Showing posts with label Coal. Show all posts
Showing posts with label Coal. Show all posts

Wednesday, January 30, 2013

Global outlook is positive for US coal and minerals mining, says NMA CEO

The following points were made today by National Mining Association (NMA) President & CEO Hal Quinn at a press briefing held at NMA's Washington, D.C., headquarters:

"The outlook for U.S. coal and minerals mining in 2013 is positive due to clear improvements in key sectors of the U.S. economy and the global demand for mined products, particularly in developing economies. While we see continued slow growth in the overall U.S. GDP and another slight contraction in Europe, projected increases in domestic new-home construction and automobile sales forecast to reach 15.3 million in 2013 are buoying demand for copper, palladium, molybdenum and other metals that are vital to these sectors. U.S. copper production, alone, is expected to be up by more than 10 percent in 2013, according to mineral commodity specialists at the U.S. Geological Survey (USGS).

"Iron ore production will benefit from infrastructure projects and stimulus spending in China, the world's biggest buyer and the purchaser of 40 percent of worldwide production of all base metals.

"Gold demand is expected to remain relatively strong, according to GFMS and USGS analyses, driven by continued financial uncertainty, central bank purchases of gold to diversify reserve assets and the continuation of current monetary policies here and abroad. At this point, the USGS expects a slight uptick in 2013 U.S. gold production. Silver tends to run in tandem with gold, based on investor demand, but has a variety of industrial applications that will be strong in China, in particular.

"Coal is on track to become the world's primary energy source—surpassing oil—by 2015, according to Wood McKenzie, two years ahead of the International Energy Agency's current estimate. Here at home, coal's contribution to meeting electricity demand will increase by nearly 45 million tons over 2012 levels, and total domestic consumption will rise by 50 million tons due to slight improvements in the U.S. economy; cooler weather; and natural gas prices that are expected to increase by 22 percent, according to the Energy Information Administration (EIA).

"Demand for coal in Europe has increased—particularly in Germany and Britain—in response to higher gas prices. Demand for coal throughout Asia for electricity and steel production contributes to a robust U.S. coal export forecast of 111 million tons in 2013.

"With these improved conditions for coal production and demand in 2013, NMA expects total U.S. coal production to come in at 1.016 billion tons in 2013—slightly more optimistic than EIA's January short-term forecast.

"Longer-term, NMA expects U.S. coal to benefit from recent and planned construction of higher efficiency coal-based power plants with higher output rates and lower emissions. The remaining coal fleet will, on average, be larger, more efficient and run at higher capacity—recovering at least 100 million tons of U.S. coal production lost to retirements of older plants.

"We continue to see improvements in U.S. mine safety and health. We finished 2012 with the second safest year on record for mine fatalities. Nonetheless, we are well short of our goal of eliminating fatalities and reducing our injury rate by 50 percent by 2015. We believe NMA's CORESafety® safety and health management system gives our operations and the people who work there the tools to reach that goal.

"Public policy challenges continue to limit the potential of U.S. mining to provide reliable materials and affordable energy vital to our economy and way of life. Inefficient and unpredictable permitting processes thwart investments that provide high-paying jobs and added value throughout the chain of production. Regulations that needlessly limit our energy options by halting the construction in the U.S. of new advanced coal plants that can serve as the platforms for cleaner coal technologies worldwide are a failure of ambition and policy. If the U.S. wants to compete with the world's fastest growing economies and remain in the forefront of technological innovations, we must address these critical shortcomings."

Note: NMA's outlook for the U.S. and global economy is drawn from a variety of economic forecasts, including the International Monetary Fund's forecasts of last week. Similarly, NMA's outlook for metals demand and U.S. production relies on a variety of public forecasts, mineral commodity specialists at the U.S. Geological Survey and leading U.S. and international producers. NMA's coal outlook is developed annually by NMA's Economics Committee and is reviewed and updated every six months.

The National Mining Association (NMA) is the voice of the American mining industry in Washington, D.C. Membership includes more than 325 corporations involved in all aspects of coal and solid minerals production including coal, metal and industrial mineral producers, mineral processors, equipment manufacturers, state mining associations, bulk transporters, engineering firms, consultants, financial institutions and other companies that supply goods and services to the mining industry.

Wednesday, December 19, 2012

Coal to rival oil as dominant energy source by 2017: IEA

Coal will nearly overtake oil as the dominant energy source by 2017, and only a drop in world gas prices could curb the use of the dirtier fossil fuel in the absence of high carbon prices, the International Energy Agency said.

China will use more coal than the rest of the world put together, while India will overtake the United States as the world's second-largest consumer and become the biggest global importer, the Paris-based IEA forecast in its annual Medium-Term Coal Market Report, released on Tuesday.

"Coal's share of the global energy mix continues to grow each year, and if no changes are made to current policies, coal will catch oil within a decade,' IEA Executive Director Maria van der Hoeven said in a statement.

