International Media Resource Articles – Page 740

SA platinum sector is dead, long live the new platinum sector – by Geoff Candy (Mineweb.com – March 13, 2014)

March 13, 2014

http://www.mineweb.com/

The future of South Africa’s platinum sector lies not in the deep-vein, shanty-town-lined mines of old but rather in the newer, shallower, more community-aware mines.

GRONINGEN (MINEWEB) – What was clear from the presentations and conversations in Toronto during this year’s Prospectors and Developers Association of Canada conference is that the long-term future of South Africa’s platinum sector lies not in the deep-vein, shanty-town-lined mines of old but rather in the newer, shallower mines that afford more opportunities to local communities and for mechanisation.

From a cost point of view, this, at least on paper, was obvious in a slide shown by Mike Jones, CEO of Platinum Group Metals, during his presentation.

As South Africa’s Minister of Mineral Resources, Susan Shabangu pointed out to Mineweb last week, “If you look at the new mines in SA, they are completely different from your traditional mines, especially the old gold mines in the West Rand of Johannesburg and the platinum mines in Rustenburg.

BHP upbeat on iron ore growth – by Mitchell Neems (Business Spectator – March 11, 2014)

March 12, 2014

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

As the fall in the iron ore price continues to send shockwaves through global markets, mining giant BHP Billiton says its focus on productivity is starting to deliver value to its iron ore business and it expects demand for steel to grow over the next decade.

Speaking at the AJM Global Iron Ore and Steel Forecast conference in Perth, BHP’s iron ore president Jimmy Wilson said the group remains confident global demand for iron ore will continue to grow, though likely at a more moderate rate, driven by urbanisation and industrialisation.

“Our market outlook is for continued strong steel demand growth over the next 10 years,” he said. “Our view that Chinese crude steel production is expected to peak at 1.1 billion tonnes, around 2025, is unchanged.” Recent world iron ore growth had been driven by Australian production, he said.

Mr Wilson added that demand over the next 10 years would be maintained as 1.2 billion people globally moved to urban areas, including 240 million people in China.

Vale Stares At $1 Billion Investment Loss If Guinea Panel Recommendation Implemented (Forbes Magazine – March 12, 2014)

March 12, 2014

http://www.forbes.com/

Vale might find $1 billion in investments at the Simandou iron ore deposit wiped out if the Guinean government accepts and implements the recommendations of a technical committee. This committee had been set up to review mining concessions awarded under previous administrations.

It has recommended that Vale and its partner BSGR should be stripped of the rights to exploit Simandou because BSGR obtained the concession allegedly through corruption. The committee wants the tendering process for the northern part of Simandou to be conducted again. The committee will submit its recommendations to a strategic committee which will take a final decision.

If the recommendations are accepted, Vale’s investments worth $1 billion will have to be written off. It is not clear whether the company will be compensated for the amount it has already paid to BSGR for acquiring a 51% stake in northern Simandou in the first place. A re-tendering process will also witness Vale’s competitors like Rio Tinto and BHP Billiton competing for the deposit.

However, a more immediate concern would be the possibility of international arbitration because BSGR has threatened to take this route if stripped of its ownership. This would mean a lengthy and protracted legal battle which will simply delay progress with mining the disputed deposit.

Geopolitical tensions a reminder for the West to seek greater rare earths independence from China – by Alessandro Bruno (Investor Intel.com – March 11, 2014)

March 12, 2014

http://investorintel.com/

There are two geopolitical disputes that could have significant effects on the prices of strategic commodities. The first is in Crimea, involving Russia, the Ukraine and NATO; the second is in the Sea of Japan (also known as East China Sea) and it involves China, Japan and not so indirectly the United States. A mathematician might reduce the two issues to one geopolitical equation: Russia and China vs. the West (that is the USA, the European Union and Japan). The Crimean crisis will likely cause grain and other agricultural prices to increase, which will in turn strengthen mineral fertilizer prices.

The Sino-Japanese crisis over control of the Senkaku/Diaoyu islands, which intensified in 2012, when Japan decided to formally annex the territory, meanwhile has grown deeper and will inevitably affect Japan’s access to much needed rare earth products from China. China’s minister of foreign affairs stated, last week, that “there is no room for compromise” with Japan over the Islands.

