The Boddington Gold Mine (BGM) is about 130km south-east of Perth in Western Australia. The largest undeveloped gold mine in the country, it is poised to become the highest producing mine once production ramps up over the next few years.
The $2.4bn project was initially a three-way joint venture between Newmont Mining, AngloGold Ashanti and Newcrest Mining. In 2006 Newmont bought Newcrest’s 22.22% share, bringing its interest to 66.67% and ending any Australian ownership. AngloGold owns the remaining 33.33%.
The original, mainly oxide open-pit mine was closed at the end of 2001.
Recent exploration has identified an extensive 19.57Moz gold bedrock resource, the basis of the Boddington Gold Mine Expansion Project. Approved in 2006, this will involve mining the hard gold/copper ore that lies beneath depleted oxide pits at Boddington’s original mine site.
The project has an attributable capital budget of between A$0.8bn and A$0.9bn. At year-end, the overall project was approximately 65% complete, with engineering and procurement activities nearing completion. Construction of the treatment plant was approximately 32% complete. At its peak the project is expected to employ some 2,000 workers. Once production begins it is expected that around 650 full-time staff will be required.
Based on the current plan, mine life is estimated to be more than 20 years, with attributable life-of-mine gold production expected to be greater than 5.7Moz.
Newmont and Anglo have focussed their exploration activities on the poorly explored areas of the greenstone belt outside the already identified Boddington Expansion resource. The exploration strategy is to identify the resource potential of the remainder of the greenstone belt, with the emphasis on high-grade lode-type deposits.
Wednesday, April 22, 2009
Campbell Gold Mine, Ontario, Canada
In continuous operation since 1949, since when it has produced over 11Moz of gold, the Campbell underground gold mine is located at Balmertown, northwestern Ontario. Formerly wholly owned by Placer Dome Inc., the mine is now owned by Goldcorp Inc., following Placer’s take-over by Barrick Gold Corp. in early 2006. Barrick subsequently sold several former Placer properties to Goldcorp, especially where there was the potential for operational synergies between neighbouring mines.
Goldcorp has now merged Campbell with its existing Red Lake mine as one operating unit, with the combined operation expected to have an output of around 1Moz/y of gold by 2008.
GEOLOGY AND RESERVES
Campbell is located in the eastern part of the Red Lake Greenstone Belt, in the Birch Lake/Uchi Lake sub-province of the Canadian Shield. The auriferous zones occur on the eastern border of a major archean tholeiitic volcanic complex. The gold occurs as either free gold or is in sulphide minerals, mainly arsenopyrite, pyrite and pyrrhotite. A minor amount of silver occurs with the gold.
As of December 2005, proven and probable ore reserves stood at 5.5Mt grading 8.2g/t and containing 1.45Moz of gold. Measured and indicated mineralisation contained a further 1.83Moz.
MINE LAYOUT AND DEVELOPMENT
Mine access is through two separate shafts – No.1 shaft is a four-compartment shaft sunk to below 27 level (1316m below surface). The Reid shaft opened up more than 600 vertical metres of new ground below 27 level, and is now the main ore hoisting shaft.
The mine is track-based with full haulage facilities on every level. Electric LHDs and hydraulic longhole drills are used in high-tonnage areas. Mining methods have evolved from shrinkage stoping through cut-and-fill and finally to longhole mining. Longhole mining includes sub-level and crown pillar operations mine-wide and accounts for 75% of production with cut-and-fill producing another 2%. The remaining 23% is from development.
Mechanised cut-and-fill commenced in 2001 and will be preferred over conventional longhole where feasible. Pastefill totally replaced hydraulic fill in the final quarter of 2000 to speed mining.
Goldcorp has now merged Campbell with its existing Red Lake mine as one operating unit, with the combined operation expected to have an output of around 1Moz/y of gold by 2008.
GEOLOGY AND RESERVES
Campbell is located in the eastern part of the Red Lake Greenstone Belt, in the Birch Lake/Uchi Lake sub-province of the Canadian Shield. The auriferous zones occur on the eastern border of a major archean tholeiitic volcanic complex. The gold occurs as either free gold or is in sulphide minerals, mainly arsenopyrite, pyrite and pyrrhotite. A minor amount of silver occurs with the gold.
As of December 2005, proven and probable ore reserves stood at 5.5Mt grading 8.2g/t and containing 1.45Moz of gold. Measured and indicated mineralisation contained a further 1.83Moz.
MINE LAYOUT AND DEVELOPMENT
Mine access is through two separate shafts – No.1 shaft is a four-compartment shaft sunk to below 27 level (1316m below surface). The Reid shaft opened up more than 600 vertical metres of new ground below 27 level, and is now the main ore hoisting shaft.
The mine is track-based with full haulage facilities on every level. Electric LHDs and hydraulic longhole drills are used in high-tonnage areas. Mining methods have evolved from shrinkage stoping through cut-and-fill and finally to longhole mining. Longhole mining includes sub-level and crown pillar operations mine-wide and accounts for 75% of production with cut-and-fill producing another 2%. The remaining 23% is from development.
Mechanised cut-and-fill commenced in 2001 and will be preferred over conventional longhole where feasible. Pastefill totally replaced hydraulic fill in the final quarter of 2000 to speed mining.
Boulby Potash Mine, United Kingdom
In the 1960s, with fertiliser demand growing and the UK reliant on imported potash, ICI decided to develop reserves 40km from its Cleveland facilities in north-east England. The 200ha mine site is at Boulby, half-way between the Tees estuary and the port of Whitby.
The design capacity is now over 1.0Mt/y of potassium chloride (KCl) product, sufficient to maintain a 55% UK market share and substantial export sales. Potash extraction requires the co-production of salt. Construction started in 1969 and the first product was delivered in 1973. To ship the potash, a new ship/road/rail terminal was constructed at Teesdock.
ICI formed Cleveland Potash Ltd (CPL) in joint venture with the Anglo American group but subsequently sold its stake to Anglo American. In 2002 the "non-core" business was sold to ICL Fertilizers, a division of Israel Chemicals Ltd.
CPL, which employs 828 people, is now integrated with Iberpotash in Spain and other regional subsidiaries into ICL Fertilizers Europe, which handles marketing and distribution of the products. Dead Sea Works recovers potash products in Israel.
GEOLOGY AND RESERVES
Boulby potash occurs at depths between 1,200 and 1,500m in a seam ranging from 0–20m but averaging 7m in thickness. Within a permian evaporite sequence, sylvinite ore comprises 35–45% sylvite (potash) and 45–55% halite (salt), plus impurities. The sedimentary strata above the evaporites include the triassic Sherwood sandstone, which contains brine under high pressure.
This situation restricted exploration drilling from surface and, together with the depth involved, prevented underground exploration and trial mining. Consequently, planners were aware of the high stresses to be dealt with but not the full extent of faulting or the presence of pressurised gas in shaly parts of the potash, sufficient to cause blow-outs during extraction. However, the geology provides excellent conditions for the Institute of Underground Sciences to undertake 'dark-matter' experiments.
The design capacity is now over 1.0Mt/y of potassium chloride (KCl) product, sufficient to maintain a 55% UK market share and substantial export sales. Potash extraction requires the co-production of salt. Construction started in 1969 and the first product was delivered in 1973. To ship the potash, a new ship/road/rail terminal was constructed at Teesdock.
ICI formed Cleveland Potash Ltd (CPL) in joint venture with the Anglo American group but subsequently sold its stake to Anglo American. In 2002 the "non-core" business was sold to ICL Fertilizers, a division of Israel Chemicals Ltd.
CPL, which employs 828 people, is now integrated with Iberpotash in Spain and other regional subsidiaries into ICL Fertilizers Europe, which handles marketing and distribution of the products. Dead Sea Works recovers potash products in Israel.
GEOLOGY AND RESERVES
Boulby potash occurs at depths between 1,200 and 1,500m in a seam ranging from 0–20m but averaging 7m in thickness. Within a permian evaporite sequence, sylvinite ore comprises 35–45% sylvite (potash) and 45–55% halite (salt), plus impurities. The sedimentary strata above the evaporites include the triassic Sherwood sandstone, which contains brine under high pressure.
This situation restricted exploration drilling from surface and, together with the depth involved, prevented underground exploration and trial mining. Consequently, planners were aware of the high stresses to be dealt with but not the full extent of faulting or the presence of pressurised gas in shaly parts of the potash, sufficient to cause blow-outs during extraction. However, the geology provides excellent conditions for the Institute of Underground Sciences to undertake 'dark-matter' experiments.
Black Thunder Coal Mine, WY, USA
The Black Thunder thermal coal mine, located in the Southern Powder River Basin of Wyoming, opened in 1977 and for many years was the largest single coal operation in the US. Having been relegated to second-largest, after Peabody's North Antelope-Rochelle operation, also in the Powder River Basin, in 2004 Black Thunder once again became the nation's leading coal-producer following Arch Coal's acquisition of the neighbouring North Rochelle mine from Triton Coal Co. The combined operation is now producing coal at a rate of around 91Mt/y, equivalent to about 10% of total US coal production. In 2004, Black Thunder became the first coal mine in the US to ship a cumulative 1,000Mst (907Mt) over its 27-year life to date.
Construction began at Black Thunder in 1976 with the installation of crushing, conveying, sampling and high-speed train-loading systems. Today, all plant processes are computer controlled, including the precision loadout systems and the hi-tech, near-pit crushing and conveying system installed in 1989.
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Until 1998, Black Thunder was owned and operated by ARCO Coal, part of the Atlantic Richfield group. It is now owned by Arch Coal, the second-largest coal miner in the US, which bought the property following ARCO's withdrawal from the coal market.
GEOLOGY AND RESERVES
Black Thunder works coal reserves in the Wyodak seam. Hosted in the palaeocene Fort Union formation, which covers vast areas of Wyoming, Montana and the Dakotas, the seam at Black Thunder is gently dipping, 22m thick and locally splits into the Anderson and Canyon beds separated by up to 18m of waste. In 2004, Arch successfully bid $611m for the rights to mine the neighbouring Little Thunder reserves, which contain some 650Mt of recoverable coal, increasing the property’s reserves to 1,370Mt-plus.
COAL QUALITY
The mine produces low-sulphur, sub-bituminous coal suitable for power station fuel without any preparation except crushing. Black Thunder coal has a heating value of 20.3MJ/kg, and the ash contents are around 5% while as-received moisture is 25–30%. The moisture content of some Powder River Basin coals increases their reactivity to the extent that spontaneous combustion can be a problem if they are not properly handled.
Construction began at Black Thunder in 1976 with the installation of crushing, conveying, sampling and high-speed train-loading systems. Today, all plant processes are computer controlled, including the precision loadout systems and the hi-tech, near-pit crushing and conveying system installed in 1989.
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Until 1998, Black Thunder was owned and operated by ARCO Coal, part of the Atlantic Richfield group. It is now owned by Arch Coal, the second-largest coal miner in the US, which bought the property following ARCO's withdrawal from the coal market.
GEOLOGY AND RESERVES
Black Thunder works coal reserves in the Wyodak seam. Hosted in the palaeocene Fort Union formation, which covers vast areas of Wyoming, Montana and the Dakotas, the seam at Black Thunder is gently dipping, 22m thick and locally splits into the Anderson and Canyon beds separated by up to 18m of waste. In 2004, Arch successfully bid $611m for the rights to mine the neighbouring Little Thunder reserves, which contain some 650Mt of recoverable coal, increasing the property’s reserves to 1,370Mt-plus.
COAL QUALITY
The mine produces low-sulphur, sub-bituminous coal suitable for power station fuel without any preparation except crushing. Black Thunder coal has a heating value of 20.3MJ/kg, and the ash contents are around 5% while as-received moisture is 25–30%. The moisture content of some Powder River Basin coals increases their reactivity to the extent that spontaneous combustion can be a problem if they are not properly handled.
Bajo de la Alumbrera Copper and Gold Mine, Argentina
The Bajo de la Alumbrera (Alumbrera) copper-gold mine in Argentina, owned and operated by Minera Alumbrera Ltd (MAA), commenced commercial operation in February 1998. The mine is located in Catamarca province, 1,100km north west of Buenos Aires at an altitude of 2,500m.
The Argentine state- and provincially-owned mining company, Yacimientos Mineros de Agua de Dionisio (YMAD), which has the title to the deposit, awarded an international tender for the Alumbrera concession to International Musto Exploration in 1992. Minera Alumbrera was formed in 1994 when MIM Holdings bought a 50% operating interest. During 1995, North Ltd and Rio Algom acquired shares in International Musto and each took a 25% holding in MAA. Pre-production capital expenditure totalled $1.2bn and capital expenditures in the 1998 and 1999 financial years were $198m and $17m respectively. Royalty payments to Catamarca province commenced in 1998. YMAD will start earning 20% of the net proceeds (before tax) once project capital plus interest has been repaid.
In 2003, three years after Rio Tinto acquired North Ltd and Billiton (now BHP Billiton) bought Rio Algom, the two companies sold their holdings to the Canadian company, Wheaton River Minerals, while MIM was acquired by Xstrata. In 2005 Xstrata opened an office in Chile, initially to manage both Alumbrera and the company's Las Bambas copper project in Peru.
GEOLOGY AND RESERVES
The Bajo de la Alumbrera deposit is a classic copper-gold porphyry. Porphyritic dacite intrudes volcanic andesite, chalcopyrite being the main copper mineral. Near-surface weathered material overlies primary sulphide. In 2003 the mine's reserve base totalled 330Mt proven grading 0.51% copper and 0.59g/t gold plus 42Mt probable grading 0.55% copper and 0.64g/t gold.
However, 2004 drilling led MAA to reoptimise the mine plan based on a new geological model and new cost figures, and this increased contained metal reserves by more than 20%, extending the mine's life to 2015. In mid-2005, reserves were reported to be 360Mt, grading 0.46% copper and 0.51g/t gold, while mineral resources stood at 380Mt (0.47% copper and 0.51g/t gold).
The Argentine state- and provincially-owned mining company, Yacimientos Mineros de Agua de Dionisio (YMAD), which has the title to the deposit, awarded an international tender for the Alumbrera concession to International Musto Exploration in 1992. Minera Alumbrera was formed in 1994 when MIM Holdings bought a 50% operating interest. During 1995, North Ltd and Rio Algom acquired shares in International Musto and each took a 25% holding in MAA. Pre-production capital expenditure totalled $1.2bn and capital expenditures in the 1998 and 1999 financial years were $198m and $17m respectively. Royalty payments to Catamarca province commenced in 1998. YMAD will start earning 20% of the net proceeds (before tax) once project capital plus interest has been repaid.
In 2003, three years after Rio Tinto acquired North Ltd and Billiton (now BHP Billiton) bought Rio Algom, the two companies sold their holdings to the Canadian company, Wheaton River Minerals, while MIM was acquired by Xstrata. In 2005 Xstrata opened an office in Chile, initially to manage both Alumbrera and the company's Las Bambas copper project in Peru.
GEOLOGY AND RESERVES
The Bajo de la Alumbrera deposit is a classic copper-gold porphyry. Porphyritic dacite intrudes volcanic andesite, chalcopyrite being the main copper mineral. Near-surface weathered material overlies primary sulphide. In 2003 the mine's reserve base totalled 330Mt proven grading 0.51% copper and 0.59g/t gold plus 42Mt probable grading 0.55% copper and 0.64g/t gold.
However, 2004 drilling led MAA to reoptimise the mine plan based on a new geological model and new cost figures, and this increased contained metal reserves by more than 20%, extending the mine's life to 2015. In mid-2005, reserves were reported to be 360Mt, grading 0.46% copper and 0.51g/t gold, while mineral resources stood at 380Mt (0.47% copper and 0.51g/t gold).
Brazil's Vale Discounts Iron Ore to Sell
Brazil's mining giant Vale said it is selling iron ore at a 20% discount to 2008 benchmark prices, a strategy that analysts say will boost the miner's sales amid weak demand.
Vale, the world's largest iron ore miner, competes directly with Australian rivals BHP Billiton and Rio Tinto, which are reported to be selling ore at spot prices rather than holding clients to predetermined benchmark rates.
This may be more attractive to clients in the steel sector, who may be uncertain of the economy's direction in the short term.
Vale insists it does not sell on the spot market. The provisional discount should help it keep market share until new annually revised term contract prices are set with the big steel makers, who have been demanding a 40% cut in prices, or more, from 2008 levels.
"Vale does this as a way to stir up demand, since the fourth quarter sales were very weak," said an analyst at investment bank Banif, who declined to be named. "Vale has been practicing this type of sale in the first quarter."
Vale told reporters in February during a conference call on its fourth-quarter results that it had signed on several new Chinese clients to iron ore supply contracts and was set to ship a record amount of iron ore to Asia in the first quarter.
Vale is scheduled to report its first quarter results on 6 May.
Analysts say the discount is not the end of Vale's commitment to the benchmark system, in which the world's largest iron ore miners and steel makers agree upon a fixed annual price for ore deliveries.
Instead, they say it is a temporary measure to improve sales that were dented by the global financial crisis and falling demand for steel.
Interim measure
New term prices normally take effect from 1 April but price changes are applied retroactively if they have failed to reach a deal by then, as happened this year.
Vale said in a statement to the market on Monday that it is being flexible on ore term prices on a provisional basis, allowing clients to pay 80% of the 2008 benchmark price for shipments and to settle any balance once 2009 prices are set.
Demand for iron ore has weakened since the global economic crisis took hold last September as industries reduce their output and requirements for steel, the main end use for iron ore.
Offering a discount is normal under these conditions, "it's just that the new term price has not yet been set," said Pedro Galdi, an analyst at SLW Corretora, adding Vale was unlikely to start selling on the spot market or abandon the benchmark.
"It will be another unexpected year with the industry granting a discount until the price is set," Galdi said. "The spot price reflects the high and low price, that is, the volatility.
"So, at first the Chinese client may win, but at some point he will shoot himself in the foot because the economy will recover and the spot price will be much higher (than the benchmark)."
