Eurobench.com

voda 3 oktober 2011 15:58

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Rio Tinto copper monster rises from the desert

IN the Gobi desert, a copper mine that is expected to change the face of Mongolia's economy and whose ability or lack of it, to hit targeted production will swing global copper prices for decades is taking shape at speed.

On 8500ha where herders once tended camels and goats, giant blue sheds are being erected to house ore and a concentrator so mining can continue through the freezing winter an extensive web of power cables crises crosses the plain and 100 meters towers are being erected above planned mine shafts.

The project is the USD 10 billion Oyu Tolgoi mine project, being built by an uneasy union of mining giant Rio Tinto, Canada's entrepreneurial Ivanhoe Mines and a Mongolian government that is threatening to take a bigger stake. If all goes to plan, Oyu Tolgoi will begin producing copper in 2013 and by 2020 will be turning out 800,000 tonnes per year making it the world's third biggest copper mine, based on current output.

Along with 1.2 million ounces of gold by product this sort of output would bring in about USD 8 billion per year in revenue. In an unusual owner operator arrangement, Rio is building and will operate Oyu Tolgoi despite having no direct interest in it. Instead, Rio owns 49% of Ivanhoe which in turn owns 66% of the project. Mongolia owns the rest.

Construction of the first stage, begun in April last year, is already having an immense impact on landlocked Mongolia, where 2.7 million people live between the giant developing powers of China and Russia in an area twice the size of NSW.

Rio Mongolia and Mr Cameron McRae CEO of Oyu Tolgi said that "This place is growing phenomenally. Speaking in the capital, Ulan Bator, he pointed to the large number of cranes on construction sites around the city, countless new restaurants and a boom in manufacturing. That's not money from Oyu Tolgoi, but it's the indirect benefit of the large investment coming into the country where you are actually bringing billions in.

Mongolia's annual economic growth was 17% in the second quarter and is expected to average more than 10% for the next decade. For the first time this year, unemployment has dipped below double digits. Oyu Tolgoi is expected to be responsible for about 5% of Mongolia's annual growth and account for more than a third of gross domestic product in 2019.

Mr McRae said that if the copper price stays strong, you will see that make an even greater contribution. Like any country presented with the chance for massive resources income, Mongolia will need to overcome the pitfalls of Dutch Disease the situation where resource windfalls make other industries uncompetitive. The project is halfway through construction. There are 8000 Mongolian workers and about 6000 Chinese workers on the site.

But the path to its target of first production in 2013 is far from smooth. On the operational side, Oyu Tolgoi's sourcing of 450 MW of power from China is looking shaky because Mongolia and China have not nailed down a deal. Rio has said this could delay first production but Mr McRae said he was confident a power deal would come. He would not go further into the source of the disagreement, other than saying deals between governments can be complicated.

Mr James Reichert World Bank infrastructure specialist based in Ulan Bator said that it could take 3 or 4 years for the mine to build a power station if a deal with China was not possible. They've got a bit of a dilemma. They're having trouble with the Inner Mongolian government and the power company. I don't know what the issues are, whether its price but they're having difficulties."

Mr Reichert said that Mongolia which has said it wanted any big power stations integrated into the national transmission system was looking at letting Oyu Tolgoi build its own station. The issue is a touchy one for Ivanhoe, which is trying to raise $US4bn of project finance for Oyu Tolgoi amid turbulent global equity and commodities markets.

(Sourced from www.theaustralian.com.au)

voda 7 oktober 2011 17:51

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Rio Tinto prepared to invest copper exploration in Uzbekistan

Interfax reported British and Australian mining giant Rio Tinto Limited could invest up to USD 100 million in exploration for copper in Uzbekistan.

Mr Chris Welton head of exploration in Central Asia said that such investment would be possible if positive results are received from the exploration of the Gava property in the Namangan region, the license to which Rio Tinto hopes to receive before the end of 2011.

Mr Welton said that the company plans to begin exploration work at Gava in spring 2012. The duration of the license will be 5 years. The company plans to spend USD 1 million in the first year and if positive results are received the company's investments will grow to USD 100 million.

