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

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%.


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 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.


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.


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

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.”

Wednesday, September 26, 2012

Vale to prioritize Brazil iron-ore mine over Guinea project - source

Vale, the world's second-largest mining company, is likely to make its $19.5-billion Serra Sul iron-ore mine project in Brazil a priority over a similar development in the West African nation of Guinea, a source with knowledge of the firm's strategy said.

The emphasis on the project in the Amazon comes as Guinea, which holds rich deposits of iron-ore and is the world's top supplier of the aluminium ore bauxite, struggles to maintain foreign investment amid deepening political turmoil, labour unrest and a government review of mining contracts.

The granting in June of a so-called preliminary environmental license for the Sierra Sul project, which includes railway and port investments, means the development of the Simandou site in Guinea is less urgent, the source said on Tuesday.

"All things considered, projects need to be prioritised," said the source, who asked not be named as his employer does not allow him to speak to the press. "The priority has become Serra Sul."


Serra Sul is an extension of Vale's giant Carajas iron, copper and nickel mining complex in Brazil's Para state. It is expected to have a capacity of 90-million tons a year, about 9% of current world iron-ore exports, helping maintain Vale's position as the No 1 producer.

Simandou, while holding enormous high-quality reserves, faces major political, commercial and transportation hurdles before it can be developed.

Guinea recently revised its mining code, raising the state's mandatory stake in mining projects to 35% from 15% and plans to change other clauses in the code after consultation with mining companies.

"I believe it will be difficult for Vale to invest in both projects at the same time because it would require very high capital spending for the company," said Marcelo Aguiar, metals and mining company analyst with Goldman Sachs in Sao Paulo.

"Vale investment in Simandou appears to have lost a bit of its urgency after getting the license for Serra Sul."

Vale gained the rights to develop iron-ore in Simandou in 2010 when it agreed to pay $2.5-billion for a 51% stake in the Guinea iron-ore mining operation of BSG Resources Ltd, the London-based mining group controlled by Israeli businessman Beny Stenmetz.

A newspaper in Brazil reported on Sunday that BSG was preparing to sue investment bank BTG Pactual, which it accuses of misusing its role as an adviser to Guinea's government to win licenses for a holding company at BSG's expense.

Guinea's mines minister Mohamed Lamine Fofana called BSG Resources threat to sue BTG "insulting" in an e-mailed response to questions from Reuters.


The Serra Sul mine is at the center of plans to boost Vale iron-ore output by 40% to 460-million metric tons a year in 2017.

Serra Sul and Carajas are two of the largest high-grade iron-ore projects under development to meet soaring demand for iron-ore from China.

Vale produces more than a quarter of the world's sea borne iron-ore exports of more than one-billion tons a year. Work to gain the preliminary Serra Sul license took nearly a decade.

Vale, though, has been re-evaluating its investment plans in the wake of a slowdown in China and sluggish growth in the US, Europe and Japan. In late 2011, it cut planned 2012 spending 11% to $21.4-billion.

As iron-ore prices fell to three year lows earlier this month, slashing billions from revenue, further cuts came under consideration.

Edited by: Creamer Media Reporter

Monday, July 16, 2012

Jindal Steel sets Aug 10 deadline for Bolivian govt to resolve issues

Jindal Steel and Power has set an August 10 deadline for Bolivian government to resolve the issues related to its $ 2.1 billion venture in Bolivia, or it will pull out of the Latin American country.

“If they (Bolivian government) resolve those issues to our satisfaction, we will stay. Otherwise we will get out of there. By August 10, we will decide for sure,” the JSPL Chairman and Managing Director, Mr Naveen Jindal, told PTI in an interview.

Jindal’s contract, signed in 2007, was considered as the largest foreign direct investment for Bolivia and consisted of 40-years mining rights of El-Mutun mines, one of the largest untapped iron ore mines in the world, and setting up of iron and steel plants in the country.

In June, the Indian steel major had sent a termination notice to the Bolivian government, while alleging that contractual obligations related to gas supplies for the venture had not been met.

The notice sought to terminate the contract in a month, if the issues were not resolved. The deadline had ended on July 8.

However, Mr Jindal said that JSPL officials are still in discussions with the Bolivian government to revive the project.

He, however, made it clear that revival of the project would depend on gas allocation and scaling down the project capacity.

“What they are giving us is one-fourth of the (required) gas and are saying that you don’t scale down the capacity, we will give you gas later. Is it possible? How can we plan our investment on such assurances?

