China's efforts to slash mineral exports pay off in 2007

China's efforts to curb heavy outflow of non-renewable mineral resources from the country have paid off.

According to the General Administration of Customs, last year China exported 120 million tons of 142 sorts of mineral resources in five categories, including non-metallic ores, metallic ores, mineral fuels, silicon and rare earth, representing a decline of 16.6 percent from the previous year.

The exports were valued at 12.6 billion U.S. dollars, up 2.8 percent. Prices of the mineral exports rose 23.2 percent on average.

Of the total foreign sales, mineral fuels accounted for 72.28 million tons, down 14 percent, and non-metallic ores made up 51.15 million tons, down 20.4 percent.

Since the second half of 2006, China has intensified control over export of mineral resources. It discontinued export rebates for almost all kinds of mineral resources and began to levy export duties of five percent to 15 percent on metallic ores that were in dearth at home and on coal, coke and some other mineral products.

However, 60 kinds of mineral products saw export reverse the downward trend. Their combined export volume amounted to 48.8 million tons, up 43.4 percent, the customs sources said. – China Mining

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Straits Resources to start major antimony mining operation

A major antimony mine, which represents around 10% of the world output, starts operation soon in Southeast Australia.

Straits Resources completes around A$ 30 million development for Hillgrove mine and processing plants in March starting commercial operation.

The firm pumps up the operation to full capacity as early as middle of 2008. – Japan Metal Bulletin

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Antofagasta to reduce molybdenum output by 33% in 2008

Chilean major copper producer, Antofagasta plans to reduce the molybdenum output by 33% for 2008 from 2007, when the firm increased the output by 4% to record 10,200 tonnes from 2006.

The firm estimates the output decreases to 6,800 tonnes in 2008 due to lower grade ore.

Demand for molybdenum is expected to remain strong, driven by the continued demand from both the steel and catalyst sectors, Antofagasta said, although supply growth in 2008 is expected to be limited. – Japan Metal Bulletin

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Manganese a quiet achiever in the iron boom, but the noise is about to start

Manganese producers

THE demand and price surge for iron ore in response to the annual global production of steel climbing to more than 1 billion tonnes for the first time is well understood.

Not so well understood is that it takes more than iron ore to make steel and that in many cases, the demand and price performance of the metals that give the full range of steel products their special properties has been as good, if not better.

Manganese is a case in point. It has gone ballistic thanks to increasingly tight supply/demand fundamentals, with power shortages in South Africa being the latest scare for steel makers who, on average, consume about 6 kilograms of the stuff for each tonne of carbon steel they produce.

Compared with the iron ore market, the seaborne trade in manganese is tiny – about 16 million tonnes a year – but mining the stuff can be hugely profitable.

BHP Billiton supplies about 15% of the world's total supply and in the December half-year, booked an underlying earnings before interest and tax result from the business of $US431 million.

Australia has two other producers – Consolidated Minerals and OM Holdings.

Ukrainian billionaire Gennadiy Bogolyubov saw what was coming and outbid everyone for ownership of ConsMin earlier this year. He ended up paying $1.3 billion – more than double the opening $625 million bid from Brian Gilbertson's equity house Pallinghurst.

Bogolyubov got a bargain. Since the takeover, contract prices secured by BHP for manganese ore have rocketed from $US2.70 a metric tonne unit in 2007 to a heady $US11.20/mtu. That is why OM's market capitalisation has grown hand over fist to more than $600 million.

All that is very interesting, but the manganese boom is still not a headline grabber. Garimpeiro's tip is that it won't be quiet for much longer, with punters set to turn their attention to the clutch of manganese explorers that offer leveraged exposure to the boom.

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GSI discovers Bauxite, Manganese mines in Orissa

While addressing the Parliament today (March 11), Subbarami Reddy, Minister of State for Mines stated that Geological Survey of India (GSI) has discovered new deposits of Bauxite & Manganese with 1.97 million ton ( Mt) and7.20 Mt of resources respectively in the State of Orissa.

He said the Iron Ore has also been discovered in the States of Karnataka (8 Mt) and Tamil Nadu (14.03 Mt).However Graphite was discovered in Tamil Nadu (0.76 Mt).

