Mark Latham Commodity Equity Intelligence Service

Tuesday 2nd June 2015
Background Stories on www.commodityintelligence.com

News and Views:

Attached Files
    Macro
    Oil and Gas
    Alternative Energy
    Precious Metals
    Base Metals
    Steel, Iron Ore and Coal

    Macro

    Economy fret: plat gold heads for cycle lows.

    Image title
    Back to Top

    Saudi Budget Gap Seen at 20% by IMF as Spending Defies Oil Slump

    Saudi Arabia will post a budget deficit equal to 20 percent of economic output this year, as the government pursues spending plans in the face of an oil slump that has slashed revenue, the International Monetary Fund said.

    The fiscal support will help keep economic growth at about 3.5 percent this year, the fund said in an e-mailed statement. That will slow to 2.7 percent in 2016 “as government spending begins to adjust to the lower oil price environment,” it said. In the next few years, Saudi Arabia will need “a sizable fiscal policy consolidation,” the fund said.

    Saudi Arabia is the world’s biggest oil exporter, and posted large budget surpluses in recent years. The plunge into deficit comes as the kingdom fights wars in Yemen and Syria and pursues a stimulus plan to ward off political unrest. Meanwhile, crude prices have dropped about 40 percent from a year ago.

    The kingdom has been burning through its reserves at a record pace to finance government spending. That is likely to slow “as the government starts to issue debt to finance the deficit instead,” the IMF said.

    Saudi Arabia has the lowest level of gross government debt in the region at 1.6 percent of GDP last year, according to the IMF.

    http://www.bloomberg.com/news/articles/2015-06-01/saudi-fiscal-deficit-seen-at-20-of-gdp-in-2015-imf-says
    Back to Top

    Europe's top oil firms jointly call for carbon pricing

    Europe's top oil and gas companies urged governments around the world to introduce a pricing system for carbon emissions, as governments meet in Bonn, Germany, on Monday to work on a U.N. deal to fight climate change.

    Criticised for not doing enough to tackle climate change, the chief executives of BG Group, BP, Eni , Royal Dutch Shell, Statoil and France's Total said carbon pricing "would reduce uncertainty and encourage the most cost-effective ways of reducing carbon emissions widely."

    In a joint statement, the companies acknowledged "the current trend" in greenhouse gas emissions is too high to meet the United Nation's target for limiting global warming by no more than 2 degrees.

    "Our industry faces a challenge: we need to meet greater energy demand with less CO2. We are ready to meet that challenge and we are prepared to play our part," the leaders of the six companies said.

    "We firmly believe that carbon pricing will discourage high carbon options and reduce uncertainty that will help stimulate investments in the right low-carbon technologies and the right resources at the right pace."

    U.S. oil majors ExxonMobil and Chevron chose not to take part in the initiative, an industry source said.

    Climate Group, a non-profit advocacy, urged the world's biggest economies to respond positively to the initiative.

    "This is a symbolic moment, and demonstrates an important if not universal shift. It reflects a growing realisation within influential sectors of the fossil fuel industry of a need to adapt to both market and climate realities," Mark Kenber, Climate Group chief executive, said in a statement.

    http://www.reuters.com/article/2015/06/01/europe-carbon-un-idUSL1N0YN08L20150601
    Back to Top

    Argentine election candidates plan to unwind president's policies

    All three of the leading candidates in Argentina's election race plan to dismantle outgoing President Cristina Fernandez's web of currency and trade controls and clean up government finances to boost the stagnating economy.

    Fernandez has ramped up state intervention in the economy during her eight years in power, trying to shore up thinning currency reserves while financing generous subsidies and welfare programs.

    The economy grew quickly in the first years of her presidency but it is now teetering on the brink of recession. The currency has slumped on the black market and inflation is running at about 25 percent, according to private estimates.

    Economic advisers to the main candidates in the October election told Reuters they plan to liberalize the dollar exchange rate, cut taxes on lucrative grains exports, and move to plug a fiscal deficit and tame inflation.

    The consensus on the need for policy changes could further encourage investors who have driven a rally in Argentina's bond and equity markets this year and renewed interest from hedge funds in the country.

    The campaign teams differ, however, on the pace and depth of reform.

    Mauricio Macri, the pro-business opposition mayor of Buenos Aires who is running a close second place in polls, promises swift changes to win back investor confidence.