He added that China would maintain a decisive stance in matter of territorial integrity and sovereignty and that it would defend “every inch of the territory that belongs to us”. China is also at odds with other Asian neighbors, triggered by spats over territorial control in the South China Sea. In the latter case, the triggers are both natural resources in the disputed sea areas and the control of important waterways.

Rising Chrome-Ore Demand Pressures Zimbabwe to Lift Export Ban – by Felix Njini (Bloomberg News – March 11, 2014)

March 12, 2014

http://www.businessweek.com/

Zimbabwe is facing “huge” external demand for chrome ore, renewing pressure on the government to relax a law that bans exports of the unprocessed material, Mines Minister Walter Chidakwa said.

There has been a “lot of pressure on us to lift the ban,” Chidakwa said by phone yesterday from the capital, Harare. “Everybody is looking for raw chrome on the market, the pressure on us is huge.”

Zimbabwe started an embargo on exports of chrome ore in April 2011 to try force companies to process the metal locally. The ban resulted in some producers, such as Harare-based Zimbabwe Alloys Chrome Ltd., shutting down mining operations completely because of the country’s inadequate smelting capacity. Ferrochrome, produces in smelters using chrome ore, is used to make stainless steel.

The nation has the world’s biggest platinum and chrome deposits after South Africa and has reserves of diamonds, gold, coal, nickel and iron ore. Companies that operate in the country include Anglo American Platinum Ltd., Impala Platinum Holdings Ltd. and Aquarius Platinum Ltd. Mining is the country’s biggest source of foreign exchange, with platinum group metals and gold leading tobacco as the nation’s biggest exports.

Indonesia’s next leader unlikely to ease tough mineral export rules – by Rieka Rahadiana and Randy Fabi (Reuters India – March 12, 2014)

March 12, 2014

http://in.reuters.com/

(Reuters) – Indonesia’s next president is unlikely to make major changes to the country’s controversial mining rules, after major political parties backed an export ban that has led miners to halt $6 billion in annual mineral exports.

The broad political support will disappoint miners, like Freeport-McMoRan Copper & Gold, Newmont Mining Corp , that may have been hoping the tough new rules were only temporary measures imposed by a lame duck administration.

Political parties representing presidential front runners for the July election told Reuters they support the current government’s moves to ban mineral exports and tax concentrate shipments, aimed at forcing miners to build smelters in Indonesia.

Freeport has cut copper output by 60 percent due to a prolonged dispute over the export tax imposed by President Susilo Bambang Yudhoyono, who is barred from running for a third term.

Opinion polls show Jakarta Governor Joko Widodo of the Indonesian Democratic Party-Struggle (PDI-P) as the most popular presidential pick.

COLUMN-Sentiment diverges from fundamentals on China commodity imports – by Clyde Russell (Reuters U.S. – March 11, 2014)

March 11, 2014

http://www.reuters.com/

LAUNCESTON, Australia, March 11 (Reuters) – The reaction of commodities to the Chinese trade data show that sentiment and fundamentals are diverging, with the fear trade winning so far.

No matter which way you try and slice and dice it, China’s imports of commodities in the first two months of the year have been surprisingly strong.

But the market has chosen rather to focus on the February slide in merchandise exports from the world’s second-biggest economy, concluding that all isn’t well and therefore commodity imports will tumble in the coming months.

Add to this the view that much of the strength in imports of copper and iron ore was related to accessing financing rather than underlying demand, and suddenly you can turn large gains in imports into something negative for future demand.

The issue is whether the market is reading it correctly and the outlook for Chinese commodity demand is weak, or whether a more modest pullback in import growth is likely in the months ahead.

Marching Into An Active Volcano With The Sulfur Miners Of Ijen, Indonesia – by Mark Johanson (International Business Times – March 11 2014)

March 11, 2014

http://www.ibtimes.com/

“You lost sir? Follow us.”

Two men emerge from the dark beside me like a mirage, puffing clove cigarettes and twirling large bamboo shoulder baskets over their heads. Their names, they say, are Addis and Sukarno, and they will show me the path into Ijen crater.

