Archive for the ‘MOVERS & SHAKERS’ Category

Adani Carmichael: Australia’s largest coal mine free to proceed after Greg Hunt gives approval

Friday, October 16th, 2015

The nation’s largest coal mine has passed a significant hurdle after Environment Minister Greg Hunt approved it with “the strictest conditions in Australian history”, in a decision environment groups have declared “a disaster”.

Mr Hunt on Thursday said the Carmichael coal mine proposed by Indian mining giant Adani has been given the green light after the Federal Court in August set aside the previous approval.

Abbot Point coal terminal image www.www-globalcommodities.com

The project, which will produce up to 60 million tonnes of coal for export a year, has faced staunch opposition because its Abbot Point terminals are located close to the Great Barrier Reef.

Opponents have already flagged an intention to launch a legal challenge to the latest approval.

The government decision clears a regulatory hurdle, yet there are still questions over how the $16 billion project will be financed. National Australia Bank has said it will not fund the mine and other banks are being pressured to follow suit.

The approval will require $1 million funding for research programs to improve conservation of threatened species over 10 years, and strict groundwater monitoring and action triggers would protect Doongmabulla Springs, Mr Hunt said.

The Department of the Environment will monitor the mine and Adani must provide a groundwater management and monitoring plan.

Federal Labor resources spokesman Gary Gray welcomed the decision and said the project was of “great importance to Queensland and to Australia”.

Australian Environment Minister Greg Hunt, with Prime Minister Malcolm Turnbull image www.www-globalcommodities.com

Environment Minister Greg Hunt, with Prime Minister Malcolm Turnbull, announced on Thursday the mine would proceed. Photo: Alex Ellinghausen

The project still requires federal dredging approval and some state-based approvals.

The Mackay Conservation Group launched its Federal Court challenge in January, alleging greenhouse gas emissions from the mine, vulnerable species and Adani’s environmental track record had not been taken into account.

Mr Hunt said the court set aside the mine’s earlier approval at the request of the government.

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The case prompted the government to propose new laws that would prevent “vigilante” environment groups from challenging large developments in court.

Mackay Conservation Group coordinator Ellen Roberts said the approval “risks threatened species, precious ground water, the global climate and taxpayers’ money”.

“[Mr] Hunt is sacrificing threatened species … and precious ground water resources for the sake of a mine that simply does not stack up economically,” Ms Roberts said, adding the black throated finch would probably be pushed to extinction.

Equipment at the Abbot Point coal terminal in Queensland image www.www-globalcommodities.com

Equipment at the Abbot Point coal terminal in Queensland. Photo: Glenn Hunt

She said the conditions set by Mr Hunt did not adequately deal with the serious implications of the mine, which “can’t be offset”.

Greenpeace Australia Pacific campaigner Shani Tager said the mine would be “a complete disaster for the climate and the Great Barrier Reef”.”This project means more dredging in the Great Barrier Reef, more ships through its waters and more carbon emissions,” she said.

Adani welcomed the decision, saying the initial legal hurdle was a “technicality” prompted by a mistake by the Department of the Environment. In a statement, the company said it was always “confident in the soundness of the broader approvals, that the species involved had been protected by conditions, and that the technical error would be promptly rectified”. “Today’s announcement … makes clear that these concerns have been addressed, reflected in rigorous and painstaking conditions,” it said. The company intended to deliver mine, rail and port projects in Queensland creating 10,000 direct and indirect jobs, and $22 billion in taxes and royalties to be reinvested into community services, Adani said. The jobs figure has been disputed.

Former prime minister Tony Abbott with mining magnate Gautum Adani image www.www-globalcommodities.com

Former prime minister Tony Abbott with mining magnate Gautum Adani. Photo: Andrew Meares

Lobby group GetUp! on Thursday said its members had already helped fund legal action against the mine, and the organisation was “exploring the legal opportunities available to us” in light of the latest decision.

“This coal mine is the dumbest, most dangerous and uneconomic development in Australia,” senior campaigner Sam Regester said.

“We are calling on GetUp! members and the community to stand up and fight this mine again. We’ve beaten it before and we can beat it again.”

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Henry Sapiecha

 

Diavik Diamond Mine releases 2014 Sustainable Development report

Friday, April 3rd, 2015

The Diavik Diamond Mine, a joint venture with Dominion Diamond Corporation (Rio Tinto 60 per cent; Dominion Diamond Corporation 40 per cent) has released its 2014 Sustainable Development report.

