Showing posts with label Iron Ore. Show all posts
Showing posts with label Iron Ore. Show all posts

Tuesday, March 12, 2013

Peru’s gold, silver and copper output fall in January 2013—Mining Ministry

Peru’s Ministry of Energy and Mines reported increased production of iron, lead and zinc in the first month of this year.

Author: Dorothy Kosich

Peru’s Ministry of Energy and Mines reported Monday the country’s gold production plunged 25.12% in January, as total silver production declined 7.27% and total copper output dipped 4.41% during the same period.

However, the ministry also noted that iron ore production was up nearly 13%, while zinc output increased 8.83% and lead was up 6.15% during the first month of this year.

In the first month of this year, Peru’s gold production was 11,762,163 grams (378,162 troy ounces), down from 15,708,384 grams (505,036 troy ounces) in January 2012. Minera Yanacocha reported a 25% decrease in gold production in January 2013.

The country’s silver production was 266,981 kilograms (8,583,638 troy ounces) during the first month of the year, 7.27% lower than the 287,918 kilograms (9,256,778 ounces) of silver production reported in January 2012.

Peru’s copper production was reported at 93,469 metric tons in January of this year, a 4.41% drop from the same period of 2012.

The Directorate of Mining Promotion of the ministry’s mining department noted that zinc production in January 2013 was 111,308 metric tons, up 8.83% from 102,280 metric tons of zinc output in January 2012.

Peru’s lead production was 19,837 metric tons in January 2013, a 6.15% increase compared to January 2012 lead output total of 18,689 metric tons.

The ministry reported that the country’s iron ore production for the first month of this year was 589,902 long tons, up 12.91% from 522,433 long tons for January 2012.

Source: Miniweb

Thursday, January 24, 2013

Cliffs Natural to take $1bn impairment for Thompson Iron Mines

Cleveland-based Cliffs Natural Resources on Thursday said it would record a goodwill impairment of $1-billion related the 2011 acquisition of Consolidated Thompson Iron Mines.

The goodwill impairment charge will be recorded as a noncash expense for the year ended December 31, 2012, and is mainly driven by the project's expected lower long-term volumes and higher capital and operating costs.

The delay of the Phase 2 expansion of the Bloom Lake mine, which the company acquired with the Thompson Iron Mines transaction, also contributed to the impairment.

Cliffs also said it expects to incur between $100-million and $150-million of other charges related to its Eastern Canadian iron-ore business segment.

Meanwhile, Cliffs' board recently authorised the sale of the company's 30% interest in Amapa. Based on the pending terms of the sale, Cliffs expects to record a noncash pretax impairment expense of $365-million within its fourth-quarter results.

In the fourth-quarter, Cliffs also expects to record $542-million in noncash valuation allowances related to two of the company's deferred tax assets, namely the Mineral Resources Rent Tax, in Australia and Alternative Minimum Tax in the US, carryforwards.

Lower long-term pricing assumptions and the related impact on profitability and expected future tax payments primarily drives these valuation allowances.

As a result, Cliffs would record these valuation allowances as an expense within the income tax expense line item on its statement of operations.

The company’s stock traded down 1,75% on the NYSE at $36.53 apiece on Thursday morning.

Edited by: Creamer Media Reporter

Thursday, January 10, 2013

China's record iron ore imports boost recovery hopes

Iron ore imports roared to a record high in December and for the full year, boosting hopes that a recovering economy in China will lift its appetite for imports.

Author: Fayen Wong and Ruby Lian

China's imports of iron ore roared to a record high in December and for the full year, while crude imports also climbed, boosting hopes that a recovering economy in the world's top commodities consumer will lift its appetite for imports.

Robust Chinese trade data, which saw December exports trumping expectations to rise 14.1 percent to a seven-month peak, also gave further evidence that a demand recovery was well under way in the world's second-largest economy.

Wednesday, January 9, 2013

Indian companies hunt for iron-ore in Brazil

Stung by the crisis in iron-ore mining at home, the Indian Steel Ministry has initiated bilateral talks with Brazil in an effort to seek ore resources in the Amapá province for Indian companies.

Iron-ore miner, NMDC, steel producer Rashtriya Ispat Nigam Limited (RINL) and MOIL Limited (formerly Manganese Ore India Limited) have started the process of acquiring Brazilian iron-ore assets, an official in the Steel Ministry said.

“Government-to-government bilateral talks have started following the Steel Ministry secretary’s visit to Brazil, last November. Current talks revolve around seeking the Brazilian government’s facilitation in identifying operating iron-ore mines in which the Indian companies could participate as strategic investors,” the official said.

“In fact, in response to inputs provided by the Brazilian government, NMDC has identified two operating reserves in the Amapá province of Brazil and due diligence on them will commence shortly,” the official added.

The focus on Brazilian iron-ore reserves was linked to the Steel Ministry's goading of Indian steel producers to seek raw material assets overseas in the wake of a rising trend of raw material imports and increasing shortages of accessable privately mined iron-ore, the official said.

In the wake of a clampdown on illegal mining and a Supreme Court order closing down iron-ore mines across the provinces of Goa and Karnataka, Indian companies were forced to import nine-million tons of ore during April to October 2012, with imports expected to continue to rise owing to the fact that total production during 2012/13 was not forecast to exceed 72-million tons.

According to Steel Ministry officials, Indian steel producers would have faced the ironic situation of rising ore import dependency despite a domestic resource of 28.52-billion tons, with overseas asset acquisition becoming a medium-term imperative to maintain growth in steel production.

The officials cited the example of RINL, which despite being owned by the government and completing a $2.5-billion investment to ramp up steel making capacity to 6.3-million tons a year from three-million tons a year, had not been allocated iron-ore reserves for captive mining despite submitting several applications over the years.

Edited by: Esmarie Swanepoel

Monday, January 7, 2013

Spot iron ore prices spike to highest in 14 months

Iron ore prices climbed to around $150/ tonne as Chinese mills continue to replenish inventory.

Author: Fayen Wong

Iron ore climbed to its highest in more than a year at around $150 a tonne, with Chinese mills continuing to replenish inventory of the steel-making raw material as recent economic data fuelled hopes of better demand in the new year.

Slower domestic production during the winter and restocking by steel mills and traders ahead of the looming cyclone season in Australia have also bolstered prices, traders said.

The benchmark index for 62-percent grade iron ore <.IO62-CNI=SI> jumped 3.4 percent to $149.80 a tonne on Thursday, a level last seen in October 2011, according to the Steel Index.

Monday, December 31, 2012

Iron ore, steel prices to fall in 2013 - Cochilco

Iron ore prices will fall to an average of US$120/t in 2013 before rising again to US$125/t in 2014, according to a study by Chile's state copper comission Cochilco.

