UPDATE 1-Petropavlovsk sees FY output at lower end of range

July 23, 2010 By Leave a Comment

LONDON, July 22 (Reuters) – Russian miner Petropavlovsk (POG.L) expects annual output to be at the lower end of the previously announced 670,000-760,000 ounce range after first-half gold production fell 26 percent on planned work at its Pioneer mine.

Gold production fell to 166,300 ounces from 224,600 ounces in the year-earlier period.

The London-listed company also announced that it acquired new mining licences in the Amur and Krasnoyarsk region of Russia.

The miner, which is considering a Hong Kong listing for its iron ore assets, last month launched its first Kuranakh iron ore mine. [ID:nLDE65N0WI]

The first product sales from Kuranakh are expected in August, it said on Thursday.

On June 7, Petropavlovsk said Hong-Kong based investors had agreed to take a $60 million equity stake in the group’s non-precious metals division, valuing the iron ore operations at $860 million. [ID:nLDE65G16Q]

(Reporting by Julie Crust; editing by Victoria Bryan)

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China Dalian also shuts berths for ore, grains -source

July 20, 2010 By Leave a Comment

July 19 (Reuters) – China’s Dalian has shut 80-90 percent of its berths, including for iron ore and grain imports, after explosions at oil pipelines at its Xingang port spilled oil to the sea, a Dalian-based shipping agent said on Monday.

Xingang port operates berths for both oil and ore. Reuters has earlier reported that the oil port was closed.

Dalian customs authority handled 15.2 million tonnes of iron ore imports in the first five months of this year, 16 percent up from Jan-May 2009.

(Reporting by Chen Aizhu; editing by Ken Wills)

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Big China steel firms won’t switch to spot market-Baosteel

July 16, 2010 By Leave a Comment

July 15 (Reuters) – China’s top steel maker Baosteel Group said on Thursday that big Chinese steel makers would not switch to spot markets for iron ore even if prices were cheaper.

Chairman Xu Lejiang also told reporters that China had yet to reach agreement with three global miners on the quarterly pricing mechanism on ore, and that current imports were still based on interim pricing.

(Reporting by David Stanway; Editing by Jonathan Hopfner)

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POSCO Q2 profit jumps on firm sales, lower costs

July 14, 2010 By Leave a Comment

July 13 (Reuters) – South Korea’s POSCO (005490.KS), the world’s No.3 steelmaker, reported on Tuesday its highest quarterly profit in nearly two years on solid demand from automakers and lower costs for materials such as iron ore and coking coal.

POSCO (PKX.N), which kicks off April-June earnings reporting by major Asian mills, earned 1.84 trillion won ($1.53 billion) in second-quarter operating profit, higher than a consensus forecast of 1.73 trillion won polled by Thomson Reuters I/B/E/S.

The profit jumped 11 fold from last year’s 170 billion won and marks the highest since it reported a record 1.98 trillion won profit in the September quarter of 2008.

POSCO, which relies almost completely on imports of iron ore and coking coal, will see earnings falter in the current quarter, hit by rising raw material costs and an inability to fully pass on soaring costs to customers.

The company, which overtook Nippon Steel (5401.T) last year to rank just behind ArcelorMittal (ISPA.AS) and Baosteel (600019.SS), increased domestic steel prices by a smaller-than-expected 6 percent from July, amid growing concerns that China’s monetary tightening and the European fiscal crisis may hit second-half demand growth. [ID:nTOE65L006] ($1=1203.3 Won) (Reporting by Cho Mee-young; Editing by Jonathan Hopfner)

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Taiwan’s China Steel to cut prices for Sept

July 14, 2010 By Leave a Comment

July 13 (Reuters) – China Steel (2002.TW), Taiwan’s top steel maker, will cut domestic prices by an average of about 4 percent for September over July-August because of reduced demand for home construction materials in China, a company executive said on Tuesday.