The Diavik Diamond Mine, located on an island in a remote sub-arctic lake in the Northwest Territories, Canada, began production in 2003 and became a fully underground mining operation in 2012. The Diavik mine produces predominantly gem quality diamonds, destined for high end jewellery in all major consumer markets around the world.

Marc Cameron, president and chief operating officer of Diavik said “At Diavik, sustainable development is integrated into everything we do. Our operations provide benefits and opportunities for local communities, businesses, and governments and we work with all our stakeholders to deliver substantial and lasting benefits.”

Highlights of the 2014 Diavik sustainable development report include:

  • Safe mining and processing of over two million tonnes of ore for the second consecutive year asa fully underground mine;
  • An underground mining team that comprises sixty per cent northerners and forty per cent Aboriginals;
  • The highest percentage of northern spending since 2006. Of the C$251 million of northern spending, C$110 million was with northern Aboriginal businesses;
  • A comprehensive transportation contract awarded to Det’on Cho Logistics, a Yellowknives Dene First Nation company; and
  • Multiple energy management initiatives resulting in a reduction in greenhouse gas emissions.

In 2014 the development of a fourth pipe, known as A21, was approved, providing an important source of incremental supply for Diavik and economic and social benefits to the communities in which Diavik operates.

www.riotinto.com

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Henry Sapiecha

 

Indian billionaire wants to buy Australian gold mines

Friday, April 3rd, 2015

Indian billionaire wants to buy Aussie gold mines

Indian jewellery billionaire, Rajesh Mehta, is said to looking for Australian gold assets as several miners are in the process of shedding non-core operations to survive the current squeeze on the industry.

According to Financial Review, the tycoon said his company is ready to spend up to US$700 million on growing its presence Down Under, with mines being the primary focus.

Bangalore-based Rajesh Exports, India’s biggest jewellery maker, is already setting up a subsidiary in Melbourne, which will drive the hunt for stakes in the local gold sector, Mehta said.

Earlier this year, the company announced it would create a new division for offering gold loans. If it goes ahead Rajesh Exports would become the first large jewellery firm to provide bullion-backed loans in India

THE TOP TEN GOLD MINERS IN THE WORLD INFOGRAPHIC

Friday, February 27th, 2015

UPDATED: The world's top 10 gold producers

Number one Barrick Gold’s output drops in 2014, but fellow Canadian firm Agnico Eagle adds 30% to production ounces.

In 2014, preliminary estimated gold production by the top publicly-traded and non state-owned gold mining companies amounted to 30 Moz, in line with the 2013 totals.

Three out of the 10 miners suffered a decline in their attributable gold output while six of them achieved growth.

With 6.25 Moz of gold produced in 2014, Canada’s Barrick Gold Corp. (TSE:ABX) holds first place in global ranking, well ahead of its competitors.

Compared to 2013’s 7.17 Moz, Barrick’s gold output declined by 13%, mainly because of significant drop in output at its Cortez Mine (-33%), as well as a number of gold mines in Australia and USA which Barrick sold during the year.

UPDATED: The world's top 10 gold producers

Provisional attributable gold production by 10 leading companies in 2014/2013, Moz of gold except Gold Fields and Kinross, where Moz of equivalent gold used (data retrieved from corporate reports)

The US-based Newmont Mining Corporation (NYSE:NEM) ranks second in the global gold competition and produced about 4.85 Moz of the precious metal in 2014, a 4% decline on 2013 (5.07 Moz), due to a significant decrease of gold output at its North America’s operations (-16%) and decline at Newmont’s Australia/New Zealand operations (-6%).

Third-ranked AngloGold Ashanti Limited (NYSE:AU), reported its second consecutive growth in annual production. In 2014, company mined out 4.44 Moz of gold, or 8% more than 2013 totals (4.11 Moz).

Fourth-ranked Goldcorp Inc. (TSE:G) produced 2.87 Moz of gold in 2014, including discontinued operations, or 7.5% more than in 2013 (2.67 Moz). This increase was due to development of production at Penasquito (Mexico, +41%) and Pueblo Viejo (Dominican Republic, +36%) mines, and commissioning of Cerro Negro (Argentina) and Eleonore (Canada) mines.

Another Canadian company Kinross Gold Corporation (TSE:K), fifth in world gold production rankings, produced 2.71 Moz of gold equivalent in 2014. This volume is slightly exceeded the Kinross’ guidance of 2.5-2.7 Moz of gold equivalent and is 3% higher than 2013 production totals (2.63 Moz of gold equivalent).