    Daniel Scioli, the frontrunner for the leftist ruling party's ticket, is more cautious as he targets votes from the Fernandez faithful as well as swing voters opposed to her policies.

    And third-placed Sergio Massa, who broke ranks with the president two years ago, pitches himself in the middle.

    On currency controls, Miguel Bein, an economic advisor to Scioli, said the first priority will be to ensure that dollars are available to importers as well as foreign companies who have been unable to repatriate profits.

    "I would not normalize [the currency market] in a year, but perhaps in two or three," Bein said.

    While Scioli talks of "gradualismo", or gradual change, Macri plans faster, more far-reaching reforms and says he would start to lift currency controls on his first day in office.

    "We would normalize flows immediately," said Federico Sturzenegger, a Macri advisor who gained repute turning around the previously loss-making Bank of Buenos Aires.

    Scioli and Massa both warn a hasty removal of controls would lead to a hemorrhaging of dollars and a spike in inflation that would hit the poor hardest.

    Macro's camp disagrees. "You won't need to protect the reserves. Everyone will sell their dollars if they believe the next president's economic program is credible," Sturzenegger said.

    Sturzenegger says inflation can be hauled down to 0-4 percent in three years. Bein says single figures are achievable by the end of a first Scioli term.

    http://www.reuters.com/article/2015/06/01/argentina-election-economy-idUSL5N0YD4J720150601
    Back to Top

    E.ON calls for 'timely' intervention to fix power market

    Germany must act swiftly to fix its fundamentally broken energy market and avoid the risk of a power capacity shortage, the chief of top utility E.ON said on Monday.

    Utility companies and politicians have clashed over whether compensation payments are needed by power producers, who have been hit hard by a crisis in the sector as coal and gas-fired power plants continue to be displaced by renewable sources.

    Utilities have called on the government to follow Britain and create a capacity market - which compensates utilities for keeping loss-making power plants online as backup.

    Utility companies say this would enable them to ensure supply and avert blackouts when there is a lull in variable wind or solar energy. The German government is opposed to funding otherwise unprofitable plants.

    "The question is should we heal the problem while it's still cheap, like the British did, or do you run it down the drain and when it's almost broken then you interfere," Johannes Teyssen said at the annual Eurelectric conference.

    He said the problems in the market risked discouraging investment in the sector.

    Britain has become the first country in Europe to set up a backup capacity market and governments pushing for renewable energy production are looking to London to prove it can work for generators as well as consumers.

    http://www.reuters.com/article/2015/06/01/electricity-europe-e-on-capacity-idUSL5N0YN1XC20150601
    Back to Top

    Peru elections seen fanning flames of mining disputes

    Mining conflicts in Peru, a top global minerals exporter, will likely heat up ahead of presidential and congressional elections next year as political outsiders whip up anti-mining sentiment, government officials and business leaders said.

    Protests from local community groups have derailed three mining projects worth $7 billion in the past five years, and threaten to hold up more.

    Carlos Galvez, head of Peru's main mining association, said opponents of mining projects can win votes in rural areas where poverty rates are high and many eke out a living as farmers.

    "Here everyone is anti. If you're anti-mining then you're in fashion," said Galvez, who leads the National Society of Mining, Petroleum and Energy.

    David Montoya, a cabinet official tasked with conflict prevention, accused protest leaders of feeding fears about pollution from Tia Maria in order to win the dispute and pave a political future for themselves. "They shut down discussion," he said.

    Several leading opponents of Tia Maria belong to an environmental party, Tierra y Libertad ("Land and Freedom"), that plans to run a candidate in the presidential election in April 2016. The group currently has no seats in Congress and is not seen as a leading contender.

    Polls show most Peruvians favor mining, which accounts for about 60 percent of the country's export earnings.

    However, projects can run up against local opposition and leftist politicians can boost their reputations by leading protests, said Roland Luque with the country's ombudsman office.

    Marco Arana, the head of Tierra y Libertad and its likely presidential candidate, said his party did not orchestrate protests against Tia Maria to promote itself.

    "That's a way to dismiss the legitimate concerns of farmers," Arana said. "What is true is that where there is conflict, candidates must make their positions clear ... that can prolong and deepen the conflict."