He said that Rio Tinto would like to explore for copper in a number of other prospective areas in Uzbekistan. There are plans to hold negotiations on these properties in 2012 with the State Geology and Mineral Resources Committee.

As reported earlier, Rio Tinto in 2011 submitted an application to the Mineral Resources Committee for a license to explore for copper at the Gava property.

About 900 copper mineralizations and deposits have so far been found in Uzbekistan but only three are being developed: Kalmakyr, Dalneye and Sary Cheku in the Almalyk district. They are being mined by the Almalyk Mining and Metallurgical Complex, the country's only copper producer.

(Sourced from Interfax)

voda 13 oktober 2011 17:19

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Mijnbouwreus merkt niets van malaise

Gepubliceerd op 13 okt 2011 om 09:04 | Views: 1.035

PERTH (AFN) - De Australische mijnbouwreus Rio Tinto merkt niets van de economische neergang. Het concern behaalde een recordomzet ijzererts in het derde kwartaal en ziet de toekomst zonnig in.

De vraag naar grondstoffen blijft volgens Rio Tinto, het op een na grootste mijnbouwconcern ter wereld, groot. ,,We draaien op volle kracht en we verkopen alles dat we produceren'', aldus de topman van de onderneming, Tom Albanese. De productie van ijzererts kwam in het afgelopen kwartaal uit op 64 miljoen ton, een groei van 5 procent ten opzichte van vorig jaar.

voda 14 oktober 2011 16:16

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Rio Tinto Q3 2011 operations review

Mr Tom Albanese CEO of Rio Tinto said "We have set new quarterly records for iron ore sales and hard coking coal production as our operations recovered from the severe weather experienced earlier in the year. Whilst we are mindful of current market volatility, the fundamentals are holding up well, particularly for bulk-traded commodities. We are operating at full capacity, selling all we produce and our growth programme is on track, supported by the strength of our balance sheet."

1. Global iron ore production of 64 million tonnes (50 million tonnes attributable) was up five per cent on the third quarter of 2010.

2. Third quarter iron ore sales of 60 million tonnes (100 per cent basis) from the Pilbara operations in Western Australia set a new quarterly record as the ports and rail recovered strongly from the inclement weather experienced earlier in the year.

3. Mined copper continued to be impacted by lower grades at Escondida and Kennecott Utah Copper and was down 32% on the third quarter of 2010.

4. Bauxite production was up by 7% t compared with the same quarter of 2010. Aluminium was 2% higher whilst alumina was 5% lower.

5. Coal production from the Queensland and New South Wales coal mines rebounded from the severe rains in the first half of the year.

I. Australian hard coking coal production set a new quarterly record and was 14% higher than third quarter of 2010 and 55% higher than the second quarter.
II. Other production from the Australian coal operations favoured semi-soft coal which was 57% higher than the third quarter of 2010 with thermal coal three per cent lower.

6. In the first nine months of 2011 Rio Tinto increased its interest in Ivanhoe Mines Ltd from 40.5% to 49.0% and participated in Ivanhoe rights offering for a total cost of USD 1.9 billion.

7. Rio Tinto completed the USD 3.7 billion Riversdale acquisition on 1 August Benga is on track to be commissioned by year-end with substantial growth options ahead.

8. On 12 October, ERA announced it is to raise AUD 500 million through an accelerated renounceable entitlement offer. Rio Tinto has committed to subscribe for its 68.4% entitlement in full and has indicated that it intends to participate in sub-underwriting any shortfall in the retail entitlement offer.

9. On 10 February, Rio Tinto announced a USD 5 billion capital management programme, which was subsequently increased to USD 7 billion to be completed by the end of the first quarter of 2012. By 12 October, 69 million Rio Tinto plc shares had been bought back at a total cost of USD 4.4 billion.

voda 14 oktober 2011 16:19

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Rio iron ore output gains 5pct after recovery from floods

Bloomberg reported that Rio Tinto Group, the world second largest mining company Q3 iron ore output rose 5% recovering from floods in Australia that disrupted operations earlier in the year.

