S.Africa’s rand steadies vs dlr, risk appetite low

JOHANNESBURG, July 20 (Reuters) – South Africa’s rand recovered its footing against the dollar on Tuesday after touching near 2-week lows overnight but remained vulnerable to risk aversion as the global economic recovery continues to stutter.

The JSE’s blue chip Top-40 September futures contract ALSIc1 was up 0.54 percent ahead of the 0700 GMT start of trade, suggesting a bounce on the bourse after miners and banks pulled stocks lower on Monday.

At 0652 GMT the rand ZAR=D3 was at 7.62 to the dollar, up 0.46 percent from Monday’s close at 7.6550.

But traders said the currency could revisit the 7.68 area it dipped to overnight as investors fretted about sluggish prospects for the global economy after last year’s recession.

“We’ve seen the dollar strengthening yesterday against the majors and that’s also supported the dollar against the rand,” a trader based in Johannesburg said.

“The consensus is that guys are taking a bit of risk off. I think we should find support towards 7.61 and we’ll trade up to 7.67/68 for the day.

Government bonds edged higher, with the yield on the benchmark 2015 bond ZAR157= falling five basis points to 7.70 percent while that on the 2036 ZAR209= note was down 4.5 basis points to 8.875 percent.

(Reporting by Stella Mapenzauswa; Editing by John Stonestreet)

China coal mine accident kills 28; owner detained

July 18 (Reuters) – Police detained the owner of a coal mine in China’s northwestern Shaanxi province where a fire killed 28 miners, Xinhua news agency reported on Sunday.

All the miners in the shaft died when an underground cable caught fire on Saturday night at the Xiaonangou coal mine in Hancheng City, the report said, citing the general office of the Shaanxi provincial government.

The report gave no other details.

Thousands of people are killed in China’s mines every year despite government pledges to shut or consolidate many small or unsafe operations.

(Reporting by Ken Wills, editing by Jonathan Thatcher))

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

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)

S.Korea POSCO says agrees on Q3 iron ore price hikes

July 13 (Reuters) – South Korea’s POSCO (005490.KS), the world’s No.3 steelmaker, said on Tuesday it had agreed on a 26 percent quarterly rise in iron ore prices for the third quarter with three major miners.

For the current quarter, the steelmaker also agreed to hard coking coal imports at $225 per tonne, soft coking coal at $172 per tonne, and pulverised coal injection (PCI) at $180 per tonne, a statement from the company said.

(Reporting by Cho Mee-young; Editing by Jonathan Hopfner)

RPT-SAfrica’s Village seeks gold mine to generate cash -paper

July 13 (Reuters) – South African junior miner Village Main Reef Gold Mining (VILJ.J) plans to buy a gold mine within the next year to generate cash for its other venture, Business Day on Tuesday quoted the chief executive as saying.

Village earlier this year bought a controlling interest in the Lesego Platinum exploration project, for which it plans to complete a bankable feasibility study within three years.

In the meantime, the company plans to buy a mine to avoid pitfalls suffered by other junior miners reliant on one asset only.

“Our first strategic objective is to buy a cash-generative asset,” CEO Bernard Swanepoel was quoted as saying. (Reporting by Agnieszka Flak, Editing by Himani Sarkar)

Australia mine tax favours multi-nationals-Fortescue

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)

European shares turn negative; miners slip

July 12 (Reuters) – European shares turned negative on Monday as miners lost ground, tracking weaker metals prices, after weekend data showed China’s June copper imports fell short of expectations, though overall data surprised on the upside.

At 0719 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was down 0.2 percent at 1,020.16 points after opening slightly higher.

Miners were among the biggest decliners, with BHP Billiton (BLT.L), Anglo American (AAL.L) and Eurasian Natural Resources (ENRC.L) falling 0.5 to 1 percent.

(Reporting by Atul Prakash)

European shares turn negative; miners slip

July 12 (Reuters) – European shares turned negative on Monday as miners lost ground, tracking weaker metals prices, after weekend data showed China’s June copper imports fell short of expectations, though overall data surprised on the upside.

At 0719 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was down 0.2 percent at 1,020.16 points after opening slightly higher.

Miners were among the biggest decliners, with BHP Billiton (BLT.L), Anglo American (AAL.L) and Eurasian Natural Resources (ENRC.L) falling 0.5 to 1 percent.

(Reporting by Atul Prakash)

Australia eyes iron ore tax breaks -mine group

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)

Australia govt, miners making progress on tax -Atlas

July 1 (Reuters) – Australia’s government and miners are making significant progress in negotiation over a controversial mining tax, Atlas Iron managing Director Dave Flanagan, who is not directly involved in the talks, said.