    He said opposition to Tia Maria and Conga, a gold mine peoject thwarted by protests in 2011, was strong in part because President Ollanta Humala had suggested when he was a candidate that he would oppose the projects. Humala ended up backing Tia Maria and Conga after his election.

    http://www.reuters.com/article/2015/06/01/peru-mining-conflicts-idUSL1N0YK1L020150601
    Back to Top

    Oil and Gas

    Naimi says Saudi oil strategy working, sees stronger demand

    Saudi Arabia's oil minister Ali al-Naimi said on Monday he expects oil demand to pick up in the second half of 2015 while supply decreases, in a sign that the kingdom's strategy of defending market share was working.

    The comment indicates Saudi Arabia will likely propose not to change output policy at producer group OPEC's meeting on Friday, although Naimi declined to speak directly on the issue.

    "The answer is yes," Naimi said in his first public comment upon arrival in Vienna, where the meeting will take place, when asked whether the strategy of defending market share through higher supplies and lower oil prices was working.

    "Demand is picking up. Good! Supply is slowing, right? That is a fact," he told reporters. "You can see that I'm not stressed, I'm happy," he said.

    Naimi was the key architect of OPEC's decision at its last meeting in November 2014 not to cut crude production despite a growing global glut, exacerbated by a boom in U.S. shale oil.

    Instead, OPEC kingpin Saudi Arabia raised production to win back market share and depress the output of higher-cost producers through lower oil prices, which fell from as much as $115 in June 2014 to as low as $46 in January 2015.

    However, prices have recovered in recent weeks to $60-$65 per barrel on the possibility of a major slowdown in U.S. oil output and signs of stronger global demand.

    Naimi said it would take time for the oil markets - still heavily oversupplied - to rebalance. "I don't have a crystal ball but it is (going) in the right direction," he said.

    He added he was not concerned by prospects of an increase in Iraqi or Iranian supplies later in the year.

    He said he doubted that millions of barrels of oil stored in recent months by traders and oil companies would be offered anew in the market, thus leading to a fresh drop in prices.

    He said one reason why that would not happen was the narrowing contango - a market structure in which future prices are higher than current prices, encouraging the storage of oil for resale at a profit in the future. The opposite structure, backwardation, has current prices higher than future prices.

    "This is not a good time to sell the surplus. So they (traders) have to keep it and as the contango goes down and they see the backwardation coming forward they will hang on to it. They are not going to dump it on the market," Naimi said.

    http://www.reuters.com/article/2015/06/01/opec-meeting-naimi-idUSL5N0YN3Z620150601
    Back to Top

    Israel's Delek Looks to Increase Stake in Cyprus Gas Field

    Israeli conglomerate Delek Group said on Monday it is in talks to buy an additional 19.9 percent stake of the offshore Cyprus gas field Aphrodite from its partner, Texas-based Noble Energy, for about $155 million.

    Noble has a 70 percent stake in the field, which is located in Block 12 off the Cypriot coast and estimated to contain 4.54 trillion cubic feet of natural gas. Delek, through two subsidiaries, holds the remaining 30 percent.

    The negotiations are at an early stage and any deal would need various regulatory approvals, Delek said.

    - See more at: http://www.rigzone.com/news/oil_gas/a/138864/Israels_Delek_Looks_to_Increase_Stake_in_Cyprus_Gas_Field?rss=true#sthash.JnvSqG5S.dpuf
    Back to Top

    Shale Oil Production in Bakken, Eagle Ford Flat in April: Platts' Bentek

    Production From These Two Prolific Shale Plays Still Up 20% Versus April 2014

    Oil production from key shale formations in North Dakota and Texas were mostly flat in April versus March, according to Bentek Energy, an analytics and forecasting unit of Platts, a leading global provider of energy, petrochemicals, metals and agriculture information.

    Oil production from the Eagle Ford shale basin in Texas continued its flat trajectory in April, growing only 1000 barrels per day (b/d) month on month. The marginal growth (less than 1% from the March levels), signifies the on-going impact resulting from the suppressed oil pricing environment. Bakken shale in North Dakota remained relatively flat in April, increasing about 2000 b/d, or less than 1%.

    In South Texas, Eagle Ford production averaged 1.6 million barrels per day in April, up 284,000 incremental barrels per day or nearly 22% higher than April 2014, said Sami Yahya, Bentek energy analyst. Additionally, crude oil production in the North Dakota section of the Bakken shale formation of the Williston Basin averaged 1.2 million b/d last month, Bentek data showed. This was 173,000 b/d higher than year ago levels.

