Archive for March, 2011

MASSIVE FORTUNE TO BE SPENT ON IRON ORE MINING BY BHP BILLITON

Sunday, March 27th, 2011

BHP plans $US10b expansion

March 25, 2011

BHP Billiton will spend nearly $US10 billion ($9.89 billion) to expand iron ore operations and energy and metallurgical coal projects in Western Australia.

The world’s biggest resource company will spend $US6.6 billion in an iron ore project expansion in Western Australia, $US2.5 billion to expand three metallurgical coal projects in Queensland and $400 million on an energy coal project in NSW.

BHP shares initially rose 0.5 per cent on the news, but slipped in morning trade and were recently down 0.5 per cent at $44.51. Rival Rio Tinto rose 0.6 per cent.

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The company said it and its partners would spend $US7.4 billion to develop the Jimblebar mine and rail links, to further develop Port Hedland and to build ore blending facilities, taking the annual iron ore capacity to 220 million tonnes.

BHP Billiton’s president of iron ore, Ian Ashby, said the intention was to develop the port capacity so that the company could fill its 240 million tonne per annum allocation in Port Hedland’s inner harbour.

‘‘We have intentionally overbuilt the ore handling facilities at Jimblebar and expect to incrementally grow mine production to ensure that our port and rail systems are operated at full capacity during this debottlenecking program,’’ he said in a statement.

BHP Billiton said first production from the Jimblebar mine was expected in early calendar 2014.

A total of $US3.4 billion will be spent on the Jimblebar mine, including buying rolling stock, with initial capacity of 35 million tonnes per annum, with embedded options to expand to 55 mtpa.

A further $US2.3 billion, including BHP Billiton’s share of $US1.9 billion, will be spent on Port Hedland, adding two berths and shiploaders and other works.BHP Billiton and its partners will spend $US1.7 billion on the port blending facilities and rail yards.

The Melbourne-based company also approved spending $US2.5 billion ($A2.47 billion) on three coking coal projects in the Bowen Basin in central Queensland. BHP’s share is half of the total $US5 billion to be spent on the expansion.

BHP Billiton metallurgical coal president Hubie van Dalsen said the company had a deep pipeline of expansion projects to develop its large reserves of metallurgical coal.

‘‘Our strategy is to rapidly progress development of these projects to capture the increasing demand we see for hard coking coal,’’ he said.

BHP Billiton said the projects would add 4.9 million tonnes of annual mine capacity to the Daunia operation and a new mining area at Broadmeadow.

In a third statement, BHP Billiton said it would spend $US400 million to expand Hunter Valley Energy Coal in NSW, to increase coal production by four million tonnes per annum to about 24 million tonnes per annum.

‘‘The emergence of demand for coal in the key growth markets allows us to get product to market quickly, ahead of further coal preparation plant expansions,’’ BHP Billiton Energy Coal President Jimmy Wilson said.

BHP Billiton is cashed up after reporting a new Australian record first half net profit in February of $US10.524 billion ($A10.41 billion) for the six months to December 31.

BHP Billiton stocks rose 51 cents to close at $44.71 on the ASX yesterday.

Sourced & published by Henry Sapiecha

CLEANING SYSTEM FOR DIRTY OIL USING LIQUID SALT

Sunday, March 27th, 2011

Liquid salt could help clean up tar sands

By Ben Coxworth

15:06 March 23, 2011

A tar sand sample treated with the ionic liquid process(Photo: Penn State University)

A tar sand sample treated with the ionic liquid process
(Photo: Penn State University)

The United States imports approximately one million barrels of oil per day from Canada, which is about twice the amount that it gets from Saudi Arabia. A large percentage of that oil comes from tar sand deposits, in which bitumen (a tar-like form of crude oil) is found combined with sand. The tar sands – also known as oil sands – are hugely controversial, as many people state that the process used for extracting the oil from the sand is too ecologically-unfriendly. A new technique being pioneered at Penn State University, however, could drastically reduce the environmental impact of that process.

The current method of separating sand and bitumen involves adding warm water to the two, then agitating the mixture. Unfortunately, it requires a lot of water, which is diverted from nearby rivers. Once the separation process is complete, the now-polluted water is pumped into open air tailings ponds. From there, it can potentially leach its way back into the water table. There’s also another risk – despite the presence of bird-scaring devices, in 2008 approximately 1,600 ducks died when they landed in one of the ponds.