Bigger rival Baosteel Group said in June that China’s steel industry will face its toughest time of the year during the third quarter, as iron ore contract prices will peak in the quarter while steel consumption by the auto and housing sectors will be sluggish. [ID:nTOE65703O]

(Reporting by Lin Miao-jung; Editing by Ken Wills)

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Australia mine tax favours multi-nationals-Fortescue

July 14, 2010 By Leave a Comment

July 13 (Reuters) – Australia’s watered down tax on mining profits favours multi-nationals and diversified commodity producers at the expense of smaller companies, iron ore miner Fortescue Metals (FMG.AX) told a government hearing on Tuesday.

Australia’s initial 40 percent profits tax proposed for the mining sector was changed to 30 percent and exempted all but coal and iron ore miners earning more than A$50 million ($43.82 million) a year.

With profits last year of $508 million, Fortescue is almost certain to pay what’s now called the minerals resource rent tax (MRRT) if it is introduced July 1, 2012 as scheduled.

“Compared to the multi-commodity, multi-national companies which negotiated the MRRT, we have no other minerals to offset the costs associated with the MRRT,” Fortescue Chief Financial Officer Stephen Pearce said in a presentation to the Senate Select Committee on Fuel and Energy.

“The proposed MRRT does not seem fair and, on face value, appears to favour the bigger companies, which have assets that sit outside the MRRT.”

The government sought to end the damaging dispute with mining executives and investors by dumping the far-reaching “super profits” tax, clearing a major hurdle to call an early election, which polls suggest Prime Minister Julia Gillard can win. Three of the world’s biggest mining houses, BHP Billiton (BHP.AX) (BLT.L), Rio Tinto (RIO.AX) (RIO.L) and Xstrata (XTA.L), met privately with Gillard and members of her cabinet to hammer out a compromise.

Under the new tax, Rio Tinto and BHP Billiton will liable on iron ore and coal mining in Australia, while base and precious metals businesses would fall outside the tax. Likewise, Xstrata would only face a tax bill on coal mining.

Pearce said Fortescue was unable to determine the full impact of the proposed new tax as it had not seen the details of the confidential heads of agreement signed by the government and BHP Billiton, Rio Tinto and Xstrata.

He also raised doubts about the government’s ability to raise a targeted A$10.5 billion from the tax by 2014. (Reporting by James Regan; Editing by Ed Davies)

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China convicts U.S. geologist of stealing state secrets

July 6, 2010 By Leave a Comment

(Reuters) – A geologist accused of stealing state secrets after he brokered the sale of an oil database has been sentenced to eight years in jail, the U.S. embassy said on Monday, over two-and-one-half years after he was detained.

Geologist Xue Feng, a 44-year-old U.S. citizen born in China, was detained late in 2007 after negotiating the sale of an oil industry database to his employer at the time, Colorado-based consultancy IHS Energy, now known as IHS Inc.

Xue was convicted of attempting to obtain and traffic in state secrets, a year after his trial ended, said the Duihua Foundation, which advocates for prisoners’ rights in China and the United States. The database was classified as a state secret only after it was sold, it added.

“We are dismayed by Dr. Xue’s eight-year sentence and 200,000 yuan ($29,540) fine. We remain concerned about his rights to due process under Chinese law,” U.S. embassy spokesman Richard Buangan said in an email. China’s notoriously vague state secrets laws received international attention last year, when Australian citizen Stern Hu and three colleagues working for mining giant Rio Tinto were detained for stealing state secrets during the course of tense iron ore negotiations.

The four were later convicted of the lesser charges of receiving kickbacks and stealing commercial secrets. The verdict of at least two senior Chinese steel officials accused of leaking the secrets has never been revealed, more than three months after they were convicted in a closed trial by a Shanghai court.

Xue’s case only became public two years after he was detained. He was burned with cigarettes while in detention, Jerome Cohen, a legal expert advising Xue’s family, has said.