Sixth in the ratings, Australian Newcrest Mining Limited (ASX:NCM), produced approximately 2.33 Moz of gold in 2014 calendar year, which is 1% lower than 2013 output (2.36 Moz).

South African Gold Fields Limited (NYSE:GFI), currently ranked seventh, produced 2.22 Moz of gold equivalent in 2014, or 10% higher than in 2013 (2.02 Moz). This increase is mainly due to the inclusion of a full year’s production from the Yilgarn South assets in 2014 compared with only one quarter in 2013.

In eighth place, Russian origin Polyus Gold International (LON: PGIL) produced 1.7 Moz of gold, a 3% increase from its 2013 tally of 1.65 Moz.

South Africa’s Sibanye Gold Limited (JSE: SGL & NYSE: SBGL), which split from Gold Fields in February 2013, enters at ninth position with its first full year output. In 2014, Sibanye produced 1.59 Moz of gold, or 11% more than in 2013 (1.43 Moz)* from its four Witwatersrand mines.

Canadian Agnico Eagle Mines Ltd (TSE:AEM) gold output jumped by staggering 30%, from 1.1 Moz in 2013, to 1.43 Moz in 2014, thanks to new mines coming on stream, including Goldex mine (Canada) and La India mine (Mexico), as well as acquisition of 50%-share in Canadian Malartic mine.

This allows Agnico Eagle to jump two positions up in the world rankings, from 12th to tenth, pushing Freeport-McMoRan Inc. (NYSE:FCX) out of the top 10. Production at US-based Freeport – primarily a copper producer and owner of the iconic Grasberg mine Indonesia – decreased by 3%, from 1.25 Moz in 2013, to 1.21 Moz in 2014.

Knocking on the door is Canada’s Yamana Gold (TSX:YRI) which and increased its gold output by 18%, from 1 Moz in 2013, to 1.18 Moz in 2014.

Note: For corporate attributable gold production, figures used are from actual official data or companies’ expectations for the 2014 calendar year. Wherever possible, calculated gold ounces are quoted instead of gold equivalent ounces. 

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Henry Sapiecha

Apple buying a third of world’s gold to meet demand for iWatch

Friday, February 27th, 2015

Apple buying a third of world’s gold to meet demand for iWatch

Technology giant Apple (NASDAQ:AAPL) may soon buy up one third of the world’s gold in order to meet the demands of its highly anticipated Apple Watch, according to reports.

Interest in the high-end model, featuring 18-karat gold casing, is picking up and the firm is already taking the necessary steps to have enough of them in stock. According to WSJ.com, Apple plans to start producing more than one million units per month in the second quarter of the year, anticipating high demand from Asian markets, mainly China.

Apple buying a third of world’s gold to meet demand for iWatch

Josh Centers, from TidBits, estimates that each gold watch will contain 2 troy ounces (62.2 grams) of gold. So, based on the estimated sales figure, he concludes that Apple will need 746 tons of gold a year, or about 30% of the world’s annual production.

His estimations — admittedly based on the Wall Street Journal predictions, not official figures — would mean that Apple may soon become a major player in the world’s luxury watch market, grabbing about half of it.

Move over Alrosa says Rio Tinto. We want to drive growth in India’s diamond sector

Saturday, December 20th, 2014

Bunder diamond jewellery collection. (Image courtesy of Rio Tinto Diamonds) www.www-globalcommodities.com

Mining giant Rio Tinto (LON:RIO) hinted Thursday its 30-year partnership with the Indian diamond industry makes it the best fit to drive the sector’s growth in the country.

Speaking at the World Diamond Conference in Delhi, Rio Tinto Diamonds managing director Jean-Marc Lieberherr said the company’s presence in the local industry was a decades-long journey that covers “everything” — from diamond manufacturing technology, to market development initiatives and “the first diamond discovery in India in decades.”

His statement comes barely a week after the news of Russian President Vladimir Putin aiming to secure a long-sought deal with India that would significantly boost exports of state-owned diamond miner Alrosa.

The Russian miner is expected to sign today a dozen deals with Indian buyers to increase direct deliveries to Asia’s third-largest economy, as financial capital Mumbai aspires to expand as a trading hub.

Rio said it remains bullish about the opportunities India has to offer, even though its flagship diamond project in the country, Bunder (monkey in Hindi), has run into permit hurdles.

Environmentalists have been raising concerns over potential threats to a tiger corridor about 100 km from the deposit in the in Madhya Pradesh region. So Rio is now working on securing environment and forest clearances to get its final mining plan approved.