Instead of warm water, the Penn State method utilizes room temperature ionic liquids (ILs), which consist of salt in a liquid state – a solvent such as toluene may also be added. When the ILs are introduced to a sand/bitumen mixture and stirred, the resulting combination settles into three distinct layers: a bottom layer of oil-free sand, a middle layer of ILs, and a top layer of bitumen. The bitumen can then be removed and refined, the ILs can be reused, and residual ILs in the sand can be removed using a relatively small amount of water (which can also be reused), after which the sand can be returned to the environment.

Not only is much less water used, but because nothing needs to be heated, there are also substantial energy savings.

The researchers state that the ionic liquids could also be used to clean up beaches devastated by oil spills. Sand could be cleaned and redeposited on the spot, supposedly containing even less hydrocarbons than it did before the spill ever occurred.

We’ll be watching this one with interest …

Sourced & published by Henry Sapiecha

CORROSIVE ACID ACCIDENT WITH RIO TINTO

Saturday, March 26th, 2011

Sulphuric acid spills at Rio Tinto site

Kym Agius

March 25, 2011

Queensland’s environment department says an alumina refinery owned by Rio Tinto has spilt sulphuric acid into a creek in central Queensland.

Rio Tinto notified the Department of Environment and Resource Management that the spill occurred at the Yarwun alumina refinery on Sunday during heavy rain.

DERM spokesman Joe Pappalardo said an unknown amount of the acid was released into Boat Creek when the site’s stormwater system overflowed in heavy rain.

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Urgent inspections and water sampling has been done at Boat Creek and nearby Port Curtis, at Gladstone.

“Inspections by DERM officers … have found no evidence of environmental harm suggesting that the recent rain and high tides in Boat Creek have helped to dilute the acid and flush it through the system relatively quickly,” Mr Pappalardo said.

“Investigations are continuing, however at this stage DERM has found no evidence that environmental harm has been caused by the spill.”

Investigators are looking at the cause of the spill, how much sulphuric acid was involved and the actions taken by Rio Tinto.

Mr Pappalardo said it looks as though it’s been a lucky escape for the environment.

“If it’s confirmed that a large amount of sulphuric acid has been released without significant environmental harm, then DERM would consider that very fortunate indeed.”

“The risk is unacceptable.”

A Rio Tinto spokesman said it is estimated that 3000 litres sulphuric acid was released when a drain valve failed.

“The vast majority of the sulphuric acid was contained within the on-site spill capture system,” the spokesman said.

“Heavy rain on Sunday resulted in a small amount of the sulphuric acid and seawater mix being discharging into a local creek.”

The drain valve has been removed from service and will remain out of operation until repaired and investigations are completed.

AAP- Sourced & published by Henry Sapiecha


GOLDEN HANDSHAKE COURT SUIT FOR $1M BY EX CEO

Wednesday, March 23rd, 2011

Former CEO sues gold firm for $1m

Leonie Wood      March 23, 2011

ED ESHUYS may have set some ambitious performance goals over the four years that he was chief executive of the gold producer St Barbara Ltd, but in the tumultuous year of 2008 he may have been too ambitious.

St Barbara’s production and budgetary targets were not met, cash was tight, and with a global crisis of confidence paralysing the banking sector there were grim prospects of refinancing the company’s facilities. As the Victorian Supreme Court heard yesterday, disappointment followed disappointment at St Barbara in 2008.

A five-year management budget did not meet Mr Eshuys’ standards, so was deferred; a multimillion-dollar accounting error emerged in October; and there were difficulties mining ore at the company’s West Australia operations.

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By November 2008, the court heard, Mr Eshuys’ fellow directors had become ”alarmed” by a further deterioration in the cash position. By mid-December, St Barbara’s board found a replacement for Mr Eshuys.

When he left in March 2009, the company paid its outgoing chief executive various entitlements plus a sum of $150,000, ostensibly for hitting some performance targets.

But Mr Eshuys is suing St Barbara for up to $1 million, which was the most he could receive for reaching performance-based goals.