Brazilian 2008 contract iron ore prices range from around $76 to $92 per tonne, depending on the mine. Spot iron ore prices soared as high as nearly $200 a tonne in February 2008, then tumbled as low as around $60 a tonne in October as the financial crisis deepened.
Cristiane Viana at Agora brokerage sees Vale's decision to offer a discount as an indication that the iron ore mining industry is moving toward a mixed pricing model that will see more spot sales alongside trade regulated by contract.
"It's gradual. I don't see the change happening in the next two to three years but the companies will gradually have spot and long-term contracts," Viana said.
Vale, the world's largest iron ore miner, competes directly with Australian rivals BHP Billiton and Rio Tinto, which are reported to be selling ore at spot prices rather than holding clients to predetermined benchmark rates.
This may be more attractive to clients in the steel sector, who may be uncertain of the economy's direction in the short term.
Vale insists it does not sell on the spot market. The provisional discount should help it keep market share until new annually revised term contract prices are set with the big steel makers, who have been demanding a 40% cut in prices, or more, from 2008 levels.
"Vale does this as a way to stir up demand, since the fourth quarter sales were very weak," said an analyst at investment bank Banif, who declined to be named. "Vale has been practicing this type of sale in the first quarter."
Vale told reporters in February during a conference call on its fourth-quarter results that it had signed on several new Chinese clients to iron ore supply contracts and was set to ship a record amount of iron ore to Asia in the first quarter.
Vale is scheduled to report its first quarter results on 6 May.
Analysts say the discount is not the end of Vale's commitment to the benchmark system, in which the world's largest iron ore miners and steel makers agree upon a fixed annual price for ore deliveries.
Instead, they say it is a temporary measure to improve sales that were dented by the global financial crisis and falling demand for steel.
Interim measure
New term prices normally take effect from 1 April but price changes are applied retroactively if they have failed to reach a deal by then, as happened this year.
Vale said in a statement to the market on Monday that it is being flexible on ore term prices on a provisional basis, allowing clients to pay 80% of the 2008 benchmark price for shipments and to settle any balance once 2009 prices are set.
Demand for iron ore has weakened since the global economic crisis took hold last September as industries reduce their output and requirements for steel, the main end use for iron ore.
Offering a discount is normal under these conditions, "it's just that the new term price has not yet been set," said Pedro Galdi, an analyst at SLW Corretora, adding Vale was unlikely to start selling on the spot market or abandon the benchmark.
"It will be another unexpected year with the industry granting a discount until the price is set," Galdi said. "The spot price reflects the high and low price, that is, the volatility.
"So, at first the Chinese client may win, but at some point he will shoot himself in the foot because the economy will recover and the spot price will be much higher (than the benchmark)."
Brazilian 2008 contract iron ore prices range from around $76 to $92 per tonne, depending on the mine. Spot iron ore prices soared as high as nearly $200 a tonne in February 2008, then tumbled as low as around $60 a tonne in October as the financial crisis deepened.
Cristiane Viana at Agora brokerage sees Vale's decision to offer a discount as an indication that the iron ore mining industry is moving toward a mixed pricing model that will see more spot sales alongside trade regulated by contract.
"It's gradual. I don't see the change happening in the next two to three years but the companies will gradually have spot and long-term contracts," Viana said.
CNMC $800m Myanmar Mine on Track
A Chinese mining giant has said it is committed to an $800m ferro-nickel mine in northern Myanmar, which officials said will eventually lift the impoverished South East Asian nation's GDP by over 2%.
Executives from the China Nonferrous Metal Group (CNMC) told visiting Myanmar Prime Minister Thein Sein, a general in the ruling junta, they would strive to complete preparations for the big mine at Tagaungtaung in northern Myanmar as early as possible, the China Nonferrous Metal News reported on Tuesday.
The Chinese-language newspaper reached subscribers on Wednesday.
The CNMC underscored the economic importance of the project and the support it had received from Chinese leaders seeking to shore up ties with Myanmar.
"The Tagaungtaung ferro-nickel mine is the biggest cooperative project between China and Myanmar in the mining sector," the group's general manager, Luo Tao, told Thien, who was attending a regional business forum on the southern Chinese island of Hainan, according to the paper.
The global slump and sharp falls in metals prices have forced several companies to abandon or put on hold their plans for new mines.
But China has pressed forward with investments that will give it a more secure hold on resources when growth revives. And it has also kept close to Myanmar's ruling junta even as other Asian nations criticise the generals for their harsh political grip.
Luo said the mine will produce 80,000t of ferro-nickel, an alloy used in stainless steel production, and lift Myanmar's gross domestic production by over 2%. But he did not say when the mine will open.
Earlier reports on the CNMC website said the Tagaungtaung mine would take 30 months to build, meaning operation could start around early 2011, eventually producing about 22,000t of pure nickel content every year.
The latest report did not specify how much of a stake the Myanmar Government has in the mine, an issue that apparently contributed to delays in the project.
Chinese Premier Wen Jiabao has given his "close concern and vigorous support" to the mining deal, which was signed in July 2008, said the paper. And Myanmar Prime Minister Thien said he would solve any problems the project encounters, it also said.
Tagaungtaung, also rendered as Tagaung Taung, is a mineral-rich area about 320km north of Mandalay.
The junta, which has ruled the former Burma since 1962, has refused to recognise a 1990 landslide election victory of the opposition National League for Democracy. Its leader, Aung San Suu Kyi, has been under house arrest for most of the past two decades.
China has kept close ties with the junta, but Beijing has also been frustrated by narcotics flowing from Myanmar into its south-west.
Executives from the China Nonferrous Metal Group (CNMC) told visiting Myanmar Prime Minister Thein Sein, a general in the ruling junta, they would strive to complete preparations for the big mine at Tagaungtaung in northern Myanmar as early as possible, the China Nonferrous Metal News reported on Tuesday.
The Chinese-language newspaper reached subscribers on Wednesday.
The CNMC underscored the economic importance of the project and the support it had received from Chinese leaders seeking to shore up ties with Myanmar.
"The Tagaungtaung ferro-nickel mine is the biggest cooperative project between China and Myanmar in the mining sector," the group's general manager, Luo Tao, told Thien, who was attending a regional business forum on the southern Chinese island of Hainan, according to the paper.
The global slump and sharp falls in metals prices have forced several companies to abandon or put on hold their plans for new mines.
But China has pressed forward with investments that will give it a more secure hold on resources when growth revives. And it has also kept close to Myanmar's ruling junta even as other Asian nations criticise the generals for their harsh political grip.
Luo said the mine will produce 80,000t of ferro-nickel, an alloy used in stainless steel production, and lift Myanmar's gross domestic production by over 2%. But he did not say when the mine will open.
Earlier reports on the CNMC website said the Tagaungtaung mine would take 30 months to build, meaning operation could start around early 2011, eventually producing about 22,000t of pure nickel content every year.
The latest report did not specify how much of a stake the Myanmar Government has in the mine, an issue that apparently contributed to delays in the project.
Chinese Premier Wen Jiabao has given his "close concern and vigorous support" to the mining deal, which was signed in July 2008, said the paper. And Myanmar Prime Minister Thien said he would solve any problems the project encounters, it also said.
Tagaungtaung, also rendered as Tagaung Taung, is a mineral-rich area about 320km north of Mandalay.
The junta, which has ruled the former Burma since 1962, has refused to recognise a 1990 landslide election victory of the opposition National League for Democracy. Its leader, Aung San Suu Kyi, has been under house arrest for most of the past two decades.
China has kept close ties with the junta, but Beijing has also been frustrated by narcotics flowing from Myanmar into its south-west.
BHP Says Escondida Copper Output to Fall 30%
Output from the world's biggest copper mine, Escondida, will decline by 30% this fiscal year, BHP Billiton said on Wednesday, as it posted falls in quarterly production across its main commodities.
The cut in its forecast for Escondida was part of a surprisingly large drop of 14% in copper output in the March quarter. Iron ore and aluminium production also fell, and the company said it stood ready to halt operations as demand weakened.
"In the medium term, we expect that market conditions will remain uncertain," said BHP, which has been cutting production and shelving projects amid the worst global recession in decades.
"All our operations will remain under review. We will continue to take appropriate actions in any business that is cash negative and set to remain so, or where there is lack of demand," the company added in its production report.
Last year, the Escondida mine in Chile produced 1.2 million tonnes of copper, or just under 5% of global output, so a 30% drop equates to about 360,000t.
BHP owns 57.5% of the mine. Rio Tinto holds 30% and Mitsubishi Corp 10%. Rio has agreed to sell China's Chinalco half its stake.
A BHP spokeswoman said the company had initially anticipated Escondida production to slip by around 20-25% in the company's fiscal year to 30 June.
BHP said Escondida production had been hurt by lower ore grades and weaker milling operations, dragging its overall copper output down. Escondida has been steadily returning less copper since the June 2008 quarter, when BHP yielded 178,200t of metal in concentrate and 40,300t of cathode.
"The copper number is particularly of concern because copper is a bellwether of the wider state of the industrial commodities sector," said Andrew Harrington, Sydney-based mining analyst for the Patersons brokerage.
In contrast, Rio last week showed a 33% gain in quarterly copper production, boosted by higher output from other mines it owns.
"Escondida is still a problem for both BHP and Rio," said Gavin Wendt, a mining analyst for Fat Prophets in Sydney. "But Rio was able to offset that nicely with a better performance from other non-Escondida related mines."
Copper, a manufacturing staple in everything from toilet taps to computer chips, has shed more than 6% of its value this week, though the price is up nearly 50% since January, leading some analysts to suggest the worst of the commodities bust is over.
Imports of refined copper to China, the world's biggest consumer and a big customer of Chilean mines, rose to a record 296,843t in March, Customs figures showed on Wednesday, a record amount for the second consecutive month.
A proposal by BHP to buy Rio with shares worth up to $193bn at one point would have significantly lifted BHP's exposure to copper.
Speculation BHP may make a second offer resurfaced in the last week, though takeover regulations mean it must wait until 27 November 2009 unless it can get the support of Rio's board.
So far, BHP's biggest curtailment has been in nickel, with the closure of the Ravensthorpe nickel mine in Australia. Analysts say more cutbacks could follow in other commodities, such as alumina and aluminium.
Coal output in Australia already has turned down as Asian steel mills hit hard times, with metallurgical coal output down 25% from the previous quarter. Iron ore, another steel-making commodity, is also feeling the pinch.
BHP reported a 1% drop in iron ore production and 4% fall in aluminium year-on-year, down 2% and 4% respectively on the previous quarter. Nickel rose 10% year-on-year and was off 4% on the second quarter.
Iron ore sales by BHP into higher-priced long-term contracts were reduced to 72% of overall output from its Australian mines over the last three quarters as buyers asked to defer long-term sales contracts because of weakening demand.
All the deferred ore was being sold on the spot market, BHP said.
The cut in its forecast for Escondida was part of a surprisingly large drop of 14% in copper output in the March quarter. Iron ore and aluminium production also fell, and the company said it stood ready to halt operations as demand weakened.
"In the medium term, we expect that market conditions will remain uncertain," said BHP, which has been cutting production and shelving projects amid the worst global recession in decades.
"All our operations will remain under review. We will continue to take appropriate actions in any business that is cash negative and set to remain so, or where there is lack of demand," the company added in its production report.
Last year, the Escondida mine in Chile produced 1.2 million tonnes of copper, or just under 5% of global output, so a 30% drop equates to about 360,000t.
BHP owns 57.5% of the mine. Rio Tinto holds 30% and Mitsubishi Corp 10%. Rio has agreed to sell China's Chinalco half its stake.
A BHP spokeswoman said the company had initially anticipated Escondida production to slip by around 20-25% in the company's fiscal year to 30 June.
BHP said Escondida production had been hurt by lower ore grades and weaker milling operations, dragging its overall copper output down. Escondida has been steadily returning less copper since the June 2008 quarter, when BHP yielded 178,200t of metal in concentrate and 40,300t of cathode.
"The copper number is particularly of concern because copper is a bellwether of the wider state of the industrial commodities sector," said Andrew Harrington, Sydney-based mining analyst for the Patersons brokerage.
In contrast, Rio last week showed a 33% gain in quarterly copper production, boosted by higher output from other mines it owns.
"Escondida is still a problem for both BHP and Rio," said Gavin Wendt, a mining analyst for Fat Prophets in Sydney. "But Rio was able to offset that nicely with a better performance from other non-Escondida related mines."
Copper, a manufacturing staple in everything from toilet taps to computer chips, has shed more than 6% of its value this week, though the price is up nearly 50% since January, leading some analysts to suggest the worst of the commodities bust is over.
Imports of refined copper to China, the world's biggest consumer and a big customer of Chilean mines, rose to a record 296,843t in March, Customs figures showed on Wednesday, a record amount for the second consecutive month.
A proposal by BHP to buy Rio with shares worth up to $193bn at one point would have significantly lifted BHP's exposure to copper.
Speculation BHP may make a second offer resurfaced in the last week, though takeover regulations mean it must wait until 27 November 2009 unless it can get the support of Rio's board.
So far, BHP's biggest curtailment has been in nickel, with the closure of the Ravensthorpe nickel mine in Australia. Analysts say more cutbacks could follow in other commodities, such as alumina and aluminium.
Coal output in Australia already has turned down as Asian steel mills hit hard times, with metallurgical coal output down 25% from the previous quarter. Iron ore, another steel-making commodity, is also feeling the pinch.
BHP reported a 1% drop in iron ore production and 4% fall in aluminium year-on-year, down 2% and 4% respectively on the previous quarter. Nickel rose 10% year-on-year and was off 4% on the second quarter.
Iron ore sales by BHP into higher-priced long-term contracts were reduced to 72% of overall output from its Australian mines over the last three quarters as buyers asked to defer long-term sales contracts because of weakening demand.
All the deferred ore was being sold on the spot market, BHP said.
Indonesia's Antam Q1 Ferronickel Output Falls
Indonesian state-owned miner PT Aneka Tambang said on Wednesday its first-quarter ferronickel output fell by 24% from a year ago on slowing demand because of the global financial crisis.
The company produced 3,296t of ferronickel in the January to March period, compared to 4,362t in the same period last year, Bimo Satryo, Antam's corporate secretary said.
"Demand for nickel is slowing," said Satryo, adding the decline was in line with a lower production target this year.
The first-quarter output was 27% of its ferronickel production target for this year of 12,000t.
In 2008, Antam produced 17,566t of ferronickel.
Nickel prices have slumped about 77% to $11,575 a tonne since hitting a record high of $51,800 in May 2007 on a drop of demand from stainless steel producers due to the global economic crisis.
Antam's gold output also fell 23.6% to 714.74kg in the first quarter of this year, compared to 935kg in the same period last year.
The company plans to produce 2,821kg this year, down from 2,980kg in 2008.
Antam, which is 65% owned by the Indonesian Government, is involved in the exploration and production of nickel ore, bauxite and iron sands as well as smelting of ferro-nickel, exploration and production and refining gold and silver.
The company produced 3,296t of ferronickel in the January to March period, compared to 4,362t in the same period last year, Bimo Satryo, Antam's corporate secretary said.
"Demand for nickel is slowing," said Satryo, adding the decline was in line with a lower production target this year.
The first-quarter output was 27% of its ferronickel production target for this year of 12,000t.
In 2008, Antam produced 17,566t of ferronickel.
Nickel prices have slumped about 77% to $11,575 a tonne since hitting a record high of $51,800 in May 2007 on a drop of demand from stainless steel producers due to the global economic crisis.
Antam's gold output also fell 23.6% to 714.74kg in the first quarter of this year, compared to 935kg in the same period last year.
The company plans to produce 2,821kg this year, down from 2,980kg in 2008.
Antam, which is 65% owned by the Indonesian Government, is involved in the exploration and production of nickel ore, bauxite and iron sands as well as smelting of ferro-nickel, exploration and production and refining gold and silver.
Fortescue Has Chinese Approval For Valin Deal
Australian iron ore miner Fortescue Metals has approval from China's National Development and Reform Commission (NDRC) for its equity tie-up with Hunan Valin Iron and Steel Group, the company said on Wednesday.
"The NDRC approval was the key milestone for the transaction and paves the way for the Chinese Ministry of Commerce and the State Administration of Foreign Exchange to formalise the agreement," Fortescue said in a statement.
Chinese state-owned steelmaker Hunan Valin already has Australian approval to take up to 17.55% of the country's third-largest iron ore miner, subject to several conditions, in a deal worth $438m.
"The NDRC approval was the key milestone for the transaction and paves the way for the Chinese Ministry of Commerce and the State Administration of Foreign Exchange to formalise the agreement," Fortescue said in a statement.
Chinese state-owned steelmaker Hunan Valin already has Australian approval to take up to 17.55% of the country's third-largest iron ore miner, subject to several conditions, in a deal worth $438m.
Monday, April 20, 2009
Bechem to Exhibit at Schleifring Grinding Symposium
The Schleifring group and its specialised daughter companies belong to the world's most important suppliers in the field of surface grinding, profile grinding, circular grinding and tool grinding.
The group of companies has organised the Schleifring Grinding Symposium, which takes place from 6 May to 8 May at Expo-Thun, Switzerland. At the event visitors will be able to learn about the innovative coolant concept Berufluid at the Bechem booth, and watch the new product in action.
The display will allow people to see the impressive performance of the new coolant generation during grinding operations on two Schaudt camshaft grinding machines.
The group of companies has organised the Schleifring Grinding Symposium, which takes place from 6 May to 8 May at Expo-Thun, Switzerland. At the event visitors will be able to learn about the innovative coolant concept Berufluid at the Bechem booth, and watch the new product in action.
The display will allow people to see the impressive performance of the new coolant generation during grinding operations on two Schaudt camshaft grinding machines.
New Website for Voith Turbo Valvex Valves
Voith Turbo, the specialist in drives and hydraulic systems, has developed a new website to showcase the products from its explosion-protected valves division.
