Ore and More Top Ten

1. Reuters: Anglo may look for Brazil partner, not defense move

Anglo American reacts to Xstrata proposed merger, may find a partner for its iron ore project in Brazil. The merger is seen as a defense strategy against Xstrata. Minas-Rio deposit is estimated to cost around $3.5 billion to build, steel companies, Chinese investors, and wealth funds are all being considered for possible partnerships.

2. The Associated Press: EPA says Monsanto mine violates law

The Environmental Protection Agency accuses the South Rasmussen Mine of leaking selenium and other heavy metals into Idaho waterways. The mine is used by Monsanto to make its Roundup week killer who takes phosphate ore and turns it into elemental phosphorous. Monsanto is seeking federal approval for a nearby new mine once Rasmussen is closed in 2011.

3. The West Australian: Iron Ore Holding up Pilbara resource

Iron Ore Holdings doubles it predicted ore reserves at its Iron Valley project in Australia’s Pilbara region. The junior miner added an inferred 65.2 million tonnes for a new total of 132.3 million tonnes. The miner is expecting to release a further resource update in August 2009.

4. Bloomberg.com: Asia’s Biggest Iron Deposit Found in China’s Liaoning Province

China’s Liaoning province government touts iron ore deposit find. The Dataigou deposit is thought to be Asia’s biggest iron ore deposit with more than 3 billion metric tons. However, the ore is over a kilometer underground that will lead to high production costs if developed.

5. Economic Times: ICVL to buy coal property abroad by 2011-12

International Coal Ventures looks to acquire at least one international coal asset by 2011-2012. The organization is focusing its acquisition efforts in Australia, Mozambique, the US, and Canada.

6. The Sydney Morning Herald: China signals end of stockpiling

Beijing officials call for the end of China’s strategic stockpiling of iron ore. The National Development and Reform Commission does not anticipate the continued building of reserves. The country also is looking to limit imports of copper, aluminum and other high-value metals.

7. Reuters: Honduras mines running smoothly, owners say

Canadian miners Yamana Gold and Breakwater Resource claim their Honduran mines are operating normally despite the political unrest. A military coup ousted Honduras’ President last weekend. The Central American nation is home to a small mining industry with few international investors.

8. The Australian: BHP cuts contract coal prices by 58pc

BHP Billiton announces the majority of its metallurgical coal contracts; negotiations follow precedent set by Japanese steelmakers. BHP has struck deals between $115 and $125 a tonne, with premium coking coal prices at $129 a tonne. The cuts are around 58% decline from than last year.

9. Bloomberg.com: Denison May Start Mining Uranium in Zambia in 2012, Times Says

The Times of Zambia updates Dension Mine Corp’s progress: uranium mining could start by 2012. The Canadian based miner will need to relocate 112 families for the mine site. The company has already invested about $23 million in the project so far.

10. Reuters: UPDATE 1- China lowers iron ore price cut demand- reports

Chinese steelmakers soften iron ore price cut demands to avoid a total breakdown of the benchmark system. The steelmakers were unable to agree to terms with producers, missing Tuesday’s negotiations deadlines. Price cuts are likely to be accepted in the 33-40% range rather than the 40-45% previously demanded.

1. Reuters: Brazil iron ore miner MMX gets offer from Wuhan

China’s Wuhan Iron and Steel presents a nonbinding offer for a minority stake in Brazilian iron ore miner MMX. MMX entered into negotiations with Wuhan in May. The proposed offer would give Wuhan a 23 percent equity interest for the purchase price of $280 million.

2. The Australian: Fortescue looks at ore port options

Fortescue Metals and Aquila Resources consider joining efforts to develop a second iron ore port in Western Australia: commission study. Fortescue has long term plans to boost capacity beyond 120 million tonnes, and is also fighting for third party use of BHP Billiton’s and Rio Tinto’s private railways. 