The IEA, the energy agency for developed countries, said earlier this year that without a major shift away from coal, average global temperatures could rise by 6 degrees Celsius by 2050, leading to devastating climate change.

The world will burn around 1.2-billion more tonnes of coal per year by 2017 than it does today, which equals the current coal consumption of Russia and the United States combined, the IEA chief said.

Global coal consumption is likely to reach 4.32-billion tons of oil equivalent by 2017, compared with 4.4-billion tons of oil equivalent for oil, although the pace of growth is likely to be slower than over the past decade, the IEA forecast.

The report said that as long as carbon prices are low, only strong competition from low-priced gas would be effective in cutting coal demand.

"The US experience suggests that a more efficient gas market, marked by flexible pricing and fueled by indigenous unconventional resources that are produced sustainably, can reduce coal use, car emissions and consumers' electricity bills, without harming energy security," van der Hoeven said.

"Europe, China and other regions should take note," she added, referring to a boom in shale gas that has cut gas prices paid by US utilities by around half of 2008 levels and prompted a major switch away from coal.

Edited by: Reuters

Sunday, December 9, 2012

Coal prices to rise on increased Chinese, US demand - Deutsche

Rising coal prices are restoring profitability to high-cost Australian mines that were making a loss due to an oversupplied global market earlier this year, and prices are set to rise further in 2013, Deutsche Bank said on Friday.

Healthy coal exports from major producers such as Australia, Indonesia, South Africa and Colombia have been met with poor demand in key markets such as Europe and China.

This caused a decline in coal prices this year that led expensive mines to produce at a loss, but prices have been recovering since the end of the summer.

"The rise in spot prices since October will have restored profitability to marginal Australian mines, relieving the pressure on producers to moderate short-term volumes, and improving the outlook for the March contract negotiation," Deutsche Bank said in a research note.

European physical spot coal prices dropped from around $130/t at the beginning of 2011 to below $83/t last October, but prices have picked up to over $90/t since then.

"According to our estimates, the rise in prices since late October has restored profitability to as much as 42-million tons of Australian export thermal coal production, and seven-million tons of Russian export thermal coal production," the bank said.

Deutsche Bank said that high Chinese coal inventories and mines returning to production would be headwinds for further price rises in the short-term, but added that it expected coal prices to rise over the course of next year.

"We believe that fundamental drivers will improve over the course of 2013 as US gas prices stabilise at a higher level and Chinese economic activity accelerates towards the trend rate of growth in the second half of the year."

A sharp drop in US gas prices on the back of the North American shale gas production boom has made natural gas more attractive for power generators in the US, leading to American miners to export their coal to European users, adding to an already oversupplied market.

But Deutsche Bank said that higher gas demand in the US would push American gas prices up, leading to a reduction of US coal exports, while Chinese demand for coal imports would rise, further supporting coal prices.

"Therefore, while the outlook in the next month is ambiguous, the second half of 2013 provides clearer signals for an improvement in thermal coal fundamentals next year," the bank said.

Edited by: Creamer Media Reporter

Wednesday, December 5, 2012

Derailment to impact on Whitehaven exports

Coal miner Whitehaven said on Wednesday that the recent train derailment near Boggabri, in New South Wales, would impact on its plans to export coal from the port of Newcastle.

The derailment interrupted train movements between Whitehaven’s Narrabri mine and Newcastle.

While investigation and clean-up crews have been on site since the incident last week, Whitehaven had been informed that track damage caused by the derailment was unlikely to be restored within the next 12 to 15 days, and track operator Australian Rail Track Corporation has been unable to forecast a date for the completion of repairs.

Whitehaven said in a statement that while the track closure did not affect its opencut operations or the Gunnedah coal handing and preparation plant (CHPP), it did preclude rail transport from the Narrabri underground mine to the port of Newcastle.

“Like all rail users affected by the track closure, Whitehaven is reviewing all options available to minimise the impact of the closure on its operations,” said MD Tony Haggarty.

He noted that the options included seeking approval for temporary trucking from Narrabri to the rail load out at Gunnedah.

“We do not currently have approval to truck coal from the Narrabri mine, even in special circumstances, and any approval to do so will need to be managed through the New South Wales state government process and local government, and will include traffic and other assessments.”

Haggarty said that trucking was only being considered as an interim measure, and any approval would be short term.

“We do not have capacity at the Gunnedah CHPP to handle all Narrabri coal, however, short-term trucking would reduce the impact of the rail closure and allow production at the Narrabri mine to continue while the track repairs are completed.”

He added that other actions, including the rescheduling of required longwall maintenance at Narrabri, the reconfiguration of stockpile facilities, maximizing coal deliveries from the opencut operations and optimising shipping schedules were also be put into place.