The company has put great effort into ensuring products and system solutions are presented clearly. The website displays all key data at a glance, and detailed information and drawings can be found in brochures that are available as PDF downloads in up to six languages. User inquiries can be sent to Voith Turbo simply by submitting a form.
For more than 40 years Voith Turbo Valvex valves have been used whenever explosion protection and reliability are key criteria. The Valvex product line includes not only components such as solenoid valves and solenoid actuators for valves, but also complete hydraulic or pneumatic special solutions for use in hazardous areas.
Valvex products have been used reliably for decades in underground mining applications and refrigeration plants. They are also suitable for use in other areas such as the chemical and petrochemical industries or for pumping petroleum and natural gas.
Voith Turbo has also focused on one customer requirement in particular: direct access to approval certificates. Users can download all approval certificates in PDF format. This includes ATEX approvals for Europe, MSHA approvals for the US and Simtars approvals for Australia. Other approvals, such as GHOST (Russia) and MA (China) are being processed and will be published when they have been granted.
The company has put great effort into ensuring products and system solutions are presented clearly. The website displays all key data at a glance, and detailed information and drawings can be found in brochures that are available as PDF downloads in up to six languages. User inquiries can be sent to Voith Turbo simply by submitting a form.
For more than 40 years Voith Turbo Valvex valves have been used whenever explosion protection and reliability are key criteria. The Valvex product line includes not only components such as solenoid valves and solenoid actuators for valves, but also complete hydraulic or pneumatic special solutions for use in hazardous areas.
Valvex products have been used reliably for decades in underground mining applications and refrigeration plants. They are also suitable for use in other areas such as the chemical and petrochemical industries or for pumping petroleum and natural gas.
Voith Turbo has also focused on one customer requirement in particular: direct access to approval certificates. Users can download all approval certificates in PDF format. This includes ATEX approvals for Europe, MSHA approvals for the US and Simtars approvals for Australia. Other approvals, such as GHOST (Russia) and MA (China) are being processed and will be published when they have been granted.
Angola Says Demand for Diamonds Picking Up
Angola said on Friday sales were finally picking up after demand for gems plunged in 2008 due to the global economic downturn.
Mining Minister Makenda Ambroise urged investors to help the African nation continue to develop its mining industry but warned those that had left the country during "these times of crisis" that they would not be able to return again.
"There are positive signs," he said in an interview with Reuters, adding that sales of Angolan gems had recently surpassed $70m per month, up from around $25m at the start of the year.
"I'm not saying the crisis is over yet but we have succeeded in mitigating the effects of the crisis."
Diamond prices fell 7% in the first quarter after slumping 9% in 2008, according to PolishedPrices.com index, as recession weighed on demand for luxury goods in vital markets like the US and Europe.
Falling demand for diamonds resulted in lower prices for gems, prompting Angola to announce it could buy gems from local mining companies to bolster the industry. However, Ambroise said such a move had not yet been necessary.
BHP Billiton, the world's biggest miner, had divested from its diamond exploration projects in Angola last year in what it said was a cost-cutting measure.
"Those (companies) that left us will never again return to the sector. It is in hard times that one finds out who their friends really are," Ambroise said. He did not say which mining companies he was referring to.
He also urged new investors to come to Angola to help the resource-rich nation diversify its mining activities away from diamonds.
"This is the best time to invest in the mining sector. We are appealing to all those that have real money, technical and financial capacity, to join us and explore not only for diamonds but for other resources as well," he said.
Ambroise lowered Angola's diamond production target to around nine million carats in 2009 - around the same as in 2008 -- from around ten million for this year.
The country has around 14 active diamond mines and 100 mines open for new investors, he said.
Angola's diamond production has been growing at a steady pace since the end of an almost three-decade long civil war in 2002.
The end of the war paved the way for diamond mining giants De Beers, Anglo American and Al Rosa to partner with Endiama and tap into Angola's vast diamond reserves.
These reserves are estimated to be over 200 million carats. Yet only 42% of the diamond reserves in a country twice the size of Texas are currently being explored.
Mining Minister Makenda Ambroise urged investors to help the African nation continue to develop its mining industry but warned those that had left the country during "these times of crisis" that they would not be able to return again.
"There are positive signs," he said in an interview with Reuters, adding that sales of Angolan gems had recently surpassed $70m per month, up from around $25m at the start of the year.
"I'm not saying the crisis is over yet but we have succeeded in mitigating the effects of the crisis."
Diamond prices fell 7% in the first quarter after slumping 9% in 2008, according to PolishedPrices.com index, as recession weighed on demand for luxury goods in vital markets like the US and Europe.
Falling demand for diamonds resulted in lower prices for gems, prompting Angola to announce it could buy gems from local mining companies to bolster the industry. However, Ambroise said such a move had not yet been necessary.
BHP Billiton, the world's biggest miner, had divested from its diamond exploration projects in Angola last year in what it said was a cost-cutting measure.
"Those (companies) that left us will never again return to the sector. It is in hard times that one finds out who their friends really are," Ambroise said. He did not say which mining companies he was referring to.
He also urged new investors to come to Angola to help the resource-rich nation diversify its mining activities away from diamonds.
"This is the best time to invest in the mining sector. We are appealing to all those that have real money, technical and financial capacity, to join us and explore not only for diamonds but for other resources as well," he said.
Ambroise lowered Angola's diamond production target to around nine million carats in 2009 - around the same as in 2008 -- from around ten million for this year.
The country has around 14 active diamond mines and 100 mines open for new investors, he said.
Angola's diamond production has been growing at a steady pace since the end of an almost three-decade long civil war in 2002.
The end of the war paved the way for diamond mining giants De Beers, Anglo American and Al Rosa to partner with Endiama and tap into Angola's vast diamond reserves.
These reserves are estimated to be over 200 million carats. Yet only 42% of the diamond reserves in a country twice the size of Texas are currently being explored.
ASX Delays Launch of Thermal Coal Futures
Australia's ASX, Asia-Pacific's second-largest listed stock exchange, has delayed the launch of its thermal coal futures contract pending regulatory clearance, an official from the bourse said on Monday.
"The process of regulatory clearance is still ongoing so the launch date has been deferred," Anthony Collins, general manager for emerging markets at ASX, told Reuters.
He added that ASX has already informed market participants of the delay on 14 April. ASX had planned to launch the thermal coal futures contract on 21 April.
"The process of regulatory clearance is still ongoing so the launch date has been deferred," Anthony Collins, general manager for emerging markets at ASX, told Reuters.
He added that ASX has already informed market participants of the delay on 14 April. ASX had planned to launch the thermal coal futures contract on 21 April.
http://www.mining-technology.com/news/news53613.html
China faces an excess supply of coal in the short term, as demand ebbs with the end of the heating season and as small mines gradually return to production, an industry group executive said on Monday.
"Output in the power sector and steel industry is staying weak," Wang Xianzheng, president of the China National Coal Association, told a Coaltrans conference.
"Coal demand falls as heating demand in the north ends, as small coal mines are returning gradually to production," he said.
Wang warned that supply could be boosted further in the next two to three years as production capacity from investments made in previous years comes on stream. From 2004-2008, fixed asset investment in the coal industry mounted to $98bn, he said.
But Wang said that China's coal supply would be tight over the long run, given the dominant status of coal in the country's energy mix.
"In the short term, there will be oversupply. But in the long run, shortage in supply will remain an important problem," he said.
Wang also forecast that China's coal demand would exceed three billion tonnes in 2010.
"Output in the power sector and steel industry is staying weak," Wang Xianzheng, president of the China National Coal Association, told a Coaltrans conference.
"Coal demand falls as heating demand in the north ends, as small coal mines are returning gradually to production," he said.
Wang warned that supply could be boosted further in the next two to three years as production capacity from investments made in previous years comes on stream. From 2004-2008, fixed asset investment in the coal industry mounted to $98bn, he said.
But Wang said that China's coal supply would be tight over the long run, given the dominant status of coal in the country's energy mix.
"In the short term, there will be oversupply. But in the long run, shortage in supply will remain an important problem," he said.
Wang also forecast that China's coal demand would exceed three billion tonnes in 2010.
Rio Tinto Chairman Committed to Chinalco Deal
The new chairman of miner Rio Tinto Jan du Plessis said Rio's board was committed to the group's proposed $19.5bn tie up with China's state-owned Chinalco, playing down talk the group had a plan B.
Speaking at a press conference following the group's annual shareholder meeting in Sydney, du Plessis also said he had not met with BHP Billiton's chairman in the past 24 hours.
There had been media speculation that representatives from Rio and BHP had held informal talks at the weekend.
Du Plessis, chairman of British American Tobacco, was appointed to the same position at Rio after a previous failed attempt to find a new chairman.
Chairman-elect Jim Leng quit the board after objecting to the Chinalco deal.
Speaking at a press conference following the group's annual shareholder meeting in Sydney, du Plessis also said he had not met with BHP Billiton's chairman in the past 24 hours.
There had been media speculation that representatives from Rio and BHP had held informal talks at the weekend.
Du Plessis, chairman of British American Tobacco, was appointed to the same position at Rio after a previous failed attempt to find a new chairman.
Chairman-elect Jim Leng quit the board after objecting to the Chinalco deal.
New Rio Tinto Chairman to Resign From BAT
Global miner Rio Tinto's new chairman, Jan du Plessis, said on Monday he planned to resign from British American Tobacco (BAT) "in due course" to concentrate on his role at Rio.
Du Plessis, who was speaking at the Australian annual general meeting of Rio Tinto, has been chairman of BAT since 2004.
Du Plessis, who was speaking at the Australian annual general meeting of Rio Tinto, has been chairman of BAT since 2004.
Sunday, April 19, 2009
Alegria Iron Ore Mine, Brazil
Samarco Mineracão's Alegria iron ore mine is in Brazil's Iron Quadrangle, about 4.5km north of the depleted Germano deposit, within the districts of Mariana and Ouro Preto in the state of Minas Gerais. The process plant pumps concentrate via a slurry pipeline to facilities at Ponta Ubu on the Atlantic coast that include two pelletising plants and a shipping quay.
BHP Billiton and CVRD each has a 50% holding in Samarco. Production commenced at Alegria in 1992. The operation employed 1,336 people directly and more than 2,000 via contractors in 2005.
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The company is implementing an optimisation project to increase concentrator and pelletisation capacity in the short term, and is also investing in a new concentrator and pelletisation plant, which started up in the first half of 2008. This is expected to make Samarco the world's second-largest exporter of iron-ore
GEOLOGY AND RESERVES
The deposit consists of low-grade itabiritic ore. Alegria's certified mineral reserves totalled 720Mt in 2005, sufficient to support mining for 20 years after the new concentrator comes on stream. Further exploration has the potential to raise reserves to more than 1,000Mt.
MINING
Itabiritic ore is excavated by bulldozers, loaded by front-end loaders into 177t-capacity trucks and taken to a crushing and screening plant in the blending yard. The ore is blended and stored before transport by belt conveyors to the surge pile.
An overland conveyor system transports the ore over a distance of 4km to the beneficiation plant at Germano.
GERMANO BENEFICIATION PLANT
At the Germano beneficiation plant the ore is screened, crushed and classified to feed the primary mills. This circuit assures sufficient reduction of the iron ore particles. It is then deslimed, deslimed, with the ultrafine material being removed in cluster cyclones before conventional flotation where waste material such as silica is separated from the iron particles. The ore is reground and enters a column flotation circuit.The addition of a roller press in 2004 improved productivity by 7%. The resulting concentrate is slurried with water for pipeline transport.
The concentrator is capable of an annual production of 15.5Mt of iron-ore concentrates, rising to 16.5Mt/y in 2006. Its output in the 2005 financial year was 15.1Mt, of which 13.1Mt came from Alegria ore and 2Mt from CVRD ore.
BHP Billiton and CVRD each has a 50% holding in Samarco. Production commenced at Alegria in 1992. The operation employed 1,336 people directly and more than 2,000 via contractors in 2005.
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The company is implementing an optimisation project to increase concentrator and pelletisation capacity in the short term, and is also investing in a new concentrator and pelletisation plant, which started up in the first half of 2008. This is expected to make Samarco the world's second-largest exporter of iron-ore
GEOLOGY AND RESERVES
The deposit consists of low-grade itabiritic ore. Alegria's certified mineral reserves totalled 720Mt in 2005, sufficient to support mining for 20 years after the new concentrator comes on stream. Further exploration has the potential to raise reserves to more than 1,000Mt.
MINING
Itabiritic ore is excavated by bulldozers, loaded by front-end loaders into 177t-capacity trucks and taken to a crushing and screening plant in the blending yard. The ore is blended and stored before transport by belt conveyors to the surge pile.
An overland conveyor system transports the ore over a distance of 4km to the beneficiation plant at Germano.
GERMANO BENEFICIATION PLANT
At the Germano beneficiation plant the ore is screened, crushed and classified to feed the primary mills. This circuit assures sufficient reduction of the iron ore particles. It is then deslimed, deslimed, with the ultrafine material being removed in cluster cyclones before conventional flotation where waste material such as silica is separated from the iron particles. The ore is reground and enters a column flotation circuit.The addition of a roller press in 2004 improved productivity by 7%. The resulting concentrate is slurried with water for pipeline transport.
The concentrator is capable of an annual production of 15.5Mt of iron-ore concentrates, rising to 16.5Mt/y in 2006. Its output in the 2005 financial year was 15.1Mt, of which 13.1Mt came from Alegria ore and 2Mt from CVRD ore.
Aitik Copper Mine, Sweden
Located near Gällivare, northern Sweden, the low-grade Aitik copper deposit was discovered in the early 1930s. Bulk-mining technology made exploitation feasible in the 1960s and mining at Europe’s first large, low-grade open pit copper mine started in 1968 at a production rate of 2Mt/y of ore. Since then, a series of pushbacks have increased output to approximately 19Mt/y. The concentrator, expanded in parallel, ships over 200,000t/y to the Ronnskär smelter.
Since the consolidation of Outokumpu’s copper and zinc mining and smelting activities into New Boliden in January 2004, Aitik has been wholly owned by Boliden.
Boliden approved the investment of Skr5.2bn ($790m) for the expansion of the operations (Aitik 36) which will see significant increases in capacity and production.
Boliden says that the expansion will result in one of the world’s most efficient mines becoming even more efficient. On average, ore is mined at the rate of 1t/manhour. Boliden says that production at Aitik is now at 43t/manhour but will increase to 55t/manhour.
The company said recently it also expected life of mine cash costs to fall from $0.80/lb to $0.43/lb.
All this extends the mine life from 2016 to 2025, while increasing copper, gold and silver production and adding new production of molybdenum. By lowering costs, ore reserves have been tripled.
The mine currently employs 430 people, of which 280 are in the mine. This number is expected to increase significantly in line with the expansion.
GEOLOGY AND RESERVES
The orebody is hosted by a basin of volcanic rocks surrounded by granitic intrusions, within a supracrustal metamorphosed shear zone of precambrian age. Biotite schists in the volcanic sequence contain disseminated chalcopyritic mineralisation averaging less than 0.40% copper plus gold and silver values.
Since the consolidation of Outokumpu’s copper and zinc mining and smelting activities into New Boliden in January 2004, Aitik has been wholly owned by Boliden.
Boliden approved the investment of Skr5.2bn ($790m) for the expansion of the operations (Aitik 36) which will see significant increases in capacity and production.
Boliden says that the expansion will result in one of the world’s most efficient mines becoming even more efficient. On average, ore is mined at the rate of 1t/manhour. Boliden says that production at Aitik is now at 43t/manhour but will increase to 55t/manhour.
The company said recently it also expected life of mine cash costs to fall from $0.80/lb to $0.43/lb.
All this extends the mine life from 2016 to 2025, while increasing copper, gold and silver production and adding new production of molybdenum. By lowering costs, ore reserves have been tripled.
The mine currently employs 430 people, of which 280 are in the mine. This number is expected to increase significantly in line with the expansion.
GEOLOGY AND RESERVES
The orebody is hosted by a basin of volcanic rocks surrounded by granitic intrusions, within a supracrustal metamorphosed shear zone of precambrian age. Biotite schists in the volcanic sequence contain disseminated chalcopyritic mineralisation averaging less than 0.40% copper plus gold and silver values.
Jembayan Thermal Coal Mine, Indonesia
The Jembayan thermal coal operation covers an area of over 12,000ha in East Kalimantan, Indonesia, some 150km north-west of Balikpapan and 80km from the sea.
Straits Resources subsidiary Straits Asia Resources (SAR) completed its acquisition of the mine in 2007 in a deal worth $350m, which was made up of $275m in cash and the issue of 75 million SAR shares to the vendors, representing 6.9% of Straits Asia's enlarged issued share capital.
The mine has been operating since 2004 with substantial year-on year ramp up. For the financial year ending December 2007, Jembayan produced 3.96Mt in 2007.
Jembayan produces two brands of coal: Prangat, which is bituminous and rated 6,000CV ADB; and Jembayan, which is sub-bituminous and rated 5,500CV ADB. Straits Resources says that the purchase of this multi-pit operation has added significant value and prospects to Straits Asia's investments in coal. Less than half the concession area has been explored and Straits Asia intends to complete a major drilling programme during 2008.
The acquisition of Jembayan is expected to double SAR's coal production. Commenting on the move, Richard Ong, CEO of SAR said: "This is a fantastic opportunity for Straits Asia to expand its thermal coal mining business in Indonesia. Jembayan is an outstanding coal mine with excellent infrastructure. I am delighted with this transaction and that the vendors will hold a stake in the future of the combined businesses."
Formerly a copper-only producer, Straits Resources has divested a number of its copper assets over the last few years and has been investing primarily in revamped gold projects.