“I have been talking to people who are involved in the majors … and it does appear there has been significant progress,” Flanagan, told Reuters on Thursday. (Reporting by Jim Regan; Editing by Balazs Koranyi)

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

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)

Australia govt, miners on brink of tax deal -report

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 new trigger point for the tax would be the 10-year Australian government bond yield plus 7 percentage points, or around 12 percent now, up from an initial proposal for 5 percent, the paper said on its website on Thursday. (Reporting by Balazs Koranyi; Editing by Ed Davies)

European shares turn negative; miners fall

June 24 (Reuters) – European shares turned negative on Thursday morning, with miners giving up gains from early in the session, having risen on hopes Australia’s new Prime Minister would compromise on proposed taxes on resource firms.

Stocks | European Markets | Global Markets

At 0730 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was down 0.4 percent at 1,035.76 points.

BHP Billiton (BLT.L), Kazakhmys (KAZ.L), Rio Tinto (RIO.L) and Xstrata (XTA.L) were between 1 and 2.7 percent lower. (Reporting by Brian Gorman)

Q+A: PM Gillard changes Australian govt election hopes

(Reuters) – Australia’s ruling Labor party elected Julia Gillard as the nation’s first woman prime minister on Thursday after former prime minister Kevin Rudd quit on losing the support of his lawmakers.

World

Gillard, 48, has promised a more consensus-driven government to help her party reconnect with disgruntled voters after months of poor opinion polls and with an election expected around October.

Here are some questions and answers on how Gillard’s appointment changes the political outlook in Australia. IS

LABOR MORE LIKELY TO WIN THE NEXT ELECTION?

Gillard’s election should help Labor re-build voter support ahead of the election, and should give the party a stronger chance of victory. Opinion polls regularly find Gillard to be more popular than Rudd, and betting agencies have already reported Labor is now the firm favorite to win the election.

Gillard has long been one of the government’s best performers in parliament with her ability to sell policies and deflect political attacks. Her promise of a consensus style of government is also in stark contrast to Rudd’s sometimes autocratic style.

Gillard also has wide voter appeal to both men and women, compared to conservative opposition leader Tony Abbott, a former Catholic seminarian who regularly polls poorly with women voters.

She is also likely to now enjoy a political honeymoon period, and every action of the first woman to lead the country is likely to be closely reported by media early in her time in charge.

DOES THIS CHANGE THE ELECTION TIMING?

Gillard’s appointment is unlikely to change the timing of the next election, which is due by the end of the year. She is likely to spend the coming months traveling the country, and making sure Australian voters know who she is and where she comes from.

She has also called a truce in the government’s damaging fight with miners over a proposed 40 percent profits tax. She is likely to need time to broker a deal ahead of the election.

An early poll in August would be risky for a new leader, still getting used to the wider responsibilities of the job. Gillard’s home state of Victoria also has elections set for late November. Both point to an election in early to mid October.

WHAT POLICIES MAY CHANGE?

Gillard has already signaled a more consultative approach on the mining tax and has indicated a stronger focus on the postponed emissions trading scheme if she wins the next election

But Gillard could also make changes to controversial asylum seeker policies. More boatpeople arrivals in recent years has been a simmering issue on talkback radio, and Labor has been vulnerable to opposition attacks blaming Rudd’s policies for the arrivals. At her first media conference, Gillard signaled a firmer stance after stressing she understood why Australians were disturbed about refugee boats arriving in Australian waters.

HOW WILL THE ELECTION BATTLE SHAPE UP?

Gillard’s elevation changes the political battle with opposition leader Tony Abbott.

Abbott is a blunt speaking conservative who grabs headlines with his combative style. Gillard can be a sharp-witted debater, but also retains a calm and composed demeanor when under attack.

Abbott may need to take care in his attacks on Gillard, to ensure the election does not become about personalities, particularly as Gillard’s election adds a gender issue to the political debate.

Gillard, in her first news conference as prime minister, has already made it clear she will focus her political attacks on Abbott’s views on workplace laws, and on health and education. Abbott has stressed that while Gillard is a new face for Labor, she supports the same policies as Rudd.

(Editing by Ed Davies and Miral Fahmy)

European shares rise in early trade; miners gain

June 24 (Reuters) – European shares rose in early trade on Thursday, with miners leading on hopes that proposals for a super tax in Australia will be diluted after a change of prime minister.

Stocks | Global Markets

At 0706 GMT, the FTSEurofirst 300 .FTEU3 index of top European shares was up 0.3 percent at 1,043.16 points, after falling 1 percent in the previous session.

Miners gained on hopes that Australia’s new leader, Julia Gillard, will compromise on proposals for increased taxes on resource companies.

Antofagasta (ANTO.L), BHP Billiton (BLT.L), Kazakhmys (KAZ.L) and Xstrata (XTA.L) rose between 0.8 and 1.2 percent.

“It seems to be more confirmation that any plans for a 40 percent resources tax have been watered down significantly,” said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin.

