Archive | Asia Mining

Freeport Indonesia copper mine access to resume after clashes – by Sam Wanda (Reuters U.S. – August 20, 2017)

TIMIKA, Indonesia (Reuters) – Limited access to the giant Grasberg copper mine in eastern Indonesia is expected to resume on Monday, its operator said, after hundreds of former workers blockaded the site and clashed with police.

Trouble erupted at the mine, which is operated by the Indonesian unit of Freeport McMoRan Inc, during a demonstration over employment terms on Saturday afternoon.

Three former workers were injured after police fired tear gas and warning shots to disperse the blockade, according to a union official representing the ex-workers. Freeport said at least four contractors were also injured. Continue Reading →

RPT-COLUMN-Coal price surge justified by China’s dynamics, for now – by Clyde Russell (Reuters U.S. – August 21, 2017)

LAUNCESTON, Australia, Aug 21 (Reuters) – How much of the current surge in thermal coal prices in Asia is because of a fundamental shift in the supply-demand balance, and how much is down to speculative froth? This is a question often asked when a commodity experiences a strong gain – or drop – in price, especially when the fundamentals don’t appear to have shifted that much, at least on a casual view.

Virtually everybody in the coal industry can agree that the strong performance in seaborne thermal coal this year is being driven by market dynamics in top importer China. What’s harder to work out is whether this rally will run out of steam or whether there has been a structural change in the market.

The argument for a structural change in China is quite compelling. It goes a long way toward justifying some of the explosive 43.2 percent rally in spot cargoes from Australia’s Newcastle port in the past three months. Continue Reading →

Booming thermal coal price on China demand cheers miners – by Henning Gloystein and Jim Regan (Reuters U.K. – August 17, 2017)

SINGAPORE/SYDNEY (Reuters) – Australian thermal coal prices for spot cargoes above $100 a tonne, lifted by reports of strikes and strong Chinese demand, are providing a boost in earnings and share prices for miners like Glencore and Whitehaven Coal.

A crackdown on illegal mining and pollution in China has curbed domestic supplies, just as a heat wave and lower hydro power output have boosted demand for coal for power generation, forcing up prices. A similar squeeze in 2016 pushed prices to $114 a tonne and miners are again eyeing windfall profits, despite warning that the market is volatile.

“Coal demand remains strong, especially in Asia,” said Paul Flynn, managing director of Whitehaven Coal (WHC.AX). “Imports of thermal coal into China have been higher than anticipated, and when combined with weather related constraints on supply from Indonesia and some production issues in Australia, have pushed up the price of seaborne thermal coal.” Continue Reading →

Rare earths make electric comeback after bust – by Henry Sanderson (Financial Times – August 16, 2017)

After a spectacular bust in 2012 and several years of stagnant prices, rare earths mined mainly in China are making a comeback.

The expansion of electric vehicles and the renewable energy industry are partly behind this year’s renaissance for the 17 minerals, which are also used in smartphones and consumer electronics. Back in 2010 their soaring price caused such angst in Washington over China’s stranglehold on the market that the subject earned a subplot on the House of Cards TV series.

Additional mining capacity, as well as end users turning to alternatives, triggered a dramatic price collapse in 2012. Five years on and it is the role of rare earths in permanent magnets used in electric vehicles and wind turbines that has reignited interest. Continue Reading →

COLUMN-Lead gets unforeseen boost from North Korean sanctions – by Andy Home (Reuters U.K. – August 17, 2017)

LONDON, Aug 17 (Reuters) – Lead has been an unlikely and unforeseen beneficiary of the North Korea missile crisis. A new round of U.N. sanctions includes North Korean exports of lead concentrate. China, which signed up to the U.S.-drafted resolution, will lose an increasingly significant flow of raw materials to its lead smelters.

The news has reinvigorated a market that had lost its bull narrative thread. London Metal Exchange (LME) lead for three-months delivery hit a nine-month high of $2,537 per tonne on Thursday morning.