Jembayan geology and reserves
The Jembayan concession covers a total area of nearly 13,000ha. In November 2007, SAR upgraded its available resources at the Jembayan mine to 254Mt (from 138Mt) as continued exploration efforts bore fruit. This is the second upgrade of Jembayan's resource since SAR acquired the mine in December 2007, and its management is optimistic that further drilling efforts will lead to more resource upgrades.
In addition, SAR's exploration target for in-situ coal at Jembayan has been raised to 600Mt – 700Mt, substantially higher than the 200Mt it had originally targeted. The resources upgrade puts SAR in a position to raise its output in the long run. However, analysts said that they did not expect any impact on the group's near-term earnings due to ongoing capacity constraints.
Straits Resources subsidiary Straits Asia Resources (SAR) completed its acquisition of the mine in 2007 in a deal worth $350m, which was made up of $275m in cash and the issue of 75 million SAR shares to the vendors, representing 6.9% of Straits Asia's enlarged issued share capital.
The mine has been operating since 2004 with substantial year-on year ramp up. For the financial year ending December 2007, Jembayan produced 3.96Mt in 2007.
Jembayan produces two brands of coal: Prangat, which is bituminous and rated 6,000CV ADB; and Jembayan, which is sub-bituminous and rated 5,500CV ADB. Straits Resources says that the purchase of this multi-pit operation has added significant value and prospects to Straits Asia's investments in coal. Less than half the concession area has been explored and Straits Asia intends to complete a major drilling programme during 2008.
The acquisition of Jembayan is expected to double SAR's coal production. Commenting on the move, Richard Ong, CEO of SAR said: "This is a fantastic opportunity for Straits Asia to expand its thermal coal mining business in Indonesia. Jembayan is an outstanding coal mine with excellent infrastructure. I am delighted with this transaction and that the vendors will hold a stake in the future of the combined businesses."
Formerly a copper-only producer, Straits Resources has divested a number of its copper assets over the last few years and has been investing primarily in revamped gold projects.
Jembayan geology and reserves
The Jembayan concession covers a total area of nearly 13,000ha. In November 2007, SAR upgraded its available resources at the Jembayan mine to 254Mt (from 138Mt) as continued exploration efforts bore fruit. This is the second upgrade of Jembayan's resource since SAR acquired the mine in December 2007, and its management is optimistic that further drilling efforts will lead to more resource upgrades.
In addition, SAR's exploration target for in-situ coal at Jembayan has been raised to 600Mt – 700Mt, substantially higher than the 200Mt it had originally targeted. The resources upgrade puts SAR in a position to raise its output in the long run. However, analysts said that they did not expect any impact on the group's near-term earnings due to ongoing capacity constraints.
Sebuku Coal Mine, Indonesia
The Sebuku coal mine is an open cut truck and shovel coal-mining operation located on the tiny and remote island of Sebuku, in the province of South Kalimantan, Indonesia. It is owned and operated by the Straits Resources Singapore-listed subsidiary Straits Asia Resources.
Sebuku Island is a remote location, 3'30" south of the equator to the south-east of the island of Borneo, approximately 5km east of Laut Island. The island is 35km from north to south and is 10km wide at its widest point.
Before the mine, the population had absolutely no infrastructure serving its 4,000 or so residents save for walking tracks. It now has local access roads, a new portsite on the southern end of the island as well as an airfield. The construction of site infrastructure started in July 1997 with waste stripping for the construction of dams, bunds and the run of mine (ROM) stockpile area and coal mining commencing in December 1997.
Annual production is currently 3mtpa and around 700 people are employed by the operation.
Sebuku Island geology and reserves
The coal seams of Sebuku Island occur within the lower part of the Eocene Tanjung formation. The coal seams are preserved within a number of deposits in the south-west region of Sebuku Island.
The main deposit is preserved within a broad north-south trending syncline that is truncated along the eastern boundary by the major Kanibungan Fault. The flanks of the syncline dip gently at typically less than 10°.
The Tanah Putih deposit lies to the northwest of the main deposit and fills a basin that deepens and thickens to the west. Further seams are developing at depth and thickening to the west above the ultramafic basement.
The strata consist predominantly of weak mudstone and shale with interbedded coal seams. All strata are capable of being mined without the need for blasting.
The coal is of high volatile bituminous rank with an average in-situ ash of 12%, total sulphur of 1.05%, a calorific value of 6,085KCal/kg (air-dried basis) with an average in situ total moisture of 14%. The coal is typically lustrous with occasional bright bands.
Sebuku Island is a remote location, 3'30" south of the equator to the south-east of the island of Borneo, approximately 5km east of Laut Island. The island is 35km from north to south and is 10km wide at its widest point.
Before the mine, the population had absolutely no infrastructure serving its 4,000 or so residents save for walking tracks. It now has local access roads, a new portsite on the southern end of the island as well as an airfield. The construction of site infrastructure started in July 1997 with waste stripping for the construction of dams, bunds and the run of mine (ROM) stockpile area and coal mining commencing in December 1997.
Annual production is currently 3mtpa and around 700 people are employed by the operation.
Sebuku Island geology and reserves
The coal seams of Sebuku Island occur within the lower part of the Eocene Tanjung formation. The coal seams are preserved within a number of deposits in the south-west region of Sebuku Island.
The main deposit is preserved within a broad north-south trending syncline that is truncated along the eastern boundary by the major Kanibungan Fault. The flanks of the syncline dip gently at typically less than 10°.
The Tanah Putih deposit lies to the northwest of the main deposit and fills a basin that deepens and thickens to the west. Further seams are developing at depth and thickening to the west above the ultramafic basement.
The strata consist predominantly of weak mudstone and shale with interbedded coal seams. All strata are capable of being mined without the need for blasting.
The coal is of high volatile bituminous rank with an average in-situ ash of 12%, total sulphur of 1.05%, a calorific value of 6,085KCal/kg (air-dried basis) with an average in situ total moisture of 14%. The coal is typically lustrous with occasional bright bands.
Spence Copper Cathode Mine, Atacama Desert, Chile
It is one of the company's newer projects, with the first copper cathode extracted in 2006. The mine reached design capacity in the third quarter of 2007, after which it was able to reach the current annual production rate of 200,000t of copper cathode.
Spence is the first greenfield large-scale mining project to be developed in Chile in six years and the first large SX-EW (solvent extraction and electrowinning) project constructed globally this decade.
Commenting at the opening, BHP Billiton president base metals, Diego Hernandez said: "This is an outstanding asset that incorporates global best operating practice and the latest technology."
Construction of the mine was undertaken at a cost of around $1bn, with annual capex estimated at around $20m. Around 90% of the engineering was undertaken in Chile, and 99% of the management team is Chilean nationals.
Spence has 663 full time employees – of which 70% are from the Antofagasta Region – and 489 contractors. Women make up about 8.5% of staff.
BHP Billiton has emphasised that design and the construction of the site was guided by best-practise safety standards, and the mine has already earned a number of awards for its achievements in this area. Mine life is currently estimated at 19 years.
Geology and reserves
The supergene enriched and partially oxidised porphyry copper deposit is of Upper Paleocene age (about 57 million years). The deposit is 100% covered by gravels and depth to mineralisation ranges from 80m to 100m below the surface. Oxide and supergene sulphide mineralisation is amenable to heap leaching (atacamite and chalcocite).
Proven and probable reserves of oxide ore as of the end of 2007 were 74.8 million tons at a grading of 1.24%. Total reserves of sulphide ore were 238.3 million tons with a grading of 1.08%.
Spence is the first greenfield large-scale mining project to be developed in Chile in six years and the first large SX-EW (solvent extraction and electrowinning) project constructed globally this decade.
Commenting at the opening, BHP Billiton president base metals, Diego Hernandez said: "This is an outstanding asset that incorporates global best operating practice and the latest technology."
Construction of the mine was undertaken at a cost of around $1bn, with annual capex estimated at around $20m. Around 90% of the engineering was undertaken in Chile, and 99% of the management team is Chilean nationals.
Spence has 663 full time employees – of which 70% are from the Antofagasta Region – and 489 contractors. Women make up about 8.5% of staff.
BHP Billiton has emphasised that design and the construction of the site was guided by best-practise safety standards, and the mine has already earned a number of awards for its achievements in this area. Mine life is currently estimated at 19 years.
Geology and reserves
The supergene enriched and partially oxidised porphyry copper deposit is of Upper Paleocene age (about 57 million years). The deposit is 100% covered by gravels and depth to mineralisation ranges from 80m to 100m below the surface. Oxide and supergene sulphide mineralisation is amenable to heap leaching (atacamite and chalcocite).
Proven and probable reserves of oxide ore as of the end of 2007 were 74.8 million tons at a grading of 1.24%. Total reserves of sulphide ore were 238.3 million tons with a grading of 1.08%.
Buckhorn gold mine
Buckhorn mine is located in north-central Washington State, approximately 76km from Kinross's Kettle River gold mining facility. Crown Resources Corporation initially applied for a licence to build an open-pit mine at the top of the 5,600 mountain near the Canadian border.
This application received strong disapproval from local residents and environmentalists that wanted to protect the natural beauty of Okanogan National Forest, where the mountain is located. In 1992, the Okanogan Highlands Alliance was formed to consolidate activists' activities.
In 1996, Kinross purchased Crown Resources Corporation for more than $100m and along with the acquisition gained the Buckhorn site. Since then, Kinross has built 8.5 miles of road, has installed buried power cables, built an administration building as well as a fuelling facility and power distribution plant. In total, Kinross has invested a further $100m at the mine. It has also changed all mining applications from open-pit to an underground mine.
Production
In April 2008, the last legal barrier to starting production was removed and ore began to be produced in October. Production for 2008 was between 25,000oz to 30,000oz, at an expected cost of between $365 and $385 an ounce.
The gold mine has an estimated 100 million ounces of deposits and an estimated mine life of between seven and eight years. From 2009 onwards it is expected to produce around 130,000oz per annum or between 500t of ore and 1,500t of development rock per day. Total costs on the mine during 2008 totalled about $27m. Proven and probable reserves equate to nearly two million tons at a grade of 15.46g/t.
This application received strong disapproval from local residents and environmentalists that wanted to protect the natural beauty of Okanogan National Forest, where the mountain is located. In 1992, the Okanogan Highlands Alliance was formed to consolidate activists' activities.
In 1996, Kinross purchased Crown Resources Corporation for more than $100m and along with the acquisition gained the Buckhorn site. Since then, Kinross has built 8.5 miles of road, has installed buried power cables, built an administration building as well as a fuelling facility and power distribution plant. In total, Kinross has invested a further $100m at the mine. It has also changed all mining applications from open-pit to an underground mine.
Production
In April 2008, the last legal barrier to starting production was removed and ore began to be produced in October. Production for 2008 was between 25,000oz to 30,000oz, at an expected cost of between $365 and $385 an ounce.
The gold mine has an estimated 100 million ounces of deposits and an estimated mine life of between seven and eight years. From 2009 onwards it is expected to produce around 130,000oz per annum or between 500t of ore and 1,500t of development rock per day. Total costs on the mine during 2008 totalled about $27m. Proven and probable reserves equate to nearly two million tons at a grade of 15.46g/t.
Grupo Mexico Can Fire Striking Miners Says Government
Mexican miners on strike for nearly two years at the country's largest copper pit can be fired, a government labour board ruled Wednesday, prompting angry workers to surround the mine in protest.
The ruling is a win for the mine's owner, Grupo Mexico, which argued it could no longer operate the massive Cananea deposit because machinery left idle for months had been looted and was damaged beyond repair.
Workers at Cananea laid down tools in July 2007 in a dispute that began over health and safety standards but has since been complicated by a personal feud between the company and the union's leaders.
"The company declared force majeure," the labour board statement issued in the early morning hours after 14 hours of deliberations.
"At Cananea, there are damages and destruction to machinery, materials, installations and equipment essential to the operation, so serious that the necessary consequence is the termination of contracts," the statement said.
Grupo Mexico said at a news conference Wednesday it will cost millions of dollars to repair the mine, but that it was committed to reopening the installations.
A spokesman for the miners' union disputed the company's claim and said at a news conference that the damage was due to the management's neglect of the installation that put workers health and safety at risk.
The labour board ordered the company to compensate the 1,500 striking workers with three months pay plus 12 days of salary for each year worked at the mine. Workers there earn on average between $770 and $920 a month, the company said.
The union, which has argued in an ongoing court battle that the company is not allowed to fire legally striking workers, pledged to appeal the board's decision.
Miners blocked Cananea's front gate in northern Mexico in protest and the union said federal police sent hundreds of officers to the city in response.
Grupo Mexico's push to close the mine and fire workers has angered the national union, which counts among its members thousands of miners and metalworkers around the country.
A blockade by some 1,000 workers in support of the Cananea workers shuttered a major Mexican port for the past two days, holding up hundreds of containers of imports and exports.
The union said the blockade would continue indefinitely until the case resolved satisfactorily.
Massive losers
Cananea produced more than 400 million pounds of copper a year when operational, which at an average price of $2 a pound means $800m in lost annual revenue, said Daniel Chavez, the company's director of operations, although copper production at Cananea was not included in the company's 2009 earnings guidance.
If reopened, Cananea contains enough ore to produce copper for 65 years, Chavez said.
Two smaller Grupo Mexico mines have been on strike for the same amount of time as Cananea and the company has promised to close those worksites as well.
This is not the first time Grupo Mexico and the miners union have clashed.
Grupo Mexico's second largest copper mine, La Caridad, was shuttered for months in 2006 by a strike that ended when the company fired all the workers and rehired most under a new contract.
One man died in a skirmish between two rival groups of miners outside La Caridad mine in 2007.
Labour Minister Javier Lozano ruled out using police or soldiers to reopen the port or to force miners to leave Cananea, where strikers are taking turns to guard the entrance to the mine and prevent its reopening.
"We have not considered any eviction or any use of force," Lozano told reporters. He said the labour board decision "is a legal ruling and no more."
But he said the government wanted to see Cananea open again.
"Grupo Mexico's concession is still valid ... Eventually this conflict must be overcome to reactivate that mining unit," he said in the northern Mexican city of Monterrey.
Grupo Mexico shares closed down 2.33% Wednesday at 11.74 pesos, also hit by a decision in a US court that it must pay its bankrupt subsidiary Asarco billions of dollars in damages.
The ruling is a win for the mine's owner, Grupo Mexico, which argued it could no longer operate the massive Cananea deposit because machinery left idle for months had been looted and was damaged beyond repair.
Workers at Cananea laid down tools in July 2007 in a dispute that began over health and safety standards but has since been complicated by a personal feud between the company and the union's leaders.
"The company declared force majeure," the labour board statement issued in the early morning hours after 14 hours of deliberations.
"At Cananea, there are damages and destruction to machinery, materials, installations and equipment essential to the operation, so serious that the necessary consequence is the termination of contracts," the statement said.
Grupo Mexico said at a news conference Wednesday it will cost millions of dollars to repair the mine, but that it was committed to reopening the installations.
A spokesman for the miners' union disputed the company's claim and said at a news conference that the damage was due to the management's neglect of the installation that put workers health and safety at risk.
The labour board ordered the company to compensate the 1,500 striking workers with three months pay plus 12 days of salary for each year worked at the mine. Workers there earn on average between $770 and $920 a month, the company said.
The union, which has argued in an ongoing court battle that the company is not allowed to fire legally striking workers, pledged to appeal the board's decision.
Miners blocked Cananea's front gate in northern Mexico in protest and the union said federal police sent hundreds of officers to the city in response.
Grupo Mexico's push to close the mine and fire workers has angered the national union, which counts among its members thousands of miners and metalworkers around the country.
A blockade by some 1,000 workers in support of the Cananea workers shuttered a major Mexican port for the past two days, holding up hundreds of containers of imports and exports.
The union said the blockade would continue indefinitely until the case resolved satisfactorily.
Massive losers
Cananea produced more than 400 million pounds of copper a year when operational, which at an average price of $2 a pound means $800m in lost annual revenue, said Daniel Chavez, the company's director of operations, although copper production at Cananea was not included in the company's 2009 earnings guidance.
If reopened, Cananea contains enough ore to produce copper for 65 years, Chavez said.
Two smaller Grupo Mexico mines have been on strike for the same amount of time as Cananea and the company has promised to close those worksites as well.
This is not the first time Grupo Mexico and the miners union have clashed.
Grupo Mexico's second largest copper mine, La Caridad, was shuttered for months in 2006 by a strike that ended when the company fired all the workers and rehired most under a new contract.
One man died in a skirmish between two rival groups of miners outside La Caridad mine in 2007.
Labour Minister Javier Lozano ruled out using police or soldiers to reopen the port or to force miners to leave Cananea, where strikers are taking turns to guard the entrance to the mine and prevent its reopening.
"We have not considered any eviction or any use of force," Lozano told reporters. He said the labour board decision "is a legal ruling and no more."
But he said the government wanted to see Cananea open again.
"Grupo Mexico's concession is still valid ... Eventually this conflict must be overcome to reactivate that mining unit," he said in the northern Mexican city of Monterrey.
Grupo Mexico shares closed down 2.33% Wednesday at 11.74 pesos, also hit by a decision in a US court that it must pay its bankrupt subsidiary Asarco billions of dollars in damages.
Norsk Hydro Predicts Positive Future
Norway's Norsk Hydro has seen some positive signs in its aluminium products business and has no plans to cut production beyond what has been announced, its chief executive said on Thursday.
"There is a better balance between production and demand in our aluminium products business," chief executive Svein Richard Brandtzaeg told Reuters on the sidelines of an event marking Hydro's 100 years on the Oslo bourse. "We see some positive signs in that business," he said.
The company has cut or announced plans to cut by half a million tonnes of primary aluminium, equal to almost 30% of 2008 output, to adjust to weak demand in the global economic downturn.
"We have no plans to cut beyond what we have cut," Brandtzaeg said.
Hydro has two main divisions: the upstream business, which is the production of aluminium metal, and the downstream business, which involves producing semi-finished aluminium parts for industries such as auto-making and construction.