“Obviously the sentence seems very harsh, especially when the evidence was so weak that the prosecutor had to return the case to the police twice and the court had to return the case to the prosecutor twice and then take almost a year after the trial to render its decision,” Cohen, a professor at New York University School of Law, wrote in an email.

Xue’s sentence was not listed among the public rulings of the Beijing No. 1 Intermediate Court. Phone calls to the court were not immediately answered at midday on Monday.

“I have visited Xue Feng several times during the past half year. He has stayed strong during this difficult time. My thoughts are with him and his family, with whom I hope he will be reunited soon,” U.S. Ambassador Jon Huntsman, who attended Monday’s sentencing, said in a statement.

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Australia eyes iron ore tax breaks -mine group

July 6, 2010 By Leave a Comment

July 5 (Reuters) – Australia’s government may make more concessions on its mining tax to iron ore miners after a meeting with miners on Monday, the Chamber of Minerals and Energy of Western Australia said on Monday.

Federal Resources Minister Martin Ferguson has agreed to consider requests to provide tax rebates for exploration costs and to exempt the burgeoning magnetite sector from the tax, the chamber’s chief executive, Reg Howard-Smith, told Reuters.

“The minister indicated these issues would be included in the terms of reference,” establishing parameters for modifying the tax under a government-backed panel, he said. (Reporting by James Regan; Editing by Ed Davies)

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UPDATE 1-Australia govt, miners on brink of tax deal-report

July 2, 2010 By Leave a Comment

July 1 (Reuters) – Australia’s government and key mining companies are on the brink of a framework agreement on a mining tax compromise, the Sydney Morning Herald reported, quoting sources with knowledge of the talks.

Based on the proposed deal, the government has given ground on the headline 40 percent tax rate and the new trigger point for the tax would be around 12 percent up from an initial proposal for about 5 percent, the paper said on its website.

The tax deal would also give miners a break on retrospective projects, enabling them to roll lucrative iron ore operations in the Pilbara and coal mines on the east coast, into the new tax regime at market value.

“It’s understood that BHP Billiton, Rio Tinto and Xstrata have agreed with the government now on the key elements of a new resources tax structure…,” the Herald report said, citing sources close to talks between the government and miners.

The government and global miners Rio Tinto (RIO.L) (RIO.AX), BHP Billiton (BHP.AX) (BLT.L) and Xstrata Plc (XTA.L), are locked in a second day of talks on Thursday over the tax.

“We’re not commenting,” a BHP spokesman said of the report.

Government officials were not immediately available for comment.

The Australian dollar AUD=D4 rose around 1/3 percent to $0.8366 from around $0.08335 before the report.

An agreement would remove uncertainty in the market and any watering down of the tax proposal is considered positive for investments and hence the Aussie dollar, traders say.

The stock market .AXJO also came off its lows off the day, as did global miners BHP Billiton and Rio tinto, on news of the report.

The proposed mining tax threatens more than $20 billion in investment, according to mining companies, but no major project has yet been scrapped and several have actually been advanced since the tax was unveiled on May 2.

The Australian mining index .AXMMA has underperformed the global mining sector .TGLOB100 by about 4 percent since the mining tax was first announced on May 2, despite a weakening in the Australian dollar over that time.

Analysts say that any firm deal would be a positive for mining shares as it removes a key risk factor while any easing in terms of the tax would be a clear positive as investor have already priced in the worst-case scenario.

“This would signal the first major development in the debate between the government and the mining industry over the tax,” said Grant Craighead, a mining analyst for Stock Resource in Sydney. (Reporting by Michael Perry; Editing by Ed Davies)

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S.Korea SK Group says to invest $14.3 bln by 2020

July 2, 2010 By Leave a Comment

SEOUL, July 1 (Reuters) – South Korea’s SK Group, whose major businesses are crude oil refining and telecom via SK Energy (096770.KS) and SK Telecom (017670.KS), said on Thursday it would invest 17.5 trillion won ($14.32 billion) by 2020 to develop energy resources and technologies.

The group also said in a statement that it would strengthen its global businesses mainly in China, South America, Middle East and Southeast Asia.