Not as exciting as zinc, which has just surged to its highest level in over a decade. But being overshadowed by its more glamorous sister metal is nothing new for lead. Characterised by a lack of statistical clarity and only sporadic news flow, lead tends to get regularly punished on the London market in the form of the popular relative value trade against zinc. Continue Reading →

In Ghana, clashes over small-scale mining have become a litmus test for China – by Andrew Green ( – August 8, 2017)

ACCRA, Ghana — Gloria Hiadzi, the executive secretary of the Ghana Independent Broadcasters Association, was present at one of the regular, informal gathering of Ghanaian media bigwigs in April, when the discussion turned to galamsey — the local term for small-scale miners who dig for gold and other minerals. The editors and publishers began to share stories of the devastation they had seen in their trips around Ghana caused by the mining.

Stories of the environmental impact of the mining regularly appear in the media, Hiadzi said, but the publishers recognized that their coverage usually faded pretty quickly.“In trying to find a way to get a solution, to get government involved, to get their eyes open, to whip up the enthusiasm of locals and everything, we felt it would be best to make it a national issue,” she said. “To launch a proper campaign.”

That campaign quickly leapt from radio spots and print stories to the streets of Accra, Ghana’s capital, where there are now regular anti-galamsey demonstrations and marches. A byproduct of the effort, though, has been heightened anti-Chinese sentiment. Continue Reading →

RPT-COLUMN-Port stocks the growing elephant in the room for iron ore prices – by Andy Home (Reuters U.S. – August 7, 2017)

LONDON, Aug 7 (Reuters) – Chinese steel and iron ore prices continue to rise in lock-step. In Shanghai today the most active steel rebar contract went limit-up, surging 7 percent to 4,013 yuan per ($597) per tonne, its highest level since April 2013. Where Shanghai steel leads, Dalian iron ore follows.

The most-traded contract on the Dalian Commodity Exchange jumped as much as 7.3 percent to 587.50 yuan per tonne at one stage, its highest level since March 21. And where Dalian leads, the rest of the iron ore world follows. On the Singapore Exchange the cash contract has just punched up through the $77-per tonne level, also for the first time since March.

There is much speculative froth in this mix. Market open interest on both Shanghai steel and Dalian iron ore hit record highs last month and is still at historically elevated levels. However, this is not just irrational exuberance. Continue Reading →

Aluminum Leaps Past $2,000 a Ton After China Deepens Capacity Cuts – by Mark Burton (Bloomberg News – August 8, 2017)

Aluminum cemented its spot as the best commodity this year as prices jumped to over $2,000 a metric ton for the first time since 2014.

Prices have rallied as China ramps up efforts to curtail illegal or polluting capacity. The metal added 2.2 percent to $2,008 as of 3:58 p.m. in London, bringing gains for the year to about 19 percent, the biggest rally among 22 raw materials on the Bloomberg Commodity Index.

“It does feel like China’s supply-side reform is deepening, and aluminum is definitely one of our favorite metals,” Xiao Fu, head of global commodities strategy at BOCI Global Commodities U.K., said by phone. Continue Reading →

Sumitomo Metal Mining exits Solomon Islands nickel exploration project (Reuters U.S. – August 8, 2017)

TOKYO (Reuters) – Japan’s Sumitomo Metal Mining Co Ltd. said on Tuesday it will exit from a nickel exploration project in the Solomon Islands because of slumping nickel prices and the loss of a legal dispute over mining rights in the country.

Sumitomo Metal Mining, which began exploring in the Solomon Islands in 2005, has been caught up in a six-year legal battle with Australia’s Axiom Mining, which ended this year with neither company being granted the rights over a nickel deposit in Isabel province, it said.

“As a result of our comprehensive review of business circumstances, the final judgment in the legal proceedings and other factors, we have concluded that it is difficult for us to implement the project,” Sumitomo Metal said in a statement. Continue Reading →

China aluminum capacity cuts boost market leaders, prices – by Tom Daly and Melanie Burton (Reuters U.S. – August 3, 2017)

BEIJING/MELBOURNE (Reuters) – China’s crackdown on its bloated aluminum industry is driving up the share price of the country’s major producers and raising the specter of a tighter global market that could buoy prices.

China is forcing the suspension of aluminum plants that have not obtained proper permits to build or expand, or that have not met strict environmental standards, as Beijing pushes to clear its skies and shore up loss-making industries.

China accounts for nearly 60 percent of global aluminum output and analysts estimate some 3-4 million tonnes of capacity could close this year, around a tenth of the country’s total, tightening the global market. Continue Reading →

Duterte threatens to impose minerals export ban – by Cliff Venzon and Mikhail Flores (Nikkei Asian Review – August 3, 2017)

Philippine president pushes for more domestic processing

MANILA President Rodrigo Duterte of the Philippines has said he is considering a ban on mineral exports to promote development of related downstream industries, rattling investors anew.

