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Asia Mining

Bidding war intensifies for Rio Tinto’s Hunter Valley coal mines – by David Chau (Australian Broadcasting Corporation – June 26, 2017)

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

Rio Tinto is currently in a dilemma on who it should sell its Hunter Valley mines to – the Swiss or the Chinese. Late on Friday, Swiss-based company Glencore upped its bid to more than $3.5 billion (US$2.685 billion) for the purchase of Rio’s subsidiary, Coal & Allied Industries Limited.

The assets on the block are Rio’s Hunter Valley operations – the Warkworth/Mount Thorley thermal and semi-soft coking coal mines and a major stake in the Port Waratah coal loading facility in Newcastle.

Glencore said its latest offer is around $297 million ($US225 million) greater than Yancoal’s proposal. “We believe the Glencore offer satisfies the criteria for a ‘superior proposal’: it delivers substantially greater value to Rio Tinto shareholders and low deal completion risk,” Glencore said in a statement.

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How China’s shaping one country’s future – Karishma Vaswani (British Broadcasting Corporation – June 23, 2017)

http://www.bbc.com/

China’s Belt and Road initiative is ploughing through central Asia. The plan, which aims to expand trade links between Asia, Africa, Europe and beyond, was unveiled in 2013. What impact has China’s grand plan had so far in Kazakhstan? I went to Almaty – the financial capital – to find out.

The lyrical strains of Almaty’s latest pop song reverberates through the city’s main Chinese market, lending a distinctly Kazakh feel to what looks like a scene that could easily be from Beijing or Shanghai.

Inside, signs in both Mandarin and Kazakh point out directions in the warren-like maze. It’s here that I meet Huang Jie, a jovial bear of a woman. She’s been running a convenience store in this market for 15 years, selling everything from hairbrushes to soy sauce. She came to Almaty from China to take part in an ice-skating competition, but then stayed on because of the opportunities here.

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Risky gold rush: Indonesia tackles illegal mining boom – by Kiki Siregar (Agence France Presse/Daily Star – June 22, 2017)

https://www.dailystar.com.lb/

WEST TABIR, Indonesia: Hulking excavators claw at riverbanks on Indonesia’s Sumatra island in the hunt for gold, transforming what was once a rural idyll into a scarred, pitted moonscape. It is one of a huge number of illegal gold mines that have sprung up across the resource-rich archipelago as the price of the precious metal has soared, luring people in rural areas to give up jobs in traditional industries.

Now authorities in Sumatra’s Jambi province, which has one of the biggest concentrations of illegal mining sites in Indonesia, have started a determined fightback, combining a crackdown with efforts at regulation.

Declines in the price of rubber, which provided a livelihood for many in the area who had worked on plantations tapping the commodity, has driven many locals to more lucrative – and dangerous – gold mining. Iwan, a 43-year-old who works at an illegal site by the Tabir River, left his job on a rubber plantation to become a gold miner two years ago but said life was still difficult.

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Global investors shun India as steep taxes make mining unviable – by Jayajit Dash (Business Standard – June 21, 2017)

http://www.business-standard.com/

A higher tax burden on the mining industry in India compared to other resource-rich countries is making mining an unviable activity and driving away investments from the sector.

A huge gap has been found between the effective tax rate (ETR) on mining in India vis-a-vis other mineral-rich nations such as Australia, Canada, South Africa, the US and Mongolia. Data by the Federation of Indian Mineral Industries (Fimi) shows that the ETR on an iron ore mine in the country, after including a cocktail of levies, comes to 64 per cent in the case of new mines allocated after the amended Mines and Minerals- Development & Regulation (MMDR) Act, 2015.

For the older mines, it is still higher at 69 per cent. The ETR excludes service tax at 15 per cent of the royalty, 10 per cent tax levied by the Supreme Court in Goa and Karnataka and the Forest Development Tax (FDT) levied by the Karnataka government. That apart, Odisha, the largest iron ore producer, levies the highest royalty rate on even the lowest grades of iron ore fines.

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World’s biggest coal company closes 37 mines as solar power’s influence grows – by Harriet Agerholm (The Independent – June 21, 2017)

http://www.independent.co.uk/

Plummeting price of renewable energy puts pressure on fossil fuel firms

The largest coal mining company in the world has announced it will close 37 mines because they are no longer economically viable.

Coal India, which produces around 82 per cent of India’s coal, said the mines would be decommissioned by March 2018. The closures, of around 9 per cent of the state-run firm’s sites, will reportedly save around 8,000,000,000 rupees (£98m).