“Development of our Bunder diamond project in Madhya Pradesh is a natural continuation of the partnership model and would put India among the top 10 diamond producing countries in the world,” Lieberherr said.

The touted project, discovered in 2004, is expected to generate about 30,000 jobs and produce up to 3 million carats a year, Rio has said.

Once operational, Bunder will be one of the only four diamond mines globally that are likely to be operational over the next decade.

The company also said that its Argyle Diamonds mine in Australia will be delivering increased volumes from 2015, which will have a direct impact on the Indian manufacturing sector.

project & construction finance banner image www.money-au.com (11)

Henry Sapiecha

Welcome to the world of Big Chocolate

Friday, December 19th, 2014

Olam’s purchase of Archer Daniels Midland’s cocoa processing business announced this week catapults the company into the premier league of chocolate. It also leaves the sector in the grip of three companies.

Three companies will dominate processing sector

Barry Callebaut, the Swiss-based cocoa and chocolate group, Cargill, the US privately owned commodities trader, and Olam’s newly expanded cocoa business will account for about 60 per cent of the world’s cocoa processing — once the deal with ADM is completed. It is the world of Big Chocolate.

dark chocolates image www.www-globalcommodities.com

The sector, which “grinds” cocoa beans into butter, powder and liquor used to make chocolate and flavourings for confectionery and desserts, has become increasingly concentrated over the past few decades due to the capital intensive nature of the business.

Many of the deals can be traced back to the merger between Belgian industrial chocolate maker Callebaut and Cacao Barry of France in 1996, which kick-started the sector’s consolidation.

At the start of the 1990s there were about 40 or so significant grinders. In just a decade that figure stood at nine, with ADM, Barry Callebaut and Cargill dominating the sector ever since. According to the United Nations Conference on Trade and Development, the “ABC” of cocoa accounted for 41 per cent of the world’s processing capacity in 2006.

ADM, along with Cargill, changed the nature of cocoa trading and processing in the 1990s when they bought their knowledge of grain trading into the sector.

Since then, the bigger companies have grown even more powerful by adding new capacity. In 2013, Barry Callebaut bought the processing business of Asian group Petra Foods, cementing its position at the top of the table.

Gerry Manley, Olam’s global head of cocoa, made clear that the company needed to be a leading player in processing to remain “strong” as the company announced its deal with ADM.

Arguably, the cocoa traders and processors are playing catch up with their customers — the chocolate makers. The sector has also seen rapid consolidation, with the top five manufacturers, including Mars, Mondelez and Nestlé, accounting for more than 65 per cent of total confectionery sales.

Chocolate Production Continues At Cadbury During Hostile Takeover Bids

The importance of global brands and rising research and development and marketing costs in an increasingly international and competitive market has pushed consolidation.

According to Ecobank, 70 per cent of the value of the chocolate bar goes to cocoa and chocolate companies reflecting investing R&D and marketing, 17 per cent goes to retailer, 7 per cent goes to intermediaries such as traders.

But as Big Chocolate gets bigger, cocoa farmers are finding themselves increasingly squeezed.

Growers only get 6 per cent of the chocolate bar, down from 16 per cent in 1980, says Edward George at Ecobank. “So little of the value goes into the raw material,” he says.

Leading cocoa and chocolate companies have now united in an action plan to try to support growers to encourage “sustainable” sources of cocoa beans. But, unless that value share changes or the whole pie gets bigger, farmers will find little incentive to continue growing cocoa.

The Commodities Note is an online commentary on the industry from the Financial Times

Henry Sapiecha

Rio, BHP on the verge of developing U.S. largest copper mine

Friday, December 5th, 2014

rio-bhp-getting-close-to-develop-u-s-largest-copper-mine image www.www-globalcommodities.com

Arizona’s lawmakers slipped Tuesday night a piece of legislation that would allow mining giants Rio Tinto (LON:RIO) and BHP Billiton (ASX:BHP) to jointly build a massive copper mine in the state as part of a deal with the U.S. Government.

According to Arizona Republic the bill —set to be passed before the end of the year— would allow Rio to acquire 2,400 acres of the federally protected Tonto National Forest in southeast Arizona in exchange for 5,000 acres in parcels scattered around the state.

The land land-swap bill was added into the 1,600-page National Defense Authorization Act, the annual defense appropriation legislation that must be passed each year, according to the report.

Both miners have said they expect operations at their Resolution Copper project —55%-45% owned by Rio and BHP— to start as early as 2020. But they have had to deal with legal hurdles and opposition by the San Carlos Apache Tribe and other southwestern nations, who claim the massive project would weaken the ground beneath their sacred Native American lands.