    'The number of active rigs in the Eagle Ford basin currently stands at 116 rigs, down 27 rigs from the previous month. The efficiency gains noted in the region—such as the trimming of average drill time per well from 13 to 11 days between 4Q2014 and 1Q2015—have helped in preventing oil production decline so far. Nonetheless, we do expect to see declines, however marginal, in Eagle Ford oil production as soon as next month,' Yahya said.

    Yahya noted that oil production in the Bakken Basin, however, is expected to continue to grow but at a slower pace. 'Producers will likely continue to focus on efficiency gains and shift their rigs to the core areas, where initial production rates are more favorable.'

    Bentek analysis shows that from April 2014 to April 2015, total U.S. crude oil production has increased by nearly 1 million b/d.

    'Prices of both Eagle Ford and Bakken shale oil have been on an upward trajectory since mid-March and reached a new year high by the end of April,' said Jacqueline Puig, Platts associate editor of Americas crude.

    The Platts Eagle Ford Marker, a daily price assessment launched in October 2012 and reflecting the value of oil out of the Eagle Ford Shale formation in South Texas, was up 21% between January and April, with an average price of $54.37/b for the year. The marker has ranged between $46.22/b and $65.17/b since the beginning of this year.

    The price of oil out of the Bakken formation at Williston, North Dakota, was up 22% between January and April, with an average price of $47.55/b for the year, according to the Platts Bakken assessment. It has ranged between $38.43/b and $57.45/b since the beginning of January.

    http://www.oilvoice.com/n/Shale-Oil-Production-in-Bakken-Eagle-Ford-Flat-in-April-Platts-Bentek-Energy/58b9d71e1fca.aspx?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+OilvoiceHeadlines+%28OilVoice+Headlines%29
    Back to Top

    Continental reports increased Bakken production

    Continental Resources Inc. has announced that its production in the Bakken region has increased by four percent with 66 net completed operated and non-operated wells in the Middle Bakken and Three Forks formations during the first quarter of 2015.

    During this time, the company operated an average of 13 rigs in the region, down from the 19 operating at the end of 2014. The company’s production in the Bakken averaged 135,538 barrels of oil equivalent per day for the first quarter, an increase of 39 percent compared to the first quarter of 2014. Through the remainder of the year, based on current market conditions, Continental plans to average 10 operated rigs.

    To maximize returns for the upcoming year, the company will focus on core leasehold areas in Williams, McKenzie, Mountrail and Dunn counties. While concentrating on the core of the play, Continental will also be entering the first stage of full-field development with roughly 60 percent of the wells in its 2015 program drilled with 660-foot to 880-foot inter-well spacing. Wells completed in this year’s program will utilize 30-stage enhanced completions to further maximize production rates and recoverable reserves per well.

    In Williams and McKenzie counties, where Continental has its largest data set, enhanced completions are delivering an average 90-day production increase of roughly 40 percent for hybrid completions and 50 percent for slickwater completions when compared with its offset legacy wells.

    The company projects estimated ultimate recovery (EUR) uplifts in a range of 25 to 45 percent for enhanced completions, eventually expanding the drilling activity into Mountrail and Dunn counties where similar uplifts and EURs are expected. For the 2015 Bakken drilling program, Continental is aiming for an average EUR of approximately 800,000 Boe per well.

    In a statement, Continental Chairman and CEO Harold Hamm said, “Our teams have done an outstanding job making the necessary adjustments to achieve our 2015 goals by aligning capital expenditures with cash flow by mid-year, reducing expenses across the board, and maximizing returns on every dollar we spend. We’re proud of Continental’s early 2015 performance and discipline.”

    As planned, the company significantly reduced its completion crew count in the Bakken during the first quarter with three active crews compared to last year’s 10. Based on current market conditions, the company plans to maintain this level throughout the year.

    Currently, Continental has 115 gross operated Bakken wells drilled and waiting on first production, down from the 2014 year-end count of 122. By the end of this year, the company expects to have approximately 90 gross operated Bakken wells drilling and awaiting first production.

    http://bakken.com/news/id/239698/continental-reports-increased-bakken-production/?utm_content=bufferbd015&utm_medium=social&utm_source=plus.google.com&utm_campaign=buffer
    Back to Top

    Tourmaline Oil Corp. provides operations and financial update

    Tourmaline currently has six rigs active post-break-up and plans to activate the remaining 10 rigs in early July. Continued optimization of recently expanded facilities has allowed the Company to increase production through-put and allowed the Company to defer planned 2H 2015 facility expansions at Wild River and Spirit River, Alberta to 2016. The available capital created by this deferral will allow for the drilling of an incremental 18-20 horizontal wells to be drilled in the NEBC Montney and Alberta Deep Basin play areas during the second half of 2015. The significant reduction in drilling and completion costs realized over the past six months will also allow for the drilling of additional incremental wells within the existing 2015 capital program.