The other major mineral discoveries by GSI are: Gold deposits in Rajasthan, Jharkhand and Karnataka; Basemetal (copper, lead, zinc) in the States of Rajasthan, Maharashtra and Madhya Pradesh; Platinum Group of Metals in Karnataka; Limestone deposits in the States of Meghalaya and Tamil Nadu and Clay in Kerala. – Myiris

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Adhunik Metaliks to sell Orissa Manganese stake to PE funds

Kolkata-based steel manufacturer Adhunik Metaliks is in talks with private equity players for picking up stakes in its wholly owned subsidiary, Orissa Manganese & Minerals.

According to Adhunik Metaliks Managing Director Manoj Agarwal, the deal will be concluded in the next one month following which the promoters can dilute 10-11 per cent stakes in the company.

Orissa Manganese & Minerals has six manganese ore mines and one iron ore mine.

"The iron ore mine has reserves of 80 million tonne and will start production by June-July 2008," said Agarwal.

Adhunik acquired the company for Rs 60 cr in April 2007.

The mines don't have captive clause and the manganese and iron ore can be sold in the open market to various end users.

The company has mining rights of 15 million tonne for its manganese reserves.

Adhunik Metaliks has lined up its third phase of expansion, which entails forward and backward integration to increase its earnings before interest, taxes, depreciation and amortisation (EBITDA) from 18 per cent to 26 per cent.

The third phase would be completed by October 2009, but the benefits would kick in by the end of 2008-09, he said.

Adhunik will be closing its current financial year with a profit after tax (PAT) of Rs 96 crore, which is expected to increase to Rs 176 crore in 2008-09.

The investment in the third phase will be Rs 422 crore, of which debt will account for Rs 274 crore.

The expansion plans include raising the sponge iron capacity from 150,000 tonne to 315,000 tonne, setting up a captive power plant of 17 mw and a Sinter plant to use the fines.

He said raw material accounted for 80 per cent of the companies expenditure, which was expected to come down to 40-50 per cent after the expansion plans were implemented. – Business Standard

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Antimony market summary Mar 10-14

Antimony market has been in decline during the week due to weak demand. Although some major smelters still hold offers of RMB40,500-41,000/t (USD5,704-5,775/t) ex works, few deals were reportedly concluded at such prices. Some dealers and consumers reported that they mananged to purchase the material at RMB39,300-39,800/t (USD5,535-5,606/t) ex works, RMB500-600/t (USD70-85/t) lower than the price seen the previous week.

Meanwhile, small smelters in Lengshuijiang, Hunan also lowered offers to a level below RMB37,000/t (USD5,211/t) VAT excluded to attract buyers. Some smelters who stocked considerable quantities of antimony ingot in February were eager to sell and reportedly close transactions at RMB36,700-36,800/t (USD5,169-5,183/t) VAT excluded for grade-one antimony ingot and RMB300-400/t (USD42-56/t) lower for standard grade-two material.

Antimony trioxide market also experienced a significant decrease in the week. The concluded prices of the material declined to RMB36,200-36,500/t (USD5,099-5,141/t) ex works from RMB36,500-37,000/t (USD5,141-5,211/t) ex works seen the previous week. As demand keeps low, producers and dealers found it even hard to sell at prices above RMB36,800/t ex works for some materials with famous brand.
The export market for antimony ingot and trioxide kept quiet. Affected by the export restrictions on antimony products, large-scale smuggling is encouraged. State-owned exporting enterprises have great difficulty in exporting antimony ingot. They have to quote as high as USD6,000/t FOB if they purchase at prices over RMB40,000/t (USD5,642/t) ex works from domestic smelters. However, overseas buyers reported that they received offers of USD5,650-5,750/t CIF Rotterdam
In line with the softening market domestically, the export price of antimony trioxide also slid down a little bit. Materials with famous brand were offered USD5,200-5,250/t FOB, USD150-200/t down compared to the previous week. Meanwhile, some traders reported that foreign buyers refused to accept their offer of RMB5,100/t (USD719/t) FOB.

 
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