Those industries have been hit hard by the global economic crisis, reducing demand for aluminium parts and metal, along with many other basic materials.
"Generally in the aluminium market we have seen that the building of stocks has flattened out, meaning a better balance between supply and demand," said Brandtzaeg who took over as CEO from Eivind Reiten on 30 March.
"The production cuts have started to have an impact, but there is still overproduction around the world," he said. "On the positive side, China is managing to keep the balance better than feared."
Brandtzaeg referred to his recent estimate that the aluminium industry would need to cut a further 1.5 million to two million tonnes to avoid stock building. "It is difficult to say (how much is needed today). Overcapacity is on the way down, but it is still too much," he said.
Norsk Hydro shares traded up 0.5% at 28.90 crowns by 08.18GMT, lagging a 0.7% rise in the Oslo bourse benchmark index and a 1% rise in the DJ Stoxx Basic Resources index, of which Hydro is a component
"There is a better balance between production and demand in our aluminium products business," chief executive Svein Richard Brandtzaeg told Reuters on the sidelines of an event marking Hydro's 100 years on the Oslo bourse. "We see some positive signs in that business," he said.
The company has cut or announced plans to cut by half a million tonnes of primary aluminium, equal to almost 30% of 2008 output, to adjust to weak demand in the global economic downturn.
"We have no plans to cut beyond what we have cut," Brandtzaeg said.
Hydro has two main divisions: the upstream business, which is the production of aluminium metal, and the downstream business, which involves producing semi-finished aluminium parts for industries such as auto-making and construction.
Those industries have been hit hard by the global economic crisis, reducing demand for aluminium parts and metal, along with many other basic materials.
"Generally in the aluminium market we have seen that the building of stocks has flattened out, meaning a better balance between supply and demand," said Brandtzaeg who took over as CEO from Eivind Reiten on 30 March.
"The production cuts have started to have an impact, but there is still overproduction around the world," he said. "On the positive side, China is managing to keep the balance better than feared."
Brandtzaeg referred to his recent estimate that the aluminium industry would need to cut a further 1.5 million to two million tonnes to avoid stock building. "It is difficult to say (how much is needed today). Overcapacity is on the way down, but it is still too much," he said.
Norsk Hydro shares traded up 0.5% at 28.90 crowns by 08.18GMT, lagging a 0.7% rise in the Oslo bourse benchmark index and a 1% rise in the DJ Stoxx Basic Resources index, of which Hydro is a component
Nippon Steel to Cut Steel Prices
Nippon Steel has led Japanese steelmakers to an agreement with Toyota Motor to cut steel prices by around 10%, a source said. This smaller-than-expected cut indicates that steel mills' earnings may not suffer too much.
However, Toyota, facing a global auto sector slump, may seek a further price cut later this year after steel mills and miners such as BHP Billiton set the price of iron ore, a key raw material, analysts said.
"The size of the price reduction is far smaller than expected," Mizuho Securities analyst Hiroshi Matsuda said. "It is hard to understand why Toyota would agree to this price."
Shares in both Nippon Steel and JFE Holdings jumped by nearly 9% after reports of the first price cut in auto sheet in seven years.
That helped the iron and steel sector sub-index gain 6.6%, leading the Tokyo share market higher as the benchmark Nikkei share average rose 1.2%.
Toyota shares rose 2.7%, in line with other exporters, aided by a surge on Wall Street.
Amid slumping demand for cars, electronics and industrial machines, Asian steel prices have more than halved to less than $500 a ton from record highs early last year.
Worries that Japanese mills faced sharp cuts in prices for auto sheet steel have weighed on their shares.
Toyota informed one of its affiliated parts makers on Thursday to cut its assumed steel product price by 15,000 yen ($151) a ton from June from an estimated 100,000 yen, a source with direct knowledge of the matter told Reuters.
He declined to be identified because of the sensitive nature of price negotiations.
The Asahi Shimbun daily reported that steelmakers would slash prices for other automakers, shipbuilders and electronics companies too.
Nippon Steel declined to comment while Toyota spokesman Keisuke Kirimoto said: "We will work to reduce costs of not only steel but other raw material in accordance with their market situation."
Yuji Matsumoto, analyst at Nomura Securities, said Nippon Steel's operating profit would exceed his forecast by more than 100bn yen if the price cut was held at 10% but he also saw risks of another price cut.
Media have reported that the price of auto sheet could fall in stages, allowing steelmakers to cope with two-to-three months of supply of costly coal carried over from last year.
A sharp drop in global sales and high material costs have pushed Toyota to forecast a 450bn yen operating loss in the year to 31 March, the first such loss in its history. Nippon Steel last month sealed a price cut of around 57% on coking coal contracts with BHP Billiton Mitsubishi Alliance (BMA), compared with what it was paying a year earlier.
However, Toyota, facing a global auto sector slump, may seek a further price cut later this year after steel mills and miners such as BHP Billiton set the price of iron ore, a key raw material, analysts said.
"The size of the price reduction is far smaller than expected," Mizuho Securities analyst Hiroshi Matsuda said. "It is hard to understand why Toyota would agree to this price."
Shares in both Nippon Steel and JFE Holdings jumped by nearly 9% after reports of the first price cut in auto sheet in seven years.
That helped the iron and steel sector sub-index gain 6.6%, leading the Tokyo share market higher as the benchmark Nikkei share average rose 1.2%.
Toyota shares rose 2.7%, in line with other exporters, aided by a surge on Wall Street.
Amid slumping demand for cars, electronics and industrial machines, Asian steel prices have more than halved to less than $500 a ton from record highs early last year.
Worries that Japanese mills faced sharp cuts in prices for auto sheet steel have weighed on their shares.
Toyota informed one of its affiliated parts makers on Thursday to cut its assumed steel product price by 15,000 yen ($151) a ton from June from an estimated 100,000 yen, a source with direct knowledge of the matter told Reuters.
He declined to be identified because of the sensitive nature of price negotiations.
The Asahi Shimbun daily reported that steelmakers would slash prices for other automakers, shipbuilders and electronics companies too.
Nippon Steel declined to comment while Toyota spokesman Keisuke Kirimoto said: "We will work to reduce costs of not only steel but other raw material in accordance with their market situation."
Yuji Matsumoto, analyst at Nomura Securities, said Nippon Steel's operating profit would exceed his forecast by more than 100bn yen if the price cut was held at 10% but he also saw risks of another price cut.
Media have reported that the price of auto sheet could fall in stages, allowing steelmakers to cope with two-to-three months of supply of costly coal carried over from last year.
A sharp drop in global sales and high material costs have pushed Toyota to forecast a 450bn yen operating loss in the year to 31 March, the first such loss in its history. Nippon Steel last month sealed a price cut of around 57% on coking coal contracts with BHP Billiton Mitsubishi Alliance (BMA), compared with what it was paying a year earlier.
Congo Rejects Miners' Contract Proposals
The Democratic Republic of Congo has rejected contract revisions proposed by six of the biggest mining firms there and will extend a much delayed review by six months, the deputy mines minister said.
The review, which aims to boost state revenues from agreements mostly signed during the chaos of the 1998-2003 war and a corruption-plagued post-war transitional government, was initially due to last six months.
Of 61 contracts evaluated under the review launched in 2007, six are unresolved. They include deals with AngloGold Ashanti, Banro, First Quantum, Gold Fields, Freeport-MacMoRan and Mwana Africa.
"The outcomes of negotiations to date are far from the terms of reference, therefore they have been rejected by the government," Victor Kasongo told Reuters.
Banro said it had received official confirmation from the government in February that its contracts were compliant with Congolese law and not heard anything to the contrary since then.
Negotiations between the six companies, representatives from state mining companies and the mines ministry broke down late last year. The government accused the companies of walking out of talks, a claim the miners denied, and earlier this year extended talks an additional 45 days.
"These companies have over 60% of our proven reserves. We can't just leave it like this ... They can come to discuss how to improve their proposals, or, in six months time, we'll shut down everything," Kasongo said.
Cash-strapped Congo's mining-dependent economy has suffered greatly due to a worldwide slump in demand for mineral exports - its primary foreign currency earner.
The majority of companies operating in its copper and cobalt sector, once a promising treasure trove of largely unexploited concessions, have either suspended projects or closed down.
In December, Congo lowered its 2009 copper export forecast to 365,000t from a pre-crash projection of 410,000t. Expectations for cobalt were slashed by more than half.
Local authorities in Katanga province, the country's mining heartland, estimate that around 300,000 miners have lost their jobs due to the crisis.
Projected direct foreign investment to Congo for 2009 has been cut by two-thirds. Economic growth this year is expected to drop to 2.7% from a 2008 average of 8%.
The review, which aims to boost state revenues from agreements mostly signed during the chaos of the 1998-2003 war and a corruption-plagued post-war transitional government, was initially due to last six months.
Of 61 contracts evaluated under the review launched in 2007, six are unresolved. They include deals with AngloGold Ashanti, Banro, First Quantum, Gold Fields, Freeport-MacMoRan and Mwana Africa.
"The outcomes of negotiations to date are far from the terms of reference, therefore they have been rejected by the government," Victor Kasongo told Reuters.
Banro said it had received official confirmation from the government in February that its contracts were compliant with Congolese law and not heard anything to the contrary since then.
Negotiations between the six companies, representatives from state mining companies and the mines ministry broke down late last year. The government accused the companies of walking out of talks, a claim the miners denied, and earlier this year extended talks an additional 45 days.
"These companies have over 60% of our proven reserves. We can't just leave it like this ... They can come to discuss how to improve their proposals, or, in six months time, we'll shut down everything," Kasongo said.
Cash-strapped Congo's mining-dependent economy has suffered greatly due to a worldwide slump in demand for mineral exports - its primary foreign currency earner.
The majority of companies operating in its copper and cobalt sector, once a promising treasure trove of largely unexploited concessions, have either suspended projects or closed down.
In December, Congo lowered its 2009 copper export forecast to 365,000t from a pre-crash projection of 410,000t. Expectations for cobalt were slashed by more than half.
Local authorities in Katanga province, the country's mining heartland, estimate that around 300,000 miners have lost their jobs due to the crisis.
Projected direct foreign investment to Congo for 2009 has been cut by two-thirds. Economic growth this year is expected to drop to 2.7% from a 2008 average of 8%.
Gold Steadies After One Week Low
Gold hovered near a one-week low on Friday, pressured by firming equities, while dealers took a drop from a record high in the world's largest gold-backed exchange-traded fund as a sign investor demand may be receding.
Holdings of New York's SPDR Gold Trust fell 0.7% from the record high it had climbed to on 9 April, the biggest decline this year.
The holdings fell to 1,119.43t by 16 April, down 8.25t from the previous day. The trust's holdings have fallen about 1% so far in April, versus a rise of roughly 4% in the comparable period last month.
Comments by European Central Bank (ECB) president Jean-Claude Trichet on Friday, which currency market participants said held no surprises, nevertheless accelerated a fall in the euro, although gold failed to budge.
The euro hit a one-month low against the dollar, dented by uncertain prospects for the euro zone economy.
Trichet said in Tokyo that banks would be the focus for any unconventional policy response to the financial crisis, and that the ECB needed a strategy to eventually reverse those measures.
Gold fell to a one-week low on Thursday on signs of a slowdown in investment demand on budding optimism that the economy was on the mend.
Sluggish physical buying has also failed to provide much support for prices, analysts said.
"Gold markets are much lower ... as the stock markets are moving higher again," said Adrian Koh, an analyst at Phillip Futures.
Investment demand had buoyed gold to above $1,000 an ounce in late February, but bullion has since lost more than 12%.
Koh said that although he was technically a little bearish about gold in the near term, he believed gold's long-term prospects remained solid.
"Yes, we are starting to see a bit of a decline (in the SPDR), but it's still not a very large figure, compared to how much we have gained in gold holdings over the past couple of months," he said.
Gold was at $874.90 per ounce by 07.02GMT, up 0.04% from New York's notional close of $874.55.
It has fallen more than 2% since the beginning of this week.
India's gold buyers continued to trickle in to stock up the yellow metal to meet festive demand, traders said.
Akshaya Tritiya, which falls on 27 April, is the second-most auspicious day to buy gold after Dhanteras.
Koji Suzuki, a senior analyst at SBI Futures, said gold was drawing some support from a recovery in demand from parts of Asia, such as China. He added that he expects gold to recover.
"Gold is sinking now because of the outflow of funds and technical profit-taking," he said.
Holdings of New York's SPDR Gold Trust fell 0.7% from the record high it had climbed to on 9 April, the biggest decline this year.
The holdings fell to 1,119.43t by 16 April, down 8.25t from the previous day. The trust's holdings have fallen about 1% so far in April, versus a rise of roughly 4% in the comparable period last month.
Comments by European Central Bank (ECB) president Jean-Claude Trichet on Friday, which currency market participants said held no surprises, nevertheless accelerated a fall in the euro, although gold failed to budge.
The euro hit a one-month low against the dollar, dented by uncertain prospects for the euro zone economy.
Trichet said in Tokyo that banks would be the focus for any unconventional policy response to the financial crisis, and that the ECB needed a strategy to eventually reverse those measures.
Gold fell to a one-week low on Thursday on signs of a slowdown in investment demand on budding optimism that the economy was on the mend.
Sluggish physical buying has also failed to provide much support for prices, analysts said.
"Gold markets are much lower ... as the stock markets are moving higher again," said Adrian Koh, an analyst at Phillip Futures.
Investment demand had buoyed gold to above $1,000 an ounce in late February, but bullion has since lost more than 12%.
Koh said that although he was technically a little bearish about gold in the near term, he believed gold's long-term prospects remained solid.
"Yes, we are starting to see a bit of a decline (in the SPDR), but it's still not a very large figure, compared to how much we have gained in gold holdings over the past couple of months," he said.
Gold was at $874.90 per ounce by 07.02GMT, up 0.04% from New York's notional close of $874.55.
It has fallen more than 2% since the beginning of this week.
India's gold buyers continued to trickle in to stock up the yellow metal to meet festive demand, traders said.
Akshaya Tritiya, which falls on 27 April, is the second-most auspicious day to buy gold after Dhanteras.
Koji Suzuki, a senior analyst at SBI Futures, said gold was drawing some support from a recovery in demand from parts of Asia, such as China. He added that he expects gold to recover.
"Gold is sinking now because of the outflow of funds and technical profit-taking," he said.
Delayed Asia Iron Ore Talks Favour Miners
Asian steelmakers may lose their battle for a steep cut in annual iron ore prices, as firm spot prices of the commodity and steady steel output growth in China, the world's top steelmaker, outweigh a glum outlook elsewhere.
Steel mills facing pressure to cut prices from struggling car makers, shipbuilders and electronics firms have pressed for a quick iron ore settlement before the end of April, but few analysts and traders see any immediate prospect of a deal as miners eye recent signs of economic recovery.
By delaying talks past the 1 April deadline, miners are now in a favourable position to concede less than the swingeing cut of 40% or 50% steelmakers sought, especially following glimmers of recovery in China's economy.
Although China's crude steel production fell 0.3% in March from a year earlier, its output continued running at a high rate even as excess supply hurt domestic prices.
"Further delay will obviously benefit miners more than steel firms, as the overall trend increasingly supports the view that the economy will recover," said GJ Kim, an analyst with Samsung Securities.
"But we don't expect it to be protracted unusually longer as things can reverse amid rising iron ore inventory in China."
The world's top three producers of iron ore, BHP Billiton, Rio Tinto and Vale, who control two-thirds of global seaborne trade in ore, are already preparing for a recovery in China with higher output targets.
Rio Tinto said on Wednesday its annual iron ore output would rise 14% this year and reported almost unchanged output last quarter from the fourth quarter, despite sharply decreased global demand, as it hopes for demand recovery from China in the second half.
Brazilian miner Vale said on Monday there were signs of demand recovery from China.
"The market could actually tolerate a 60% cut in contract prices, but what we can do?" said an iron-ore trader based in Anhui in China. "The big three miners are effectively a monopoly and I think they will hold out for a 30% cut."
Japanese steel firms led by Nippon Steel agreed with Toyota Motor to cut steel prices by around 10% and media reports said prices could fall again when cheaper raw materials under a new contract will be used.
The latest Reuters survey of six analysts forecast iron ore prices to fall around 35%, between a 20% cut suggested by miners and a cut of up to 50% demanded by steel firms.
Despite the signs of a recovery, China, home to about 700 steel mills, is overproducing at an annualised rate of 530 million tonnes, well above its targeted 8% cut to 460 million, as small and medium mills react promptly.
That would mean China could see record imports of iron ore over an extended period of time and weak spot iron ore price may halt its slide in support of miners, who are facing steel output cuts of as much as 50% in other major producing countries.
Spot prices of iron ore have traded steady in recent weeks at around $64 a tonne, a factor favouring miners, as demand for a cut of 40% to 50% means contract prices would be signed at an unusual discount to spot prices.
"Iron ore suppliers showed willingness to compromise, as witnessed by the fact that Rio Tinto proposed a 20% drop in temporary prices," said Jiro Lokibe, a Daiwa analyst.
"Nevertheless, there is a rift between the two parties. If iron ore spot prices, which are showing signs of bottoming, rebound, both parties may compromise partly because a new fiscal year has already started."
POSCO said last week Rio Tinto had offered a preliminary 20% cut in iron ore term prices, but it was unclear when final negotiations would be concluded, due to the wide price gap.
Steel mills facing pressure to cut prices from struggling car makers, shipbuilders and electronics firms have pressed for a quick iron ore settlement before the end of April, but few analysts and traders see any immediate prospect of a deal as miners eye recent signs of economic recovery.
By delaying talks past the 1 April deadline, miners are now in a favourable position to concede less than the swingeing cut of 40% or 50% steelmakers sought, especially following glimmers of recovery in China's economy.
Although China's crude steel production fell 0.3% in March from a year earlier, its output continued running at a high rate even as excess supply hurt domestic prices.