3. The Associated Press: Court OKs dumping gold mine waste in lake

The Supreme Court allows the Kensington gold mine to dump waste into a nearby 23-acre lake. Environmentalist worry the ruling could lead to the easing of requirements on how mining companies dispose their mining waste. The court voted six to three against a federal appeals court that blocked the Army Corps of Engineers’ waste disposal permit on environmental grounds.

4. AFP: Arcelor Mittal, Vale agree cut in iron ore price

ArcelorMittal and Vale agree to 28.2-48.3% iron ore price cuts for new supply contracts. The price decreases vary on the category of ore. ArcelorMittal said the negotiations with Vale were of great importance due to Vale’s size as a supplier.

5. Bloomberg.com: China’s Iron Ore Purchase Talks Won’t End by June 30, CCTV Says

China Central Television cites unidentified industry officials to conclude 2009 price talks with iron ore suppliers are unlikely to meet a June 30 deadline. Chinese steelmakers are trying to hold out for producers to cut contract prices by up to 50%.

6. Reuters India: Govt plans iron ore royalties linked to price

India’s Mining Minister announces plans to link iron ore royalties to market prices rather than a fixed rate. The government did not release the level of the royalty, but some believe the rate is likely to be 10% of the sale price before freight costs. 

7. Brisbane Times: Gindalbie secures $162m Ansteel approval

Gindalbie Metals meets its final condition for its $162 million share placement to Ansteel: secures Chinese government approval. Australian regulators signed off on the proposed transaction in May. Ansteel will contribute $143.68 million to complete funding requirements for Gindalbie’s Karara Iron Ore Project.

8. Reuters: Mechel’s owner pledges 38 pct stake as collateral

Owner Igor Zyuzin places 38% of the Mechel’s shares up as collateral to obtain unspecified financing. The financing document was filed with the U.S. Securities and Exchange Commission on June 19. Mechel has struggled under $5.4 billion in debt as is considered to be most heavily indebted Russian coal and steel producers.

9. Melbourne Herald Sun: 174 Xstrata staff face the axe

A Hunter Valley mine is expected to be placed on care and maintenance in March 2010. Xstrata Coal said the first start of layoffs would start in September. The closure will affect 174 full time employees; Xstrata officials hope to redeploy staff to other its other coalmines in the area.

10. Bloomberg.com: Macarthur Says Demand for Coking Coal Showing Recover Signs

Australia’s Macarthur Coal sees China’s shipments on the rise; claims metallurgical coal market is showing tentative signs of recovery. The miner now believes coking coal contract prices may gain 8.5% next year, revising its earlier forecast for a 15% decline.

 1. Bloomberg.com: Rio Said to Consider $15 Billion Share Sale, Reject Chinalco

Rio Tinto rejects a $19.5 billion investment from Chinalco, now looks to raise funds through a stock sale. Rio is expected to make an announcement about the rights offer today, causing its market activity in New Zealand and Australia to be halted. The miner’s largest shareholder Legal & General Group Plc largely criticized the proposed Chinalco deal.

2. The Australian: China’s iron ore stockpile will reach 120m tonnes

Ships loaded with iron ore start to queue outside China’s harbors; China’s stockpile expected to reach as high as 120 million tonnes by the end of June. As much as 60 million tonnes entered the country in May, with nearly 30% coming from major iron ore producers such as BHP Billiton and Rio Tinto.

3. AFP: Death toll in S.Africa mine tragedy rises to 76

Illegal gold mining accident death toll rises to 76. South African police are not sure all victims were illegal miners. Twenty miners died in a March accident at another mine. Illegal miners often live months underground in search of the precious metal.

4. Reuters: Grupo Mexico can use share guarantee in offer-court

Court grants Grupo Mexico the right to post noncash guarantees to secure their bid for bankrupt Asarco. The Mexican miner will place shares of its mining unit Southern Copper Corporation in escrow instead of cash. Grupo acquired Asarco in 1999, but lost control in the company’s 2005 bankruptcy proceedings.