The London based company said in a statement that production was 49.8 million tonnes in the three months to September 30 from 47.6 million tonnes a year earlier. That compares with UBS AG estimate of 48.6 million tons and 49.9 million tons from RBC Capital Markets.

Mr Tom Albanese CEO of Rio Tinto said “Demand for iron ore and coal remains strong and financial market concern sparked by the European debt crisis didn’t reflect the real economy”.

He said in the statement “Whilst we are mindful of current market volatility, the fundamentals are holding up well, particularly for bulk-traded commodities.”

He added that “We have set new quarterly records for iron ore sales and hard coking coal production as our operations recovered from the severe weather experienced earlier in the year.”

Credit Suisse analysts led by London-based Michael Shillaker said “We expect Rio and the other majors to continue to ship very profitable iron ore tons.”

(Sourced from Bloomberg)

voda 17 oktober 2011 16:21

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Rio Tinto streamlining its Aluminium product group

Rio Tinto is streamlining its Aluminium product group following a strategic review. Thirteen assets will be divested at an appropriate point in the future, and some of these will be managed separately in the meantime. The move will allow Rio Tinto Alcan to concentrate on its strategy to grow the value of its high quality, tier one assets and improve the product group's financial performance.

Rio Tinto's interests in six Australian and New Zealand assets will transfer into a new business unit, to be called Pacific Aluminium, and be managed and reported separately from the Rio Tinto Alcan product group prior to divestment.

These are:
1. Australia: Gove bauxite mine and alumina refinery, Boyne Smelters and the associated Gladstone Power Station, the Tomago smelter and the Bell Bay smelter
2. New Zealand: New Zealand Aluminium Smelters

A second group of seven non-core assets will continue to be managed by Rio Tinto Alcan while it further investigates divestment options. These assets include:
1. France and Germany: Three Specialty Alumina plants and the Gardanne refinery
2. United States: Sebree smelter
3. United Kingdom: Lynemouth smelter and associated power station, for which potential options include closure

Mr Tom Albanese CEO of Rio Tinto said "The assets identified for divestment are sound businesses that are well managed with productive workforces. But they are no longer aligned with our strategy and we believe they have a bright future under new ownership. The strength of our balance sheet means that we can choose the most opportune method and timing to divest these assets, which may not occur until the economic climate improves. In the meantime, we will continue to run these operations safely and efficiently. This move is a further significant step towards achieving our performance targets in the Aluminium product group. We have already made good progress, with plans in place to generate sustainable performance improvement, and we are investing at a number of our core assets.”

Rio Tinto Alcan chief executive Jacynthe Cote said "We are already well on our way to building a truly outstanding aluminium business. Streamlining the product group allows Rio Tinto Alcan to concentrate its efforts even more on driving performance improvements and investing in growth to increase shareholder value."

Rio Tinto has begun consultations with affected stakeholders and will engage with the relevant governments and regulators. The relevant Rio Tinto business units will engage with their workforces during the process.

The CEO of Pacific Aluminium will be Sandeep Biswas. He will report to Rio Tinto business support & operations group executive Bret Clayton.

voda 17 oktober 2011 16:28

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Cost pressures returning to aluminum sector - Rio Tinto

Rio Tinto's aluminum output rose 4% in the Q3 against a return of cost pressures in the industry.

The miner's share of aluminum production reached 962,000 tonnes up 4% QoQ and 2% higher YoY driven by a resumption of normal production at Laterriere after a transformer failure.

Rio Tinto said that cost pressures are returning to the aluminum industry, including the effect of stronger currencies and the higher costs of caustic, coke and pitch. However, the miner is keeping its full year output forecast unchanged at 3.9 million tonnes.

Meanwhile, an increase in third party demand helped bauxite production rise to 9.2 million tonnes in the quarter up 5% from the previous three months and 7% higher YoY. Alumina production was at 2.2 million tonnes, unchanged from the Q2 and down 5% YoY.