The commission is estimating an average price of US$125/t for this year.

The price of iron ore fell 10% in 2012 due to a series of factors that resulted in a market surplus.

These include the larger than expected slowdown in the Chinese economy, the financial crisis in Europe that reduced demand for products and an increase in output as projects entered into production.

Next year will not be very different and the global surplus will continue into 2014, according to Cochilco.

Demand from China will also remain subdued, rising just 2% in 2013.

In the last five years, China has increased its consumption of iron ore from a 56.5% share in 2008 to 68.8% in October 2012, according to the report.

In 2011 global iron ore production was 2.93Bt, up 4.7% over the previous year. Output is expected to increase in 2012 by 3.5%.

STEEL

HRC steel prices registered a fall of 14% in 2012 and the commission is forecasting an average price of US$651/t for the year.

China is the main consumer absorbing 44% and therefore the slowdown in the Asian country affected demand and consequently prices during the year.

The steel market will continue to be in surplus in 2013, although smaller than in 2012. The market is expected to enter into balance in 2014, according to the report.

Cochilco is forecasting a price of US$693/t for HRC steel to the Asian market in 2013 rising to US$716/t in 2014.

Despite the slowdown in demand from China and India, Cochilco believes that steel consumption in these countries will continue to grow in 2012-14, but at a slower pace than in the past.

Crude steel production in 2011 was 1.49Bt, up 6.2% from 2010. In 2012, production is expected to increase 2.9% to 1.54Bt.

Friday, December 28, 2012

Iron ore up most since 2010 on China hopes

The steel making ingredient is rallying the most in around two years on expectations that China will import a record amount of iron ore in 2013

Author: Phoebe Sideman and Isaac Arnsdorf

Iron ore is rallying the most in about two years as analysts predict that China, the biggest buyer, will import a record amount in 2013 as its accelerating economic growth spurs demand for steel.

Trade to China will climb 6.9 percent to 778 million metric tons in 2013, or 65 percent of all shipments, according to the median of 10 analyst estimates compiled by Bloomberg. Seaborne demand will exceed supply for at least a 10th year, Morgan Stanley data show. Prices will climb as much as 22 percent to $170 a ton by June, according to Justin Smirk of Westpac Banking Corp., who correctly predicted this year’s slump and was the most accurate industrial-metals forecaster tracked by Bloomberg.

Prices tumbled to a three-year low in September as China slowed for seven consecutive quarters, before rallying 56 percent since then on mounting confidence the nation’s growth will accelerate for at least the next six months. The rebound will boost earnings for suppliers and Vale SA, the biggest exporter, is expected to report a 19 percent increase in profit next year, analyst estimates compiled by Bloomberg show.

“We’re confident to stay bullish for now,” said Smirk, the economist at Westpac in Sydney who beat as many as 25 others in predicting metals prices for two consecutive quarters on a rolling two-year basis. “We’re seeing the recovery come through in China. They’ve made a switch to their policy adjustments from being contractionary to be more stimulatory.”

London Dry

Ore at China’s Tianjin port, a global benchmark, was last at $139.40, for an annual gain of 0.6 percent and a fourth- quarter average of $119.88. The Standard & Poor’s GSCI gauge of 24 raw materials gained 0.2 percent and the MSCI All-Country World Index of equities rose 13 percent. Treasuries returned 2 percent, a Bank of America Corp. index shows.

The Tianjin price will average $119 in the first quarter and $122 in the following three months, the medians of 14 analysts’ estimates shows. Investors can trade swaps handled by brokers including SSY Futures Ltd., London Dry Bulk Ltd., GFI Group Inc., Clarkson Plc and Freight Investor Services Ltd. The derivatives market may total as much as 150 million tons this year, from 53 million tons in 2011, The Steel Index Ltd., which publishes the Tianjin price, said last month.

Seaborne trade will climb 6 percent to 1.18 billion tons next year, the same pace as in 2012, says London-based Clarkson, the world’s biggest shipbroker. Morgan Stanley estimates that seaborne demand will exceed supply by 28 million tons next year, extending a run of deficits going back to at least 2004. Global steel output expanded about 50 percent since then, according to MEPS (International) Ltd., an industry consultant.

Lowest Level

Steel production in China, equal to 47 percent of world output in the first 11 months, will expand another 6 percent in 2013, Credit Suisse Group AG estimates. Ore inventories at Chinese ports dropped 19 percent since the end of October to 71.32 million tons, the lowest level in more than two years, according to Beijing Antaike Information Development Co., a state-backed research company. That may spur imports as steel plants restock, says UBS AG.

China’s manufacturing may expand at a faster pace in December, according to a preliminary reading on Dec. 14 by HSBC Holdings Plc and Markit Economics, adding to signs the economy is strengthening as a new leadership takes power. The government has approved projects for the construction of about 2,000 kilometers (1,250 miles) of roads, subways in 18 cities and extra spending on railways.

Steel Association

While China is rebounding, the 17-nation euro area and Japan have slipped back into recessions. They represent a combined 16 percent of global steel output, according to the Brussels-based World Steel Association. Steel production in the 27-nation European Union retreated 5.3 percent in November from a year earlier and in Japan fell 2.3 percent, the WSA estimates.

Demand also may weaken in the U.S., the third-largest steelmaker, should lawmakers fail to reach an agreement on more than $600 billion of tax increases and spending cuts that start automatically next month. The Congressional Budget Office says the lack of an accord risks sending the world’s biggest economy back into a recession. President Barack Obama is due back in Washington from vacation today, according to a White House aide, as Congress returns to continue talks on a budget agreement.

Current ore prices are more than double the average cost of production in Australia and Brazil, the two biggest exporters, and above the $100 that Chinese mining companies pay to extract every ton, according to estimates from Credit Suisse and Australia & New Zealand Banking Group Ltd. That may spur Chinese miners to raise supply, diminishing demand for imports.

Capacity Glut

Rising prices and seaborne trade won’t be enough to return ship owners to profit because of a glut of capacity. Rates for Capesizes, which carry more iron ore than any other class of vessel, slumped 82 percent this year, according to the Baltic Exchange in London, which publishes prices for 61 maritime routes. Earnings will average $12,250 a day in 2013, below the $15,500 that Pareto Securities AS says they need to break even, the mean of nine analyst estimates shows.

Chinese steel production rose 14 percent to 57.47 million tons in November from a year earlier, while the price of reinforcement bars used in construction climbed about 11 percent this month to the highest level since July on the Shanghai Futures Exchange. Ore imports were the second-highest ever in November at 65.78 million tons, customs data show.