5. The Moscow Times: Mechel Posts $500M Q4 Loss, Breached Loans

Russian miner Mechel posts a $496.9 million net loss in 2008 after suffering a $4.2 billion fourth-quarter loss and breached covenants. Mechel’s chief said most lenders have been understanding of the tough economic conditions.

6. The Australian: Rio Tinto takes first steps in Congo

Rio Tinto explores Congo mining opportunities. The Australian miner is exploring for iron ore in northern Congo and partnering with smaller miners in search of diamonds. Rio is planning on spending between $56-57 million on exploration in Congo this year.

7. Living in Peru: Doe Run Peru shut operations

Doe Run Peru shuts its La Oroya smelter after failing to reach an agreement with banks and suppliers. The Peruvian miner says it needs more time to settle debts and comply with required environmental cleanup.

8. Reuters: UPDATE 2- BHP offers iron ore indices to China steelmakers

BHP Billiton tries to rid its industry of the annual pricing system: offers China’s steel sector index-linked prices for iron ore. None of China’s major steelmakers have agreed to BHP’s terms; however, a few smaller mills have reportedly signed up. BHP’s CEO Marius Kloppers has stated his desire for a change in pricing mechanisms towards an index system.

9. Mount Shasta Herald: Senate passes bill to temporarily halt recreational mining

California’s Senate pass bill to place a moratorium on recreation suction dredge mining. The lawmakers are halting the mining activities until a scientific study can determine its impact on fisheries, water quality and public health. Recreational miners are still allowed to use other techniques that are less environmentally destructive.

10. The Australian: Weak iron ore prices bring $91m deficit in April trade

Australia caught off guard by significant trade deficit in April following a surplus one-month before. The Australian Bureau of Statistics published the month’s $91 million deficit. Analysts were expecting a $1.7 billion surplus in April following a $2.3 million surplus in March.

1. Bloomberg.com: China Iron Ore Surplus May Increase, Steel Group Says (Update 1)

China’s steelmakers concerned about the risk of over-importing iron ore. In the last four months, Chinese ore imports have exceeded actual demand by 27 million metric tons. The China Iron & Steel Association believes this year’s surplus could grow as large as 300 million tons this year.

2. The Associated Press: Grupo Mexico offers $2.9 billion for Asarco

Grupo Mining tops rival’s Sterlite Industries’ bid to regain control of Arizona-based Asarco LLC. Asarco has been under Chapter 11 bankruptcy protection since 2005.  Grupo’s bid includes $1.3 billion in cash and $1.3 billion in escrow.

3. The West Australian: EPA gives conditional approval for Sinosteel’s Mid West project

Australia’s Environmental Protection Authority recommends Sinosteel Corp be given conditional approval for its Koolanooka-Blue Hills iron ore project, and blocks the group from accessing ore within the Mungada East pit. Sinosteel had planned to mine iron ore at both locations.  The Chinese group took over Midwest Corporations for $1.4 billion last year.

4. Brisbane Times: Rains hit Fortescue’s iron ore mining

Fortescue Metals Groups report heavy rains slowed production in its first three quarters of the financial year production.  The miner shipped 20 million tons during the period, below original estimates and expectations. Fortescue has set their target at 35 million tons for next year.

5. Associated Press: Foundation settles supply suit with ArcelorMittal

Foundation Coal Holdings, ArcelorMittal settle $40 million coal supply contract dispute. Foundation accused the steel producer of reneging on a deal to buy more than 200,000 tons of coking coal. A Foundation spokesperson said the settlement is not expected to affect current prices or the companies’ relationship.

6. Bloomberg.com: Harmony Increases Death Toll of Illegal Miners to 61 (Update 4)

Fire sweeps through a Harmony Gold Mining Co. disused mineshaft, kills at least 61 illegal miners. Illegal miners steal a tenth of South Africa’s gold production each year. As the rise of gold prices increases illegal activity, the government is increasing efforts to apprehend employers of recently arrested illegal miners, including members of organized crime. 