For the full year, Rio Tinto expects to produce 35.8 million tonnes of bauxite and 9.2 million tonnes of alumina, 2% lower than its early forecasts.

(Sourced from www.worldal.com)

voda 17 oktober 2011 16:29

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BHP Billiton want rising Brazilian producer Ferrous Resources

It is reported that BHP Billiton could buy anything it wants if overseas media reports on possible acquisition targets for the world biggest miner are to believed.

Fresh from last week spruiking by overseas media of the potential for a USD 6 billion bid for US coal company Walter Energy, London Sunday Times yesterday had another potential target for BHP: Brazilian iron ore producer Ferrous Resources.

The report said BHP started talks to buy the company earlier this year. It could offer USD 3.1 billion for the Brazilian miner. Failing that BHP could settle for buying a stake in the company.

Ferrous is an iron ore developer focusing on development of an export iron ore business in the "Iron Quadrangle" of Brazil Minas Gerais state. Ferrous has big ambitions having said it plans to become one of the five biggest iron ore miners in the world within a few years.

BHP already has a presence in Brazil. Along with Brazil Vale, it earlier this year gave the go ahead for a USD 3.5 billion expansion of their jointly owned Samarco iron ore pellets operation in the country. In Western Australia's Pilbara, BHP is planning to boost production from 155 million tonnes a year to 240 million tonnes.

BHP ability to make what for it would be bite sized acquisitions is not doubted. But the talk of more acquisitions comes after the group said it would spend USD 20 billion earlier this year on the US shale gas industry and its pledge to spend USD 80 billion over five years on expanding its existing operations. Included is expansion of the Olympic Dam copper, uranium and gold mine in South Australia's outback.

BHP received environmental approval for the project last week but is not due to seek board approval until early next year. Analysts believe the cost of the staged expansion could exceed USD 30 billion.

(Sourced from www.smh.com.au)

voda 18 oktober 2011 16:08

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BHP Billiton modifies coal project for new Australian park

Dow Jones reported that BHP Billiton Ltd has modified plans for a coal project to exclude an area of land that is to form part of a national park in Australia.

Premier Barry O'Farrell and Environment Minister Mr Robyn Parker said in a statement that other companies with mineral and petroleum exploration interests in the area of the government's plans to create the Dharawal National Park have been told that mining won't be allowed.

Mr O'Farrell said "The creation of the national park will be a big win for the local community which has fought for many years for the protection of the area. At the same time, jobs and investment in the Illawarra have been protected."

The officials said the government plans to establish the park covering almost 99% of the current Dharawal State Conservation Area, with two small areas excluded which are essential to BHP Billiton ongoing and proposed mining operations in the Illawarra region. It said the mining company has modified its Bulli coal project to exclude an area of the proposed park.

(Sourced from Dow Jones)

voda 18 oktober 2011 16:14

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Rio USD 700 million tax to boost Guinea infrastructure

Reuters quoted a Guinean official said the government of Guinea will use 35% of a USD 700 million windfall from Anglo-Australian miner Rio Tinto to rebuild the mineral-rich West African nation broken infrastructure.

Rio struck a deal with Guinea in April to settle a dispute over its stake in the Simandou iron ore project agreeing among other terms to pay USD 700 million in compensation a sum that is nearly 75% of the poor nation's 2008 budget.

Guinea did not release budget figures for 2009 and 2010 when it was under the rule of a turbulent military junta. The USD 700 million is expected to boost Guinea USD 4.5 billion economy held back by years of political instability and lack of infrastructure despite its mineral wealth in bauxite, gold, iron ore and diamond coveted by major miners including Vale, Rusal and Chinalco.

Mr Amadou Camara member of a council that is acting as Guinea transitional parliament said about USD 240 million will be spent on improving roads, electricity, health, the justice system and education in this fiscal year.

He said Guinea budget minister presented the body with a revised budget including a spending plan for part of the money and the council had adopted the plan.

Mr Camara said "About 770 billion Guinean francs will be used in the power sector including the launch of the 240 megawatt capacity Kaleta Dam and the purchase of a thermal power station with a capacity of about 100 megawatt."