Edited by: Mariaan Webb

Tuesday, December 4, 2012

India's Adani to begin coal mining in Australia by 2016

India's Adani Group announced the company has completed its exploration in Australia and says they will beging mining by 2016.

The company's Carmichael mine is located in the Galilee basin in Queensland, Australia.

The company is positive that miningwill begin in 2015-2016 and will reach its peak at approximately 60 million tonnes a year by 2022.

The Carmichael mine is estimated to hold approximately 10 billion tons of coal and could be the larges coal deposit in the world.

The company said in a press release "Our partnership with Australia and Queensland has been one of exceptional trust, transparency and understanding. Having seen the speed, and with the support received to undertake and complete the largest and most ambitious mining exploration programme in record time, I am now certain that Queensland has been the right choice. Australian industry and the Indian corporates like the Adani Group have some distinctive synergies, which will prove to be of mutual benefit to all in the long run,"

Chile approves Endesa 740 MW coal-powered project

A Chilean ministerial group has lifted a suspension on energy firm Endesa's 740 MW Punta Alcalde coal-fired thermoelectric project, the company said on Monday, in a boon for miners in the mineral-rich north of the world's No 1 copper-producing nation.     

An environmental commission in June blocked Endesa's  $1.4-billion complex, citing the project's potential to cause water and air pollution.     

Government sources were not available to comment on Endesa's statement or explain why the suspension had been lifted.   

Environmental groups are increasingly opposing power projects ranging from coal-fired thermoelectric plants in Chile's northern Atacama, the world's driest desert, to hydropower dams in the pristine Patagonia region.      

"With the aim of canceling emissions of material particles, Endesa Chile will be the first electrical company in Latin America to use domes to cover the two fields that will be used for the stockpiling of coal in Punta Alcalde," Endesa said in a statement.     

Once in operation, the project will have the capacity to supply around 12% of energy demanded in Chile's central energy grid.     

Chile's power grid has a capacity of 17 000 MW. The government aims to add another 8 000 MW by 2020.     

The ministerial committee, made up of six ministries, meets to review appeals against environment-related decisions. Chile's energy, environmental and economy ministries were not available for comment.     

Marine conservation group Oceana has decried Punta Alcalde, saying the project will saturate the coastal area of Huasco, already home to thermoelectric plant Guacolda and a factory belonging to steelmaker CAP.   

"This is a completely arbitrary decision, tainted by pressure from the mining sector," said Oceana's executive director Alex Munoz. "We're waiting for further details to figure out how to follow up in court or via other paths."      

The two 370 MW units are planned in Chile's Atacama region, close to Antofagasta Minerals' Los Pelambres mine, Barrick Gold's Pascua Lama and Lumina Copper's Caserones mine, among others. Several energy and mining projects in the Atacama region are reeling from legal setbacks.    

Chile's energy and mining sector is putting pressure on conservative businessman and president Sebastian Pinera's administration to clarify regulatory rules surrounding mega projects. During the annual mining council dinner late last month, Pinera said "we need ... to face the topic of increasing lawsuits against approvals given to projects that this country needs ... We need to urgently advance in materialising energy investment."    

The Andean country is banking on attracting $100-billion in mining investment and boosting annual copper output by more than 30% to over seven-million tons by 2020, but many analysts and even miners themselves have called into question the investment aim.     

Shares in Endesa rose 0.9% on Monday, outpacing a 0.45% increase on Santiago's blue-chip IPSA stock index.

Edited by: Creamer Media Reporter

Wednesday, November 28, 2012

India's coal import bill heading for the sky

India’s coal import bill was standing at $29-billion as the country imported some 245-million tons of coal over the past three years, India’s junior Coal Minister Pratik Prakashbapu Patil said before the Indian Parliament on Tuesday.

However, quick calculations by analysts indicated that India’s annual bill would skyrocket to $18-billion a year by 2017, based on an import requirement of 185-million tons a year and at current international coal prices and a 5% growth in domestic production.

Giving details on imports over the last three years, the junior minister said that in 2009/10 import were 73.2-million tons, valued at $7.06- billion, with 68.91-million tons imported in 2010/11, valued at $7.49- billion, and 102.8-million imported during 2011/12, valued at $14.21-billion.

The analysis pointed out that the forecast increase in the coal import bill should be viewed against India’s worsening current account deficit (CAD), so far majorly attributed by the government and Reserve Bank of India (RBI) to rising oil prices and sustained rise in gold imports.

According to a recent statement by the chairperson of Prime Minister’s Economic Advisory Council, C Rangarajan, India’s CAD rose to $ 78.2-billion or 4.2% of gross domestic product in 2011/12 on the back of increased imports of gold and oil. Gold imports during 2011/12 stood at $62-billion, accounting for over 80% of the CAD, according to government data.

So far the government was seized by trade imbalances caused by gold imports boosting the trade deficit, which in turn increased the CAD and a fallout in the form of a steadily-weakening Indian currency.