Of the total investment, the group would spend 4.5 trillion won to secure low-carbon energy, including solar, bio fuel and rechargeable battery, along with overseas natural resources such as oil, gas, iron ore and rubber, it said.

The group, via this overseas resource development, aims to raise its contribution to energy independency rates of South Korea, the world’s No.5 crude oil and No.2 liquefied natural gas

(LNG) buyer, to 13 percent by 2013 from 6 percent in 2008.

SK Energy said last month it would focus on exploration and production (E&P) of oil, and research and development (R&D) of energy by doubling the success rate of exploration to 20 percent and enhancing E&P business through various strategies, while enhancing its Chinese businesses. [nSGE65K026]

According to Thursday’s statement, SK Group would focus on developing crude oil, LNG and iron ore in South America, and petroleum, coal, rubber along with enhancing its telecom infrastructure business in Southeast Asia.

In the Middle East, the group said it would work on construction business of power-generating facilities and plants.

Of the total investment, 4.2 trillion won would be to establish “smart” environment, like a smart grid to raise energy efficiency via computerised monitoring of electricity flowing through a power grid, the statement said.

It added the remainder of the investment would go for developing innovative technologies, such as for bio businesses.

($1=1222.1 Won)

(Reporting by Cho Mee-young; Editing by Muralikumar Anantharaman)

((meeyoung.cho@thomsonreuters.com; +82 2 3704 5653; Reuters Messaging: meeyoung.cho.reuters.com@reuters.net))

((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com)) Keywords: SKGROUP KOREA/

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FACTBOX-Guinea’s major mining operations

June 29, 2010 By Leave a Comment

(Reuters) – Guinea, the world’s biggest exporter of aluminium ore bauxite and a potentially huge source of iron ore, is holding a presidential election on Sunday intended to end a political crisis that has persisted since a 2008 military coup.

Stocks | Global Markets

Resources firms have committed billions of dollars of fresh investment in the West African country this year. Several presidential candidates have indicated they could put existing contracts under review if elected.

Here are details of some of the country’s major mining operations and planned developments.

*********************BAUXITE***************************

BACKGROUND:

Guinea boasts about a third of all known reserves of bauxite, the ore used to make aluminium. CBG, or Compagnie des Bauxites de Guinee, owned by Alcoa (AA.N), Rio Tinto (RIO.L) (RIO.AX) and the Guinean government, is the world’s biggest bauxite exporter. It shipped a 13.7 million tonnes in 2008.

PRODUCTION:

Guinea’s total bauxite production in 2009 was 14.77 million tonnes, down from 19.78 million in 2008, partly because of the effects of political turmoil. Output recovered in the first quarter of 2010 to nearly 4 million tonnes from 3.35 million in the same period a year ago, the government said. [ID:nLDE64K1VP]

Bauxite production capacity is estimated as follows:

- Compagnie des Bauxites de Guinee/Boke Mine 15 mln

- Alumina Company of Guinea/Fria-Kimbo Mine (RUSAL) 2.8 mln

- Compagnie des Bauxites de Kindia 3.8 mln

ALUMINA REFINERIES:

RUSAL’s (0486.HK) Friguia plant, Guinea’s largest single employer, refines bauxite to alumina, with a total production of about 530,000 tonnes.

Alcoa and Rio Tinto are considering adding an alumina refinery to their Guinea bauxite joint venture.

Toronto-listed Global Alumina (GLAu.TO) is building a new 3.3 million tonnes per year alumina refinery but has delayed start-up by two years to 2011 and raised its cost forecast by 35 percent to $4.3 billion.

Total Guinean production of alumina was down 15.8 percent in 2009 to 500,400 tonnes and continued to lag during the first quarter of 2010.

**********************IRON ORE**************************

BACKGROUND:

Guinea is believed to have some of the world’s richest undeveloped iron ore deposits. A flurry of deals have been announced in recent months despite ongoing political uncertainty.

