China’s run-of-mine iron ore output is, however, of low quality, containing about 22% iron.

Over half of the nation’s domestic iron ore production comes from mines located in Hebei and Liaoning provinces while Beijing, Shanxi province and Inner Mongolia are the other iron ore producing regions. Ansteel Mining, a wholly-owned subsidiary of Anshan Iron and Steel Group (Ansteel Group), is the biggest iron ore producer in the country.

Australia

Australia produced 519 million tonnes (mt) of iron ore in 2012 accounting for about 18% of global iron ore output. The country’s estimated iron ore reserves of 35bt, containing 17bt of iron, makes it the world’s richest iron ore reserves holder.

Mining giants – the top ten richest mining companies (Mining-Technology.com – March 27, 2014)

June 5, 2014

http://www.mining-technology.com/

Glencore Xtrata, followed by BHP Billiton, Rio Tinto and Vale recorded the biggest revenue from mining operations in 2013. Mining-technology.com profiles the world’s ten biggest mining companies based on revenue earned in calendar year 2013.

Glencore Xtrata

Glencore Xstrata, created through the merger of the world’s biggest commodities trader Glencore and the diversified mining company Xtrata in May 2013, is the world’s biggest mining company. The mining and trading conglomerate headquartered in Switzerland reported revenues exceeding $200bn from industrial and marketing activities in its metals and minerals, and coal and oil segments in 2013.

The company’s mining operations encompass over 150 mining and metallurgical sites around the world. Revenue from the metals and minerals business including copper, nickel, zinc/lead, alloys, alumina/aluminium and iron ore was over $64bn in 2013. Glencore Xstrata also produced 138.1 million tonnes of coal in 2013 recording industrial revenues exceeding $10bn.

The Zanaga iron ore mine in Republic of Congo, the Collahuasi copper mine in Chile, the Antamina copper-zinc mine in Peru, and the Correjon coal mine in Colombia are among the major mining operations in which Glencore Xtrata holds significant interests.