He said about USD 25 million will be used for military and security spending while about 1% of the amount released will be spent on education. He added that the remaining USD 460 million will be kept in the state treasury for future budget outlays.

(Sourced from Reuters)

voda 24 oktober 2011 16:23

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Rio Tinto may invest EUR 1 billion in Portuguese iron ore mines -Report

Portuguese news agency Agencia Lusa reported citing an unidentified person close to the negotiations that mining giant Rio Tinto PLC may invest about EUR1 billion in northern Portugal Torre De Moncorvo mines which are considered to be among Europe largest iron ore deposits.

According to the report ortugal Economy Ministry confirmed it is negotiating a big investment in the country's mining sector with one of the world's largest mining companies, but didn't name it.

(Sourced from Agencia Lusa)

voda 24 oktober 2011 16:24

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Rio Tinto targets longer alumina position with asset sales

Worldal reported that if and when Rio Tinto manages to sell all of the 13 assets it put up for sale on October 17th 2011 it will have divested itself of around 2 million tonne per year of primary aluminum production capacity and given itself a substantially longer position in alumina than in aluminum.

A Rio spokesman said that “Being long in bauxite and alumina is part of our strategy. The company is investing heavily across the value chain. But those investments will not alter the alumina and aluminum balance in the primary metal’s favor.

The USD 2.5 billion modernization of Rio’s Kitimat smelter in Quebec will boost production to 420,000 tonne per year from 282,000 tonne per year but upgrades at the Yarwun alumina refinery will take that facility's production to an expected 3.4 million tonne per year of alumina on 2012 from 1.3 million tonnes in 2011.

The company is not alone in seeing value further upstream on the production chain which has been illustrated in the initial reaction to Rio’s announcement. Among the producers polled by MB, the interest in the Australian assets put up for sale which include the Bell Bay, Boyne and Tomago smelters confined to the Gove bauxite mine and alumina refinery.

A source from a large, integrated producer said that “I was expecting, after a few days, to hear what our people are thinking about Gove. The Gove refinery would be a good asset for someone like us.”

Others have already made strides towards a longer alumina position. Following Norsk Hydro’s acquisition of Vale’s upstream aluminum assets in Brazil in February the company will soon be twice as long in alumina as in aluminum a situation that Hydro was aiming for with the purchase.

A source from Hydro said that in general, we believe we have a very attractive bauxite/alumina position over the long term. We’re long in bauxite and long in alumina, and we’re very pleased with that move from a strategic point of view. Even among those integrated companies that aim simply to cover their own alumina needs, such as United Company Rusal, people are beginning to see the benefits of having a long position in alumina.

A Rusal source said that the Rusal strategy is to make sure we are self sufficient for our own needs. But a long alumina position adds value to big companies.

BHP Billiton is also getting longer on the alumina side. In the third quarter, BHP Billiton produced 1.06 million tonnes of alumina up 6% from the corresponding quarter last year. Over the same period the company’s aluminum production remained flat at 315,000 tonnes.

Alumina producers have long wanted the pricing of their product to be delinked from LME aluminum prices which has always tied the profitability of alumina to the aluminum price. Index based pricing was established last year with MB launchings its fob Australia alumina index in August.

(Sourced from www.worldal.com)

voda 24 oktober 2011 16:27

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BHPB CEO Mr Kloppers declines to comment on Ferrous Resources

Dow Jones Newswires reported that BHP Billiton CEO Mr Marius Kloppers has declined to comment on speculation the mining giant was interested in purchasing Brazilian iron ore producer Ferrous Resources.

At the company's annual general meeting in London last week, Mr Kloppers said the company had heaps of iron ore resources to develop but noted valuations on resource companies have come down a lot.

BHP continues to invest in expanding its iron ore supply despite falling iron ore prices and plans to invest more than USD 80 billion over the next five years in a variety of organic growth projects.