DEALS:

In March, Rio Tinto and Chinese metals group Chinalco signed a $2.9 billion agreement to jointly develop the Simandou iron ore project. Under the terms of the deal, Rio puts its 95 percent stake in Simandou into the joint venture, and Chinalco pays $1.35 billion for 47 percent in that venture.

Rio says Simandou is the largest undeveloped iron ore mine in the world, containing 2.25 billion tonnes of the mineral. The project is forecast to cost $6 billion.

On June 23, Rio issued a statement insisting it has “firm rights” to all of its Simandou deposit after the government said it wanted to exercise an option to acquire 20 percent of the part under Rio’s control. The government last week gave Rio 60 days to produce a feasibility schedule for the project or face a possible further review of the deposits’ future.

In April, Vale (VALE.N)(VALE5.SA) spent $2.5 billion on a majority stake in a division of BSG Resources in Guinea in order to develop the Simandou-Zogota project. Output will begin in 2012 with 10 million tonnes of iron ore and reach 50 million tonnes by 2015, Vale said.

London-listed explorer Bellzone BMZ.L announced a joint-venture deal with Guinea in June, paving the way for a feasibility study into the construction of the 280-km railway line from the Kalia iron ore concession to the port of Matakan. The study should be completed within 30 months, according to the terms of the deal. China International Fund will help fund the project, Guinea’s government said.

************************GOLD****************************

BACKGROUND:

Guinea’s gold production surged during the first quarter of 2010 to 229,991 ounces from 73,210 ounces in the same quarter a year ago. It remains a relatively small producer compared with regional leaders Ghana and Mali, which produce closer to 2 million ounces each per year.

PRODUCTION:

Anglogold Ashanti (ANGJ.J) operates Guinea’s biggest gold mine at Siguiri in the northeast, where it produced 332,000 ounces of gold in 2008. Guinea holds a 15 percent stake.

Crew Gold (CRU.TO) operates the LEFA Corridor Gold Project, which produced 189,520 ounces in 2008.

West Africa-focused gold miner Semafo, which is listed in Toronto, operates the Kiniero mine in eastern Guinea. It produced 51,700 ounces in 2008.

Artisanal gold mining is also common in Guinea.

**********************DIAMONDS***************************

Guinea’s diamond reserves are estimated at more than 25 million carats, not including as yet unmapped kimberlite fields. Production during the first quarter of 2010 was 72,870 carats, up slightly from 70,920 carats in the same period in 2009.

**********************NICKEL****************************

Australian-listed company Lindian Resources (LIN.AX) is exploring for nickel at the Dinguiraye project, about 400 km northeast of Conakry. ******************************************************** Sources: Reuters news, company websites & Reuters Metal Production Database, available to 3000Xtra users here (Reporting by Daniel Magnowski, Richard Valdmanis, Saliou Samb and David Cutler; editing by Matthew Jones) (For full Reuters Africa coverage and to have your say on the top issues, visit: africa.reuters.com/)

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FACTBOX-Guinea, rich in minerals, holds landmark vote

June 29, 2010 By Leave a Comment

(Reuters) – Guinea is holding a presidential election on Sunday which could emerge as the first truly free vote in the West African country’s troubled history since 1958 independence from France.

Stocks | Global Markets

For news on the election, click on: [ID:nLDE65Q03F]

Following are some key details about Guinea:

* ECONOMY: Guinea is the world’s top exporter of bauxite, the raw material used to make aluminium and relies on minerals for over 70 percent of exports.

– Guinea boasts around a third of all known reserves of bauxite. CBG (Alcoa and Rio Tinto’s Compagnie des Bauxites de Guinee), the world’s biggest bauxite exporter, shipped a record 13.7 million tonnes in 241 shiploads during 2008.

– Guinea saw two huge iron ore deals this year: a $2.5 billion deal between the world’s top iron ore miner Vale (VALE5.SA) and BSG Resources, and a $2.9 billion deal between global No. 2 iron ore miner Rio Tinto (RIO.L) (RIO.AX) and Chinese metals group Chinalco.