Shares of Rio de Janeiro-based Vale rose 8.3 percent this year to 40.97 reais and will gain 20 percent to 49.02 reais in the next 12 months, according to the average of 12 analyst estimates. Net income will climb to 28.92 billion reais ($13.9 billion) next year, from 23.92 billion reais in 2012, the mean of seven analyst predictions shows.

Ore Exports

Profit at Rio Tinto Group, the second-largest exporter, will rise to $10.85 billion from $10.07 billion, according to the mean of 20 analyst estimates. Shares of the London-based company jumped 14 percent to 3,574 pence this year and will reach 3,868 in 12 months, the forecasts show.

Brazil’s ore exports fell 0.9 percent to 294.3 million tons in the first 11 months as rain curbed output, government data show. Vale plans to invest the least in three years in 2013 and will cut production to 306 million tons from 312 million tons this year, the company said Dec. 3.

India’s shipments may slump 25 percent to 38 million tons in 2013, Australia’s Bureau of Resources and Energy Economics said Dec. 12. The state of Goa, which exports more than half the country’s ore, banned all mining in September after a panel said the province lost money because of illegal work.

China’s miners may struggle to make up for any shortage in seaborne supply because they produce ore that contains about 20 percent iron, compared with 62 percent internationally, according to HSBC estimates and data compiled by Bloomberg Industries. Domestic ore output dropped 3.4 percent in the past two months, National Bureau of Statistics data show.

“It’s not a screaming bull year, it’s just a modestly bullish year,” said Tom Price, a commodities analyst at UBS in Sydney. “The next six months will be fairly active and positive for iron ore trade.”

Source:Mineweb

Monday, December 24, 2012

Anglo American says last Minas-Rio injunction lifted

Global miner Anglo American said on Friday an injunction blocking installation of an electricity transmission line at its Minas-Rio iron-ore project, in Brazil has been lifted, clearing the final hurdle for the project.

A Brazilian court removed two injunctions in September, letting the company restart construction at the mine site, which has a capacity of 26.5-million tons a year.

The removal of the final injunction on Friday will allow the company to install a 90 km electricity transmission line.

The project has faced a series of delays and cost overruns since it was bought for $5.5-billion from Brazilian billionaire Eike Batista's MMX Mineracao e Metais in 2008. Criticism of the project soured the relationship between Anglo American's former CE, Cynthia Carroll, who championed the purchase, and leading shareholders. Carroll resigned in October.

The company raised the estimated cost of the Minas Rio project last month, saying it was unlikely to cost less than $8-billion.

Anglo American shares fell 0.48% to 1 855.48p in London.

Edited by: Creamer Media Reporter

Monday, December 10, 2012

Vale eyeing new iron ore distribution center in China

Brazilian mining giant Vale (NYSE: VALE) is looking to build a new iron ore distribution center in mainland China as part of the company's efforts to deliver its products to the Asian country, according to Vale's director of iron ore and strategy, José Carlos Martins.

"There are at least six ports in China capable to receive one of Vale's distribution centers in its area," Martins told the international press during a conference call at the company's annual Vale Day meeting with investors, held in London.

Vale is currently losing US$2.00 to US$3.00 per ton of iron ore shipped to Chine due to the Asian country's restrictions for its very large ore carriers (VLOCs), the executive said.

According to Martins, Vale is waiting for the Chinese government's authorization to allow VLOCs in the country in 2013, adding that "the current situation is not ideal, as we have to transfer the ore to smaller vessels at sea."

In early-February China's transport ministry announced a ruling that restricts port rights to accept many of these vessels, prompting analysts to speculate that Vale would no longer be able to make full use of its VLOCs.

Although Vale has said its Asia shipments will not be affected by the ruling, the company is also reportedly in talks with Chinese authorities to obtain access for its VLOCs at the Asian country's ports.

LOGISTICS

Vale's whole logistics solution, which includes encompassing vessels, floating transfer stations and distribution centers, is expected to be in place in early 2014.

Each vessel is capable of transporting 400,000t of iron ore and could reduce carbon emissions by 35%, according to the company. VLOCs are considered eco-friendly as their fuel consumption and carbon dioxide emissions are smaller than those of conventional ships with around 200,000t capacity, due to the use of more modern equipment.

Vale has stated that the vessels were commissioned at a total cost of US$2.35bn in an effort to lower international freight costs, which had been weighing on margins.

Rio de Janeiro-based Vale is the world's largest iron ore producer and exporter.

Friday, December 7, 2012

Vale to invest US$16.3bn in 2013 -

By Frederico Barbosa 

Brazilian mining giant Vale (NYSE: VALE) announced a capital expenditure budget of US$16.3bn in 2013, lower than the US$17.5bn estimated for 2012 and the US$18bn invested in 2011, amid prospects of a moderate expansion of global demand for minerals and metals over the medium term.

Of the total, US$10.1bn will be used for project execution. In addition, the plan includes US$1.1bn for R&D and US$5.1bn to support existing operations, Vale said in a statement.

Last year Vale had planned a record US$21.4bn investment for 2012 when the market showed strong iron ore demand and the company was accelerating projects.

However, CFO Luciano Siani recently admitted that the company is unlikely to reach its target of US$21.4bn by the end of the year due to a highly volatile market in Q3, which led to lower international prices for the diversified miner's products, mostly in iron ore.

Now, 2011's US$18bn is expected to be the company's investment peak for the foreseeable future.

MAJOR PROJECTS

Among its main projects, Vale's Carajás expansion in Brazil has US$2.1bn earmarked for its iron ore operations, to be included in five different areas.

Also in Brazil, one of Vale's largest investments next year will be in its Carajás S11D (Serra Sul) iron ore project in the southern area of Pará state, with US$658mn earmarked for the development of a mine and a processing plant. Budgeted at US$8.04bn, Serra Sul's start of operations is scheduled for 2H16.

The company's Long Harbor nickel plant in Canada will receive US$1.22bn from Vale in 2013, from a total expected capex of US$4.25bn.

Vale's Moatize coal operation in Mozambique will receive US$344mn for mine expansion and another US$1.08bn for the Nacala corridor project, which includes the construction of a port and a railroad to transport the coal mined.

The Río Colorado potash project in Argentina will see estimated investments of US$611mn in 2013. Río Colorado is expected to begin production in the second half of 2014, with a total investment of US$5.92bn.

STEEL, COPPER, EXPLORATION

Also, in 2013 the company expects to invest US$439mn in the Companhia Siderúrgica do Pecém (CSP) steel plant to be built in Ceará state, where Vale holds a 50% stake and South Korean firms Dongkuk (30%) and Posco (20%) own the remainder.