He argues that while St Barbara under his management fell short of stated operating cost targets and gold production targets, the board did not fairly and reasonably take into account other factors.

Mr Eshuys yesterday told Justice Stephen Kaye that by December 2008, despite the setbacks and cash-flow figures being below budget, he believed the company’s position was improving and that by February 2009 it would have gone ”close to, if not exceed” the budgeted cashflow forecast.

A letter from Mr Eshuys’ lawyers to St Barbara’s lawyers in December 2008, which was tendered in court, contended Mr Eshuys ”is meeting the milestones” set out in his performance contract, namely gold production targets and the company’s cash position.

Asked by counsel for St Barbara, Philip Solomon, SC, what he meant by ”is” meeting the targets, Mr Eshuys told the court that at the time he ”fully believed that we would achieve them [the targets] by the end of February”.

Later he told Justice Kaye that in January 2009, ”we were short of budget but we were improving”.

The court heard St Barbara in mid-2008 raised $120 million through a rights issue, but some St Barbara directors and some of its shareholders were concerned about the suddenness of the raising. In February 2009 St Barbara again tapped the market to raise $75 million.

The court also heard that St Barbara’s woes in late 2008 and early 2009 coincided with rapidly rising Australian dollar prices for gold. Under cross-examination, Mr Eshuys conceded it was a ”poor” outcome that gold production fell 16 per cent short of budgeted figures between September 2008 and February 2009.

St Barbara, which is expected to begin calling witnesses today, argues it was not obliged to pay Mr Eshuys more than $150,000

EARTHQUAKE DISASTER IN JAPAN & THE FUEL SHORTAGE CRISIS

Wednesday, March 23rd, 2011

Japan fuel demand to surge amid nuclear crisis

ALEX KENNEDY – Associated Press – Associated Press | Tuesday, March 22, 2011

Japan’s nuclear crisis could reverberate through global energy markets for years to come, pushing up prices as suppliers look to take advantage of a surge in demand for non-nuclear fuels from the world’s third-largest economy.

The 9.0-magnitude earthquake and tsunami that likely killed more than 18,000 people earlier this month shut down 11 of Japan’s 54 nuclear power plants — a source that provided 30 percent of the country’s power. That means producers of natural gas, coal and oil — particularly in Asia — will be called on to help fuel conventional sources of power generation in Japan.

The government is still struggling to contain radiation leaks at the crippled Fukushima Dai-ichi nuclear power plant in the devastated northeast. Damage from the tsunami and attempts to cool reactor cores by dumping sea water by helicopter almost certainly mean the plant is out of action permanently. The future of some of the other plants is also in doubt.

“It appears that the shutdown nuclear plants will be out of action for at least three years, if not forever,” said Ravi Krishnaswamy, energy analyst with consultancy Frost & Sullivan, referring to half a dozen plants. “We’re likely to see prices for both coal and natural gas increasing in the short and longer term.”

Analysts expect regional energy exporters such as Indonesia, Malaysia, Australia and Vietnam to benefit most from Japan’s sudden thirst for fuel as the country tries to overcome its power crunch. Ending rolling blackouts and shortages will be crucial to Japan’s economic recovery and restoring normal production at manufacturers like Toyota Motor Corp. and Panasonic Corp.

Australian oil and gas producer Woodside Petroleum, Indonesian thermal-coal miner Adaro, South Korean refiner SK Innovation, and Thai petrochemical firm PTT Chemical are among the Asian energy companies best positioned to satisfy Japan’s energy gap, said Renee Lam, an analyst with Moody’s Investors Service.

“These firms and others in the region can capitalize on near- and longer-term displaced demand as Japan must now rely more on non-nuclear fuel,” Lam said.

Energy prices — and how much consumers pay for daily necessities like fuel for cars, heating and cooking — would be pushed even higher if other countries decide to turn away from nuclear power. Heightened concerns about the safety of nuclear plants have triggered policy reviews across the world. China has halted approval for new nuclear projects while Germany shut down several older plants.

“Longer-term demand for fossil fuels could remain high as other nations revisit plans for their nuclear electricity production,” the World Bank said in a report.

The price of benchmark U.S. crude fell during the first few days after the March 11 disaster on concern Japan’s economy could slip into recession, which would reduce demand for oil.