However, little attention has been paid to the macro-economic impact of the rising import dependency of the country’s energy security as indicated by a predicted spurt in coal imports, analysts said.

Back-of-envelope calculations revealed that the coal import bill by 2017 would account for 23% of the CAD, as it stands today.  According to Rangarajan, capital inflows into India would be insufficient to cover the CAD.

The trade deficit was at an all time high of $21-billion in October, up from $18-billion in September, resulting from weak exports which has been declining for the past six consecutive months to a negative 1.6% in October, year-on-year.

Viewed against a 40% increase in oil import bill, which stood at $140-billion in 2011/12, India’s increasing import-linked energy security as reflected by cost of imported coal would be a near term macro-economic negative, according to analysts.

Edited by: Esmarie Swanepoel

Sunday, November 18, 2012

Colombian coal production falls 8% in Q3 vs year ago

Colombian coal production fell 8% in the third quarter to 21-million tons versus the same period last year as labor disputes cut output in the world's fourth-largest coal exporter, according to data from the mining regulator.

Strikes at a key coal railway serving some of the country's top producers and at a large mine have had a negative impact on output in Latin America's top exporter of the material.

Drummond, the country's second-biggest exporter, saw production increase a paltry 1.7% in the quarter to around six-million tons versus a year before. Output fell 8.5% versus the second quarter this year.

Glencore-owned mines saw output drop 21% due to a three-month-long strike at La Jagua coal mine. La Jagua's is the highest-quality coal produced in Colombia and the mine's production plunged 92% in the third quarter.

Compared with the second quarter of 2012, total output from the mines fell nearly 19%.

The walkout to demand higher wages and better working conditions started on July 19 and became one of the longest labour strikes in the sector's recent history, ending in late October.

Drummond and Glencore's Prodeco unit are shareholders in the Fenoco railway whose workers went on strike for more than a month in July to August.

In the July-to-September period, coal production at Colombia's largest exporter, Cerrejon, fell about 2% to 8.7-million tons versus the same period in 2011, regulator data showed. It decreased around 7% versus the second quarter.

The Andean nation's thermal coal sector is dominated by major producers such as Glencore, Drummond and Cerrejon, which is jointly owned by BHP Billiton, Anglo American and Xstrata.

Labour strife has forced the government to lower its production goal to 93-million tons for 2012 from a previous target of 97-million tons. Colombia produced 85.8-million tons last year.

Colombia's mining industry has also faced increased attacks by Revolutionary Armed Forces of Colombia (FARC) rebels this year despite Bogota sending thousands of additional troops to protect the sector.

The government and FARC guerrillas have started a peace process aimed at finding a negotiated end to the five-decade-old conflict. At the start of talks, rebels called for foreign oil and mining interests to leave the country.

Edited by: Creamer Media Reporter

Friday, November 9, 2012

Canada’s coal industry contributed $5.2bn to GDP in 2011 - PwC

Canada’s coal mining industry had contributed about $5.2-billion to the country’s gross domestic product (GDP) in 2011, a report by PricewaterhouseCoopers (PwC) had found.

The report, commissioned by the Coal Association of Canada, revealed that coal production in Canada delivered more economic and social benefits than expected, and included $3.2-billion in direct impacts and $2-billion of indirect impacts. The industry was also a positive contributor to Canada’s trade balance and benefited employment and communities.

Canada’s coal sector has experienced strong revenue growth and capital investment in recent years, and increased demand for metallurgical coal in emerging Asian economies, coupled with rising energy prices, had resulted in revenue growing at a yearly average rate of 15% between 2001 and 2010.

Capital investment rose yearly by almost 20% on average during the same timeframe.

“PwC’s research showed coal consumption in developed countries has remained stable over the last decade, but coal consumption in emerging economies has doubled and is trending upwards. If these consumption trends continue, we expect coal prices to continue above historic levels,” PwC director of economics and statistics and report author Janice Plumstead said in a statement.
Along with a contribution to Canada’s GDP and export trade, the report found the coal industry benefited Canadians through employment. Over 42 000 people were directly and indirectly employed in the coal industry. This included those who work in mine production, construction, exploration, transportation and reclamation activities as well as those who supplied goods and services to the industry.

Since 2004, employment in the coal sector had been steadily increasing and accounted for 14% of total mining employment. Average coal industry salaries were more than double the average national wage. From 2001 to 2010, salaries in the mining industry increased by 37%.

Along with employment, Canadians directly benefited from the coal industry through the royalties coal companies pay to governments. In addition to royalties exceeding $300-million a year, additional economic impacts on government revenues in 2011 were estimated at $698-million, which was available to fund public infrastructure, such as roads, hospitals, schools and government programmes, which have the potential to enrich the lives of Canadians.

The report found Canada had about 6.6-billion tons of recoverable coal reserves as at 2009, which was the latest year complete information was available for. These reserves are mainly located in British Columbia, Alberta, Saskatchewan and Nova Scotia.