The company will invest US$401mn in the Salobo II copper project in Marabá, Pará state, which is expected to begin production in the first half of 2014.

The 2013 budget also includes US$382mn to fund the company's exploration program, and US$465mn for conceptual, prefeasibility and feasibility studies.

Vale estimates production of 306Mt of iron ore in 2013, while pellets are expected to reach 43Mt.

Rio de Janeiro-based Vale is the world's largest iron ore producer.

Source: Business News Americas

Iron ore at 2 week high on Chinese demand hopes

Expectations that demand from China will rise ahead of the Lunar New Year break in February, traders are buying up cargoes of the metal.

Iron ore rose to two-week highs, on course to end the week with its biggest gain in more than a month, as traders snapped up forward cargoes hoping demand from top buyer China will perk up ahead of the Lunar New Year break in February.

Higher domestic steel prices are also spurring interest in iron ore, backed by a decline in inventories and optimism that the Chinese economy is on the road to recovery after a seven-quarter slowdown.

Benchmark iron ore with 62 percent iron content <.IO62-CNI=SI> gained 0.4 percent to $118.40 a tonne on Thursday, according to Steel Index, the highest since Nov. 23.

Rising for a third straight day, iron ore is up more than 2percent for the week, its best performance in six weeks.

"People are buying forward cargoes, those arriving from January onwards. The market is looking at mills stocking up for the Chinese New Year in February," said a physical iron ore

trader based in Shanghai.

Price offers for imported iron ore cargoes in China rose by a dollar per tonne on Friday, Chinese consultancy Umetal said.

Chinese steel mills typically boost iron ore inventories ahead of the week-long Lunar New Year break that falls in February next year, and buying usually extends past the holiday.

That anticipated demand spike is accompanied by hopes for China's economy to stay in recovery mode in the early part of 2013.

FALLING STEEL STOCKS

Communist Party chief Xi Jinping, who replaces Hu Jintao as head of state in March, said on Tuesday the government would fine-tune policies to revive the economy.

The most active rebar contract for May delivery on the Shanghai Futures Exchange touched a three-week high of 3,658 yuan ($590) a tonne on Friday.

It closed up 1.7 percent at 3,656 yuan, rising 5.1 percent for the week in its biggest gain since mid-September.

"Steel prices will continue to be supported in anticipation of policy support on the part of the government and low inventories," said Helen Lau, a senior commodity analyst at UOB-Kay Hian in Hong Kong.

Beijing's stronger efforts to consolidate legions of steelmakers may help the sector finally deal with the overcapacity that consistently eats into steelmakers' margins.

Falling steel product inventories also point to firm consumption in China, said Lau. She expects China's steel demand to grow about 4 percent to 710 million tonnes in 2013 from a forecast rise this year of 5 percent to 681 million tonnes.

Chinese traders' inventory of five major steel products, including rebar and flat products, dropped to 12 million tonnes by the end of November from a February peak of 19 million, Lau

said.

That has kept China's steel production plants turning out an average of 1.9599 million tonnes of steel a day from Nov. 21 to 30, 0.4 percent higher than the previous 10 days, the China Iron and Steel Association said on Friday.

($1=6.2282 Chinese yuan)

(Editing by Miral Fahmy)

Wednesday, December 5, 2012

Trade volume on China's iron ore platform CBMX to hit 10 mil mt in 2013: CISA

The volume of iron ore traded on the China Beijing International Mining Exchange, or CBMX, is expected to reach 10 million mt in 2013 as more Chinese steelmakers are planning to trade cargoes on the electronic platform, China Steel Industry Association said Friday.

CBMX, backed by CISA, was launched May 8 in a bid to assert China's say in determining pricing. The country is the world's largest buyer of iron ore, importing 56.43 million mt in October, up 13% year on year.

Forty two iron ore cargoes were traded on the CBMX over May 8-November 20, with a total volume of 5.29 million mt.

CISA said that as the CBMX platform gains momentum, more member mills were planning to scale back back their long term contractual volumes with miners and instead trade more on the CBMX platform next year.

"Baosteel has taken the lead by stating it is planning to put 10-15% of its trading ore volume on the CBMX platform next year," said CISA vice president Wang Xiaoqi.

The most recent trade settled on CBMX Friday was a 170,000 mt parcel of 57.5%-Fe Australian Special fines at $110/dmt CFR China, according to a trader with access to the platform.

The platform currently has 191 registered members.

Monday, December 3, 2012

Iron Roads looks to develop port for Central Eyre project

ASX-listed junior Iron Road on Monday said that it was looking to build a port to export ore from its Central Eyre iron project, in South Australia.

The company said that it had secured sufficient land at Cape Hardy on the east coast of the Eyre Peninsula for a proposed deep-water, 30-million ton a year bulk export facility, capable of loading various size bulk carriers.

Iron Road was looking to export some 20-million tons a year of iron-concentrates form its Central Eyre project, over a 30-year period. Initial export requirements for the project also allowed for an additional ten-million tons a year of capacity for third-party users from the inception of operation at the port facility.

MD Andrew Stocks said that the selection of the preferred infrastructure and port location had brought into clear focus an essential component of the company’s vision for the Central Eyre project.

“This is a key step in realising our vision of becoming a trusted and reliable supplier of premium iron concentrates to the Asian marketplace.”

Stocks said that the company’s option for a port location would admirably serve the export requirements of the Central Eyre project, with a short rail route, naturally sheltered all-year loading conditions, with minimal environmental impact.

“The final estimated capital costs will be determined upon conclusion of our definitive feasibility study, but early indications are that the port, if approved, will be a cost competitive development.

“Compared with other developments in Australia, we would not require a costly breakwater and only minimal marine construction, with a simple finger jetty being suitable to service loading requirements. The natural deep water location also removes any requirement for dredging,” said Stocks.

He added that the possibility of bringing a third-party user for a third of the initial capacity, or a third-party specialist port operation on a build and operate basis, also had significant potential to further enhance the economics of a port at Cape Hardy.

Edited by: Creamer Media Reporter

Sunday, November 25, 2012

China's Oct iron ore 13% on month as colder weather dampens demand

China imported 56.43 million mt of iron ore in October, down 13% month on month but up 13% year on year, data released Friday by the General Administration of Customs of China showed.

With the onset of colder weather halting construction projects in China in October, demand for steel and correspondingly, steelmaking raw material iron ore, weakened considerably from September.

"It's hard for construction projects to take off in the north now due to the snow, and it's also difficult in the south because of the rain. Steel demand is really weak now," a Jiangsu-based mill source said.