"Further delay will obviously benefit miners more than steel firms, as the overall trend increasingly supports the view that the economy will recover," said GJ Kim, an analyst with Samsung Securities.
"But we don't expect it to be protracted unusually longer as things can reverse amid rising iron ore inventory in China."
The world's top three producers of iron ore, BHP Billiton, Rio Tinto and Vale, who control two-thirds of global seaborne trade in ore, are already preparing for a recovery in China with higher output targets.
Rio Tinto said on Wednesday its annual iron ore output would rise 14% this year and reported almost unchanged output last quarter from the fourth quarter, despite sharply decreased global demand, as it hopes for demand recovery from China in the second half.
Brazilian miner Vale said on Monday there were signs of demand recovery from China.
"The market could actually tolerate a 60% cut in contract prices, but what we can do?" said an iron-ore trader based in Anhui in China. "The big three miners are effectively a monopoly and I think they will hold out for a 30% cut."
Japanese steel firms led by Nippon Steel agreed with Toyota Motor to cut steel prices by around 10% and media reports said prices could fall again when cheaper raw materials under a new contract will be used.
The latest Reuters survey of six analysts forecast iron ore prices to fall around 35%, between a 20% cut suggested by miners and a cut of up to 50% demanded by steel firms.
Despite the signs of a recovery, China, home to about 700 steel mills, is overproducing at an annualised rate of 530 million tonnes, well above its targeted 8% cut to 460 million, as small and medium mills react promptly.
That would mean China could see record imports of iron ore over an extended period of time and weak spot iron ore price may halt its slide in support of miners, who are facing steel output cuts of as much as 50% in other major producing countries.
Spot prices of iron ore have traded steady in recent weeks at around $64 a tonne, a factor favouring miners, as demand for a cut of 40% to 50% means contract prices would be signed at an unusual discount to spot prices.
"Iron ore suppliers showed willingness to compromise, as witnessed by the fact that Rio Tinto proposed a 20% drop in temporary prices," said Jiro Lokibe, a Daiwa analyst.
"Nevertheless, there is a rift between the two parties. If iron ore spot prices, which are showing signs of bottoming, rebound, both parties may compromise partly because a new fiscal year has already started."
POSCO said last week Rio Tinto had offered a preliminary 20% cut in iron ore term prices, but it was unclear when final negotiations would be concluded, due to the wide price gap.
Vale Halts Canadian Nickel Mines
Brazil miner Vale has announced it is shutting down its Sudbury mines and smelters in the Canadian province of Ontario for eight weeks.
Vale parent Companhia Vale do Rio Doce said it will close its five operating Sudbury mines and its entire suite of nickel processing operations in June and July following a major downturn in nickel prices and falling demand for the metal.
About 5,000 Vale employees will be affected by the shutdown with some staff being given temporary layoff notices, the company said.
The shutdowns follow Xstrata Nickel's decision to shut most of its mining operations in Sudbury in February when it laid off over 600 workers.
Vale parent Companhia Vale do Rio Doce said it will close its five operating Sudbury mines and its entire suite of nickel processing operations in June and July following a major downturn in nickel prices and falling demand for the metal.
About 5,000 Vale employees will be affected by the shutdown with some staff being given temporary layoff notices, the company said.
The shutdowns follow Xstrata Nickel's decision to shut most of its mining operations in Sudbury in February when it laid off over 600 workers.
Thursday, April 16, 2009
Grupo Mexico Offers $1.3bn for Bankrupt Asarco
Grupo Mexico offered $1.3bn in cash to recover bankrupt US miner Asarco in a US court on Monday, a Grupo Mexico lawyer said.
In the middle of court proceedings in Corpus Christi, Texas, Jorge Lazalde confirmed the amount of the offer, saying more details will be available after the hearing concludes.
The offer is lower than the $1.7bn - $1.1bn in cash, plus a $600m in notes - offered by India's Sterlite Industries, a unit of London-listed Vedanta Resources, to take over the ailing Arizona-based miner, weighed down by heavy environmental claims.
Grupo Mexico acquired Asarco in a leveraged buyout in 1999, but lost board control due to the bankruptcy.
In a separate court case in Brownsville, Texas, Asarco sued its former parent, saying it was not paid fair market value during the original sale.
A US District Court Judge ruled on 1 April that Grupo Mexico had committed a fraudulent transfer and ordered it to return as much as $6bn in stock and dividends to Asarco, but the Mexican miner said it would appeal the decision.
Grupo Mexico last traded at 11.30 pesos, up 6.50%, according to preliminary closing market data on Monday
In the middle of court proceedings in Corpus Christi, Texas, Jorge Lazalde confirmed the amount of the offer, saying more details will be available after the hearing concludes.
The offer is lower than the $1.7bn - $1.1bn in cash, plus a $600m in notes - offered by India's Sterlite Industries, a unit of London-listed Vedanta Resources, to take over the ailing Arizona-based miner, weighed down by heavy environmental claims.
Grupo Mexico acquired Asarco in a leveraged buyout in 1999, but lost board control due to the bankruptcy.
In a separate court case in Brownsville, Texas, Asarco sued its former parent, saying it was not paid fair market value during the original sale.
A US District Court Judge ruled on 1 April that Grupo Mexico had committed a fraudulent transfer and ordered it to return as much as $6bn in stock and dividends to Asarco, but the Mexican miner said it would appeal the decision.
Grupo Mexico last traded at 11.30 pesos, up 6.50%, according to preliminary closing market data on Monday
Indonesia Prods State Miners to Buy Into Newmont Unit
Indonesia's minister for state enterprises said he wants state mining firms to have first right to buy shares in a unit of US gold miner Newmont Mining Corp, but analysts and some firms said they lack the funds.
An arbitration court last month ordered the foreign owners of PT Newmont Nusa Tenggara (NNT), which operates the Batu Hijau copper and gold mine in Sumbawa, to sell part of their stake to the government within six months after a long-running dispute.
However, with the 17% stake valued by Newmont at around $800m, analysts have said that neither the government nor the state-owned mines have the necessary funds.
That potentially poses problems for Newmont, which could fall foul of the ruling if it fails to find a buyer, but which could be pressured into dropping its price as the deadline approaches.
The Newmont case has attracted considerable interest from foreign investors particularly as some Indonesian politicians are taking an increasingly nationalistic approach over ownership and access to the country's rich natural resources against the backdrop of this year's elections.
"We have sent letters to the finance ministry, requesting state-owned miners to be given priority to buy the stakes if the government declines to buy it," Sofyan Djalil, state enterprises minister, told reporters on Tuesday, adding "Of course there should be a negotiation on prices."
Local media reports have cited state miner PT Aneka Tambang, coal miner PT Tambang Batubara Bukit Asam, and tin miner PT Timah as the state-owned firms most likely to consider buying the shares.
But analysts and two executives said the price was too high and that they lacked the financing.
"The funding needed is huge and our internal cash won't be able to cover it," said Timah corporate secretary Abrun Abubakar.
Bimo Satryo, Antam's corporate secretary, said the firm was waiting for an offer from the government on the stakes.
"We will have to review it first because it involves huge financing. It's not easy getting financing in this situation," said Satryo.
An arbitration court last month ordered the foreign owners of PT Newmont Nusa Tenggara (NNT), which operates the Batu Hijau copper and gold mine in Sumbawa, to sell part of their stake to the government within six months after a long-running dispute.
However, with the 17% stake valued by Newmont at around $800m, analysts have said that neither the government nor the state-owned mines have the necessary funds.
That potentially poses problems for Newmont, which could fall foul of the ruling if it fails to find a buyer, but which could be pressured into dropping its price as the deadline approaches.
The Newmont case has attracted considerable interest from foreign investors particularly as some Indonesian politicians are taking an increasingly nationalistic approach over ownership and access to the country's rich natural resources against the backdrop of this year's elections.
"We have sent letters to the finance ministry, requesting state-owned miners to be given priority to buy the stakes if the government declines to buy it," Sofyan Djalil, state enterprises minister, told reporters on Tuesday, adding "Of course there should be a negotiation on prices."
Local media reports have cited state miner PT Aneka Tambang, coal miner PT Tambang Batubara Bukit Asam, and tin miner PT Timah as the state-owned firms most likely to consider buying the shares.
But analysts and two executives said the price was too high and that they lacked the financing.
"The funding needed is huge and our internal cash won't be able to cover it," said Timah corporate secretary Abrun Abubakar.
Bimo Satryo, Antam's corporate secretary, said the firm was waiting for an offer from the government on the stakes.
"We will have to review it first because it involves huge financing. It's not easy getting financing in this situation," said Satryo.
South Africa's ANC Plans State Mining Firm
South Africa's ruling ANC plans to set up a state mining firm after next week's election, but nationalising mineral assets is not on the agenda, a top official of the African National Congress said.
Led by presidential frontrunner Jacob Zuma, the ANC is expected to retain its dominance in the 22 April general election with a promise to do more for the poor in the major metals producer but also to maintain business-friendly policies.
ANC Secretary General Gwede Mantashe, a former mine workers leader who also chairs the ANC's Communist Party ally, said a state mining firm would create jobs and help Africa's biggest economy benefit more from its mineral wealth.
"Having a state mining company is distinct from nationalisation. It will compete with other companies in mining," he told Reuters, adding it would also renew a focus on local processing.
"To sell gold or iron ore in raw form undermines our mining industry. We sell less value like raw iron ore and buy products such as steel at a higher cost."
But signs of greater state involvement in the sector, which accounts for 7% of gross domestic product and nearly half a million jobs, could raise concerns among investors wary of any shift to the left under Zuma.
Mantashe said the new firm might focus on strategic minerals such as coal, uranium or platinum, and operate in a similar manner to state-owned PetroSA, which competes with private oil firms, particularly in exploration.
The mining sector is subject to intense scrutiny by big foreign groups such as Anglo American, South Africa's biggest mining player, which want the sector handled carefully.
The global economic slowdown has already knocked metals prices and put thousands of jobs on the line.
Doubts
Paul Walker, chief executive of London-based metals consultancy GFMS, said state involvement was a bad idea.
Led by presidential frontrunner Jacob Zuma, the ANC is expected to retain its dominance in the 22 April general election with a promise to do more for the poor in the major metals producer but also to maintain business-friendly policies.
ANC Secretary General Gwede Mantashe, a former mine workers leader who also chairs the ANC's Communist Party ally, said a state mining firm would create jobs and help Africa's biggest economy benefit more from its mineral wealth.
"Having a state mining company is distinct from nationalisation. It will compete with other companies in mining," he told Reuters, adding it would also renew a focus on local processing.
"To sell gold or iron ore in raw form undermines our mining industry. We sell less value like raw iron ore and buy products such as steel at a higher cost."
But signs of greater state involvement in the sector, which accounts for 7% of gross domestic product and nearly half a million jobs, could raise concerns among investors wary of any shift to the left under Zuma.
Mantashe said the new firm might focus on strategic minerals such as coal, uranium or platinum, and operate in a similar manner to state-owned PetroSA, which competes with private oil firms, particularly in exploration.
The mining sector is subject to intense scrutiny by big foreign groups such as Anglo American, South Africa's biggest mining player, which want the sector handled carefully.
The global economic slowdown has already knocked metals prices and put thousands of jobs on the line.
Doubts
Paul Walker, chief executive of London-based metals consultancy GFMS, said state involvement was a bad idea.
China Steel in Tie-Up talks With China Firms
China Steel, Taiwan's top steel maker, is talking with three of its leading peers to jointly invest in overseas miners to take advantage of low prices and secure future supplies, its chairman said on Wednesday.
China Steel is seeking possible deals with Wuhan Steel, Angang Steel and Baoshan Iron & Steel, as well as Japan's Sumitomo Metal, said chairman CJ Chang.
"We are in talks with them about buying stakes in global mining companies," he told Reuters in an interview, declining to identify specific miners. "All of China Steel's raw materials are imported. We hope joint bids with these China peers will help secure our future supply."
Major suppliers of China Steel include BHP Billiton and Rio Tinto, the latter of which is planning a $19.5bn tie-up with another Chinese firm, state-owned metals firm Chinalco.
China Steel shares rallied on news of the potential tie-ups, ending up 2.5% in Wednesday trade even as the broader TAIEX share index fell 0.3%. The shares have staged a 27% rally in the past month, outpacing the TAIEX's 24% rise.
More losses
Chang added that China Steel expects to report more losses in the first and second quarters of this year, amid weak demand and high raw material prices. The company reported a net loss of T$15.45bn ($458m) in the December quarter, as it and its global peers suffered during the global economic downturn.
"The steel industry should bottom out in the first half. Steel prices have dropped to a level close to production costs," Chang said. "A recovery would come at the end of this year before stabilising in the second half."
Separately, Chang said China Steel would welcome various ways of tying up with Formosa Plastics Group, including jointly building a steel plant in Vietnam.
His comments came after market speculation that Formosa, among Taiwan's major conglomerates, was aggressively buying China Steel stocks recently, while foreign investors were heavy net sellers of the shares.
China Steel is seeking possible deals with Wuhan Steel, Angang Steel and Baoshan Iron & Steel, as well as Japan's Sumitomo Metal, said chairman CJ Chang.
"We are in talks with them about buying stakes in global mining companies," he told Reuters in an interview, declining to identify specific miners. "All of China Steel's raw materials are imported. We hope joint bids with these China peers will help secure our future supply."
Major suppliers of China Steel include BHP Billiton and Rio Tinto, the latter of which is planning a $19.5bn tie-up with another Chinese firm, state-owned metals firm Chinalco.
China Steel shares rallied on news of the potential tie-ups, ending up 2.5% in Wednesday trade even as the broader TAIEX share index fell 0.3%. The shares have staged a 27% rally in the past month, outpacing the TAIEX's 24% rise.
More losses
Chang added that China Steel expects to report more losses in the first and second quarters of this year, amid weak demand and high raw material prices. The company reported a net loss of T$15.45bn ($458m) in the December quarter, as it and its global peers suffered during the global economic downturn.
"The steel industry should bottom out in the first half. Steel prices have dropped to a level close to production costs," Chang said. "A recovery would come at the end of this year before stabilising in the second half."
Separately, Chang said China Steel would welcome various ways of tying up with Formosa Plastics Group, including jointly building a steel plant in Vietnam.
His comments came after market speculation that Formosa, among Taiwan's major conglomerates, was aggressively buying China Steel stocks recently, while foreign investors were heavy net sellers of the shares.
Australia's Fortescue Confident About Valin Deal
Fortescue Metals Group, Australia's third-largest iron ore miner, expects China's Hunan Valin Steel to gain Chinese Government approval this month to take a 17% stake in the miner.
A company spokesman on Wednesday dismissed a report on the Sydney Morning Herald newspaper's website which said that China's top economic planning agency was withholding approval of the $438m deal because of concerns over Australia's handling of it.
The deal has received Australian Government approval, with conditions, amid a storm of political protest in Australia over investment by state-owned Chinese firms in the country's resources industry - a key driver of the economy.
"Fortescue remains of the view that the Valin investment in the company will proceed," said the spokesman, adding that Fortescue was not aware of any reason why the deal would not be approved by China's National Development and Reform Commission (NDRC).
The Herald report, by a China-based columnist, said the NDRC was withholding approval amid concerns that Australia's Foreign Investment Review Board had imposed overly onerous conditions.
The conditions were imposed to ensure that the directors of Hunan Valin appointed to the Fortescue board could not use pricing information against the Australian company in iron ore contract negotiations.
The report said unspecified Chinese media and observers in Beijing have reported NDRC officials were worried the conditions set an unfavourable precedent that may fetter other Chinese investments, particularly state-owned aluminium maker Chinalco's $19.5bn tie-up with Rio Tinto.
The Australian Government is yet to approve that deal.
An analyst, who did not wish to be identified, said if China attempted to use concerns about the Hunan Valin investment as a way to make conditions on the Chinalco deal less onerous, it would only highlight any concerns Australian authorities might have over undue Chinese Government influence.
A company spokesman on Wednesday dismissed a report on the Sydney Morning Herald newspaper's website which said that China's top economic planning agency was withholding approval of the $438m deal because of concerns over Australia's handling of it.
The deal has received Australian Government approval, with conditions, amid a storm of political protest in Australia over investment by state-owned Chinese firms in the country's resources industry - a key driver of the economy.
"Fortescue remains of the view that the Valin investment in the company will proceed," said the spokesman, adding that Fortescue was not aware of any reason why the deal would not be approved by China's National Development and Reform Commission (NDRC).
The Herald report, by a China-based columnist, said the NDRC was withholding approval amid concerns that Australia's Foreign Investment Review Board had imposed overly onerous conditions.
The conditions were imposed to ensure that the directors of Hunan Valin appointed to the Fortescue board could not use pricing information against the Australian company in iron ore contract negotiations.
The report said unspecified Chinese media and observers in Beijing have reported NDRC officials were worried the conditions set an unfavourable precedent that may fetter other Chinese investments, particularly state-owned aluminium maker Chinalco's $19.5bn tie-up with Rio Tinto.
The Australian Government is yet to approve that deal.
An analyst, who did not wish to be identified, said if China attempted to use concerns about the Hunan Valin investment as a way to make conditions on the Chinalco deal less onerous, it would only highlight any concerns Australian authorities might have over undue Chinese Government influence.
Rio Tinto Q1 Aluminium Output Down 6%
Rio Tinto's first-quarter aluminium output fell 6% as the world's biggest producer attempted to better balance supply with sinking global demand from industrial sectors, the company said on Wednesday.
Rio also produced 2% less alumina, 15% less iron ore but 33% more refined copper in the first quarter versus the same period a year ago, it said.
Rio Tinto, the world's top aluminium maker since 2007 after buying Canada's Alcan, has proposed selling minority asset stakes and more equity to state-owned Chinese aluminium group Chinalco - already its biggest shareholder - to raise $19.5bn to help weather the bust in commodities markets.
Rio also produced 2% less alumina, 15% less iron ore but 33% more refined copper in the first quarter versus the same period a year ago, it said.