The reserves comprised about 53% of bituminous coal and 47% subbituminous and lignite coal. The report found the country had recoverable coal reserves to support about another hundred years of future production and PwC said Canada’s coal potential could be even larger with a broader measure of coal resources in place estimated at 190-billion tons.

Canada produces about 60-million tons of metallurgical and thermal coal a year, the value of which reached $7-billion in 2011. Alberta produced about 30-million tons of coal in 2010, followed by BC with 27-million tons and Saskatchewan with almost ten-million tons.

The sales value of exported metallurgical coal was found to have totalled $8-billion in 2011, representing almost 40% of coal produced in Canada.

“Coal has always played an important role in contributing to Canada’s economic strength, however, this report helps to confirm the profound impacts the coal industry has on our economy and our communities through employment, taxes and royalties to governments and regional expenditures,” Coal Association of Canada president Ann Marie Hann said.

Edited by: Creamer Media Reporter

Monday, October 22, 2012

Colombia cuts 2012 coal output goal on labour strife - official

Colombia has lowered its coal production target for this year by 4% due to a nearly month-long strike at the country's main railway and low prices for metallurgical coal, a senior mining official said.

The coal sector in Colombia, the world's fourth-largest exporter of the material, has hit historic highs in both investment and production in the last few years on better security and fiscal terms.

But labour strife has forced the Andean nation to lower its production goal to 93-million tons in 2012 from a previous target of 97 million tonnes, said Henry Medina, deputy mining minister. Colombia produced 85.8-million tons last year.

"There's going to be a very good increase but not what was planned due specifically to the stoppages that happened in Drummond, Prodeco and Fenoco. That's going to reduce output," Medina told journalists Thursday evening at a conference in Cartagena.

Workers at Colombia's main railway, Fenoco, went on strike earlier this year for 25 days, paralysing exports from Colombia's main coal-producing province of Cesar.

Fenoco transports coal for Drummond International , Goldman Sachs affiliates and Glencore International's Prodeco unit.

"The other impact was the price of coal this year, mainly metallurgical. It's been low and that is affecting coal production in the country," Medina said.

Metallurgical coal prices have plummeted this year as the global steel industry grapples with weak demand and falling prices. Metallurgical coal is used to make steel.

Hundreds of thousands of tons of Colombian metallurgical and pulverised coal have not made it to the market due to l ow prices, high production costs and the firming peso currency as producers scramble to sell cargoes, industry sources say.

While the Fenoco walkout ended after the company scored victories against the workers in court, another strike at Prodeco's La Jagua mine has dragged on for about three months.

After failing to come to an agreement, union officials said they are only waiting for the labor ministry to request the two sides go to an arbitration tribunal and lift the walkout.

The Andean nation's thermal coal sector is dominated by major producers such as Glencore, Drummond and Cerrejon, which is jointly owned by BHP Billiton, Anglo American and Xstrata.

The metallurgical sector, however, is made up of small miners in central provinces that sell to larger companies for export.

This year, Colombia's mining industry has also faced increased attacks by Revolutionary Armed Forces of Colombia (FARC) rebels despite Bogota sending thousands of additional troops to protect the sector.

The government and FARC guerrillas started a peace process this week aimed at finding a negotiated end to the five-decade-old conflict, but in the first sign of discord, rebel leader Ivan Marquez slammed foreign oil and mining interests.

The bearded and bespectacled Marquez specifically called for production halts at Cerrejon and Drummond, the country's two top coal exporters.

Colombian President Juan Manuel Santos' administration has ruled out talking about foreign investment in the negotiations.

Edited by: Creamer Media Reporter

Tuesday, October 16, 2012

Forbes Coal reports higher Q2 production

By: Megan Wait

Canada-based Forbes & Manhattan Coal on Tuesday reported a 5% increase in its saleable coal production for the second quarter of 2013, as a result of higher run-of-mine (ROM) output.

Forbes increased its saleable coal output to 256 583 t, from 244 605 t it produced in the first quarter.

However, its ROM production of 414 511 t was still under its target of 436 910 t for the quarter as a result of difficult geology, overloading of the underground conveyor system, interruptions in the power supply and high target tonnages for a stone section in its Magdalena mine, in South Africa.

The company also reported an 11% growth in consolidated earnings before interest, depreciation and amortisation, which increased from $C2.45-million in the first quarter to C$2.72-million, while its revenue increased by 12% quarter-on-quarter to C$23.39-million.

“On the back of these strong set of results in a challenging coal market environment and with the recent announcement of the Zululand Anthracite Colliery acquisition from Riversdale, we believe that the company is going from strength to strength in terms of both performance and achieving its growth strategy,” CEO Stephan Theron said.

He added that strong operations continued to support the financial position of the company‚ with continued increased production at both Magdalena and Aviemore. At Aviemore in particular‚ production levels indicated record ROM and saleable tons.