(Sourced from DJ & theaustralian.com.au)

voda 16 november 2011 16:44

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UPDATE 2-BHP Billiton to spend around $4.5 bln on shale gas in 2012

14 November 2011

(c) 2011 Reuters Limited
* Highlights shale gas advantages over conventional gas
* Sees U.S. gas prices over $6/mmBtu by 2020
* Eyes LNG export opportunities
(Adds quote, details)
Nov 14 (Reuters) - BHP Billiton plans to spend around $4.5 billion on developing shale gas in 2012 following two shale gas acquisitions this year, the head of the top global miner's petroleum business said on Monday.
BHP Billiton spent nearly $17 billion buying shale gas producer Petrohawk Energy and shale gas assets from Chesapeake Energy earlier this year.
"This is going to be a gamechanger around the world and for BHP Billiton not to be part of it would be irresponsible," BHP petroleum chief executive Michael Yeager said in slides prepared for an investor presentation to allay concerns about the company's push into shale gas.
BHP said it plans to spend around $5.5 billion a year by 2015, about a billion more than previous estimates, and around 6.5 billion a year in 2020 on U.S. shale.
BHP's move this year into the relatively new and contentious energy source has worried some investors, particularly with U.S. gas prices depressed by the growing supply of gas from shale. CEO Marius Kloppers, however, has played down the concern, saying the group takes a "multi-decade view on price."
Yeager said BHP expects to benefit from an increase in U.S. demand for gas, particularly as U.S. efforts to cut greenhouse gas emissions push more buyers to switch from coal to gas.
U.S. gas prices are expected to rise to over $6 per million British thermal units (mmBtu) by 2020, up from around $4 per mmBtu currently, he said.
Evy Hambro, investment chief for natural resources at BlackRock, BHP's top shareholder, recently told Reuters he was "reserving judgment" on the Petrohawk deal ahead of Monday's briefing, and also expressed general concern over the cheap price of U.S. gas and the potential for environmental issues.
Landowners in Arkansas and other shale gas producing areas have raised concern about the technique used to drill for shale gas, hydraulic fracturing or "fracking", but BHP has said the technology is safe.
"The technology used here has been proven and used for a long, long time," Yeager said of the fracking technique, adding that the shale gas industry is tightly regulated and even smaller players are unlikely to take shortcuts.
"We are subject to inspection at any time ... I think the opportunity for the industry to cut corners at any level is small."
Yeager also highlighted the low costs, long life, and advantages of U.S. shale over conventional gas resources, saying that "quantum leaps," in shale gas extraction technology have allowed the company to boost production.
BHP is targeting U.S. shale production of 545 billion cubic feet equivalent (90 million barrels of oil equivalent) in financial year 2012.
The shale gas projects are part of BHP's plans to spend $80 billion over five years on expanding production across its iron ore, coal, copper, uranium and petroleum businesses.
BHP's proximity to the U.S. Gulf of Mexico will also enable it to take advantage of liquefied natural gas export opportunities to Europe and Asia, Yeager said.
There is currently a wide differential between prices in the United States, which stand at around $4 per mmBtu, versus around $10 per mmBtu in Europe and $17 per mmBtu in Asia.
(Reporting by Rebekah Kebede in Perth, Sonali Paul in Melbourne and Narayanan Somsaundaram in Sydeney; Editing by Ed Davies, Himani Sarkar)
BHP-SHALE/ (UPDATE 2)

Reuters Limited

voda 17 november 2011 17:03

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BHP Billiton approves USD 822 million investment for Orebody 24 mine

BHP Billiton approved a USD 822 million (BHP Billiton share USD 698 million) investment for the development of its Orebody 24 mine, located approximately 10 kilometres north-east of Newman, Western Australia. Orebody 24 is a sustaining mine to maintain iron ore production output from the Newman Joint Venture operations.

The new Orebody 24 mine will have a capacity of 17 million tonnes per annum (100% basis) and will include the construction of an ore crushing plant, train loadout facility, rail spur and other associated support facilities.

Initial mining from Orebody 24 will start in the second half of calendar year 2012.