Rio Tinto, the world's top aluminium maker since 2007 after buying Canada's Alcan, has proposed selling minority asset stakes and more equity to state-owned Chinese aluminium group Chinalco - already its biggest shareholder - to raise $19.5bn to help weather the bust in commodities markets.
Russia's Raspadskaya 2008 Net Up 121%
Russia's Raspadskaya said its 2008 net profit more than doubled to $531m as the coking coal producer benefitted from a strong performance in the first nine months of the year.
Full-year sales rose 53% to $1.2bn, and its net profit margin was 44%, the company said in a statement issued on Wednesday.
Raspadskaya, part-owned by steel maker Evraz Group, also reduced its net debt to $165m at the end of 2008, down from $265m at the end of 2007.
Raspadskaya is one of several Russian metals and mining companies struggling to preserve cash during the downturn, and it also said that it will not make a final 2008 dividend payment. In November it recommended a nine-month interim dividend payment of 1.50 roubles per share, one quarter of the six roubles it said it would recommend in September.
Raspadskaya also reported raw coal production reached 1.89 million tonnes in the first quarter, down 35% from the year-earlier period.
Coal concentrate sales were 1.3 million tonnes, down 42%.
"The global financial crisis and a drop in the output of the Russian steel industry affected our prices and sales volumes of coal concentrate as compared to the trouble-free 2008," it said in the statement.
Full-year sales rose 53% to $1.2bn, and its net profit margin was 44%, the company said in a statement issued on Wednesday.
Raspadskaya, part-owned by steel maker Evraz Group, also reduced its net debt to $165m at the end of 2008, down from $265m at the end of 2007.
Raspadskaya is one of several Russian metals and mining companies struggling to preserve cash during the downturn, and it also said that it will not make a final 2008 dividend payment. In November it recommended a nine-month interim dividend payment of 1.50 roubles per share, one quarter of the six roubles it said it would recommend in September.
Raspadskaya also reported raw coal production reached 1.89 million tonnes in the first quarter, down 35% from the year-earlier period.
Coal concentrate sales were 1.3 million tonnes, down 42%.
"The global financial crisis and a drop in the output of the Russian steel industry affected our prices and sales volumes of coal concentrate as compared to the trouble-free 2008," it said in the statement.
Coal Miner Peabody's First-Quarter Profit Soars
Miner Peabody Energy Corp said first-quarter profit tripled as higher-price contract sales offset slumping spot coal prices.
Net earnings were $170m, or 63 cents per share, compared with $57m, or 21 cents per share, in the same quarter of 2008, the St Louis-based company reported on Wednesday.
Income from continuing operations was 50 cents per share. Revenue rose 15% to $1.46bn.
During the first quarter, coal prices dropped dramatically. A ton of eastern US coal that cost $61.50 on 1 January slumped 25% to $45.63 on 31 March.
Analysts attributed Peabody's revenue increase to the fact that the company sold much of its coal production at locked-in contract prices negotiated before the recent drop in spot prices
Net earnings were $170m, or 63 cents per share, compared with $57m, or 21 cents per share, in the same quarter of 2008, the St Louis-based company reported on Wednesday.
Income from continuing operations was 50 cents per share. Revenue rose 15% to $1.46bn.
During the first quarter, coal prices dropped dramatically. A ton of eastern US coal that cost $61.50 on 1 January slumped 25% to $45.63 on 31 March.
Analysts attributed Peabody's revenue increase to the fact that the company sold much of its coal production at locked-in contract prices negotiated before the recent drop in spot prices
Anglo American Launches $1.5bn Convertible Bond
Mining group Anglo American launched a $1.5bn, five-year convertible bond on Thursday to help strengthen its balance sheet and lengthen its debt profile.
Anglo, the world's fourth-biggest diversified mining group by market value, said the bonds were expected to have a semi-annual coupon of 4.25-4.75% a year.
The initial conversion price was expected to be set at a premium of 30-35% over the current share price, a statement said.
The total amount of the bonds could be increased to $1.7bn under an overallotment option to joint bookrunners Goldman Sachs International and Morgan Stanley & Co International.
Final terms of the bond were due to be announced later on Thursday. The proceeds would be used for general corporate purposes, Anglo said.
On Wednesday, Anglo chairman Mark Moody-Stuart told the group's annual general meeting that its $11bn of borrowing was sustainable.
Anglo, the world's fourth-biggest diversified mining group by market value, said the bonds were expected to have a semi-annual coupon of 4.25-4.75% a year.
The initial conversion price was expected to be set at a premium of 30-35% over the current share price, a statement said.
The total amount of the bonds could be increased to $1.7bn under an overallotment option to joint bookrunners Goldman Sachs International and Morgan Stanley & Co International.
Final terms of the bond were due to be announced later on Thursday. The proceeds would be used for general corporate purposes, Anglo said.
On Wednesday, Anglo chairman Mark Moody-Stuart told the group's annual general meeting that its $11bn of borrowing was sustainable.
Grupo Mexico Can Fire Striking Miners Says Government
Mexican miners on strike for nearly two years at the country's largest copper pit can be fired, a government labour board ruled Wednesday, prompting angry workers to surround the mine in protest.
The ruling is a win for the mine's owner, Grupo Mexico, which argued it could no longer operate the massive Cananea deposit because machinery left idle for months had been looted and was damaged beyond repair.
Workers at Cananea laid down tools in July 2007 in a dispute that began over health and safety standards but has since been complicated by a personal feud between the company and the union's leaders.
"The company declared force majeure," the labour board statement issued in the early morning hours after 14 hours of deliberations.
"At Cananea, there are damages and destruction to machinery, materials, installations and equipment essential to the operation, so serious that the necessary consequence is the termination of contracts," the statement said.
Grupo Mexico said at a news conference Wednesday it will cost millions of dollars to repair the mine, but that it was committed to reopening the installations.
A spokesman for the miners' union disputed the company's claim and said at a news conference that the damage was due to the management's neglect of the installation that put workers health and safety at risk.
The labour board ordered the company to compensate the 1,500 striking workers with three months pay plus 12 days of salary for each year worked at the mine. Workers there earn on average between $770 and $920 a month, the company said.
The union, which has argued in an ongoing court battle that the company is not allowed to fire legally striking workers, pledged to appeal the board's decision.
Miners blocked Cananea's front gate in northern Mexico in protest and the union said federal police sent hundreds of officers to the city in response.
Grupo Mexico's push to close the mine and fire workers has angered the national union, which counts among its members thousands of miners and metalworkers around the country.
A blockade by some 1,000 workers in support of the Cananea workers shuttered a major Mexican port for the past two days, holding up hundreds of containers of imports and exports.
The union said the blockade would continue indefinitely until the case resolved satisfactorily.
Massive losers
Cananea produced more than 400 million pounds of copper a year when operational, which at an average price of $2 a pound means $800m in lost annual revenue, said Daniel Chavez, the company's director of operations, although copper production at Cananea was not included in the company's 2009 earnings guidance.
If reopened, Cananea contains enough ore to produce copper for 65 years, Chavez said.
Two smaller Grupo Mexico mines have been on strike for the same amount of time as Cananea and the company has promised to close those worksites as well.
This is not the first time Grupo Mexico and the miners union have clashed.
Grupo Mexico's second largest copper mine, La Caridad, was shuttered for months in 2006 by a strike that ended when the company fired all the workers and rehired most under a new contract.
One man died in a skirmish between two rival groups of miners outside La Caridad mine in 2007.
Labour Minister Javier Lozano ruled out using police or soldiers to reopen the port or to force miners to leave Cananea, where strikers are taking turns to guard the entrance to the mine and prevent its reopening.
"We have not considered any eviction or any use of force," Lozano told reporters. He said the labour board decision "is a legal ruling and no more."
The ruling is a win for the mine's owner, Grupo Mexico, which argued it could no longer operate the massive Cananea deposit because machinery left idle for months had been looted and was damaged beyond repair.
Workers at Cananea laid down tools in July 2007 in a dispute that began over health and safety standards but has since been complicated by a personal feud between the company and the union's leaders.
"The company declared force majeure," the labour board statement issued in the early morning hours after 14 hours of deliberations.
"At Cananea, there are damages and destruction to machinery, materials, installations and equipment essential to the operation, so serious that the necessary consequence is the termination of contracts," the statement said.
Grupo Mexico said at a news conference Wednesday it will cost millions of dollars to repair the mine, but that it was committed to reopening the installations.
A spokesman for the miners' union disputed the company's claim and said at a news conference that the damage was due to the management's neglect of the installation that put workers health and safety at risk.
The labour board ordered the company to compensate the 1,500 striking workers with three months pay plus 12 days of salary for each year worked at the mine. Workers there earn on average between $770 and $920 a month, the company said.
The union, which has argued in an ongoing court battle that the company is not allowed to fire legally striking workers, pledged to appeal the board's decision.
Miners blocked Cananea's front gate in northern Mexico in protest and the union said federal police sent hundreds of officers to the city in response.
Grupo Mexico's push to close the mine and fire workers has angered the national union, which counts among its members thousands of miners and metalworkers around the country.
A blockade by some 1,000 workers in support of the Cananea workers shuttered a major Mexican port for the past two days, holding up hundreds of containers of imports and exports.
The union said the blockade would continue indefinitely until the case resolved satisfactorily.
Massive losers
Cananea produced more than 400 million pounds of copper a year when operational, which at an average price of $2 a pound means $800m in lost annual revenue, said Daniel Chavez, the company's director of operations, although copper production at Cananea was not included in the company's 2009 earnings guidance.
If reopened, Cananea contains enough ore to produce copper for 65 years, Chavez said.
Two smaller Grupo Mexico mines have been on strike for the same amount of time as Cananea and the company has promised to close those worksites as well.
This is not the first time Grupo Mexico and the miners union have clashed.
Grupo Mexico's second largest copper mine, La Caridad, was shuttered for months in 2006 by a strike that ended when the company fired all the workers and rehired most under a new contract.
One man died in a skirmish between two rival groups of miners outside La Caridad mine in 2007.
Labour Minister Javier Lozano ruled out using police or soldiers to reopen the port or to force miners to leave Cananea, where strikers are taking turns to guard the entrance to the mine and prevent its reopening.
"We have not considered any eviction or any use of force," Lozano told reporters. He said the labour board decision "is a legal ruling and no more."
Wednesday, April 15, 2009
US economy continues to contract
The report, used to set US interest rates, said "overall economic activity contracted further or remained weak".
But a number of districts had noted a "moderation in the pace of decline", while others were "stabilising".
The report comes a day after President Barack Obama and Fed chairman Ben Bernanke said the recession was easing.
The Beige Book is compiled eight times a year and is based on reports and comments from businesses across the US.
The last report was released at the beginning of March.
'Slight improvement'
Despite some signs of improvement, this report painted a bleak picture of current US economic activity
"Manufacturing activity weakened across a broad range of industries in most districts, with only a few exceptions," it said.
"Non financial service activity continue to contract across districts," it added.
The report also said that retail spending remained slow, but did comment that "some districts noted a slight improvement in sales compared with the previous reporting period".
The property market also continued to suffer, but there were signs that interest from buyers was returning.
"Home prices and construction were still falling in most areas, but better-than-expected buyer traffic led to scattered pick-up in sales in a number of districts," the report said.
Downward pressure on prices was also reported.
Indeed, official figures from the US Labor Department on Wednesday confirmed that US consumer prices fell by 0.1% in March.
The fall meant consumer prices were down 0.4% from a year ago, the first annual decline since 1955.
'Economic progress'
The book also noted that "manufacturing activity continued to decline in most districts and across a wide range of industries".
But a number of districts had noted a "moderation in the pace of decline", while others were "stabilising".
The report comes a day after President Barack Obama and Fed chairman Ben Bernanke said the recession was easing.
The Beige Book is compiled eight times a year and is based on reports and comments from businesses across the US.
The last report was released at the beginning of March.
'Slight improvement'
Despite some signs of improvement, this report painted a bleak picture of current US economic activity
"Manufacturing activity weakened across a broad range of industries in most districts, with only a few exceptions," it said.
"Non financial service activity continue to contract across districts," it added.
The report also said that retail spending remained slow, but did comment that "some districts noted a slight improvement in sales compared with the previous reporting period".
The property market also continued to suffer, but there were signs that interest from buyers was returning.
"Home prices and construction were still falling in most areas, but better-than-expected buyer traffic led to scattered pick-up in sales in a number of districts," the report said.
Downward pressure on prices was also reported.
Indeed, official figures from the US Labor Department on Wednesday confirmed that US consumer prices fell by 0.1% in March.
The fall meant consumer prices were down 0.4% from a year ago, the first annual decline since 1955.
'Economic progress'
The book also noted that "manufacturing activity continued to decline in most districts and across a wide range of industries".
Mobile phones stir Indian voters
Nearly 50% of Indians are less than 25 years old - making the country one of the youngest in the world.
But the prime ministerial candidates of the two leading parties are over 70 years old.
To bridge the gap, political parties have been going all out to take their election campaign into the digital media using text messages, social networking sites, online campaign tunes and videos.
In the last four years, a booming economy has vastly increased the penetration of internet and mobile phone ownership, giving politicians tools to connect with voters faster.
Knocking on doors
Door to door campaigning is what political parties traditionally did during elections. But this time, they are substituting some of the usual knocking on doors by getting online.
And taking their messages to the young urban voter are internet companies like Yahoo.
With a new India website, they hope to ride the election bandwagon to build their own brand among young people.
Yahoo! estimates that a majority of the 45 million internet users in the country are of voting age and are actively looking online for political information.
So users can login to their site and create their own manifestoes. Looking at the youth manifestoes provides some interesting insights says Gopal Krishna, head of Yahoo! India.
Youth concerns
But the prime ministerial candidates of the two leading parties are over 70 years old.
To bridge the gap, political parties have been going all out to take their election campaign into the digital media using text messages, social networking sites, online campaign tunes and videos.
In the last four years, a booming economy has vastly increased the penetration of internet and mobile phone ownership, giving politicians tools to connect with voters faster.
Knocking on doors
Door to door campaigning is what political parties traditionally did during elections. But this time, they are substituting some of the usual knocking on doors by getting online.
And taking their messages to the young urban voter are internet companies like Yahoo.
With a new India website, they hope to ride the election bandwagon to build their own brand among young people.
Yahoo! estimates that a majority of the 45 million internet users in the country are of voting age and are actively looking online for political information.
So users can login to their site and create their own manifestoes. Looking at the youth manifestoes provides some interesting insights says Gopal Krishna, head of Yahoo! India.
Youth concerns
Dig 'may reveal' Cleopatra's tomb
Excavation at the sites, which are near a temple west of the coastal city of Alexandria, is due to begin next week.
Teams working in the area said the recent discovery of tombs containing 10 mummies suggested that Anthony and Cleopatra might be buried close by.
The teams also found a bust of Cleopatra and coins carrying her image.
The archaeologists from Egypt and the Dominican Republic have been excavating at the temple of Taposiris Magna for the last three years.
'Charm'
There they discovered a series of deep shafts in which it is thought that Anthony and Cleopatra might be buried, Egypt's Supreme Council of Antiquities said in a statement.
Alongside the coins and bust of Cleopatra, a mask believed to belong to Mark Anthony was also found.
The temple was built during the reign of King Ptolemy II (282-246BC).
Anthony and Cleopatra committed suicide in 30BC after losing the Battle of Actium.
Zahi Hawass, Egypt's chief archaeologist, said the coins found at the temple refuted "what some scholars have said about Cleopatra being very ugly".
"The finds from Taposiris reflect a charm... and indicate that Cleopatra was in no way unattractive," he said.
A team of experts from Newcastle University said two years ago that another set of coins showed the beauty of Anthony and Cleopatra portrayed in popular culture to have been exaggerated.
Teams working in the area said the recent discovery of tombs containing 10 mummies suggested that Anthony and Cleopatra might be buried close by.
The teams also found a bust of Cleopatra and coins carrying her image.
The archaeologists from Egypt and the Dominican Republic have been excavating at the temple of Taposiris Magna for the last three years.
'Charm'
There they discovered a series of deep shafts in which it is thought that Anthony and Cleopatra might be buried, Egypt's Supreme Council of Antiquities said in a statement.
Alongside the coins and bust of Cleopatra, a mask believed to belong to Mark Anthony was also found.
The temple was built during the reign of King Ptolemy II (282-246BC).
Anthony and Cleopatra committed suicide in 30BC after losing the Battle of Actium.
Zahi Hawass, Egypt's chief archaeologist, said the coins found at the temple refuted "what some scholars have said about Cleopatra being very ugly".
"The finds from Taposiris reflect a charm... and indicate that Cleopatra was in no way unattractive," he said.
A team of experts from Newcastle University said two years ago that another set of coins showed the beauty of Anthony and Cleopatra portrayed in popular culture to have been exaggerated.
Millions of Indians go to polls
Voters in 124 constituencies are taking part in the ballot. There are four other phases between round one and the last phase on 13 May.
More than 700 million Indians overall are eligible to vote for seats in the lower house of parliament.
The incumbent Congress-led coalition government is facing a challenge from the main opposition BJP-led alliance.
The two main blocs are also competing against a "third front" of communist and regional parties in a poll that is too close to call.
Results are due on 16 May and a new parliament must be in place by 2 June.
Voters began queuing up early at many polling stations across the country.
Among the high profile candidates who arrived early to cast his vote was former UN diplomat Shashi Tharoor in the southern city of Thiruvananthapuram.
"It is a great privilege to vote. It is an extra bonus to vote for myself," said Mr Tharoor, who is standing for the Congress party. "I should be able to romp home."
TV pictures showed women queuing in Assam state in a light drizzle.
A massive security operation is in place. In the eastern state of Jharkhand six paramilitary soldiers were killed in a landmine blast blamed on Maoist rebels, police said.
Local issues
The first voting takes place in constituencies spread across the country, including volatile areas in north and central India.