India’s solar sector has received heavy international investment, and the plummeting price of solar electricity has increased pressure on fossil fuel companies in the country.

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Cheaper Solar in India Prompts Rethink for Coal Projects – by Anindya Upadhyay and Rajesh Kumar Singh (Bloomberg News – June 1, 2017)

https://www.bloomberg.com/

After a string of federal auctions, solar is suddenly the cheapest source of electricity in India. That’s darkening the outlook for the coal-fired power industry as projects struggle to find customers or face cancellation amid a glut of capacity.

“The crashing solar tariffs are creating a mental block for distribution companies and holding them back from signing long-term purchase agreements with conventional power producers,” said T. Adi Babu, chief operating officer for finance at Lanco Infratech Ltd., an Indian power producer. “A couple of years back, when people talked of solar reaching grid parity, people were skeptical. Now the solar tariffs have gone well below that. It is definitely making conventional players sit up and take notice.”

In May, the Business Standard reported that the state of Gujarat scrapped a so-called ultra-mega power project. Sujit Gulati, Gujarat’s additional chief secretary for energy and petrochemicals, didn’t respond to an email seeking comment. Uttar Pradesh ditched plans to buy long-term power supplies in favor of short-term purchases through the oversupplied spot power markets.

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COLUMN-China’s plan to boost commodity trading needs reality check – by Clyde Russell (Reuters U.S. – June 20, 2017)

http://www.reuters.com/

The call by China’s securities regulator for the country’s wealth managers to invest in domestic commodity futures is both encouraging and somewhat bizarre.

The China Securities Regulatory Commission (CSRC) aims to promote the domestic derivatives industry by loosening regulations that restrict how commercial banks, insurance companies and pension funds invest in commodity futures, Fang Xinghai, the commission’s vice chairman, said on June 17.

Fang, who was speaking at a financial forum in Qingdao, didn’t give further details of the proposal, but it seems to fit into recent moves by the authorities in Beijing to promote commodity trading and become more of a player in global markets.

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China’s Biggest Aluminum Producer to Cut Outdated Capacity (Bloomberg News – June 20, 2017)

https://www.bloomberg.com/

China Hongqiao Group Ltd., the nation’s biggest aluminum smelter, is curtailing outdated capacity amid a broader crackdown by the government on illegal production. Shares of aluminum makers gained in China.

The company, the main aluminum arm of Shandong Weiqiao Pioneering Group Co., declined to give the scale or timing of the reduction in an emailed statement. Two people with knowledge of the situation said Weiqiao’s aluminum business started cutting 250,000 metric tons of annual capacity from Tuesday, declining to be identified as the information is private. A Weiqiao spokesman couldn’t be reached for comment.

China, the world’s top producer of the lightweight metal, has stepped up efforts this year to prune capacity to reduce excess supply. Its top economic planning agency issued an order in April for local governments to halt smelters that violate environmental guidelines, while a plan earlier in the year called for capacity to be shuttered during the peak pollution season over the winter. China’s total smelting capacity last year was about 40 million tons.

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Nickel production to grow for first time since 2013 — report – by Cecilia Jamasmie (Mining.com – June 19, 2017)

http://www.mining.com/

If BMI Research predictions are correct, prices risk staying at painfully low levels for years.

Global nickel production will come out of negative territory this year for the first time since 2013, driven by Indonesia’s export ban moderation, a new report published Monday shows.

Along with Indonesia, Canada and Australia will lead growth output rates from until 2021, while major miners in the number one global producer, the Philippines, will benefit from the ousting of anti-mining minister Gina López from government, BMI Research analysts say.

World nickel production is expected to grow by an average 3.4% each year until 2021, the research arm of Fitch Group said in the report. However, production growth rates during the next five years will remain lower than the 5.3% average rates achieved between 2012 and 2016, they said, citing higher nickel prices experienced before the commodities slump as the main reason.

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Some Indonesian nickel smelters cease operations due to falling prices (Reuters U.S. – June 19, 2017)

http://www.reuters.com/

About a dozen newly constructed nickel smelters in Indonesia have stopped operations due to a plunge in nickel prices while others are operating at a loss, an industry association executive said on Monday.

Thirteen smelters with a combined capacity of 750,000 tonnes of nickel pig iron a year “were forced to cease operation” because nickel prices reached as low as around $8,000 a tonne, Jonatan Handojo, deputy chairman of the Indonesian Smelter Association told Reuters, declining to name the owners of the smelters.

Three-month nickel touched a one-year low of $8,680 per tonne on the London Metal Exchange last week and is down more than 10 percent so far this year. The metal was trading at $8,975 per tonne on Monday at 0800 GMT.