The group’s gross profit for the quarter ended August amounted to C$2.35-million, compared with C$1.81-million the previous quarter. Further, Forbes Coal reported that its operating expenses had increased to C$18.3-million, or C$63.95/t, for the quarter, up from C$16.2-million.

The company also implemented a reconstitution of its board of directors on Tuesday, following discussions between the company and one of its major shareholders, Resource Capital Fund.

Forbes Coal's board would now include Theron, Stan Bharti, Bernard Wilson, Ryan Bennett, Mike Price, John Dreyer and Craig Wiggill.

David Stein, David Gower and Grant Davey have resigned their board positions effective immediately.

Edited by: Mariaan Webb

Wednesday, September 19, 2012

China displays continued appetite for Australian minerals with Western Desert bid

China's Meijin Energy Group has launched a USD$457 million bid for Australia's Western Desert Resources (ASX:WDR).

"This offer from a major Chinese corporation represents excellent value for shareholders" said Western Desert chairman Rick Allert in a statement.

The bid of AUD$1.08 per share at a 26% premium to Western's last closing price demonstrates that the Asian economic giant still retains considerable appetite for minerals despite recent signs to the contrary.

The Australian branch chief for China's biggest bank announced earlier this week that it would be winding down lending to Australia's resource sector in anticipation of troubled times for miners.

Speculation has also been rife in the Australian media of late that the peak period for the resources sector has passed, triggered by resource minister Martin Ferguson's impromptu announcement of the end of the mining boom in an ABC interview at the end of August.

Western Desert is a diversified miner with interests encompassing iron ore, gold, base metals and uranium. It has 321.1 million outstanding shares and is due to issue a further 19.6 million share as part of a rights offer, which alongside 61.5 million in unlisted options brings total outstanding shares to 402.23 million.

Shenzhen-listed Meijin Energy is based in the inland Chinese coal cradle of Shanxi province, and engages in coal mining, coke production and steel making.

Meijin has already made inroads into the Australia resource industry with a 4.2 billion tonne coal project in Queensland's Galilee basin.

Thursday, September 13, 2012

BHP silent on report of 24% cut in coking coal prices to Japan

Top global coking coal exporter BHP Billiton declined on Thursday to comment on a report that it has agreed to a 24% cut in coking coal prices to Japanese steelmakers for October to December.

The reported 24% cut matches the steep fall in spot coking coal prices, which have slumped to around $165 a tonne for the key steel-making fuel, amid an unexpected slowdown in demand from China and weaker steel output around the region.

Japan's Nikkei reported on Wednesday that Japanese steelmakers and BHP had agreed to set prices at $170 a ton for the December quarter, which the newspaper said was the lowest level since the quarterly pricing system was adopted two years ago.

BHP said it never comments on what it called price speculation.

Source: Reuters

Tuesday, September 4, 2012

China coal under more pressure as demand falters

China's coal prices, already near a two-year low, are likely to fall further as industrial demand growth slows and imports add to pressure on domestic stocks, industry officials said on Tuesday.

Benchmark prices in China, the world's top producer and importer of the fuel, have been lolling at two-year lows of 626 yuan ($98.50) a ton since end-July amid a global supply glut.

Hou Wenjin, a coal industry official with the Shanxi government, the country's second-biggest coal producing region, predicted China's 2012 imports could top 200-million tons as coastal utilities lock in cheaper foreign supplies.

"Overall inventories, at over 80-million tons, are still much higher than normal levels, so I don't think there will big demand even for winter restocking," he said.

Imports of more than 200-million tons would compare with 2011 imports of 182.4-million tons. January-July imports totalled 133-million tons, a rise of 51.8% over a year earlier, customs data shows.

China produced 3.52-billion tons of coal in 2011 and has set a target of 3.65-billion tons this year. Officials spoke an industry conference on Tuesday.

Chen Ze, deputy director with the coal industry department of the government of Inner Mongolia, China's biggest coal producing region, said demand growth from key industrial users such as those in the steel and cement sectors would "most likely slow".

A slump in the Chinese steel sector has also put coking coal prices under pressure, and this will have knock-on effects for coal as a whole, said Dong Yueying, secretary general of the China Coal Transportation and Distribution Association.

"Falling prices means it is no longer economical for mines to wash the coal to get higher specifications. So more mines will sell into thermal markets," he said.

Chen of the Inner Mongolian government said he expected a "flood of imports" to compound the oversupply problems on the Chinese market.

"We expect to see strong exports from the United States due to the shale gas boom, and also increased shipments from Australia, Indonesia, Columbia and South Africa because demand in Europe is poor so everyone will try to move their coal to China," he said.

"We may see supply growth surpassing demand over the coming months as China's economy cools."