It’s a few minutes after 4 a.m., and not five minutes earlier, my “English-speaking guide,” [who didn’t speak a lick of English], had dropped me at a grassy knoll in this remote corner of East Java’s puffing interior with one less-than-illuminating instruction: “walking.” With that, he pointed along a line perpendicular to the road and drove off.

The facts about the path ahead, as I know them, are as follows: The long walk into Ijen crater will include sharp drops, slippery steps and a toxic lake that claimed the life of a French backpacker a few years ago. At 2,600 meters (8,530 feet), Ijen is also a working mine where men carry up to 100 kilos (220 pounds) of sulfur by hand out of the noxious crater and down the volcano’s outer slopes to a weigh station as many as three times a day, six days a week.

Afghanistan’s Minerals Await Vital Railroads – by Gopal Ratnam (Bloomberg News – March 6, 2014)

March 11, 2014

http://www.businessweek.com/

At the Naibabad freight terminal near the northern Afghan town of Mazar-e-Sharif, workers rush to unload wheat and construction materials from Uzbekistan that have arrived on Afghanistan’s only railroad. Trucks will have to carry the cargo through the icy Hindu Kush mountains to the rest of the country because Afghanistan, which encompasses almost 252,000 square miles, has only 47 miles of train track.

The government has grand plans to change that by constructing a 2,237-mile national rail line to transport not just food and other goods but something more vital to the struggling nation’s economy: its vast natural resources, including iron, copper, and gold.

In 2010 the Pentagon estimated Afghanistan is sitting on mineral deposits worth about $1 trillion. In 2011 the Afghan government put the value at $3 trillion. This potential wealth has remained largely untapped, because there’s no way to safely and reliably ship the minerals from the country’s mines.

Afghanistan’s 25-year economic plan calls for connecting the country to established rail lines that run through Asia, Europe, and the Middle East.

SA continues to slide in ferrochrome stakes – by David McKay (Miningmx.com – March 11, 2014)

March 11, 2014

http://www.miningmx.com/

[miningmx.com] – SOUTH Africa’s share of the world ferrochrome market shrank further in 2013 despite efforts by the industry to have the country’s government consider protective trade measures.

Merafe Resources said in comments to its year-end results, in which comprehensive income increased more than 300% to R210.6m (2012: R48.9m), that South Africa’s share of world ferrochrome production fell to 32% from 34% in 2012.

“Chrome ore imports into China increased by 30% year-on-year to 12.1 million tonnes (mt), of which 6.7mt (2012: 4.5mt) was from a South African source,” said Merafe Resources. Global ferrochrome production was 10.2mt in 2013, 8% higher than in 2012. Ferrochrome is used in the manufacture of stainless steel and is therefore highly geared to industrial production growth.

As early as 2011, Merafe Resources raised concerns about the export of cheap supplies of chrome ore, partly by platinum producers which mine chrome as a by-product, to China. The contention was that this allowed the Chinese market to grow while the local market struggled, especially amid rising power and labour costs in South Africa.

REFILE-Lower iron ore prices here to stay – Citi – by James Regan (Reuters U.S. – March 11, 2014)

March 11, 2014

http://www.reuters.com/

(Reuters) – Iron ore prices are set to remain at lower levels given increased supplies of the steel-making ingredient, although the speed of their recent slump has taken the market by surprise, Citigroup said on Tuesday.

Spot iron ore prices posted their biggest one-day fall in more than four years on Monday after China’s trade balance swung into deficit and amplified fears of a slowdown in the world’s second-biggest economy.

“The broad move lower is here to stay,” Ivan Szpakowski, commodities strategist at Citi Research, said at an iron and steel conference in Perth.

“Prices are moving on a cyclical basis due to the increase in supply. The question had been the timing of it, and the rapidity of the fall, that’s something that had not been expected,” Szpakowski said. Iron ore for immediate delivery to China .IO62-CNI=SI fell 8.3 percent, its largest one-day percentage fall in 4-1/2 years, to $104.70 a tonne, its weakest since October 2012, according to data compiled by The Steel Index.