At the opening of the 17th Congress on July 24, Duterte said that he is fine with mining activities that benefit the poor but warned miners to observe environmental laws. He told them to comply or “I will tax you to death.”

“I call on our industrialists, investors [and] commercial barons to put up factories and manufacturing establishments right here in the Philippines to process our raw materials into finished products,” Duterte told a joint session of the House of Representatives and the Senate. Continue Reading →

UPDATE 1-Philippines’ environment minister says ban on open-pit mining to stay in place – by Enrico Dela Cruz (Reuters U.S. – July 31, 2017)

MANILA, July 31 (Reuters) – The Philippines’ environment minister Roy Cimatu said on Monday he would not lift a ban on open-pit mining imposed in April in an anti-pollution crackdown, as an inter-agency mining council reviews how miners are taxed in the Philippines.

Cimatu, a former general, was appointed by President Rodrigo Duterte in May after Duterte’s previous choice as environment minister, firebrand Regina Lopez, failed to secure congressional confirmation after a drive to implement radical environment protection measures that raised mining industry hackles.

“There is a department order on the ban on open pit mining issued by Secretary Lopez,” Cimatu told a news conference in the capital. “It still stays.” Continue Reading →

Dear President Trump, Afghanistan’s Minerals Aren’t Very Valuable, They’re Really Not – by Tim Worstall (Forbes Magazine – July 27, 2017)

This is almost amusing actually, Donald Trump is reported, in the New York Times, as thinking that Afghanistan’s valuable mineral deposits might be a good reason for the US to stay in that country. The humour here coming from the role of the New York Times in misreporting the value of the minerals in Afghanistan some 7 years ago. True, they weren’t the original source but they certainly propagated the mistake enthusiastically.

The point being that there are a lot of rocks in Afghanistan, those rocks contain metals and if the metals were out of the rocks and out of Afghanistan then they’d be valuable. But they’re not out and out, the metals are still in the rocks in Afghanistan and thus aren’t valuable. As we can tell from the fact that no one is lining up to pay for them.

Thus the idea that the US should stay there in order to aid in exploiting this value doesn’t really work out, there’s no value to be exploiting. This is the bit the NY Times just doesn’t get: Continue Reading →

Freeport stock soars 15 percent on copper prices, permit progress – by Susan Taylor (Reuters U.S. – July 25, 2017)

TORONTO (Reuters) – Freeport-McMoRan Inc shares jumped to a 16-month high on Tuesday, as soaring metal prices and progress in a long-running, costly permit dispute with Indonesia buoyed the world’s biggest publicly traded copper miner.

Investors brushed aside quarterly results and full-year forecasts that were short of expectations, focusing instead on a two-year high for copper prices and Chief Executive Officer Richard Adkerson’s confidence in securing a new mining agreement by October for Freeport’s giant Grasberg mine.

Freeport’s stock surged nearly 15 percent on the New York Stock Exchange by mid-day Tuesday, making it the top performer on the S&P 500 Index as it outpaced gains by fellow copper miners. Continue Reading →

Trump Finds Reason for the U.S. to Remain in Afghanistan: Minerals – by Mark Landler and James Risen (New York Times – July 25, 2017)

WASHINGTON — President Trump, searching for a reason to keep the United States in Afghanistan after 16 years of war, has latched on to a prospect that tantalized previous administrations: Afghanistan’s vast mineral wealth, which his advisers and Afghan officials have told him could be profitably extracted by Western companies.

Mr. Trump has discussed the country’s mineral deposits with President Ashraf Ghani, who promoted mining as an economic opportunity in one of their first conversations. Mr. Trump, who is deeply skeptical about sending more American troops to Afghanistan, has suggested that this could be one justification for the United States to stay engaged in the country.

To explore the possibilities, the White House is considering sending an envoy to Afghanistan to meet with mining officials. Last week, as the White House fell into an increasingly fractious debate over Afghanistan policy, three of Mr. Trump’s senior aides met with a chemical executive, Michael N. Silver, to discuss the potential for extracting rare-earth minerals. Mr. Silver’s firm, American Elements, specializes in these minerals, which are used in a range of high-tech products. Continue Reading →