7. The Australian: Miners lost 62pc of their value last year

A PricewaterhouseCoopers study reports the world’s top 40 miners’ market capitalization has dropped 62% last year. It was the first time in the study’s seven-year history that the miners experienced a net earnings decline. Fourteen of the top miners announced mine closures, production cuts, or put workers on care and maintenance.  

8. The Associated Press: GM bankruptcy watched by Stillwater Mining

Stillwater Mining waits to see if its Stillwater-GM contracts will be honored in GM’s bankruptcy proceedings. The miner sells the carmaker platinum and palladium for use in catalytic converters.

9. Guardian: Nigeria seeks power from coal in mining revival

Nigeria working on projects to mine its untapped coal deposits to fuel power plants. The country is also working to stimulate its gold, iron ore, and bitumen industries. Mining accounts for 1% of Nigeria’s GDP.

10. Reuters: Peabody sees patchy H2 rebound in coking coal demand

Miner anticipates a slow recovery for coking coal, does not see a significant price catalyst. Peabody Energy, a U.S. based coal miner, believes the demand for coal will recovery intermittently in the second half of 2009 and will be led by Asian customers.

1. Reuters: UPDATE 1- POSCO to agree to 33 pct iron ore cut

South Korean steelmaker follows Japan’s Nippon Steel’s recent iron ore contract precedent. POSCO and Rio Tinto are expected to finalize negotiations as early as today; the steelmaker has agreed to a 33% cut in iron ore prices. The reoccurrence of similar priced contracts are expected to influence this year’s annual negotiations still under review.

2. Bloomberg.com: Teck Resources in Talks to Sell Coking Coal Assets to Pay Debt

Teck Resources shops around its coal assets. The Canadian miner is in talks with Chinese companies to purchase up to a 20% stake in its coking coal business. Teck is trying to pay down debt after acquiring $9.8 billion in loans last year from the purchase of Fording Canadian Coal Trust.

3. The Australian: Fortescue gives in to BC Iron on open access to rail line

BC Iron granted permission to use Fortescue Metals Group’s rail line when its Nullagine mine is developed. Negotiations between the two miners took weeks longer than expected. Fortescue has fought for the right to use BHP Billiton’s Newman route.

4. The Telegraph: SAIL earnings drop 37%

SAIL’s January-March quarter profits drops 37% while its 2008-2009 annual profit slips 18%. Despite the losses, the steelmaker is continuing its expansion plans, with borrowed funds accounting for half of expendable capital. SAIL is also actively scouting for coking coal opportunities, with or without a joint venture.

5. Bloomberg.com: Delta Quits Liberia Iron-Ore Project After Bid Terms Changed

Delta Mining Consolidated Ltd. forgoes plans to develop the Western Cluster; miner can’t meet Liberia’s requirement for a large cash guarantee. Liberia earlier announced Delta as its preferred bidder.

6. Bloomberg.com: Vale Cut to ‘Neutral’ at Goldman Sachs After Rally (Update 2)

Goldman Sachs expresses concerns over falling metal prices and stronger Brazilian currency, reduces Vale to ‘neutral.’ The downgrade took into account Vale’s plans to increase shipments to 311 million tons in 2010.

7. The Olympian: N. Idaho mine fined for clean water violations

The Hecla Mining Co. charged $177,500 for violating federal clean water laws. The Environmental Protection Agency claims the Lucky Friday Mine exceeded discharge levels between September 2008 and February 2009. Hecla has spent around $2.3 million to upgrade the mine’s wastewater system.

8. The Age: Kerry Stokes: WA’s new iron ore magnate?

Iron Ore Holdings confirms its Iron Valley discovery in Western Australia’s Pilbara region. The iron ore project requires the use of Rio Tinto, BHP Billiton, or Fortescue’s railways. Analysts believe the junior miner has an advantage, as 52% owner Kerry Stokes is a close friend to Rio Tinto’s boss.