– Guinea also has gold, diamonds, uranium and other minerals. Guinea’s diamond reserves are estimated at over 25 million carats, not including as yet unmapped kimberlite fields.

– Guinea’s economic progress remains mostly driven by growth in mining, construction, and public works and services. While mining firms already working in Guinea continued doing so, the government said the political situation was at least partially responsible for a downturn in mineral exports in 2009.

– Guinea was recently named by watchdog Transparency International in its 2009 Corruption Perceptions index as ranking 168, jointly with Equatorial Guinea, Iran, Burundi and Haiti out of 180 countries listed.

For a factbox on major mining operations in Guinea, click on: [ID:nLDE64A1TR]

* COUNTRY DETAILS:

POPULATION: 10.1 million.

ETHNICITY: There are 16 ethnic groups in Guinea, the most numerous being the Peul, Malinke, and Sussu. RELIGION: About 65 percent Muslim. Traditional African religions 33 percent. There is also a small Christian minority.

LANGUAGE: The official language is French but Malinke and Sussu are also widely spoken.

GEOGRAPHY: Area is 245,720 sq km (94,870 sq mile). The former French colony lies on West Africa’s Atlantic coast. It shares borders with Liberia, Sierra Leone, Ivory Coast, Senegal, Guinea-Bissau and Mali.

Sources: Reuters/Global Insight/CIA/IMF/Alertnet

(For full Reuters Africa coverage and to have your say on the top issues, visit: africa.reuters.com/ ) (Writing by David Cutler, London Editorial Reference Unit;)

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UPDATE 1-Origo buys stake in Chinese tyre recycling company

June 26, 2010 By Leave a Comment

LONDON, June 25 (Reuters) – China-focused private equity firm Origo Partners (OPP.L) will spend up to $6.65 million buying a stake in a Chinese recycling company, making its third investment in the region since raising $30 million to fund such deals.

London-listed Origo said on Friday it would spend $3 million acquiring a 10.5 percent stake in Jinan Eco-Energy Technology which designs and operates recycling systems that convert scrap tyres and plastics into fuel oils.

It also has an option to raise its interest to 20 percent at an additional cost of $3.65 million.

“We expect that recycling plants based on Eco-Energy’s technologies will be processing in excess of 100,000 tonnes of scrap tyres and waste plastic per annum by end of 2011 with significant future potential for growth given the estimated 4 billion tyres in landfills around the world,” Origo Chief Executive Chris Rynning said in a statement.

Origo raised $30 million from investors through a share placing earlier this month with a view to investing in China’s mining, agriculture, renewable energy and telecoms sectors. [ID:nLDE65A075]

Earlier this week the company said it had completed investments in two Mongolian exploration companies prospecting for coal, iron ore, copper and gold. [ID:nSGE65M08P]

(Reporting by Karolina Tagaris; editing by Paul Hoskins)

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DEALS-Australia M&A deals fall nearly a third in H1

June 26, 2010 By Leave a Comment

June 25 (Reuters) – Mergers and acquisitions involving Australian firms fell 30.6 percent in the first half of 2010 from a year earlier to $63.4 billion, although cross-border activity was steady and private equity interest returned, according to Thomson Reuters data.

Private Capital

The preliminary data, released on Friday, showed deal activity where Australia was the target nation fell 45.7 percent to $48.4 billion in the half from a year ago.

The comparable data in the 2009 first half included BHP Billiton BHP,AX and Rio Tinto’s (RIO.AX) massive iron ore joint venture valued at $58 billion.

The materials sector was the most active in the first half of 2010 with 345 deals worth $23.2 billion.

Newcrest Mining’s (NCM.AX) $9.2 billion takeover offer for Lihir Gold (LGL.AX) is the largest deal involving an Australian firm for the year so far.