But analysts say the amount of fuel Japan must import to make up for shutdown nuclear generation will greatly outstrip the immediate drop in consumer demand. Goldman Sachs estimates Japan must import 247,000 barrels a day of oil to compensate for the country’s lost nuclear capacity while demand will drop only 16,000 barrels a day due to an expected economic slowdown in the first half.

Oil has rebounded above $102 this week as attention returned to political violence in Libya and Bahrain.

Tokyo Electric Power Co., Japan’s biggest electricity utility and operator of the Fukushima Dai-ichi plant, said Tuesday its power generating capacity stands at 35.5 million kilowatts, down from 52.4 million kilowatts before the disaster.

Previous Japanese power crises suggest demand for crude and other fuels will spike.

Analysts estimate demand for crude and fuel oil jumped 25 percent to 50 percent and use of gas and coal rose 8 percent to 12 percent in 2002 after the Tokyo utility was forced to idle 17 nuclear plants following accusations it falsified safety records and again in 2006 when an earthquake damaged a major reactor.

Japan will likely covet low-sulfur crude, especially from Indonesia, which can be more easily processed into gasoline, kerosene and diesel, said John Vautrain, an analyst with energy consultant Purvin & Gertz in Singapore.

“The price of these Asian sweet crudes shoot up relative to other crudes because the Japanese all of a sudden start burning considerable quantities,” Vautrain said. “Every time the Japanese get into a power issue, they buy a bunch more oil.”

Investors also expect Japanese demand for liquefied natural gas to rise as the country favors inexpensive gas-fired power generation. Japan is the world’s biggest importer of LNG and about 70 percent of its LNG imports come from Australia, Indonesia, Malaysia and Brunei.

Natural gas prices in Europe and Asia have jumped since the disaster. Last week, Royal Dutch Shell PLC said it would divert LNG and fuel oil to Japan while Qatar, the world’s largest gas exporter, promised to meet any increased requirements.

“Diversion of gas supplies from regular customers in Europe to Japan is bound to drive up gas prices in Europe,” Krishnaswamy said.

Sourced & published by Henry Sapiecha

METAL MARKET PRICE INDICATORS

Tuesday, March 22nd, 2011

Metal Market Price Indicators

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February 2011 Indicators
Aluminum Sheet & Cast: 123.0
No. 1 Heavy Melt: 155.0
Yellow Brass Solids: 143.8
Stainless 304 Solids: 111.4

AMM price indicators show trends in key scrap prices. Each figure represents the current month average dollar price relative to an average price over the last two years, for that commodity. These indicators will be published monthly to track these critical markets.


More Market Trends

Sourced & published by Henry Sapiecha


WORLD ECONOMIC FORUM IS AVAILABLE TO SOURCE GLOBAL INFO

Tuesday, March 22nd, 2011
The World Economic Forum

Overview: The World Economic Forum is an independent international organization committed to improving the state of the world by engaging business, political, academic and other leaders of society to shape global, regional and industry agendas. Incorporated as a not-for-profit foundation in 1971, and headquartered in Geneva, Switzerland, the Forum is tied to no political, partisan or national interests.

The World Economic Forum publishes a comprehensive series of reports which examine in detail the broad range of global issues it seeks to address with stakeholders as part of its mission of improving the state of the world. Besides reports on its key events and standalone publications such as the Global Competitiveness Report, the Global Risks Report and the Global Gender Gap Report, the Forum produces landmark titles covering the environment, education, individual industries and technologies.


Visit The World Economic Forum

Sourced & published by Henry Sapiecha

KNOW THE COUNTRY IF YOU WANT TO DO BUSINESS THERE-SOUTH AFRICA PROFILE

Tuesday, March 22nd, 2011

COUNTRY PROFILE- SOUTH AFRICA

Doing business in different countries one needs to be aware of their customs, beliefs and practices if you are to be sucessful getting business there

General Information:
• South Africa is located in Southern Africa, at the southern tip of the continent of Africa.
• The capital is Pretoria (administrative capital).
• The spoken languages include IsiZulu, IsiXhosa, Afrikaans, Sepedi, English,
Setswana, Sesotho, Xitsonga.
• South Africa’s government is a republic.
• The climate is mostly semiarid; subtropical along east coast with sunny days and cool nights.
• The terrain features a vast interior plateau rimmed by rugged hills and narrow
coastal plain.
• South Africa’s natural resources include gold, chromium, antimony, coal, iron ore, manganese, nickel, phosphates, tin, uranium, gem diamonds, platinum, copper, vanadium, salt, and natural gas.
• The official currency is the rand.