States where voting takes place are Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Jammu and Kashmir, Kerala, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Orissa, Uttar Pradesh, Chhattisgarh, Jharkhand, Lakshwadeep and the Andaman and Nicobar Islands.
More than two million security personnel are expected to be deployed, especially after a string of recent attacks by Maoist rebels who have threatened to disrupt the vote.
Thousands of police and paramilitary troops have been deployed across the southern Indian state of Andhra Pradesh, which will vote for both national and state assembly representatives.
More than 700 million Indians overall are eligible to vote for seats in the lower house of parliament.
The incumbent Congress-led coalition government is facing a challenge from the main opposition BJP-led alliance.
The two main blocs are also competing against a "third front" of communist and regional parties in a poll that is too close to call.
Results are due on 16 May and a new parliament must be in place by 2 June.
Voters began queuing up early at many polling stations across the country.
Among the high profile candidates who arrived early to cast his vote was former UN diplomat Shashi Tharoor in the southern city of Thiruvananthapuram.
"It is a great privilege to vote. It is an extra bonus to vote for myself," said Mr Tharoor, who is standing for the Congress party. "I should be able to romp home."
TV pictures showed women queuing in Assam state in a light drizzle.
A massive security operation is in place. In the eastern state of Jharkhand six paramilitary soldiers were killed in a landmine blast blamed on Maoist rebels, police said.
Local issues
The first voting takes place in constituencies spread across the country, including volatile areas in north and central India.
States where voting takes place are Andhra Pradesh, Arunachal Pradesh, Assam, Bihar, Jammu and Kashmir, Kerala, Maharashtra, Manipur, Meghalaya, Mizoram, Nagaland, Orissa, Uttar Pradesh, Chhattisgarh, Jharkhand, Lakshwadeep and the Andaman and Nicobar Islands.
More than two million security personnel are expected to be deployed, especially after a string of recent attacks by Maoist rebels who have threatened to disrupt the vote.
Thousands of police and paramilitary troops have been deployed across the southern Indian state of Andhra Pradesh, which will vote for both national and state assembly representatives.
US unveils plan to tackle piracy
She said an expanded international effort was needed, as well as freezing pirates' assets, and plugging gaps in the shipping industry's own defences.
Improving the situation in Somalia itself was also key, she said.
Pirate attacks have increased in the past few days, including on US vessels, despite anti-piracy patrols by the US and other navies.
Mrs Clinton said: "We may be dealing with a 17th-Century crime, but we need to bring 21st-Century assets to bear."
The US Navy shot dead three pirates a few days ago in the rescue of a US cargo ship captain who had been taken hostage from his own ship.
The captain was unhurt and a fourth pirate was captured.
His crew had managed to fight off the armed pirates from the Maersk Alabama, but the captain was taken away in a lifeboat.
Among recent developments:
Another US ship, the Liberty Sun, was attacked by armed pirates, but escaped them with slight damage to the vessel.
The crew of the Maersk Alabama flew home to the US from the Kenyan city of Mombasa, but their captain's own return was delayed as he was still on the USS Bainbridge, the warship which had diverted to assist Liberty Sun.
One pirate said the attack on the Liberty Sun was revenge for the recent deaths of pirates.
The French navy captured 11 pirates after intercepting a command vessel about 550 miles (900km) off the coast of Kenya.
The Greek maritime ministry announced that a Greek cargo ship and its 24 crew, held by pirates since mid-March, had been released.
Improving the situation in Somalia itself was also key, she said.
Pirate attacks have increased in the past few days, including on US vessels, despite anti-piracy patrols by the US and other navies.
Mrs Clinton said: "We may be dealing with a 17th-Century crime, but we need to bring 21st-Century assets to bear."
The US Navy shot dead three pirates a few days ago in the rescue of a US cargo ship captain who had been taken hostage from his own ship.
The captain was unhurt and a fourth pirate was captured.
His crew had managed to fight off the armed pirates from the Maersk Alabama, but the captain was taken away in a lifeboat.
Among recent developments:
Another US ship, the Liberty Sun, was attacked by armed pirates, but escaped them with slight damage to the vessel.
The crew of the Maersk Alabama flew home to the US from the Kenyan city of Mombasa, but their captain's own return was delayed as he was still on the USS Bainbridge, the warship which had diverted to assist Liberty Sun.
One pirate said the attack on the Liberty Sun was revenge for the recent deaths of pirates.
The French navy captured 11 pirates after intercepting a command vessel about 550 miles (900km) off the coast of Kenya.
The Greek maritime ministry announced that a Greek cargo ship and its 24 crew, held by pirates since mid-March, had been released.
Talent show singer is online hit
Susan Boyle, from Blackburn, stunned judges on ITV's Britain's Got Talent with her performance of I Dreamed A Dream from Les Miserables on Saturday.
Since then Hollywood actress Demi Moore has joined the legions of fans who have voiced their support on the internet.
Ms Boyle has now become the bookies' favourite to win the talent show.
Ms Boyle, who told viewers she had "never been kissed", said she had always wanted to be a singer.
She said: "I entered the competition because I wanted to have a chance at my singing.
"I found it very nerve-wracking to begin with but once I settled down and began to sing, I thought that the audience accepted me a bit more. Then I sort of relaxed and began to enjoy it.
Ms Boyle, who is currently unemployed, is a keen church-goer and community worker who is well-known for her Karaoke performances.
She said: "It all began for me at age 12, when I used to sing in choirs and school concerts. Then after that when I got older I was singing in clubs."
Hollywood fans
Her performance on Saturday has received more than 5m hits on You Tube.
Among those who have clicked to watch are Ghost star Demi Moore and her husband Ashton Kutcher.
He sent her a message on the micro-blogging service Twitter saying: "This just made my night."
Her entry read: "You saw it made me teary!"
After Ms Boyle's audition performance at Glasgow's Clyde Auditorium she is now tipped to beat 75,000 other applicants to the Britain's Got Talent prize, a chance to perform at the Royal Variety Performance.
Tom Kerr, West Lothian's Provost, said: "We would like to add our best wishes for the next stage of the competition.
"Susan has clearly wowed the audience, the judges and the world with a truly fantastic performance.
"Now tributes from across the globe are flooding in, including from Hollywood star Demi Moore.
"And with millions of hits on You Tube, Susan has put Blackburn, West Lothian, firmly on the map."
Since then Hollywood actress Demi Moore has joined the legions of fans who have voiced their support on the internet.
Ms Boyle has now become the bookies' favourite to win the talent show.
Ms Boyle, who told viewers she had "never been kissed", said she had always wanted to be a singer.
She said: "I entered the competition because I wanted to have a chance at my singing.
"I found it very nerve-wracking to begin with but once I settled down and began to sing, I thought that the audience accepted me a bit more. Then I sort of relaxed and began to enjoy it.
Ms Boyle, who is currently unemployed, is a keen church-goer and community worker who is well-known for her Karaoke performances.
She said: "It all began for me at age 12, when I used to sing in choirs and school concerts. Then after that when I got older I was singing in clubs."
Hollywood fans
Her performance on Saturday has received more than 5m hits on You Tube.
Among those who have clicked to watch are Ghost star Demi Moore and her husband Ashton Kutcher.
He sent her a message on the micro-blogging service Twitter saying: "This just made my night."
Her entry read: "You saw it made me teary!"
After Ms Boyle's audition performance at Glasgow's Clyde Auditorium she is now tipped to beat 75,000 other applicants to the Britain's Got Talent prize, a chance to perform at the Royal Variety Performance.
Tom Kerr, West Lothian's Provost, said: "We would like to add our best wishes for the next stage of the competition.
"Susan has clearly wowed the audience, the judges and the world with a truly fantastic performance.
"Now tributes from across the globe are flooding in, including from Hollywood star Demi Moore.
"And with millions of hits on You Tube, Susan has put Blackburn, West Lothian, firmly on the map."
Hong Kong's Cardinal Zen retires
The Vatican said Pope Benedict XVI had agreed to Cardinal Zen's retirement as Bishop of Hong Kong for reasons of age.
An outspoken advocate of democracy and religious freedom in China, the cardinal has been a vocal champion of human rights and social justice.
During his tenure, the 77-year-old cardinal criticised both the governments in Hong Kong and Beijing.
Local media quoted him as saying he planned to concentrate on advising the Pope on church affairs in mainland China after his retirement.
But he stressed he would not interfere in Vatican-Chinese relations, as they were a diplomatic matter.
"It is not something I can help," he was quoted as telling reporters last week. "It is not something that I can get involved in."
There are no formal diplomatic relations between Beijing and the Vatican.
Catholics in China are split between a state-sanctioned Church and an underground Church that rejects government ties and answers only to the Pope.
The cardinal has been succeeded by Bishop John Tong Hon, 69.
An outspoken advocate of democracy and religious freedom in China, the cardinal has been a vocal champion of human rights and social justice.
During his tenure, the 77-year-old cardinal criticised both the governments in Hong Kong and Beijing.
Local media quoted him as saying he planned to concentrate on advising the Pope on church affairs in mainland China after his retirement.
But he stressed he would not interfere in Vatican-Chinese relations, as they were a diplomatic matter.
"It is not something I can help," he was quoted as telling reporters last week. "It is not something that I can get involved in."
There are no formal diplomatic relations between Beijing and the Vatican.
Catholics in China are split between a state-sanctioned Church and an underground Church that rejects government ties and answers only to the Pope.
The cardinal has been succeeded by Bishop John Tong Hon, 69.
Thailand revokes Thaksin passport
It leaves the exiled former leader without any legal travel documents.
An arrest warrant has also been issued for Mr Thaksin, who has been calling for a popular uprising in Thailand.
Bangkok is now calm but under heavy security, after violent clashes between police and anti-government protesters left two dead and over 100 injured.
On Wednesday, Mr Thaksin published a statement calling on his followers to pursue their struggle through peaceful means.
He blamed Monday's violent scenes in the capital solely on the government's decision to deploy the army against his red-shirted supporters.
Status unclear
The decision to revoke Mr Thaksin's personal passport also follows the recent disruption of a major Asian summit by his supporters. His diplomatic passport was invalidated in December.
A government spokesman said that if a person was "doing anything that could undermine the security of the nation, then we have the right to revoke the passport".
The government says it has been in talks with other countries and Interpol to try to get him sent back to Thailand, where he has been sentenced to two years in prison for abuses of power when he was in office.
He now also faces additional charges of inciting a public disturbance - for which an arrest warrant was issued by the authorities on Tuesday in the wake of the protests.
Police are still hunting 10 key protest leaders, after three others surrendered.
Secret location
Prime Minister Abhisit Vejjajiva welcomed the end of the protests on Tuesday, but said his government would remain on guard.
He is now working from a secret location because he fears an assassination attempt, our correspondent says.
Mr Abhisit has accused Mr Thaksin's supporters of stockpiling weapons for a possible armed struggle against the government.
During the three-week-long rally, Mr Thaksin addressed the red-shirted protesters nearly every night via a video-link. In one speech, he called for a "revolution".
An arrest warrant has also been issued for Mr Thaksin, who has been calling for a popular uprising in Thailand.
Bangkok is now calm but under heavy security, after violent clashes between police and anti-government protesters left two dead and over 100 injured.
On Wednesday, Mr Thaksin published a statement calling on his followers to pursue their struggle through peaceful means.
He blamed Monday's violent scenes in the capital solely on the government's decision to deploy the army against his red-shirted supporters.
Status unclear
The decision to revoke Mr Thaksin's personal passport also follows the recent disruption of a major Asian summit by his supporters. His diplomatic passport was invalidated in December.
A government spokesman said that if a person was "doing anything that could undermine the security of the nation, then we have the right to revoke the passport".
The government says it has been in talks with other countries and Interpol to try to get him sent back to Thailand, where he has been sentenced to two years in prison for abuses of power when he was in office.
He now also faces additional charges of inciting a public disturbance - for which an arrest warrant was issued by the authorities on Tuesday in the wake of the protests.
Police are still hunting 10 key protest leaders, after three others surrendered.
Secret location
Prime Minister Abhisit Vejjajiva welcomed the end of the protests on Tuesday, but said his government would remain on guard.
He is now working from a secret location because he fears an assassination attempt, our correspondent says.
Mr Abhisit has accused Mr Thaksin's supporters of stockpiling weapons for a possible armed struggle against the government.
During the three-week-long rally, Mr Thaksin addressed the red-shirted protesters nearly every night via a video-link. In one speech, he called for a "revolution".
China's GDP growth falls to 6.1%
This is the weakest growth since quarterly records began in 1992.
Growth was 6.8% in the last quarter of 2008 and economists had forecast about 6.3% amid the global collapse in trade.
China's government has said it is determined to achieve annual growth of 8%, seen as necessary to maintain employment and forestall unrest.
The continued fall in growth underlined the impact of the world economic slowdown on one of its largest economies, analysts said.
But other data offered by the government suggested recovery may already be under
Staff from the National Bureau of Statistics (NBS) said that export demand had dropped sharply, cutting into company profits, reducing government revenues and raising unemployment.
"The national economy is confronted with the pressure of a slowdown," an NBS statement said.
China experienced double-digit growth from 2003 to 2007, and recorded 9% growth in 2008.
Analysts said the first-quarter drop in growth was in line with expectations.
Recovery?
It has started to implement a 4 trillion yuan ($585bn, £390bn) stimulus package to counter the impact of the global slowdown, which has been seen as helping to spur lending in the first three months of the year.
"The overall national economy showed positive changes, with better performance than expected," the NBS said.
It said that urban per-capita incomes were up 11.2% from a year earlier in real terms and that rural per-capita incomes were up 8.6%.
The consumer price index (CPI), China's main gauge of inflation, fell 0.6% in the first quarter of 2009 from a year earlier, according to the bureau.
Industrial output expanded 5.1% in the first quarter, while in March it increased by 8.3%, the government said, after rising 12.9% in all of 2008.
Growth was 6.8% in the last quarter of 2008 and economists had forecast about 6.3% amid the global collapse in trade.
China's government has said it is determined to achieve annual growth of 8%, seen as necessary to maintain employment and forestall unrest.
The continued fall in growth underlined the impact of the world economic slowdown on one of its largest economies, analysts said.
But other data offered by the government suggested recovery may already be under
Staff from the National Bureau of Statistics (NBS) said that export demand had dropped sharply, cutting into company profits, reducing government revenues and raising unemployment.
"The national economy is confronted with the pressure of a slowdown," an NBS statement said.
China experienced double-digit growth from 2003 to 2007, and recorded 9% growth in 2008.
Analysts said the first-quarter drop in growth was in line with expectations.
Recovery?
It has started to implement a 4 trillion yuan ($585bn, £390bn) stimulus package to counter the impact of the global slowdown, which has been seen as helping to spur lending in the first three months of the year.
"The overall national economy showed positive changes, with better performance than expected," the NBS said.
It said that urban per-capita incomes were up 11.2% from a year earlier in real terms and that rural per-capita incomes were up 8.6%.
The consumer price index (CPI), China's main gauge of inflation, fell 0.6% in the first quarter of 2009 from a year earlier, according to the bureau.
Industrial output expanded 5.1% in the first quarter, while in March it increased by 8.3%, the government said, after rising 12.9% in all of 2008.
Pan American's Morococha silver mine strike ends
After an eight-day strike, unionized workers at Pan American's Morococha silver mine in Peru reached a settlement with the Vancouver-based silver miner and resumed work on Friday, Pan American officials announced.
Pan American did not expect the short-term production disruption at Morococha to significantly impact its 2009 silver production forecast and the company still expects to mine 21.5 million ounces of gold this year.
The union workers had sought an increase in base pay and benefits. Pan American did not make public details of the settlement.
To make the best of the down time during reduced mining production during the strike, the company said repairs to a crack in the primary rod mill, discovered during the course of maintenance activities carried out during the strike, should be repaired in two days.
Meanwhile Pan American Silver also announced Tuesday that it has reached an agreement for the joint development of Orko Silver's La Preciosa silver project in the state of Durango, Mexico. The indicated resource is believed to contain 71.7 million ounces of silver and 97,000 ounces of gold.
Pan American and Orko have agreed to form a joint venture to develop Las Preciosa with Pan American providing 100% of the funds needed to develop and construct an operating mine in consideration for a 55% interest in joint venture, while Orko will continue its exploration expertise, the La Preciosa project and related concessions to remain a 45% interest.
The silver mine will spend US$16 million at La Preciosa over the next three years to conduct definition drilling, acquire surface rights, obtain permits, and prepare and deliver a feasibility study. Furthermore Pan American will spend $5 million in the first year of the development program.
Pan American will be the operator of the joint venture, and will form a management committee with representation from both Orko and Pan American.
Pan American did not expect the short-term production disruption at Morococha to significantly impact its 2009 silver production forecast and the company still expects to mine 21.5 million ounces of gold this year.
The union workers had sought an increase in base pay and benefits. Pan American did not make public details of the settlement.
To make the best of the down time during reduced mining production during the strike, the company said repairs to a crack in the primary rod mill, discovered during the course of maintenance activities carried out during the strike, should be repaired in two days.
Meanwhile Pan American Silver also announced Tuesday that it has reached an agreement for the joint development of Orko Silver's La Preciosa silver project in the state of Durango, Mexico. The indicated resource is believed to contain 71.7 million ounces of silver and 97,000 ounces of gold.
Pan American and Orko have agreed to form a joint venture to develop Las Preciosa with Pan American providing 100% of the funds needed to develop and construct an operating mine in consideration for a 55% interest in joint venture, while Orko will continue its exploration expertise, the La Preciosa project and related concessions to remain a 45% interest.
The silver mine will spend US$16 million at La Preciosa over the next three years to conduct definition drilling, acquire surface rights, obtain permits, and prepare and deliver a feasibility study. Furthermore Pan American will spend $5 million in the first year of the development program.
Pan American will be the operator of the joint venture, and will form a management committee with representation from both Orko and Pan American.
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