Analysts are confident this time the miners will get their wish granted.

Analysts are confident this time the miners will get their wish granted.

“This land swap has faced a long and bumpy road in Congress,” Caitlin Webber, a Bloomberg Intelligence analyst told The Daily Telegraph.

“Finally being tucked into this must-pass bill is the closest it’s been to enactment,” she added.

Resolution Copper, located in Arizona’s famous Copper Corridor, is expected to create 3,700 direct and indirect jobs and bring more than $6o billion in economic benefits to the state over its 66-year life. Rio and BHP estimate that output from the mine will meet 25% of the U.S. total demand, which will make it North America’s largest copper mine.

Learn more about the project:

BAUXITE PRODUCERS THE WORLD’S BIGGEST IS RIO-TINTO IN AUSTRALIA.INFO

Tuesday, October 28th, 2014

 

RioTintoAlcan red sign image www.www-globalcommodities.com 

 

 

Rio Tinto Alcan (RTA) has mined & shipped bauxite from Weipa since 1963. Their Weipa mines currently employ over 1,000 people & each year RTA pay $150m in salary/wages. Their local workforce increased by 54 staff last year.The RTA Weipa operation operates two continuous mines – East Weipa & Andoom – with two plants, 19km of railway to Weipa’s port, two stockpiles & two ship loaders.

RTA exported 26m tonnes of bauxite last year, a 14% increase on 2012.

BAUXITE DEMAND

Australia is the largest producer of bauxite in the world. In addition, Australia is the second largest bauxite resource in the world, after Guinea in Africa.

There are 5 active bauxite mines & 6 refineries across Australia, & Weipa – given the quality of its bauxite plus its prime port location so close to Asia – is the largest operation in the country.

World-wide demand for high quality bauxite is rising & particularly in Asia.

Chinese demand remains strong. Bauxite consumption is projected to increase by 6% to 7% per annum in coming decades.

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Henry Sapiecha

AUSTRALIA & BRAZIL TO CONTROL WORLDS IRON ORE PRODUCTION

Thursday, October 16th, 2014

Australia, Brazil to control 90% of global iron ore trade by 2020

australia-brazil-to-control-90-of-global-iron-ore-trade-by-2020 image www.www-globalcommodities.comDespite iron ore prices touching rock bottom, the top three producers have no plans to slowdown production. Quite the contrary.

Australia and Brazil, the two largest iron ore producing countries, are forecast to increase their combined share of global seaborne supply to 90% by 2020 as mining giants VALE (NYSE:VALE) and Rio Tinto (LON:RIO) continue to boost output and push higher-cost miners out of the market, research shows.

The two countries are expected to rise their joint share from 73% last year to 79% in 2015, Macquarie Group Ltd. notes in a commodities report sent out Wednesday.

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Oversupply, together with a slowdown in demand from top consumer China, has caused prices to plummet by almost 40% this year below $80 per ton

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Oversupply, together with a slowdown in demand from top consumer China, has caused prices to plummet by almost 40% this year below $80 per ton, their lowest level since 2009. And the top three iron miners have no plans to slowdown their plans to boost production.

Delivering its third quarter results today, Rio Tinto —the world’s second-largest producer of the steel-making ingredient— said iron-ore output increased 5% in the period. The miner added it aims to keep hiking production in order to win a greater share of the iron-ore export market.

“Our strategy of focussing on long-life, low-cost assets means we will continue to generate strong cash flows despite a lower price environment, resulting in materially increased and consistent cash returns to shareholders,” CEO Sam Walsh said in a statement.

He added the size of its operations in the remote northeast of Australia allows it to produce ore at a significantly lower cost than its competitors.

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Walsh also reiterated expectations that Rio would produce 295 million tons of iron ore globally this year, including output from its Canadian operations. In addition, he said the miner intends to sell around 5 million tons of extra ore from its own stockpiles.

BHP Billiton (ASX:BHP), the world’s largest mining company, said last week it will to lift its iron ore capacity by almost 30% without building any new mines and vowed to overtake Rio as the world’s most profitable producer of the steelmaking commodity.

And Vale, the world’s largest iron-ore mining company, has said it plans to boost output to 450 million tons by 2018 from 306 million last year.

If everything goes according to plan, global surplus of seaborne will more than triple to 163 million tons next year from 52 million this year, according to Goldman Sachs Group Inc. The bank projects an expansion to 245 million tons in 2016, 295 million tons in 2017 and 334 million tons in 2018.

Henry Sapiecha

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