    The aforementioned incremental 2H 2015 drilling and the 2015 acquisitions completed to date are expected to yield a 2015 production exit of 200,000 boepd. Tourmaline is also raising 2016 production guidance to 215,000 boepd from the 205,000 boepd originally forecast. April 2015 production of approximately 153,500 boepd was ahead of the Company's Q2 2015 target of 151,500 boepd.

    Recent notification of unplanned maintenance by TCPL on the Edson, Alberta lateral, affecting production in late May and the first week of June and by Spectra on the T North B.C system, affecting production in the first three weeks of June, is expected to reduce Q2 average production to approximately 147,500 boepd. These interruptions are incremental to the 5,000 boepd provision for unscheduled down time that Tourmaline has built into the 2015 forecast.

    Full-year 2015 average production guidance remains unchanged at 164,500 boepd. Tourmaline currently has approximately 22,000 boepd of production shut-in either awaiting tie-in or facility access. The Company will provide revised 2H 2015 and 2016 capital and cash flow guidance in July with the release of the second quarter 2015 results.

    Tourmaline is pleased to announce the expansion of its credit facility to $1.80 billion, an increase of $200 million, which has been established with a syndicate of eight banks. Tourmaline also has an additional operating line of $50 million and a term loan of $250 million. The prevailing effective interest rate on the facility is 2.7%. The term of the credit facility has been increased from three years to four years and the existing covenants remain the same.

    A new provision has been included whereby, at the Company's request, up to an additional $500 million may be accessed under identical terms to the credit facility. The revision to the syndicated bank facility is expected to close in early June 2015. The total credit facility of $1.85 billion along with the term debt of $250 million brings the total credit capacity to $2.1 billion.

    http://www.oilvoice.com/n/Tourmaline-Oil-Corp-provides-operations-and-financial-update-in-advance-of-annual-meeting/ab6c32b3d0e2.aspx
    Back to Top

    Enterprise Products to buy midstream assets for $2.15 bln

    Pipeline company Enterprise Products Partners LP said it would buy member interests in EFS Midstream LLC from affiliates of Pioneer Natural Resources Co and Reliance Industries Ltd for $2.15 billion.

    The purchase price of this deal, which is expected to close in the third quarter, will be paid in two installments, Enterprise Products said on Monday.

    EFS Midstream was formed by affiliates of Pioneer Natural and Reliance Industries in June 2010 to construct, own and operate facilities providing gas gathering, treating, and transportation services in the Eagle Ford Shale in South Texas.

    http://www.reuters.com/article/2015/06/01/efs-midstream-llc-ma-enterprise-prodt-idUSL3N0YN43120150601
    Back to Top

    Alternative Energy

    Miner Molycorp misses $32.5 mln interest payment

    Miner Molycorp Inc said it missed a $32.5 million interest payment on its senior secured notes.

    Molycorp has a 30-day grace period to make the payment, after which it would be considered in default, the company said on Monday.

    Molycorp, which posted its thirteenth consecutive quarterly loss last month, had warned its annual report in March that it might not have enough money to stay afloat if its debt restructuring efforts failed.

    Missing the loan repayment deadline could lead to Molycorp filing for bankruptcy by the end of the month.

    http://www.reuters.com/article/2015/06/01/molycorp-debt-idUSL3N0YN45J20150601
    Attached Files
    Back to Top

    Iran plans to purchase 80 wind turbines - Mr Harsini

    Mr Iraj Harsini, director for engineering affairs of Renewable Energies Organization, said that Iran's Renewable Energies Organization plans to purchase 80 wind turbines to be installed mainly in the southeastern Sistan Balouchestan province.

    Mr Harsini said that Iran, enjoying a unique strategic position, could use win as a secure source of energy for generating electricity.

    He said that Sistan Balouchestan, East Azerbaijan, West Azerbaijan, Qazvin, Semnan and Khorasan are good places for the installation of wind turbines.

    Mr Harsini said that the wind turbines could not be installed in northern and southern coasts due to irregular winds.