Economy:

The emerging market of South America features an abundant supply of
natural resources, well-developed financial, legal, communications, energy, and
transport sectors, a stock exchange that is 18th largest in the world, and a modern infrastructure that supports an efficient distribution of goods to major urban centers throughout the region. The economy reaped the benefits of macroeconomic stability and a global commodities boom, but began to slow in the second half of 2008 due to the global financial crisis’ impact on commodity prices and demand leading to a decline in GDP of nearly 2% in 2009. Unemployment remains high and outdated infrastructure has constrained growth while Daunting economic problems remainespecially poverty, lack of economic empowerment among the disadvantaged groups, and a shortage of public transportation.
Agricultural products include corn, wheat, sugarcane, fruits, vegetables, beef,
poultry, mutton, wool, and dairy products. Exports of gold, diamonds, platinum, other metals and minerals, and machinery and equipment are traded to major partners including Japan, the United States, Germany, the United Kingdom, China, and the Netherlands. Commodities such as machinery and equipment, chemicals,petroleum products, scientific instruments, and foodstuffs are imported from Germany, China, the United States, Saudi Arabia, and Japan.
CULTURE ETIQUETTE
• Greetings:
Between the same gender, a handshake is the most common form of greeting,
unless it is between family or friends, then hugs and kisses are common. With
men greeting women, or vice versa, a handshake is common, but some women
simply give a nod of acknowledgement. Allow the woman to initiate a handshake.

• Communication Style:

Depending on the cultural background, the type of communication behavior can
either be direct or indirect, and sometimes even a blend of the two. People in the city tend to be more direct than those in the rural areas. Most people do not want to argue or disagree with strangers, so they will either ignore your question or give you a non-committed answer.
Personal Space and Touching:
When speaking, people usually stand close to one another, and less than an
arm’s length of space is appropriate in many Western culture. There tends to be
a decent amount of touching of arms, shoulders and hands when interacting witha South Africans. However, business colleagues do practice giving each other the appropriate arm’s length space to avoids being uncomfortable and to fit in with the rest of the business practices abroad.
Eye Contact:
Direct eye contact is normal, but not to the point of blatantly staring. After initial eye contact is established, intermittent contact is best during conversations since overly direct eye contact may be misinterpreted as a challenge.
• Views of Time:
Punctuality is taken more seriously in business than it is in social situations.
Buses and trains tend to run on time, but meetings could start up to two hours
later than scheduled. Taking your time is an important part of the culture.
Gender Issues:
Women are generally accepted in business and it is very common for women to
work but many are still expected to run the house and look after the children. In
tribal and rural areas, foreign women are treated with greater respect than native women, but can still be expected to know very little about typical “male”
pursuits, such as sports, math or science.
• Gestures:
Thumbs up is a common gesture to say well-done or to say everything is okay.
Placing both hands together with fingers pointing up is a way to say thank you.
Beckon someone by extending the arm and waving towards yourself. Saying
“bless you” when someone sneezes is polite.