Private equity activity also showed signs of recovery compared to a year ago, increasing almost three times from the first-half of 2009 to $2.6 billion. Two private equity consortiums are currently in talks to buy Healthscope (HSP.AX).

Cross-border deals were on a par with last year at about $26.5 billion, the data showed.

The preliminary data included include bids for toll-road operator Transurban (TCL.AX) and Macarthur Coal (MCC.AX) which have since been withdrawn

Lazard held the top spot for mergers and acquisitions advice for 2010 so far, according to the latest league table data which did not include the Transurban and Macarthur figures.

Lazard advised on $13.5 billion worth of deals. It was followed by Bank of America Merrill Lynch with $11.8 billion and Macquarie Group with $11.6 billion. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^

For more on the M&A data [ID:nN24244594] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

(Reporting by Michael Smith; Editing by Ed Davies)

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Fortescue chief cheers move to negotiate on mine tax

June 25, 2010 By Leave a Comment

June 24 (Reuters) – Australian iron ore miner Andrew “Twiggy” Forrest on Thursday welcomed overtures by Australia’s new prime minister Julia Gillard to negotiate over a proposed new mining tax.

Basic Materials

Forrest, chief executive of Fortescue Metals Group (FMG.AX), has been at the centre of attacks on a tax that he described as a veiled act of nationalisation of Australia’s mining sector by former Prime Minister Kevin Rudd.

“Ms Gillard and her new government have realised that government policy is best effected through open and honest consultations with the Australian people and industry,” Forrest said in a statement. (Reporting by James Regan; Editing by Ed Davies)

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UPDATE 1-JFE says can pass materials costs on to customers

June 23, 2010 By Leave a Comment

TOKYO, June 22 (Reuters) – JFE Steel Corp (5411.T) will be able to pass most of higher costs for raw materials on to customers in the April-June quarter, President Eiji Hayashida said on Tuesday.

Worries that Japanese mills will not be able to fully pass higher iron ore and coal costs on to customers like Toyota Motor Corp (7203.T) have battered their shares.

Shares in JFE Holdings, the world’s sixth-biggest steelmaker rose 0.7 percent to an intraday high of 3,010 yen after the news, outperforming a 1 percent decline in the broader market.

“Generally speaking, we’ll be able to pass most of the higher raw material costs on to our customers in almost every sector dating back to April,” Hayashida told a news conference.

Hayashida, also the chairman of the Iron and Steel Federation of Japan, said higher raw material prices will cost Japan’s steel industry 2 trillion yen ($22 billion) in the year through March 31 if iron ore and coking coal prices stay at current levels after October.

Hayashida also said an appreciation in the China’s yuan would not have a large impact if it was gradual.

“A gradual rise in the value of the yuan is positive if it helps expand China’s domestic demand, curtails exports and leads to healthy growth in the steel market,” he said. (Reporting by Yuko Inoue; Editing by Edwina Gibbs)

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UPDATE 1-Brazil’s central bank welcomes China yuan move

June 21, 2010 By Leave a Comment

June 20 (Reuters) – Brazil’s Central Bank on Sunday welcomed China’s move to boost flexibility of the yuan exchange rate, saying the decision showed China’s willingness to help the global economy.

China announced on Saturday that it would resume making the yuan more flexible, signaling that it was ready to break a 23-month-old peg to the dollar that had come under intense international criticism.

“The announcement by the Chinese central bank regarding greater fluctuation of the yuan, is welcome,” Central Bank President Henrique Meirelles said in a terse statement.

“It shows the disposition of the Chinese government to contribute to greater global economic equilibrium. But we need to wait to see what the effects will be.”

Analysts believe China announced the decision in part to reduce tensions at the upcoming Group of 20 meeting of nations in Canada following months of pressure from Washington and charges from around the world that it was manipulating its currency to favor its export sector.