9. Australian Broadcasting Corporation: Conservation concerns over new mining project

Waratah Coal to develop a coal project in Queensland’s central-west; environmentalist warn of harm to a major conservation park. Wartah’s mining permit includes part of the 8,000 hectare Bimblebox Natural Refuge. Wartah Coal has secured backing for the $6.5 billion project from a Chinese company.

10. Arizona Daily Star: Hazardous-waste lawsuit nears settlement

Mining lawsuit wraps-up loose ends: Freeport McMoRan Copper & Gold subsidiary agrees to pay $825,000. The U.S. Department of the Interior and the Tohono O’odham Nation filed suit aginst Cyprus Tohono Corp. The Environmental Protection Agency required Cyprus to clean up a portion of its mine site in 2006.

1. The Independent: Rio slashes iron ore prices by a third

Rio Tinto accepts a 33% price reduction for its annual iron ore contracts with Japan’s steel mills; Chinese customers hold out for greater cuts. Chinese steelmakers have been pushing for cuts up to 50% and may not follow the precedent set by Japan’s deals with Rio. A rejection of annual contracts could break the traditional benchmark system.

2. Reuters: UPDATE 1- Workers strike at Centerra’s Mongolia mine

Unionized workers strike at the Boroo gold mine, demand higher wages. Centerra Gold owns the Mongolian mine. The company believes the stoppage is illegal as a collective agreement is in effect and is in discussion with workers to resolve the issues.  

3. Bloomberg.com: Vale Will Press for Better Iron-Ore Prices Than Rio (Update 1)

Vale aspires to negotiate better annual contracts than Rio Tinto’s precedent. Vale looks to limit the decline in benchmark prices to 20-27.5% below last year’s prices, less than Rio’s 33% cut. Last year Vale won a 65% price increase only to be surpassed by an 85% price increase won by its Australian rivals BHP Billiton and Rio Tinto.

4. AFP: CITIC chairman looks beyond forex disappointments

Chinese conglomerate Citic Pacific earmarks $2.2 billion for its iron ore and steel businesses despite dramatic quarterly losses. The firm made a net loss of 1.62 billion in 2008 due to bad foreign exchange bets.

5. The Associated Press: Group says coal protesters unable to make bail

Coal mine trespassers remain jailed, Mountain Justice members unable to raise $2,000 apiece bail. Six protestors were arrested Saturday at Massey Energy’s Marfork Coal mining complex. Environmentalists group Mountain Justice is against the firm’s proposed plan to blast at the mine. 

6. Australian Broadcasting Corporation Rural: New iron ore lobby group to fight for better ETS deal

Western Australian low-grade iron ore miners form the Magnetite Network, a lobby group, to represent their industry in discussions concerning Australia’s proposed emissions trading scheme. Low-grade ore requires significant amounts of energy during processing.

7. Reuters: UPDATE 1- CGA Mining to raise C$17 mln from stock sale

CGA Mining needs funding to supplement working capital during the initial production at its Masbate Gold Mine. The miner is offering a private placement of its shares to raise an estimated $15.1 million. The share sale is expected to close around June 12.

8. Guardian: Venezuela ends Gold Reserve Brisas’ concession

Venezuela denies granting an extension to the El Pauji concession of the Brisas project to U.S. miner Gold Reserve. President Hugo Chavez wants the gold industry to be controlled by the state. The country’s gold deposits will be exploited by a joint venture between the state and a Russian mining company.

9. Bloomberg.com: Rio Tinto Cuts 121 Jobs at Argyle Diamond Mine, Review Says

Diamond prices continue to slide; Rio Tinto cuts jobs to reduce costs. One hundred and twenty-one jobs are being cut from the miner’s Argyle mine in Western Australia. Cut workers will be offered positions at Rio’s iron ore operations in the Pilbara region.

10. Reuters India: UPDATE 1- Mechel, banks agree on principles of loan refinance

Lenders agree to extend deadline for Mechel to refinance a $1.5 billion bridge loan for a term up to 3.5 years. The Russian steel and coal producer needs the capital to pay off the remaining loan from purchasing Gazprombank. Mechel received its first extension on the bridge loan in March.