Andrew ‘Twiggy’ Forrest takes billion-dollar hit as iron ore tumbles – by James Thomson (Sydney Morning Herald – March 10, 2014)

March 10, 2014

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

Andrew ‘Twiggy’ Forrest knows better than most how movements in commodity prices can cause havoc with your bank balance. With iron ore prices falling to its lowest in close to a year, shares in Fortescue Metals Group tumbled 8.38 per cent to $4.98 in initial trade on Monday morning, wiping around $500 million off the value of Forrest’s stake.

Since February 21, when FMG’s shares broke through $6 for the first time since early 2012, the stock has dropped by almost 15 per cent, broadly in line with the fall in the iron ore price. That drop has wiped around $1.3 billion off the value of Forrest’s stake in a matter of 11 trading days. His stake is now worth $5.1 billion.

Calculating the impact of the iron ore price movement on other iron ore moguls such as Gina Rinehart and Angela Bennett isn’t as transparent, although given they both rely on royalties paid by Rio Tinto – which mines tenements owned by their fathers, Lang Hancock and Peter Wright – the share price of that company can be seen as a very rough proxy.

In morning trade, Rio shares dipped 4.23 per cent to $62.19. Since February 21, Rio’s stock is down 11.4 per cent. BHP Billiton shares lost 3.15 per cent this morning, to $36.53. The stock is down 6.7 per cent since February 21.

Glencore Xstrata mining merger produces $2.4bn in synergies – by Jana Marais (Business Day Live – March 9, 2014)

March 10, 2014

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

GLENCORE Xstrata has done an “excellent” job in finding synergies through the mining giants’ $29bn merger in May 2013, the combined group’s first set of annual results shows.

Releasing the results this week, CEO Ivan Glasenberg said the group had increased the synergy benefits of the merger from the original estimate of $2bn a year by 2014 to $2.4bn, and there was scope for further cost savings.

Despite a $7.5bn write-down on the value of Glencore Xstrata assets since the takeover on May 2 last year, the merger was a good decision and the additional realised cost savings show Glencore has done an excellent job, said Hanré Rossouw, head of commodities for frontier and emerging markets at Investec Asset Management.

“Because it was an all-share deal, the impairment is really an accounting issue related to the share price movements since the date the transaction was finalised and the allocation of fair value to Xstrata assets. It is not a cash-flow item,” Mr Rossouw said.

BHP workers brace for uncertainty – by Neale Prior (The West Australian – March 10, 2014)

March 10, 2014

http://au.news.yahoo.com/thewest/

Nickel West workers are bracing for a year of uncertainty as mining giant BHP Billiton embarks on a formal campaign to sell the underperforming mining and processing wing.

After slashing the book value of the operation by $US1.6 billion, BHP is believed to have appointed international investment bank Goldman Sachs to find a buyer.

The Goldman Sachs appointment leaked over the weekend via The Australian Financial Review after speculation building out of London last week that BHP was offloading its WA poor relation.

The nickel arm has been starved of capital and sits outside BHP’s favoured areas of iron ore, coal, petroleum and copper.

The sale push puts the jobs of up to 2000 employees and contractors in play and fans fears that BHP could close all or part of the division if it cannot reach acceptable sales terms.

RPT-UPDATE 1-Panel says Guinea should strip BSGR, Vale of rights to iron deposit – by Silvia Antonioli, David Rohde and Saliou Samb (Reuters India – March 10, 2014)

March 10, 2014

http://in.reuters.com/

LONDON/CONAKRY, March 7 (Reuters) – A technical committee in Guinea has recommended the government strip BSG Resources (BSGR) and its partner Vale of the rights to exploit a giant iron ore deposit because the panel alleges BSGR obtained the concession through corruption, sources close to the matter said.

The latest development in a saga surrounding one of the world’s largest mining deposits casts uncertainty over the future of the sought-after Simandou, a mine that could help one of Africa’s poorest countries to prosper.

It also raises concerns over the position of Brazilian miner Vale, which, according to a source close to the company, has spent more than $1 billion in its Guinean venture and risks seeing its investment and efforts wiped away.

BSGR vigorously denied the allegations of wrongdoing and said it believes the committee’s procedure is part of a predetermined and orchestrated plan to expropriate the company’s mining rights.