China is Brazil’s largest trading partner, importing large amounts of commodities including soy, petroleum and iron ore. (Reporting by Isabel Versiani, Writing by Brian Ellsworth, editing by Marguerita Choy)

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UPDATE 1-African Minerals says CRM investment completed

June 17, 2010 By Leave a Comment

LONDON, June 16 (Reuters) – African Minerals Ltd (AMIq.L) said a proposed 167.8 million pound ($260 million) investment by China Railway Materials (CRM) to develop the Tonkolili iron ore project has been completed following Chinese government approval.

As previously announced, CRM will take a 12.5 percent stake in African Minerals as a result of the investment and has the right to appoint a non-executive director to the board.

In February, African Minerals verified the size of the Tonkolili project in Sierra Leone at 10.5 billion tonnes of magnetite, making it the biggest deposit in the world.

China’s steel sector, which produced almost half the world’s steel output last year, is the biggest consumer of iron ore.

(Reporting by Julie Crust; editing by Victoria Bryan)

($1=.6465 POUND)

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Iron ore mine collapse kills one in Ukraine

June 14, 2010 By Leave a Comment

June 13 (Reuters) – A man was killed on Sunday at an iron ore mine in Ukraine’s eastern city of Kryvyi Rih, the Emergencies Ministry said.

Basic Materials

The mine is run by a company belonging to local tycoon Rinat Akhmetov.

Part of the Ordzhonikidze mine caved in, causing a car and driver to fall into the pit, the ministry said in a statement.

The mine is run by Metinvest, part of Akhmetov’s System Capital Management group. The ministry did not say how the accident would affect operations at the mine.

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UPDATE 1-Coal firm Ncondezi lists in London, shares rise

June 11, 2010 By Leave a Comment

LONDON, June 10 (Reuters) – Mozambique coal company Ncondezi (NCCL.L) shrugged off weaker markets with a successful London initial public offering on Thursday, raising $52 million to help develop its mines.

Shares in Ncondezi Coal Company Ltd. rose 7.3 percent to 132 pence in thin trading by 0930 GMT, compared to an issue price of 123 pence. The UK mining index .FTNMX1770 was up 1.0 percent.

Thursday’s gain gave the AIM-listed firm a market capitalisation of $230 million.

On June 2, Brazilian iron ore firm Ferrous Resources Ltd postponed a planned listing due to a sharp fall in mining stocks. [ID:nLDE6511ZR]

Ncondezi had hoped to raise up to $60 million, but Chief Executive Graham Mascall said he was happy with the result considering volatile markets.

The UK mining index has shed 21 percent since touching a peak on April 6 on worries about European debt, a slowdown in Chinese metals demand and a proposed Australian mining tax.

“Despite the choppy markets we had a lot of interest on the roadshows… certainly the $52 million we have is a good positive sign from the institutions that invested in us,” Mascall told Reuters.

FIRST OUTPUT BY 2015

The company will use the funds for more exploration work over the next 18 months, which will form the basis for a final feasibility study due by late 2012.

An initial study pegged the cost of developing a mine at $376 million to produce 10 million tonnes a year of thermal coal used to fuel power stations.

The firm was likely to produce 2.5 million tonnes in a first phase, costing $200-$250 million, and would probably use a mix of funding including new equity, project equity, mezzanine debt and upfront payments from future customers, Mascall said.

Ncondezi is planning to export to the Indian market, with first production by late 2014 or early 2015, later ramping up to 10 million tonnes. [ID:nLDE65113K]

It is planning to produce coal in the Tete province of Mozambique, in the same area where mines are being developed by Brazilian mining giant Vale (VALE5.SA) (VALE.N) and Riversdale Mining (RIV.AX), which has a market value of $1.6 billion.

“We see realistic scope to replicate its neighbours’ exceptional value growth, particularly if the region’s signature coking coal potential is found,” said a note by Liberum Capital, the firm’s adviser and broker for the placing. ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For a map of Mozambique showing Ncondezi’s, Vale’s and Riversdale’s properties plus road and river links, click on: here ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ (Reporting by Eric Onstad; Editing by Tom Pfeiffer)

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