Australia remained the largest supplier of iron ore to China, selling 27.33 million mt in October, down 21% month on month but up 20% year on year. Contributing to the month-on-month decrease in Australian ore imports was the trend of mills in China to procure more port stocks and non-mainstream material in a bid to lower production costs and remain competitive in a depressed market. The price difference between port stocks of

Australian material and seaborne imports widened significantly in October, making dockside cargoes more popular.

Brazil was the second largest supplier to China in October, delivering 14.68 mil mt, up almost 7% from September and up 22% year on year, and South Africa third.

Imports from India, the fourth largest supplier, totaled 270,000 mt in October, 65% down from the previous month and down 87% year on year. Imports have been declining since India hiked export duties to 30% from 20% on December 30, 2011.

Imports from the southwestern Indian state of Goa have plummeted further since September after environmental clearance was suspended at 93 mining leases, mostly for iron ore.

China's tax cut plan for iron-ore miners unlikely to slash imports

A proposed tax cut by China for its iron-ore miners could lead to lower prices of the raw material, but it is unlikely to reduce imports by the world's top buyer as it does little to improve the competitiveness of domestic producers.

China may also face strong opposition to the plan to drop the total tax rate for local iron-ore miners to 10% to 15% from 25% because of the potential revenue loss for local governments, industry officials and analysts say.

China is the world's biggest producer of the raw material, with an annual output of more than one-billion tons. But the low quality of its iron-ore means it relies heavily on imports.

It buys about two-thirds of globally traded iron-ore, with this year's imports of the steelmaking raw material expected to top last year's record 686-million tons.

The proposed tax cut will "not make one iota of difference" in China's iron-ore imports, said Rory MacDonald, an iron-ore broker at Freight Investor Services (FIS).

Other analysts agreed, saying the move to cut taxes would also not change China's status as one of the world's most expensive iron-ore producers.

"Given China's place at the top of the global cost curve, reducing cost support through lower taxes will only mean that prices fall, leaving the domestic producers in the same position as before the tax cuts," said Graeme Train, commodity analyst with Macquarie in Shanghai.

Production cost will be cut by $12 per ton at the top of the curve if the overall tax rate is chopped to 10%, Train said.

Chinese miners, whose margins have been squeezed by higher energy, labour and environmental costs, spend between $90 to $130 to produce a ton of iron-ore, compared to $30 $50 per ton for big producers in Australia and Brazil.

"It's just a retrospective nod by the government to lighten their load a bit after what's been a tough year and a half. I don't see them passing it on to pricing, they'll embrace it potentially to widen profit margins," FIS' MacDonald said.

MORE VULNERABLE TO PRICE VOLATILITIES

A forecast drop in global iron ore prices over the next three years as top overseas miners ramp up output while Beijing's steel output growth slows will also negate any benefit from China's planned tax cut.

Even with iron ore prices unlikely to return to record levels of near $200 per ton reached last year, the still big margins enjoyed by low-cost producers Vale, Rio Tinto and BHP Billiton mean they can go ahead with plans to boost output, although they are holding off on longer-term strategies.

"I don't think China can cut reliance on seaborne supplies priced off spot indices by growing its domestic iron ore industry. It only can really achieve a decrease in reliance on seaborne supplies by purchasing mining assets overseas and shipping the material back home," said FIS' MacDonald.

With thinner margins, Chinese miners are also more vulnerable to price volatilities than their overseas rivals. Some of them have been forced to shut in recent months when prices slumped to three-year lows below $87 a ton. Prices have since rebounded to around $120.

Still, with local governments already struggling with falling revenues on a slower economy, there are doubts on whether the tax cuts could be rolled out.

"There are various taxes and many parties are involved. It's still hard to predict which tax could be cut, which not," said an official from industry group China Iron and Steel Association who declined to be named as he was not authorised to speak to media.

"However, they may have to make compromises eventually if local mines are not able to maintain business."

Edited by: Reuters

Sunday, November 18, 2012

Iron-ore prices to remain volatile to 2020 – report

While iron-ore prices appeared set to make a partial recovery, they would remain volatile, as revised Chinese growth targets and performance were likely to result in further short-term peaks and troughs up to 2020, metals and minerals research firm Roskill’s new ‘Iron-Ore: Market Outlook to 2020’ report has revealed.

Risk factors include uncertainty over the eurozone and its impact on iron-ore demand and availability, as well as on cost of capital; growing resource nationalism, particularly in Africa; highly unpredictable energy costs; rising labour costs; and the fate of the Indian mining industry following the mining bans in Goa and Karnataka states.

With the disruption of supplies from India, concerns over slowing economic growth in China and the effects of large stockpiles forcing the price of iron-ore through a series of supposed ‘price floors’, the industry faced a turbulent 2011 and 2012.

Following the slump in prices from June to September, Roskill expected prices to remain above $120/t cfr for 63.5% Fe content Indian fines until the end of 2014, while a restocking phase could push prices towards $135/t during 2013.

The firm noted that large fluctuations were likely and that the industry’s price floor would gradually drop as new capacity came on-stream. Roskill envisaged that the $100/t price level would be repeatedly tested and eventually broken towards 2015.

Against this backdrop, and adjusting for inflation, prices were expected to trend towards $85/t and $95/t during 2016 to 2020.

Despite downward revisions in the long-term outlook for iron-ore demand and prices, Roskill estimated that an additional 425-million tons a year of nameplate capacity would come on board from the middle of 2012 to the end of 2014.

These capacity additions would continue to surpass 100-million tons a year to 2020 and were foreseen to exceed demand growth and represent low- to medium-cost operations mostly.

“Consequently, producers at the higher end of the cost curve, particularly those in China, will gradually find themselves unable to compete in the open market,” Roskill said.

From now to 2020, corporate control of seaborne trade in iron-ore was expected to increase, as the limited availability of capital would make securing project financing increasingly difficult for emerging producers.

Much of the increase in control was expected to come from Australia and Brazil, as well as from projects backed by leading steel producers seeking to secure future supply.

Meanwhile, demand for steel is expected to grow at a slower rate in 2012. The World Steel Association expected apparent consumption of finished steel products to grow by 2.1% in 2012, down from 6.2% in 2011.

Although a partial recovery in demand growth appeared likely, supported by the construction sector in China and increased infrastructure spending, rising demand from other emerging nations during the period to 2020 was unlikely to fully offset the slowing pace of growth in the intensity of steel use in China, which was approaching a peak in per capita steel consumption.

Roskill expected growth in apparent crude steel use to average 2.9% a year from 2012 to 2020.

Owing to the ongoing shift of steel production to countries with a higher use of iron-ore per unit of steel, the firm forecast that at 3.1% a year, demand for iron-ore would marginally outpace steel demand, despite a relative increase in the use of scrap metal.