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China eyes Obor Gold Rush as it seeks to build reserves – by Zi Yang (Asia Times – June 16, 2017)

http://www.atimes.com/

The country’s own deposits may be costly to explore but Chinese mining giants are taking advantage of ‘New Silk Road’ connectivity to explore additional sources as Beijing looks to close the gap on US reserves

China’s demand for investment-grade gold is going up. The first quarter of 2017 saw a 60.2% rise in demand for physical gold bars, compared to 22.4% growth for the year-earlier period.

Recovering from a 14.4% decline during the same period last year, demand for gold jewelry rose just 1.4%, which is to be expected when demand for gold bars and bullion is high. This year, total Chinese gold imports through Hong Kong are set to breach 1,000 tonnes, compared to 771 tonnes imported in 2016.

The rise comes as no surprise. China has long been interested in accumulating gold to diversify its assets and reduce its dependency on the US dollar. In addition, a larger gold reserve strengthens the renminbi as an IMF reserve currency. In a time of economic slowdown, renminbi depreciation and concern over equity and property markets, however, citizens and businesses also view gold as a safe haven investment.

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North Korea is sitting on trillions of dollars of untapped wealth, and its neighbors want in – by Steve Mollman (Quartz.com – June 16, 2017)

https://qz.com/

Few think of North Korea as being a prosperous nation. But it is rich in one regard: mineral resources. Currently North Korea is alarming neighbors with its frequent missile tests, and the US with its attempts to field long-range nuclear missiles that can hit American cities.

A sixth nuclear test could be imminent. An attack on the US or its allies would be suicidal, so Pyongyang probably aims to extract “aid” from the international community in exchange for dismantling some of its weaponry—rewind about 10 years to see the last time it pulled off the old “nuclear blackmail” trick.

But however much North Korea could extract from other nations that way, the result would pale in comparison to the value of its largely untapped underground resources. Below the nation’s mostly mountainous surface are vast mineral reserves, including iron, gold, magnesite, zinc, copper, limestone, molybdenum, graphite, and more—all told about 200 kinds of minerals. Also present are large amounts of rare earth metals, which factories in nearby countries need to make smartphones and other high-tech products.

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Diamond in the bluff: Koh-i-noor stories lose their shine – by Michael Safi (The Guardian – June 14, 2017)

https://www.theguardian.com/

Delhi – It is the best known and most controversial jewel in the Tower of London, but virtually everything known about the Koh-i-noor diamond’s history may be wrong, according to a new book.

Said to be 5,000 years old, and to bear a curse that afflicts any man – but not woman – who wears it, the jewel was surrendered to the East India Company by Duleep Singh, a boy maharajah, in 1849.

India has felt the sting of its removal ever since, with a collection of Bollywood stars and businessmen pressing the UK government in 2015 to return the “stolen” jewel, on the same legal basis as art seized by the Nazis during the second world war.

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Mongolia presidential hopeful urges more state control in mining – by Terrence Edwards (Reuters U.S. – June 8, 2017)

https://www.reuters.com/

ULAANBAATAR – A leading candidate for Mongolia’s presidency has called for greater state control of projects like the giant Oyu Tolgoi copper-gold mine run by Rio Tinto, making mining and foreign investment central issues in the election campaign.

The landlocked North Asian country of three million people goes to the polls on June 26, just a month after securing a $5.5 billion International Monetary Fund-led bailout to lift the economy out of a balance of payments crisis.

Campaigning began on Tuesday, and painful austerity measures agreed by the Mongolian People’s Party (MPP), which runs the government but doesn’t hold the presidency, have made an easy target for rivals, as have controversies over deals done with foreign mining companies.

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Freeport ‘on path’ to new Indonesia mine deal this year, CFO says – by Susan Taylor (Reuters – June 9, 2017)

https://www.reuters.com/

TORONTO – Freeport-McMoRan Inc, the world’s largest publicly traded copper miner, is “on a path” to get a new mining deal with Indonesia this year for its giant Grasberg mine, Chief Financial Officer Kathleen Quirk said on Thursday.

The Arizona-based company resumed copper concentrate exports from Grasberg, the world’s second-biggest copper mine, in April after a 15-week outage related to a government dispute over mining rights. Freeport had planned to ramp up production, which was cut by around two-thirds during the outage.

Freeport shares gained 2.9 percent to $12.06 on Thursday. Jakarta halted Freeport’s copper concentrate exports in January, under new rules that require miners to adopt a special license, pay new taxes and royalties, divest a 51 percent stake in their operations and relinquish arbitration rights.

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