Source: Reuters

Chalco drops $926m offer for Mongolia coal miner

Chalco has dropped its $926-million offer for a majority stake in Mongolia-focused coal miner SouthGobi Resources in the face of stiff political opposition.

The State-controlled Chinese aluminium giant's April bid triggered a sharp backlash in Mongolia, which in May passed a law limiting foreign ownership to 49% for companies in strategic sectors including mining.

Turquoise Hill Resources, which owns a 58% stake in SouthGobi, said in a statement on Monday that there was "minimal prospect of obtaining the necessary regulatory approvals within an acceptable timeframe".

Shares of SouthGobi, which owns large coal projects in Mongolia close to the Chinese border, have wilted since April as the C$8.48 per share bid by state-controlled Aluminum Corporation of China, or Chalco, ran into opposition from the Mongolian government.

The firm's Hong Kong-listed shares slumped 5.57% on Monday ahead of the widely-expected announcement to close at HK$20.35. The Toronto listed shares last traded at C$2.69.

"This is good news for both Chalco and SouthGobi," said Helen Lau, analyst at UOB Kay Hian,

"For Chalco it wouldn't need to pay such a high premium for SouthGobi shares and for SouthGobi now the political risk has been removed and that probably will see the company returning to normal production and sales."


SouthGobi's second-quarter profit plunged after Mongolia suspended its mining licence following Chalco's bid.

Operations at its flagship Ovoot Tolgoi mine in the south of the country had been "fully curtailed" since June 30 and were not expected to resume in the third quarter, SouthGobi said last month.

The proposed deal had the backing of Turquoise Hill, but Mongolia is becoming wary about the growing Chinese presence in its mining sector.

The former Soviet satellite, landlocked between China and Russia, passed a controversial law in May aimed at capping foreign ownership in the mining, finance, media and telecommunications sectors

Bids above $75-million or involving state-owned firms like Chalco that aim for majority control are subject to scrutiny by a government panel.

Chalco has been investing in coal, iron ore and electricity projects as the profit margin for its core aluminium business shrinks.

Edited by: Reuters

Thursday, August 30, 2012

New Continental mine to start producing in October

South African thermal coal producer Continental Coal on Thursday said that it remained on budget to start first production from Penumbra thermal coal mine, in Mpumalanga, with about one-third of the budget spent to date.

“The project is now 48.4% complete with a total forecast cost to complete of R329-million,” the ASX- and Aim-listed company said in a statement.

The current forecast is that the project will be completed with a R0.8-million cost overrun, mainly owing to geological conditions and higher tender prices; however it is fully funded from the company's existing cash resources.

First coal production is still forecast for end October, with a ramp-up to full production scheduled for June 30, 2013. The mine is set to produce 750 000 t/y of run-of-mine (RoM) coal beneficiated through a 1.8-million-ton-a-year coal processing plant at the Delta processing operations, as well as a 1.2-million-ton-a-year Anthra rail siding.

The Penumbra mine would be the company's third thermal coal mining operation in South Africa.

Meanwhile, the company reported that total run-of-mine production during July, for its Vlakvarkfontein and Ferreira thermal coal mining operations, was 175 783 t, a 2% increase on the average monthly ROM coal production achieved during the previous quarter.

Total thermal coal sales of 142 135 t for the month was a 1% increase on average monthly sales of 140 347 t achieved in the previous quarter.

The Vlakvarkfontein coal mine achieved RoM coal production of 138 068 t during July, representing a 16% increase on the average monthly RoM coal production achieved during the previous quarter.

Meanwhile, the Ferreira mine achieved RoM coal production of 37 715 t during July, 11% above budgeted production levels.

Edited by: Mariaan Webb

Vale sees 2012 Mozambique coal output at 4.6m tons

Brazil's Vale plans to produce 4.6-million tonnes of coal at its Moatize mine in Mozambique this year as it ramps up production to supply growing demand from Asia, a senior company official said on Thursday.

Vale began producing coal at Moatize last year, with first exports leaving Mozambique in September, and is investing heavily to increase the mine's capacity to 11-million tons by 2014 and to 22-million tons by 2017.

"Our production is still constrained by the limited capacity at the Beira port and the Sena railway line," Ricardo Saad, a director at Vale Mozambique, told reporters.

"We have a lot of production stockpiled at the mine and we hope that when the refurbishment of the Sena line is completed, we can begin to accelerate our production capacity."

The miner is also investing $4.5-billion to rehabilitate another railway line and the northern port of Nacala to carry coal from the mine, partially passing via Malawi.

The line will transport 30-million tons of coal when completed from mines operated by Vale and other producers.

Source: Reuters

Sunday, August 26, 2012

Indonesia miners cut 2012 thermal coal output forecast

Thermal coal output in Indonesia could be steady this year with 2011, at around 360 million tonnes, an industry group said on Tuesday, cutting its forecast as a global oversupply puts pressure on the industry.