Edited by: Mariaan Webb

Friday, November 16, 2012

Increased iron ore demand from china in the fourth quarter to help ease shipping industry's oversupply

Five Star Equities Provides Stock Research on Genco Shipping & Trading and Eagle Bulk Shipping

NEW YORK, NY–(Marketwire – Nov 16, 2012) – Shipping stocks have struggled as oversupply and global economic uncertainties have continued to plague the industry. The Baltic Dry Index, a measure of costs to ship dry-bulk commodities such as grain, coal and iron ore, has dropped as much as 50 percent in 2012. Five Star Equities examines the outlook for companies in the Shipping Industry and provides equity research on Genco Shipping & Trading Limited (NYSE: GNK) and Eagle Bulk Shipping Inc. (NASDAQ: EGLE).

Access to the full company reports can be found at:

www.FiveStarEquities.com/GNK

www.FiveStarEquities.com/EGLE

Things may be turning around for the industry as stimulus measures announced by the Chinese government in September have seen demand for iron ore spike. China, who is the largest importer of iron ore, plans to purchase record amounts of the commodity in the fourth quarter, which will help ease the current glut in shipping.

"We're finally getting back into a period when the market isn't so oversupplied," said Jeffrey Landsberg, managing director of Commodore Research & Consultancy. "When we do have sharp increases in demand, Capesize rates can rise significantly."

Five Star Equities releases regular market updates on the Shipping Industry so investors can stay ahead of the crowd and make the best investment decisions to maximize their returns. Take a few minutes to register with us free at www.FiveStarEquities.com and get exclusive access to our numerous stock reports and industry newsletters.

Genco Shipping & Trading transports iron ore, coal, grain, steel products and other drybulk cargoes along worldwide shipping routes. Excluding Baltic Trading Ltd.'s fleet, the company's owns a fleet of 53 dry-bulk vessels with an aggregate carrying capacity of approximately 3,810,000 deadweight tons. The company reported a net loss of $38.4 million in the third quarter of 2012, compared to a net income of $1.6 million in the third quarter of 2011.

Eagle Bulk Shipping is the largest U.S.-based owner of Handymax dry bulk vessels. This modern fleet is comprised principally of Supramax class vessels, a larger and more efficient Handymax design that enjoys strong demand from customers around the world. The company reported net loss widened to $29.8 million in the third quarter of 2012, compared to $5.9 million in the year-ago quarter.

Five Star Equities provides Market Research focused on equities that offer growth opportunities, value, and strong potential return. We strive to provide the most up-to-date market activities. We constantly create research reports and newsletters for our members. Five Star Equities has not been compensated by any of the above-mentioned companies. We act as an independent research portal and are aware that all investment entails inherent risks. Please view the full disclaimer at:

www.FiveStarEquities.com/disclaimer

Monday, November 12, 2012

London Mining plans further Marampa expansion

London Mining said it has its sights set on expanding production at its flagship Marampa iron ore mine in Sierra Leone beyond the initial 5 million tonnes per annum target.

The company said it is still on track hit 5 Mpta, with the second plant expected to be completed in the first quarter of next year, increasing capacity to 3.6 Mtpa, with further expansion in the third quarter.

However, after getting the results of a bankable feasibility study back, London believes the production capacity could stretch even further to 9 Mtpa.

“We have now completed detailed technical studies for an expansion to 9 Mtpa which shows competitive capital intensity against the industry average with initial operating costs of US$39 per tonne or USD mid-20s on an adjusted Fe equivalent basis,” said chief executive Graeme Hossie.

“We are now completing value engineering work to incorporate identified potential for capex and opex improvements and are investigating the best approach to finance expansion beyond the 5Mtpa stage which will be achieved next year.”

He said this may involve using free cash flow from the operation, debt, offtake related finance and even possibly bringing in a strategic partner.

Hossie added that London is making headway with its expansion plans aimed at working out the best approach to develop the 1.1 billion tonne resource for a sustainable operation and in the best interests of shareholders.

In a conference call, Hossie said that a 5 Mtpa operation will produce substantial cash with very little risk at that point.

“As such it will be a very defensive, solid and profitable operation,” he said.

“Expansion plans to 9 Mtpa and then to 16 Mtpa will thereafter be hugely derisked.”

Hossie said the resource supports an operation of over 16 Mtpa and said the company continues to look at ways of reaching this level from the “solid platform” of 5 Mtpa.

In the three months to the end of September, the company gave a solid performance in the face of the wet season, which had a limited effect on production.

Although maximum plant capacity was boosted over the quarter as part of the ramp-up, overall concentrate production volumes were slightly lower due to restricted access to the Masaboin pit during part of the wet season.

The company produced 373,000 wet metric tonnes in the third quarter compared with 397,000 wmt in the previous quarter.

Sales volumes also dipped to 298,000 wmt from 350,000 wmt after it deferred one shipment to build inventory ahead of commissioning of the floating offshore transhipment vessel, which is permitted under the offtake agreement with Glencore at no penalty.

“We have continued to solve problems as they have come up and some things are out of our control,” Hossie continued.

“Certainly the macro environment has been against up and coming miners in iron ore this year, but I think we will change that perception once we start delivering the cash flow and get our second plant up and running in the first quarter of next year.”

Saturday, November 10, 2012

Miner Rio Tinto says fresh China stimulus unlikely soon

China's incoming leadership change is unlikely to spur fresh economic stimulus measures anytime soon, according to global miner Rio Tinto, which sells tens of millions of tons of iron-ore, copper and coal to China annually.

"The forces for a big stimulus are pretty limited," Rio Tinto chief economist Vivek Tulpule told reporters.

Earlier rounds of stimulus helped drive global iron-ore and coal prices to record highs. This in turn translated into soaring profits for the likes of Rio Tinto and other mega-miners, including BHP Billiton and Xstrata .

Since then, an economic downdraft has seen Chinese growth slow for seven successive quarters and left 2012 on course to be the weakest full year of growth since 1999 – albeit at a 7.7% clip that is the envy of developed economies.

The Chinese Communist party's week-long congress is due to anoint a new generation of leaders, but is also an opportunity for senior officials to hash out or defend policies.

Rio Tinto expects economic growth in China to rise to at least 8% in 2013 and average 8% to 9% to 2015, a more bullish view than the global miner's main rivals.

China is scheduled on Friday to release a string of data, including industrial output and retail sales, expected to show modest growth recovery in the world's No.2 economy.

Rio Tinto, the world's No.2 iron-ore miner, sees Chinese growth picking up from below 8% this year as a new government in Beijing relaxes restrictions on real estate investment and pushes infrastructure spending, which will drive demand for steel and in turn iron-ore, its chief economist said.