    He said that "Using wind energy brings about energy security and will contribute to curbing fossil fuel consumption because that would reduce the country's dependence on the electricity generated by power plants which are mainly fed by gas and petroleum products."

    According to Mr Harsini, more than 200 wind turbines are operating in Iran.

    http://steelguru.com/power/iran-plans-to-purchase-80-wind-turbines-mr-harsini/425665#tag
    Back to Top

    Precious Metals

    AngloGold in exclusive talks with Newmont on Colorado mine – sources

    Newmont Mining is in exclusive talks with AngloGold Ashanti as it moves closer toward clinching a deal to buy the African miner's Cripple Creek & Victor gold mine in Colorado, according to two sources familiar with the matter. A sale could be finalised soon, and the price for the gold asset is likely to be well below the $1-billion that was initially speculated on by analysts, said the sources, who asked not to be named as they are not authorised to discuss the matter publicly. 

    The sources said that if South African-based AngloGold agrees to a sale, the asset is likely to fetch a price somewhere in the $700-million to $800-million range. One source said that the divestiture process, which is being led by BMO Capital Markets, may still result in the partial sale and not an outright sale of the entire asset. 

    Other players that had been vying for the Cripple Creek asset and that may still re-enter the fray if Newmont fails to strike a deal, are Canadian gold miners Iamgold, Kinross Gold, Goldcorp and Yamana Gold. 

    US-based gold and silver miner Hecla Mining had looked at the asset but decided against making a bid for it, Luke Russell, the company's VP for external affairs said. Cripple Creek & Victor is an openpit mine that produced some 211 000 oz of gold in 2014 and about 110 000 oz of silver. 

    AngloGold, the world's No 3 gold miner by production, said in April it was looking for a partner or buyer for the mine as it attempts to reduce its $3.1-billion debt pile by at least $1-billion over the next one to three years.

    http://www.miningweekly.com/article/anglogold-in-exclusive-talks-with-newmont-on-colorado-mine-sources-2015-06-02
    Back to Top

    Base Metals

    Seafloor copper extraction better than traditional mining — report

    Extracting copper from the seabed can be cause less disruptions to the environment and local communities than traditional mining. (Image courtesy of Nautilus Minerals)

    A fresh study commissioned by Canadian seafloor miner Nautilus Minerals (TSX:NUS) shows than extracting copper from the seabed causes less disruptions to the environment and local communities than traditional mining, the company said.

    The report, released by Earth Economics, compared Nautilus' copper, gold Solwara 1 project — located in the Bismark Sea, north of Papua New Guinea — to three traditional copper mines: Bingham Canyon (Utah, U.S.), Prominent Hill (South Australia, Australia) and Intag (a proposed project in Ecuador).

    Based on the analysis of each mine’s social and environmental impacts, the research concluded that seafloor mining has the potential to not only provide economic benefits within the communities nearest to the operations, but also to minimize the impact of copper mining.

    According to Nautilus Minerals, the study proves that the proposed Solwara 1 project would be "far superior" than existing and proposed terrestrial copper mines. “[Seabead mining] has also the potential to change the physical nature of the mining industry for the better," Nautilus' chief executive officer said in a statement.

    The Toronto-based company, the first yet not the only one with projects to mine the ocean floor, summarized the key finding of the reports as follows:

    http://www.mining.com/seafloor-copper-mining-has-less-social-and-environmental-impacts-than-open-cut-underground-report/?utm_source=twitterfeed&utm_medium=twitter
    Attached Files
    Back to Top

    Guinea bauxite miner CBG plans $1bn expansion to meet demand

    Guinea bauxite miner Compagnie des Bauxites de Guinée (CBG) plans a $1-billion expansion to increase its production capacity to 23.5-million tonnes per year by 2018 to respond to increased demand, the firm's director general said. 

    CBG is 51% owned by Halco Mining consortium, controlled by aluminium producer Alcoa, global miner Rio Tinto and Dadco Investments. 

    The company signed a contract with Abu Dhabi state-owned investment fund Mubadala and Dubai Aluminium (Dubal) in 2013 to supply ten-million tonnes of bauxite, starting with five-million tonnes from 2017. 

    Namory Conde said CBG had signed other supply deals which required it to invest heavily to expand its production capacity to meet the demand. "We have finalised a roundtable with financial partners. 

    The expansion project will cost around $1-billion," Conde said, but did not give details on how the funds will be secured. He added that financial advisers selected by the partners will visit the firm in June to conclude the project. 