“Cost of gas there is USD 8/mBtu (million British thermal unit), while in US it is USD 2-2.5/mBtu. Okay, we will pay higher prices but how can we plan bigger without the gas being committed? We have to scale down (the capacity),” he said.

According to the contract, JSPL’s $2.1 billion project requires gas supply of 10 million standard cubic metres per day (MSCMD).

However, the Bolivian government is willing to commit only 2.5 MSCMD gas from 2014 due to non-availability of gas in the country, the company had said earlier.

The mining and steel project consists of setting up of a 10 million tonnes per annum iron ore pellet plant, six MTPA DRI (direct-reduced iron) plant and 1.7 MTPA steel plant, besides mining of El—Mutum mines for 40 years.

So far, the Naveen Jindal—led firm has invested $90 million in the venture and made investment commitments exceeding $600 million till March 2012 for purchase of technology, machinery, equipment and advances to vendors.


Friday, July 13, 2012

Jindal Steel, Bolivian government resume talks to revise deadlines for project milestones

Talks between Naveen Jindal's Jindal Steel Bolivia and the Bolivian government continued on Wednesday, with the latter offering to revise deadlines for project milestones.

The $ 2.1 billion mining and steel project, the largest foreign investment into the country, has been threatened by a fallout between the two parties over commitments.

Jindal won rights to the El Mutun iron ore mines in 2007. It was to develop the mines and build a downstream steel plant, on guaranteed energy supplies from the state.

Bolivia's state gas company Yacimientos PetrolAferos Fiscales Bolivianos (YPFB) is now willing to promise only 2.5 million per day as against Jindal's initial requirement of 4.5 mcmd (million cubic metres of gas per day) leading up to

Declining to comment on the specifics, a senior company official who didn't want to be named, only confirmed, ""Discussions were on yesterday (Wednesday) but no resolution has been reached at this stage.""

Jindal Steel Bolivia has asked for the government to accordingly scale down project which includes a pellet and DRI plant as per the actual gas availability. Bolivia with 50mcmd daily gas output is South America's largest producer with export commitments to Brazil and Argentina.

According to reports from La Paz, quoting the country's mines minister, Minister of Mining, Mario Virreira, the Bolivian government is willing to reconsider timeline and commitments, but not scale down original plan for the El Mutun mines.

On June 8, JSB had notified the government of its intention to terminate the contract if energy guarantees on the part of the state could not be met. The notice called for a termination of the contract in thirty days.

Wednesday, June 27, 2012

Sundance Mobilises $40 million for Mbalam Iron Ore Project in Cameroon

The exploration of iron ore reserves in Mbalam, East Region by Cam Iron will in the days ahead receive a boost following additional $40 million funding pumped in by the mother company, Australian-based Sundance Resources.

According to a release posted on the company's website, the money raised through a placement with a 0.345 dollars interest rate per share; will be used to assist Sundance Resource Limited to undertake early works at the port and rail areas to help maintain the construction timeline, continue drilling on the previously announced exploration targets as well as help to provide general working capital for the company.

Commenting on the fundraising, Sundance's Managing Director and Chief Executive Officer, Giulio Casello, is quoted to have expressed gratitude with the amount. "The strong demand from institutional investors resulted in the placement being significantly oversubscribed. Funds raised allow Sundance to continue to develop the Mbalam Project which will further Sundance's progress towards becoming a world-class producer," he reportedly said.

The equity raising is said to be consistent with Sundance's rights under the Amended and Restated Scheme Implementation Agreement signed with Hanlong (Africa) Mining Limited last May 2012. While waiting for a mining license, Sundance and Hanlong; the release further states continue to expect the scheme of arrangement to be implemented by mid November 2012.

Government, Sundance Resources Limited and Hanlong Group officials on April 26, 2012 at the Prime Minister's Office signed the Joint Statement on the key terms and principles of the convention on Mbalam Iron Ore mining project with hopes that the Mining Convention would be signed in August 2012.

Information from Cam Iron says the Mbalam Iron Ore Project that straddles the border of the Republic of Cameroon and the Republic of Congo proposes development of mines in both countries which together will produce 35 million tonnes per annum. Within the framework of the project, Cam Iron will construct a 510-km rail line dedicated to the transport of iron ore from the Mbarga mine to the Cameroon coast with a 70-km rail spur line to connect to the Nabeba mine in Congo as well as build a deep water iron ore export terminal in Lolabe- Kribi which will be capable of taking bulk "China Max" iron ore carriers.