"We see we may not reach our target of 390 million to 400 million tonnes, and the chances are it will be the same as last year," Supriatna Suhala, executive director of the Indonesian Coal Mining Association, told Reuters.

Indonesia is the top supplier of thermal coal to China, its main market, but a slowdown in the Chinese economy coupled with increasing output from Chinese hydropower stations has led to declining demand for power station fuel from the world's second-largest economy.

Chinese traders scrapped import deals for at least 2 million tonnes of coal in July, with coal stockpiles already full at Chinese ports and cargoes waiting to offload.

"I hear that a lot of coal has been rejected. They have requested delaying shipments. There are also many cases where they cannot offload because ports are already full," Suhala said, adding that smaller operations with high stripping ratios had been forced to close because operations were no longer profitable.

"If prices go below $70 per tonne, companies with stripping ratios above 10 begin to get hit. Still, we are in a better position than Australia or South Africa," he said, explaining that Indonesian coal mines benefited from being close to cheap river transport and seaports. "That's our competitive advantage."

The excess supply has also hammered thermal coal prices in recent months. Australian thermal coal on the globalCOAL Newcastle index, the benchmark for Asian coal, closed at $88.41 on Friday, after prices plummeted from above $125 tonne in the first quarter of 2011.

"The biggest problem is oversupply, because the United States has started pouring their production into East Asia, to Japan, Korea and Taiwan. And also Canada has started exporting," Suhala said.

Source: Reuters

Friday, August 17, 2012

China imports 2.1Mt of SA coal in July – exporters

China's imports of South African thermal coal rose to 2.1-million tons in July, nearly 35% of total shipments of 6.3-million tons, exporters said.

Despite widespread defaults by Chinese trading firms and end-users, China's coal imports have remained strong during the past several months .

"It was a big import month for China," one exporter said.

China's record thermal and metallurgical coal imports in the first half of this year were not enough to prevent thermal coal prices from dropping to two-year lows in June or the slump in metallurgical coal which began last month, suppliers said.

China imported 140-million tons of all types of coal in the first half, a 65 percent rise on year-ago levels.

Indian spot demand has been steady but given the lack of buying in Europe, if China had not taken increasing volumes from South Africa, the Richards Bay FOB benchmark price would be sharply lower than current levels of around $88-$90, traders said.

India, which has been the biggest importing country of South African coal for several years, took 1.7 million tonnes in July, little changed from 1.6-million in the previous month.

Asia, including India, accounted for five-million tons of exports.

The Atlantic had for decades until 2006 been the largest, key market for South African producers but its share has been shrinking annually, displaced by cheaper coal from Colombia and the United States.

The Atlantic market's share rose to 1.3-million tons from 830 000 t in June.

Source: Reuters

Monday, July 23, 2012

Colombia to offer gold, coal and copper rights next year

The country aims to draw more spending from investors such as Brazilian billionaire Eike Batista with auctions that may lead to producing mines by 2020, Mines and Energy Minister Mauricio Cardenas says.

Colombia expects to auction gold, coal and copper reserves for the first time next year to draw investment in energy and metals deposits stretching from the nation's Pacific coast to the Amazon jungle.

Rights to explore for coltan, used in mobile phones, uranium and platinum won't be part of next year's auction, Mines and Energy Minister Mauricio Cardenas said yesterday in an interview in central Colombia.

"We're not going to offer all of them at the same time," he said. "We will just take the areas where we have the best geological information."

Colombia aims to draw more spending from investors such as Brazilian billionaire Eike Batista with auctions that may lead to producing mines by 2020, Cardenas said. Investment in mining has lagged spending on oil production that helped push foreign direct investment in Colombia to a record $13.2 billion in 2011.

Next year's auction will include areas where the government has more data on reserves, such as the Andean mountains, Cardenas said. Colombia hasn't set the number of blocks it will offer.

Colombian President Juan Manuel Santos said this week that the government has put aside 20.5 million hectares (50.7 million acres) where new mining rights will be restricted to companies winning at auction.

There is less information available about potential mining reserves than for oil deposits, where auctions helped increase investment, said Gabriel Bayona, an analyst at Interbolsa SA, Colombia's largest brokerage.

‘Lack of Knowledge'

"There's a lack of knowledge about the areas," Bayona said today by phone from Medellin. "The plan perhaps is too ambitious."

Concern about global economic growth also may cool demand for new projects, he said.

Colombia will still award mining rights without auctions outside of the areas set aside by the government.

Colombia is the largest coal supplier in South America, exporting the fuel from mines owned by companies including Drummond Co., Anglo American Plc (AAL), Xstrata Plc (XTA) and BHP Billiton Plc. Companies already developing gold projects in Colombia include AngloGold Ashanti Ltd. (ANG) and Batista's AUX Canada Acquisition Inc., which bought control of Ventana Gold Corp. last year to gain gold deposits in Colombia.