    Conde said 2014 output was not adversely affected by the worst outbreak on record of an Ebola epidemic which began in Guinea and spread to several countries in the region, killing over 11 000 people. Although the outbreak curtailed mining activities in the region, Conde said CBG's operations in Kamsar, north of the capital Conakry, was spared the worst of the epidemic as production hit a record 15.2-million tonnes in 2014 compared with 15-million in 2013. 

    http://www.miningweekly.com/article/guinea-bauxite-miner-cbg-plans-1bn-expansion-to-meet-demand-2015-06-01
    Back to Top

    Steel, Iron Ore and Coal

    Vale to ship coal along Mozambique Nacala Corridor in Q3 -exec

    Brazilian miner Vale SA plans to start exporting coal along the Nacala rail and port corridor in Mozambique and Malawi in the third quarter after heavy rains damaged the rail line, the firm’s head of coal told Reuters on Friday.

    The Moatize mine remains on track to reach a run rate of 11 million tonnes of coal per year by mid-2016, Vale Executive Director of Coal and Fertilizers Roger Downey said on the sidelines of the Japan-Africa Mining & Resources Business Seminar in Tokyo. Current production is 7 million tonnes per year.

    Vale’s Moatize project has been beset by logistics issues, with the difficulty of constructing and expanding the Nacala railway and port holding back production increases at the mine. The rail line runs for 900 kilometers (560 miles)from the Moatize mine, through land-locked Malawi, to the port of Nacala on the Indian Ocean. Vale had previously said it expected to ship coal from the new port in the first quarter of 2015.

    Downey said the plan remained to increase production to 22 million tonnes of coal per year by 2017.

    In December, Vale sold a stake in the project to Japanese trader Mitsui & Co Ltd. Mitsui bought a just under 15 percent stake in the mine and 35 percent in the rail and port.

    http://www.miningne.ws/2015/06/01/vale-to-ship-coal-along-mozambique-nacala-corridor-in-q3-exec/
    Back to Top

    Datong Coal kicks off Yanggao low-CV coal fired power project

    Datong coal mine Group, one major thermal coal producer based in Shanxi province, kicked off construction of a low-CV coal based thermal power project in Yanggao county, northeast of the province, on May 30, the miner said on its website.

    The first phase project, with an investment of 3.3 billion yuan, involves two 350 MW generating unit of supercritical circulating fluidized bed, with efficient dedusting, desulfurization, denitration and sewage treatment devices.

    And, a coal-dedicated railway and closed storage yard will be put in place to realize ultra-low emissions, zero waste water discharge and pollution-free coal shipment and storing.

    According to the miner’s plan, the two generators will be put into full-load trial operation (168 hours) by the end of November 2016. It is expected to contribute annual electricity output at 3.5 TWh and annual heat supply at 3.26 million GJ.

    The project was approved by the Shanxi Development and Reform Commission on April 29, 2015, after gaining initial approval in August 2014 and passing feasibility study in September 2013.

    Datong Coal’s combined installed capacity under operation and construction had reached 14.01 GW by the end of 2014, which is able to burn 17 million tonnes of coal annually, said Chairman Zhang Youxi. Total installed capacity is expected to reach 15 GW by the end of 2015, he added.

    http://en.sxcoal.com/0/119842/DataShow.html
    Back to Top
    Commodity Intelligence LLP is Authorised and Regulated by the Financial Conduct Authority

    The material is based on information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. Opinions expressed are our current opinions as of the date appearing on this material only.

    Officers and employees, including persons involved in the preparation or issuance of this material may from time to time have "long" or "short" positions in the securities of companies mentioned herein. No part of this material may be redistributed without the prior written consent of Commodity Intelligence LLP.

    Company Incorporated in England and Wales, Partnership number OC344951 Registered address: Commodity Intelligence LLP The Wellsprings Wellsprings Brightwell-Cum-Sotwell Oxford OX10 0RN.

    Commodity Intelligence LLP is Authorised and Regulated by the Financial Conduct Authority.

    The material is based on information that we consider reliable, but we do not guarantee that it is accurate or complete, and it should not be relied on as such. Opinions expressed are our current opinions as of the date appearing on this material only.

    Officers and employees, including persons involved in the preparation or issuance of this material may from time to time have 'long' or 'short' positions in the securities of companies mentioned herein. No part of this material may be redistributed without the prior written consent of Commodity Intelligence LLP.

    © 2024 - Commodity Intelligence LLP