• Taboos:
Placing the thumb between the forefinger and second finger and pointing it at
someone is an obscene gesture.
Business Etiquette:
• Dress:
For men, suits or pants with a tie and jacket are acceptable in most situations.
Women should wear business suits or skirts/dresses with an appropriate top.
Clothes that are tight fitting or too revealing should be avoided. Pants are also
acceptable, and high heels are common. Presentation is often more important
than substance, so be sure to iron clothes and shine shoes since shoes are
closely watched.
• Titles and Business Cards:
It is best to address people by their professional title or Mr./Mrs followed by the
last name, and avoid using someone’s first name unless invited to do so first.
While there is no specific routine for exchanging business cards, always treat
them with respect.
Meetings:
Punctuality in the business environment is valued, so be sure to arrive on time
for meetings. Greet everybody in the room, starting with the senior member. This senior member will usually begin and end meetings.
• Negotiations:Remain calm during the negotiation process, and avoid interrupting the South African counterpart. Doing so will be seen as rude and over-eager. Decisions are usually made from the top, so they can take a while to be reached.
• Gift Giving:
At initial meeting, gifts are not usually exchanged. If invited to someone’s house, flowers, a bottle of high quality wine, or good chocolates are acceptable gifts to give.
Travel Information:
Visitors from most commonwealth countries including Australia and the United
Kingdom, most Western European countries, Japan, and the United States do not require visas. Upon arrival, a free entry permit will be issued, and this permit is valid for up to 90 days.
Those not entitled to an entry permit must obtain a visa which must be obtained at a South African embassy or consulate.
Any entry, whether a visa is required or not, requires at least one completely
blank page must be available in a valid passport.
For more information, visit the Ministry of Foreign Affairs website at
http://www.dfa.gov.za

Sourced & published by Henry Sapiecha

RARE EARTH FORTUNES FOR AUSTRALIAN MINE

Thursday, March 10th, 2011

Lynas boss reaps rare wealth

from are earth

March 8, 2011
Nick Curtis, chairman and chief executive officer of Lynas Corp.
Nick Curtis, chairman and chief executive officer of Lynas Corp.

Nick Curtis made a $5 million contrarian bet in 2002 to develop an Australian rare earth mine, aiming to challenge China’s control of global supply of the metals. His company, Lynas, now has a market value of $3.5 billion.

Curtis, 53, saw his gamble start to pay off last year when China slashed rare earth exports, causing prices to surge as much as 13-fold and setting off a scramble to lock in alternative sources of the metals used in missile guidance systems, iPods and hybrid cars.

With China controlling more than 95 per cent of the world’s rare earths, Lynas’s stock jumped almost fourfold since June 30 as investors sought more secure future supply.

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Mt.Weld in Western Australia, the richest known deposit of rare earths in the world. Source: Bloomberg
Mt.Weld in Western Australia, the richest known deposit of rare earths in the world. Source: Bloomberg

“The dominance of China in rare earths was unsustainable,” Curtis, chief executive of Lynas, said in an interview.

“I’d pictured the need for order in the industry, that these were important metals that would ultimately need a stable, secure non-China supply chain,” said Curtis, who graduated with a bachelor’s degree in fine arts from the University of Sydney.

His decision to invest in rare earths was informed by experience with China’s aluminum industry, where mushrooming construction of smelters led to power shortages followed by a government clampdown and industry regulation.

“The reform process in China in the metals sector goes through a period of unfettered competition leading to chaos followed by which the state tries to get control of things again,” Curtis said.

New supply

Sydney-based Lynas, the second-best performer on the benchmark S&P/ASX200 index last year, is set to become the first new source of supply outside China in at least two decades with the start up this year of the $535 million Mt Weld project, the world’s richest deposit of rare earths according to Lynas.

Ore production will begin this month at the mine about 1000 kilometers north-east of Perth. Lynas shares ended the day flat at $2.10.

Rare earths are 17 chemically similar elements used by companies such as Toyota, Apple and Raytheon. They include neodymium, cerium and lanthanum used in sonar systems, flat-screen TVs and computers.

The price of lanthanum oxide, used in hybrid batteries, has surged more than 13-fold since the second quarter to $US92 a kilogram, according to Lynas’s website. Vehicles such as the Toyota Prius hybrid contain about 10 kilograms of rare earths, used to make lightweight batteries and motors.

Working in China

Curtis developed an interest in rare earths working with Madame Bai Jie, a former head of raw materials at China’s state planning commission. He worked for six years from 1994 at a unit of China National Nonferrous Metals Industry Corp, which controlled all of China’s non-steel-related metals until 2000.

Curtis bought Mt Weld from Anaconda Nickel, part-owned by Glencore International.

Anaconda’s CEO was Andrew Forrest, today Australia’s richest man, with a fortune of $6.9 billion, according to Forbes Asia. Forrest went on to start Fortescue Metals, the fourth-biggest supplier of iron ore to China.

Forrest “epitomises going long where China is short, which was the right move,” Curtis said. “I went long where China is ultra-long, which was the wrong move for the particular time” about 2002.