“The market is still in a range, and maybe it can trade towards the top of it. ”

The U.S. Federal Reserve renewed its vow to hold benchmark interest rates exceptionally low on Wednesday, but downgraded its assessment of the economic recovery. (Reporting by Brian Gorman)

European stock index futures rise, miners eyed

June 24 (Reuters) – European shares were set to rise on Thursday, snapping two consecutive sessions of losses, tracking gains in Asia on hopes new Australian Prime Minister Julia Gillard would compromise on a controversial mining tax.

Stocks | Global Markets | Financials

At 0601 GMT, futures for the STOXX Europe 50 STXEc1, Germany’s DAX FDXc1 and France’s CAC 40 FCEc1 were up 0.4 to 0.7 percent.

Mining stocks were expected to be a focus, after mining shares in Australia gained around 1.5 percent, encouraged by new Prime Minister Julia Gillard’s comments about seeking negotiations with the miners over the super tax. (Reporting by Joanne Frearson)

Australia’s minerals council suspends anti-tax ads – TV

June 24 (Reuters) – Australia’s minerals council will suspend advertisements opposing government plans for a new tax on mining after new prime minister Julia Gillard pledged to open the door to miners for negotiations, Sky TV reported on Thursday.

(Reporting by Ed Davies; Editing by Michael Smith)

Kazakh copper mine explosion kills three – Interfax

June 20 (Reuters) – Three miners died on Sunday in an explosion at a copper miner in Kazakhstan operated by the Central Asian country’s largest miner of the metal, Kazakhmys (KAZ.L), Interfax news agency reported. Interfax-Kazakhstan quoted the manager of Mine No. 67, Serik Aitmukhanov, as saying the explosion occurred at 0950 local time (0350 GMT).

Caterpillar: Australia mining tax could hurt sales – report

(Reuters) – Australia’s proposed 40 percent mining tax could hurt Caterpillar Inc’s (CAT.N) sales in the country, a spokeswoman for the world’s largest maker of construction and mining equipment told Bloomberg.

Stocks | Global Markets | Industrials

“Along with our dealers and customers in the region, we are concerned about the potential impact the proposed change in tax policy will have on the manufacturing of mining equipment and our sales in Australia,” Kate Kenny told the agency in an emailed response.

Caterpillar’s distributor in Australia is Seven Network (SEV.AX), a television-to-earthmoving equipment conglomerate.

The company has not faced any order cancellations or delays, Kenny told the agency.

Caterpillar opposes any significant tax increases that will impact the viability of future mining investment in Australia and threatens the company’s long term competitiveness, Kenny said.

Over $20 billion in new resource investment in Australia has been put on hold by global miners strongly opposing the tax.

Caterpillar could not immediately be reached for comment by Reuters outside regular U.S. business hours. (Reporting by Sakthi Prasad in Bangalore, Editing by Ian Geoghegan)

UPDATE 1-China steelmakers face tough Q3 -Baosteel chairman

SHANGHAI, June 8 (Reuters) – China’s steel industry will face its toughest time of the year during the third quarter, the head of the parent firm of Baoshan Iron & Steel Co Ltd (600019.SS), China’s biggest listed steelmaker, said on Tuesday.

Iron ore contract prices will peak in the third quarter, while steel consumption by the auto and housing sectors will be sluggish, Xu Lejiang, chairman of Baosteel Group, told reporters.

“The third quarter will be the most difficult time of the year because that’s when iron ore prices will peak if contracts are based on quarterly pricing as the three major iron ore suppliers have requested,” Xu said.

“Demand from downstream industries such as auto, housing and home appliances will become relatively weak,” he added.

Baosteel cut its hot-rolled product prices for July delivery by about 10 percent and cold-rolled prices by 13 percent, the first cuts since last November. [ID:nTOE652093]

Some small steel mills and traders may spurn iron ore purchase contracts and turn to the spot market for ore in the third quarter, when spot prices are likely to fall below contracted prices, Xu added.

However, Baosteel will not buy in the spot market, Xu said, adding that the company would stick to long-term iron ore supply contracts, although it harbours doubts about the quarterly pricing mechanism the miners have initiated this year to replace annual term price agreements.

China’s largely state-run steel industry has steadfastly insisted on adhering to annual pricing, as it seeks greater price stability and fears a possible rise in prices later this year, although in practice it appears to be acceeding to quarterly deals, in line with other Asian steelmakers.

“We haven’t accepted the new pricing system but there’s nothing we can do about it by ourselves. We’re still trying to negotiate,” Xu said.

“We will negotiate with each iron ore miner to figure out how to finalise payment for second-quarter iron ore deals.”

Xu said spot iron ore prices were certain to fall in the fourth quarter as a large number of Chinese steel mills would curtail production. (Editing by Clarence Fernandez) (Reporting by Rujun Shen, Ruby Lian and Jacqueline Wong)