RPT-UPDATE 2-New rules to slash Indonesian coal exports in short term at least – by Wilda Asmarini and Yayat Supriatna (Reuters India – October 1, 2014)

http://in.reuters.com/

JAKARTA, Sept 30 (Reuters) – Indonesia’s coal exports are expected to fall by between 15 and 20 percent in October from September and could decline 5 percent this year as firms scramble to obtain government export permits to comply with new rules due to come into effect on Oct. 1.

The new regulations, intended to stamp out illegal mining and ensure ample coal supplies for domestic power plants, require exporters to get approval from the mining and trade ministries.

But the industry says the rules are poorly timed and could push many firms out of business with coal prices at a five-year low. Unregistered firms will not be allowed to ship coal past the deadline.

Many miners and traders have encountered delays and a backlog of firms have yet to be registered, Pandu Sjahrir, chairman of the commercial committee at the Indonesian Coal Mining Association (ICMA), told Reuters.

“A lot of the backlog happens to be at the coal and minerals directorate level. Everything has to be done manually,” Sjahrir said, adding that firms needed to obtain the signature of each director at the department.

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Investors Head for Exit as Commodities Extend Slump – by Luzi Ann Javier (Bloomberg News – September 30, 2014)

http://www.bloomberg.com/

Investors are betting that the worst isn’t over for commodity prices that already are the lowest in five years.

About $907 million was pulled from U.S. exchange-traded products backed by raw materials this month, the most since April, data compiled by Bloomberg show. Expanding surpluses, a surging dollar and slowing growth in China helped send the Bloomberg Commodity Index to the lowest since 2009, reversing first-half gains fueled by a polar vortex and dead pigs in the U.S., and escalating tensions in Ukraine and the Middle East.

Banks from Societe Generale SA to Citigroup Inc. expect the losses for many raw material to continue. U.S. farmers are collecting the biggest corn and soybean crops ever, and global stockpiles of nickel are at an all-time high. Americans are producing the most oil since 1986, compounding a global surplus. China, the largest consumer of grains, energy and metals, is poised for its slowest expansion in two decades.

“The commodity complex as a whole did really well for a long time, and as a result, a lot of money poured in across the board and created oversupply and over-capacity,” said Peter Sorrentino, a Cincinnati-based fund manager who helps oversee $1.8 billion at Huntington Asset Advisors Inc. “It definitely has been an asset class that people have been withdrawing money from. Hedge funds congregate in momentum trades, and over the last two years, commodities have been sources of cash.”

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The great Canadian LNG poker game – by Peter Tertzakian (Globe and Mail – October 1, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

“They’re just playing poker, right?” asked an investor friend of mine who knows how to make a dollar. “Guys like Petronas, Shell and Chevron have already put a bazillion or two on the table,” he said with his furrowed face. “Aren’t their investments to date far too large to just walk away from their British Columbian LNG projects?”

I paused before answering. Petronas had just publicly announced that they were unhappy with Canada. It was a tap of the Malaysian company’s closely held cards signalling they might be willing to pack up their B.C. drill bits and go home in the absence of better liquefied natural gas investing odds.

It’s easy to believe that Petronas’s verbal shots in the public arena were a poker-faced “take-it-or-leave-it” bluff to get better terms on the eve of the B.C. government’s anticipated LNG tax announcement. But Canadians with a stake in the multibillion-dollar LNG business – for example, investors, governments and suppliers – should be cautious about interpreting such statements as hollow bravado.

Deferring to the wisdom of country singer Kenny Rogers, I replied to my friend, “Surely you know the lyrics to The Gambler?”

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UPDATE 1-Nickel miner Talvivaara gets debt cut plan, still lacks financing – by Jussi Rosendahl (Reuters U.S. – September 30, 2014)

http://www.reuters.com/

HELSINKI, Sept 30 (Reuters) – Finnish nickel miner Talvivaara lacks the long-term financing it needs to avoid bankruptcy, it said on Tuesday after an administrator proposed an eight-year restructuring plan that includes slashing its debts by up to 99 percent.

Talvivaara listed to great fanfare in London in 2007 when nickel peaked at around $51,000 per tonne.

But nickel prices have more than halved, and hurt by repeated production disruptions and environmental damage, the company last year suspended its mining operations and started a court-led debt restructuring process to avoid bankruptcy.

The administrator on Tuesday proposed Talvivaara’s unsecured debts of around 1.4 billion euros ($1.8 billion), including group internal debt, be cut by 97-99 percent. The plan could involve a share issue, which the administrator warned could dilute the company’s shares.

It shares fell as much as 24 percent on Tuesday. The company lamented on Tuesday that implementing the plan would need funds and creditor support, which is does not have.

“In order to ramp-up the Talvivaara group’s mining operations to full scale, a significant amount of new financing for the operative activities is required immediately,” it said in a statement.

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Metals and mining: Years of renewal – by David Miller and Alexei Lossan (Russia Beyond the Headlines – September 25, 2014)

http://rbth.com/

Global metals and mining firms face a difficult operating environment amid falling commodity prices. Russian companies are cutting costs and refocusing on domestic assets.

Russia’s metals and mining industry, the country’s second-most important sector after oil and gas, has faced its share of adversity since the salad days of the past decade, when commodity prices were pushed skyward by a hike in demand from China and India.

Today, as lower commodity prices put pressure on resource-producers around the world, many Russian metals and mining companies are nevertheless showing respectable profit margins, after shedding non-core operations and taking difficult steps towards rebuilding.

Iron ore prices fell to a five-year low in September as Chinese demand slackened off and economic activity in Europe and Japan remained weak. Even so, for Russian firms, signs are emerging that, in some areas, the future may be looking a little brighter.

“The global aluminum industry has turned a corner,” declared Rusal CEO Oleg Deripaska in a statement this summer after the firm, which produces almost 9% of the world’s aluminum, posted an income of $116 million in the second quarter of 2014.

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