"On balance we're seeing some green shoots and an expectation next year that the GDP growth rate will have an 8 in front of it, at least 8%, maybe on the low side of that," Tulpule said.

Among those green shoots, he pointed to recent data showing a pick-up in containers in ports and rail cargo turnover in September, a rise in housing sales, and an increase in credit from new financing sources.

Rio is sticking to its view outlined earlier this year for Chinese growth to average 7% to 8% from 2015 to 2020 and slowing to 5% to 6% growth beyond 2020, but said it was likely to be a volatile path towards slower growth as the Chinese economy evolves from being investment driven to consumer driven.

"There are some uncertainties about the future," he said.

By comparison, top global iron-ore miner Vale now sees China's economy growing at 6% to 7% a year over the rest of this decade. BHP Billiton sees China's annual growth averaging 7% to 8% over the next decade.

Rio Tinto sees Chinese steel production peaking at one-billion tons a year around 2030, slightly later than earlier forecasts for it to peak at that level around 2025.

Tulpule warned that if the US failed to find a solution to the "fiscal cliff" it would not only shave US demand for commodities, but would have a bigger impact in terms of contagion in financial markets, which would hit activity on the London Metal Exchange, where trading of metals like copper and aluminium has been driven by speculation.

The fiscal cliff refers to a $600-billion package of automatic spending cuts and tax increases due to take effect early next year unless Washington can negotiate a deal.

But Tulpule said the net impact on bulk commodities, like iron ore, would be limited because if Chinese growth slowed sharply as a result of the US fiscal cliff, we would likely see China step up stimulus spending swiftly.

"If we don't, then I think we would start to see some negative effect on bulk markets," Tulpule said.

Edited by: Reuters

Monday, November 5, 2012

Great expectations fill Greenland as China eyes minerals

Whether in iron, zinc or rare earth minerals, China is eyeing investments in the Danish-ruled country whose own, increasingly autonomous, national government is looking further afield for investors

Author: Alistair Scrutton

By a remote fjord where icebergs float in silence and hunters stalk reindeer, plans are being drawn up for a huge iron ore mine that would lift Greenland's population by four percent at a stroke - by hiring Chinese workers.

The $2.3-billion project by the small, British company London Mining Plc would also bring diesel power plants, a road and a port near Greenland's capital Nuuk. It would supply China with much needed iron for the steel its economy.

With global warming thawing its Arctic sea lanes, and global industry eyeing minerals under this barren island a quarter the size of the United States, the 57,000 Greenlanders are wrestling with opportunities that offer rich rewards but risk harming a pristine environment and a traditional society that is trying to make its own way in the world after centuries of European rule.

Great expectations could lead to greater disappointments, for locals and investors. Yet a scramble for Greenland already may be under way, in which some see China trying to exploit the icebound territory as a staging ground in a global battle for Arctic resources and strategic control of new shipping routes.

Whether in iron, zinc or rare earth minerals vital for 21st-century technology like smartphones, China, the emerging economic superpower is eyeing investments in the Danish-ruled country whose own, increasingly autonomous, national government is looking further afield for investors.

"This is not just a region of ice and polar bears," Prime Minister Kuupik Kleist told Reuters in the capital Nuuk, formerly known by its Danish name Godthab. "Developing countries are interested in a more political role in opening up of the Arctic. Greenland could serve as a stepping stone."

Talk in Europe or North America of a Chinese grand design to take over the Arctic is mocked as overblown by many in Greenland - an recent exhibition of cartoons recently in Nuuk featured one drawing of an iceberg, Greenland-shaped above the water line, and in the form of China below. Its caption: "Polar Paranoia".

Compared to its investments in Africa or Latin America, Beijing has a light footprint in the Arctic. In Greenland, not one mining or oil project has yet got off the ground. Appetite for exploration is tempered by political polarisation, as Greenland's leaders square off over how to regulate and tax new wealth under a self-government regime just three years old.

"There are great expectations in Greenland, but no results," said Rasmus Ole Rasmussen, a senior researcher specialising in Arctic affairs at the Nordregio institute in Stockholm.

Nonetheless, transformation is approaching rapidly for a land still mostly inhabited by indigenous Inuits engaged in an economy dominated by fishing. And China may play a larger role in this than Europeans and North Americans find comfortable.

"It's fair to say countries like China and South Korea are far more active than Americans and Europeans in showing their interest in investing," said Kleist, who adds that the West, for which Greenland remains part of its Cold War-era NATO defence pact, can appear complacent, despite new geopolitical currents.

In Nuuk, home to 16,000 people on the southwestern coast, 1,000 sea miles north of Newfoundland, there are just two traffic lights. But new construction is everywhere: gleaming office buildings that house foreign companies and even a new mall where one can buy olives and French cheeses - for a price.

Greenland's Bureau of Minerals and Petroleum (BMP) has now awarded overall some 150 licences for mineral exploration compared with only a handful in existence a decade ago, with around $100 million spent by companies last year alone. Oil companies have spent more than $1 billion in exploring offshore.

That includes exploration of rare earth minerals, used in products from wind turbines to hybrid-powered cars. China currently accounts for the vast majority of the world's supply.

UNFROZEN NORTH

Greenland can look like ground zero for global warming. This summer many scientists were shocked as nearly all its massive ice sheet thawed. Hunters no longer prowl offshore ice that has grown too thin to support their dog sleds. A walrus was the talk of Nuuk this year, found drifting far south of its normal range.

But there also benefits from warmer weather - and it is not just dreams of growing strawberries and broccoli in the south.

With ice receding, some estimates suggest the polar ice cap may by 2040 be disappearing entirely during summer. Melting sea ice may open passages north of Canada and Russia and cut sailing distances by up to 40 percent between Shanghai and New York.

"Greenland used to be a big, white blob on the world map," said Aleqa Hammond, an opposition leader and former foreign minister of Greenland. "Now we have a global role."

But she criticised the government for keeping people in the dark about Chinese plans: "We see Chinese delegations everywhere and even the parliament does not know who they are," she said. "We seen them in our hotels, in our fjords and on our streets."

London Mining plans construction at the Isua iron ore deposit next year if Greenland gives the go-ahead. The project, which aims for finance from China, would ship some 15 million tonnes of iron ore annually from fjords near Nuuk to China.

CHINA'S GHOST

An icebreaker completed China's first crossing of the Arctic Ocean this past summer, and diplomacy earlier in the year has also underlined China's interests in the north Atlantic.