Mining priority

China made rare earths production a priority in the early 1990s under Deng Xiaoping, dominating the market, pushing down prices and rendering mines elsewhere uneconomical. The government introduced its export quota system in 1999.

Rare earth shortages followed the government’s directive in 2006 to create larger domestic companies while curbing output and exports.

About 50 per cent of global rare earth demand comes from customers outside China and they are looking elsewhere for supplies, Deutsche Bank said in a report last year.

Global demand for rare earths is forecast to rise to $US11.2 billion by 2014 from $US7.8 billion last year, Lynas said in a presentation last month.

“Nick’s always been an entrepreneur,” said Warwick Grigor, an equity analyst at BGF Equity in Sydney, who’s tracked the “exceptional” Mt Weld deposit since the mid-1980s. “He saw an opportunity there. It’s probably an understanding of the market he’s picked up from dealing with the Chinese.”

Future prices?

To be sure, prices of some rare earths, including lanthanum, may start to drop by 2013 as additional production creates a “vast oversupply,” Western Minerals Group, a Canadian exploration company, forecast last month.

Curtis, a former executive director of Macquarie Group and head of its commodity trading desk in Sydney, founded Sino Gold Mining, the owner of China’s second-largest gold mine whose shares began trading on the Australian stock exchange in 2002. The company was bought by Eldorado Gold in 2009 for about $C2 billion.

“We were insiders when no one else could penetrate China,” said Jake Klein, the former CEO of Sino Gold and now the chairman of Conquest Mining and board director of Lynas.

The financial crisis forced Curtis to suspend work on Mt Weld in February 2009 after failing to lock up funding. He raised capital in the equity market in September that year after the Australian government blocked China Non-Ferrous Metal Mining Group Co from buying a majority stake.

“This being a strategic resource with existing supplies controlled by China, sophisticated investors got the story in a nanosecond and the deal built its own momentum,” said Alan Young, head of natural resources & infrastructure in Sydney for JPMorgan Chase, which managed and underwrote the $450 million share sale.

China Non-ferrous Metal offered to pay $252 million for a 51.6 per cent stake in Lynas. The company has a market value today of $3.5 billion.

“I’d be really disappointed today if I had gotten off the bus somewhere along the way looking at the speed it’s moving today,” Curtis said.

Bloomberg News

Sourced & published by Henry Sapiecha


WESTERN AUSTRALIA MINING BOOM SENDS PROFITS SOARING

Wednesday, March 2nd, 2011

Booming WA economy

sends surplus soaring

through the $1bn mark

March 1, 2011
WA mining towns have become the place to buy property ... again.WA’s mining boom is raking in the money for the state government.

Western Australia’s burgeoning mining royalties have continued to strengthen the state’s economy, with the government sector recording a $1.1 billion surplus for the first half of the financial year.

The operating surplus of $1.1 billion for the first six months of 2010/11 is a huge turnaround from the $259 million operating deficit for the first half of 2009/10.

Treasurer Christian Porter said the WA Quarterly Financial Results report showed the state reaped nearly $12.3 billion worth of revenue for the first half of 2010/11.

That is up by $2.1 billion on the same period last financial year.

“The main driver of this increase was a rise of $964 million in mining royalties, partly due to the state government’s successful negotiations to remove the royalty concession on iron ore production,” Mr Porter said.

Increased taxes added an extra $509 million to revenue as well as the one-off payment of $350 million by BHP Billiton and Rio Tinto resulting from changes to the State Agreement Acts.

The report revealed that the property and retail sectors remained subdued in the first half of 2010/11, resulting in lower stamp and other transfer duties, which were down $89 million.

General government sector expenditure was also up $761 million, blowing out by 7.3 per cent because of higher grants spending and the government’s one-off payroll tax rebate.

However, Mr Porter said the December result showed that public sector salaries grew by only 4.9 per cent and reflected the government’s effort to rein in spending.

Public sector net debt also rose by $446 million in the first six months of 2010/11, in line with planned spending on major infrastructure.

Spending on public infrastructure was up $338 million from the same period in 2009/10 due to construction on the Southern Seawater desalination plant, Fiona Stanley Hospital and other health infrastructure projects.

Sourced & published by Henry Sapiecha

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