Mr Ian Ashby president iron ore of BHP Billiton said that "The Orebody 24 development is consistent with our strategy to invest in high quality, expandable resource basins and highlights the benefits of our ability to leverage existing infrastructure to sustain current production.”

voda 17 november 2011 17:07

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BHP Billiton approved development of Yarnima Power Station

BHP Billiton announced that it approved development of its Yarnima Power Station to secure future power supply for its Western Australia Iron Ore mining operations in the Pilbara.

BHP Billiton will build, own, and operate the combined cycle gas turbine (CCGT) power station, to be located in Newman, which will deliver 190 megawatts to replace supply from the existing Newman Power Station. The capital cost of the project is expected to be US$597 million (BHP Billiton share US$507 million).

The power station will include gas turbines equipped with heat recovery steam generators to capture waste heat for the generation of additional power. This will minimise gas usage while increasing thermal efficiency and reducing carbon emissions. In the event of a gas service interruption, the plant has also been configured to allow normal operations to continue using diesel fuel.

Power supply from this project will be available in the first half of calendar year 2014.

Mr Ian Ashby president iron ore of BHP Billiton said that "Yarnima Power Station will power our existing operations and provide a platform for further mine development. By employing state of the art technology, this power station will also increase our carbon efficiency and promote long term energy sustainability."

voda 30 december 2011 15:46

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Minesite.com reported that BHP Billiton, the world's dominant producer of manganese, recently slashed the price of manganese for delivery to China by 14%, arousing the suspicion that the Big Australian is aiming to drive rival producers from the business and when Chinese steelmaking is expected to revive next year, corner a larger share of the market.

Ironically, the price action may also accelerate the exit of the Australian independent Consolidated Minerals from Australia, where costs are now close to the break even level, towards African operations.

The writing on the wall for manganese mining has been bad news for weeks. Chinese imports peaked in May and then again in September at almost 1.3 million tonnes per month. But Chinese steel mills, which require manganese to harden steel products, have cut their production in recent weeks.

Imports of manganese held steady at one million tonnes per month until Chinese steelmakers and traders began to lose their nerve. Inventories of manganese at ports, principally in the Qinzhou and Tianjin areas, climbed between September 2010 and May 2011, tailed off a little during the summer, and are now rising again.

Even if forecast Chinese steel production goes back up above 700 million tonnes per year by February, there is enough inventory in China and enough supply of manganese ore in global reserve to hold down a recovery in the manganese price and thus in manganese mining company earnings and profits.

The largest of the independent manganese miners globally are Consolidated Minerals and OM Holdings. Both have ties to African manganese reserves, though for the time being it is Consmin which is already operational in Africa. OMH is a minority stakeholder in Tshipi, a South African mining project which has yet to materialize. Around 55% of Consmin's total output comes from the Nsuta mine in Ghana, while 45% comes from the Woodie Woodie mine in Australia. For Consmin, total manganese resources in Africa comprise 56% of the company's total of 68.3 million tonnes. Consmin reports that in the third quarter it managed to lift ore output to 825,000 tonnes. That's up by 23% over same period in the corresponding period a year earlier. Meanwhile, sales doubled to 941,000 tonnes.

(Sourced from www.minesite.com)

voda 6 januari 2012 16:38

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BHPB plans to sell diamond assets

BHP Billiton the world's biggest miner, is considering selling all or part of its diamond assets, which include the EKATI mine in northern Canada, as it focuses on large, long life, scalable assets.

BHP said that it had begun a review to examine whether a continued presence in the diamond industry was consistent with its strategy of investing in expandable assets. The review is due to be completed by the end of January 2012.

The miner said that "EKATI is a world class operation and Chidliak is a promising exploration opportunity, but many years of extensive exploration suggest there are few options to develop new diamond mines that are consistent with this approach.”

Diamonds represent only a fraction of BHP's global portfolio. The diamonds and specialty products division which includes its titanium minerals and potash projects as well as diamond mining accounted for roughly 2.5% of 2010 operating profit.

Analysts at BMO Capital Markets value BHP's 80% stake in the EKATI mine at USD 2.7 billion, just over 1% of the company's value.