Premier Wen Jiabao began a tour of Europe in April with a visit to Iceland, population 320,000, where there has been much talk of a Chinese developer's bid to lease a vast tract of land.

And it was little surprise when President Hu Jintao, leader of the world's most populous nation, paid a three-day visit in June to Denmark, home to just six million people. Many assumed Greenland's riches were on his mind, despite official denials.

Just days before, EU Industry Commissioner Antonio Tajani had flown to Nuuk to sign a letter of intent to cooperate with Greenland on its raw materials: "The letter of intent," said one senior Greenland official, "Was a political message that we would not lock ourselves into to supplying China with minerals."

In Greenland, Kleist spoke of European pressure, saying one EU politician had suggested he limit Chinese mining. The prime minister, whose nation is not part of Denmark's membership of the European Union, refused, saying modern trading rules would not allow it: "Could the EU do that?" he asked. "Of course not."

When U.S. Secretary of State Hillary Clinton visited last year, her bodyguards worried at the near absence of security measures in Greenland. But she had other things on her mind: "One of her first questions was, 'What is happening about rare earths?'" said another Greenland government official.

One deposit alone, in southern Greenland, being explored by Australia's Greenland Minerals and Energy, could contain more than 10 percent of the world's deposits of rare earths.

Oil could have an even greater impact.

Energy consultancy Wood Mackenzie says Greenland may have reserves of 20 billion barrels of oil. The BMP says reserves may be equivalent to as much half of the entire North Sea.

Greenland has approved a sovereign wealth fund on oil-rich Norway's model that would allow it to invest new earnings.

GREENLAND'S "HOLY GRAIL"

Yet a big question is whether such a tiny population can cope, and there are signs of local political unease that may hinder investment, whether Asian or Western.

Four hours north from Nuuk by ship, through melting icebergs and passing whales, lies Maniitsoq, a symbol both of the hope foreigners bring and a reality check for Greenland's ambitions.

U.S. giant Alcoa Inc is considering building an aluminium smelter there, strategically sited between European and North American markets. It would entail the import of thousands of workers, possibly from China.

The smelter would be fed from mines as far apart as Brazil and Australia and shipped out as aluminium to the world market. Alcoa has not decided to go ahead. Among several pending issues, it wants to see whether cheaper foreign labour will be allowed.

After it won greater self-rule in 2009, an annual grant from Denmark which has covered more than half of Greenland's public spending was effectively frozen at around 3.5 billion Danish crowns ($600 million) and will shrink in real value over time.

"There is a need to become independent economically," said Naaja Nathanielsen, a Greenland lawmaker. "Most people see it not as opportunity, but as necessity."

Villages like Maniitsoq are dotted along Greenland's western coast, relying on state subsidies for heating and communications. Unemployment is high and alcoholism rife.

Much of the Maniitsoq fisheries industry has vanished. Locals say shrimp have moved north as southern waters warm. The town is huddled on an outcrop of windswept rocks with Soviet-style housing blocks, empty streets and a few downtrodden bars.

"We need a Big Bang here," said Karl Lyberth, deputy major in Maniitsoq. "Alcoa is the only project that can help us.

The town's population, now 2,715, has fallen by around 200 in a decade. Few will speak against Alcoa, though a local hotel owner made headlines that were uncomfortable for some by saying the town would need a brothel for workers building the smelter.

"It was only half a joke," said Soren Lyberth of the Heilmann Lyberth Hotel. "But people don't want to talk about it."

He touched a sore point in Greenland - some fear that the country cannot absorb so many dollars and foreign workers, and that untrained and poorly educated Greenlanders will lose out.

"They think the holy grail is Alcoa, but it's not true," said Jens Moller, head of a community training project in Maniitsoq. "It could bring a lot of problems."

ENVIRONMENTAL HESITATION

Locals also debate bringing in 2,000 Chinese workers to Nuuk for London Mining, and whether Greenland should let foreign employers undercut local wages. Such arguments stall projects.

To the dismay of investors, a consensus behind foreign companies has frayed. The opposition is calling for more taxes on miners. Environmentalists demand more consultations.

"We need more royalties," said opposition leader Hammond. "The polluter should be paying."

The leftist, pro-independence coalition led by Kleist has more technocratic ministers than a previous government criticised by opponents as nepotistic and inward-looking.

But Kleist, born to an Inuit mother and Danish father in a now abandoned mining village, is aware of communities' problems and his coalition is split on whether to let in low-paid foreign labour. Several mining executives and Greenland officials expressed frustration at the slow pace of projects.

"Our dream is about to come true," said one senior Greenland official, who spoke on condition of anonymity. "But people are getting nervous, asking whether they are ready for this."

Take rare earths. Because they are massed with uranium, neither could be mined without ending Greenland's prohibition on extracting radioactive materials - a policy inherited from Denmark. Greenland's politicians are split on the issue.

"The policy of zero tolerance is the main issue for us," said Ib Laursen, operations manager at Greenland Minerals and Energy. Only by ditching the ban could his project be feasible.

Today there is only one operational mine in Greenland, a gold deposit, which opened in 2004. Oil drilling in 2010 and 2011 has failed to yield any discoveries despite a $1.2 billion campaign led by Britain's Cairn Energy [ID:nL5E8CN0BI].

While Greenlanders wait for any bonanza to start, the notion that it may bring Chinese dominion seems far-fetched to many in a country whose European links stretch back a thousand years to Viking colonists and whose ties to the Americas include the Cold War-era U.S. Thule Air Base, deep inside the Arctic Circle.

Some analysts say China's role in Greenland is exaggerated - and that its ambitions are more economic than geopolitical:

"Many non-Arctic countries, like in Europe, are seeing ghosts and troubles ahead," said Rasmussen at Nordregio, describing such fears as having "little to do with reality".

Greenland's prime minister also stresses the limits to his ambitions for the pace of development: "Our situation is uncertain," said Kleist. "I would say five projects in 10 to 15 years are realistic in terms of the global economic situation and the capacity of Greenland society."

Among capacity constraints are concerns over its ability to protect an ecosystem which, global warming aside, is largely unsoiled by human industry. Some big oil executives say it is simply not worth the risk of a spill to drill in a region where its effects could be devastating and clean-up facilities scarce.

For Mikkel Myrup, chairman of local environmental group AvataQ, the country is unready for industrial development: "Greenland simply does not have the regulatory capacity to take responsibility for monitoring the industry," he said.

Standing on a cliff in Maniitsoq, hotelier Lyberth has put off building a new hotel with a view of snow capped mountains. Alcoa and its foreign executives, for the moment, seem far away.

"This is my dream," he said, smiling as he pointed to a barren piece of flat rock where the hotel would be.

"But so far it's only a dream."