(Sourced from Reuters)

voda 19 januari 2012 20:34

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Shale gas swells BHP's petroleum spending
Angela Macdonald-Smith
589 words
19 January 2012
The Australian Financial Review
AFNR
Second
1
English
Copyright 2012. Fairfax Media Management Pty Limited.
BHP Billiton's $US20 billion foray into US shale gas will see investment in oil and gas exploration surge to more than double last year's levels.
BHP yesterday revealed a $US1.4 billion budget on the search for new oil and gas fields, some $US400 million higher than the estimate it gave in October, which excluded exploration in the new shale gas business.
It also reported that capex in drilling and development in shale gas – separate to exploration–has already ramped up to an annualised rate of more than $US3 billion a year.
BHP last year spent only $US557 million on petroleum exploration, short of its $US900 million budget because of restrictions in the Gulf of Mexico after BP's drill-rig disaster.
"The petroleum division has now got a larger budget to go out and find new fields, so that's certainly a vote of confidence," said Deutsche Bank resources analyst Paul Young.
Mr Young said he expected the spending in the US would be focused on the promising Permian Basin in west Texas and in the liquids-rich Eagle Ford region.
Drilling in the Gulf of Mexico, Western Australia and the South China Sea is expected to swallow up most of the rest of the budget.
The mining major followed up its $US4.75 billion acquisition of Chesapeake Energy's Fayetteville shale assets with the $US15.1 billion takeover of Petrohawk Energy, expanding its shale footprint into the more lucrative Eagle Ford and highly productive Haynesville regions and into the emerging Permian Basin.
The shale assets, which drove a record quarterly output for BHP in oil and gas, demand relatively light investment in exploration compared to deep waters offshore, but a lot of capital to develop.
While capital investment on the onshore US petroleum business reached $US900 million in the December quarter, that is set to rise further given petroleum chief executive Mike Yeager's forecast in November of $US4.5 billion this year, rising to $US6.5 billion by 2020.
In the December half, BHP spent $US565 million on exploration, notching up discoveries at the Noble Energy-run Deep Blue well and at its Mad Dog North-1 well in the Gulf of Mexico, and at the Woodside Petroleum-operated Tidepole East well on the North-West Shelf. Drilling at the Woodside-operated Seraph-1 well was unsuccessful, while work is continuing on wells in Brunei and at the Gunflint field in the Gulf of Mexico.
But some of BHP's drilling plans in the Philippines have hit a hurdle, with junior partner Otto Energy revealing the major has terminated a contract to use a Transocean drill-rig for the highly anticipated Cinco well because it failed performance tests.
Drilling of Cinco was due to start in April, targeting up to 3.8 trillion cubic feet of gas.
BHP's oil and gas output jumped 56 per cent in the December quarter from a year earlier to 57.98 million barrels of oil equivalent.
By more than doubling gas production BHP easily offset a drop in crude oil.
The weakness in US gas prices has prompted some shale gas producers to cut back drilling but Deutsche's Mr Young said BHP's low-cost position and economy of scale protected it.
BHP's offshore US production suffered in the December quarter from the temporary shutdown of the BP-operated Mad Dog venture for maintenance with the field to remain closed until the June quarter.
Fairfax Media Management Pty Limited

voda 20 januari 2012 15:44

0

BHP starts building infrastructure at Indonesia coal venture

Bloomberg reported that BHP Billiton Ltd the world largest mining company started developing infrastructure at its 75% owned coal project in Borneo after receiving regulatory approvals.

Ms Kelly Quirke a spokeswoman for the Melbourne-based company said the work at the IndoMet Coal project includes road construction and associated infrastructure for future mine development.

She said “Regulatory permits and approvals that we need for the initial road works are now in place. Those early works have now begun.”

According to a BHP presentation in September the project in Kalimantan on Indonesia part of Borneo island could start production in the year ending June 2016.

The basin has the potential to support large-scale metallurgical and thermal-coal output and the first development at Lahai will provide the initial operating platform and development of transport infrastructure.

(Sourced from Bloomberg)

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