Short news minerals
September 14, 2012 Category Automotive Metals & Minerals, Short news minerals
- Calvin Zhu, former Vice President of Hanlong Mining pleaded guilty in an Australian court to three charges of insider trading. He admitted making AUD1.3 million trading in shares while working for three different employers, including Hanlong, after acquiring inside information about proposed takeovers. They included details related to Australian iron ore explorer Sundance Resources and uranium explorer Bannerman, which were both targets of Hanlong.
- Huaneng Power International, the listed unit of China’s biggest power producer, China Huaneng Group, forecast higher power demand and lower coal prices in the year’s second half, after posting an 87.7% year-on-year jump in net profit in the first six months to CNY2.12 billion. Revenue rose 4.9% to CNY67.18 billion, as a 1.46% year-on-year fall in power output due to the economic slowdown was more than offset by a 6.5% rise in the average power selling price that took effect on December 1.
- Mongolia Energy, the controversial coal miner controlled by tycoons Cheng Yu-tung and Simon Lo, posted a HKD4.83 billion net loss for the financial year, much wider than the HKD310.75 million it lost the previous financial year. The company switched the location of its planned coal processing plant from Mongolia to Xinjiang, where its sole customer, Bayi Iron and Steel, is located. The plant would not be ready for at least a year. In late 2009, then Chief Executive James Schaeffer said the company aimed to start coal production in 2010 with a target of 3 million tons for 2011 and 8 million tons for 2012. It sold 17,350 tons for HKD6.2 million last year.
- China will increase its iron ore imports from foreign independent miners to diversify its supply channels. The ratio of China’s iron ore imports from independent miners will rise to 50% of total imports in the following years, said Wang Xiaoqi, Vice Chairman of the China Iron and Steel Association (CISA). In 2011, up to 60% of China’s iron ore imports came from the three giant miners — Rio Tinto , Vale and BHP Billiton.
- CITIC Pacific, the Chinese company building the world’s largest magnetite iron ore mine, said it has delayed production for at least the second time, hindered by Australia’s safety standards and labor shortages. Trial production of the Sino Iron project will now start in November. The mine, being built by China Metallurgical Group Corp, was originally slated to begin output in the first half of 2011. The total cost for the mine will be less than USD10 billion, after costs rose 35% more than expected. Australian mining magnate Clive Palmer sold the rights to the project to CITIC Pacific in 2007 for USD200 million.
- China’s coal industry is facing a severe downturn as the national economic slowdown has led to a slump in coal demand and prices. Inner Mongolia, which benefited from the rapid development of its coal industry in the past few years, reported that the Inner Mongolia Chamber of Commerce launched its energy branch, which is responsible for providing the region’s energy companies with a platform to support their development. Chairman Liu Yuchuan said the platform will include a coal port in Caofeidian, Hebei province, and an integrated coal trading system. Coal inventories in Qinhuangdao port, the world’s largest coal-trading port, have been rising.
- The collapse of China’s steel market has reverberated around the world: benchmark prices for iron ore, a key steelmaking ingredient, have dropped to three-year lows of USD89 a ton, down 24% in the past month alone. China accounts for about 60% of global imports of iron ore, a market worth more than USD100 billion annually worldwide. Global mining houses are scaling back investment plans because of slowing Chinese demand.
- Yancoal Australia said it was considering all options to reduce costs in response to lower coal prices. In its 2012 first half-year results presentation, Yancoal said it would review its expansion plans across all mines to ensure that the appropriate capital expenditure discipline is maintained.
- Miners at the Chinese-owned Collum coal mine in Zambia have killed the Chinese mine manager, Wu Shengzai, 50, in a pay dispute. The miners were protesting against what they said was the management’s failure to pay a minimum wage of USD320 a month. Last year, Chinese managers at the Collum mine fired on workers. They were charged with attempted murder, but the charges were dropped.
- China Shenhua Energy’s plans to invest more than CNY10 billion in coal rail projects is a sign the rail sector is being liberalized. The company already invested in the Jitong railway in Inner Mongolia. Shenhua had a plan to increase its coal railway network from 1,600 kilometers at present to 3,170 km by 2015. On August 16, another Hong Kong-listed coal company, China Coal Energy, announced it had formed a joint venture with the Ministry of Railways (MOR) and 14 other investors to invest in and build a 1,837 km coal railway from Inner Mongolia to central China, with an investment of CNY154 billion.
- China Shenhua Energy, the listed flagship of China’s largest coal producer, reported a 17.2% rise in net profit in the first half, thanks to higher sales and production volume. Profit attributable to shareholders was CNY26.74 billion, while revenue rose 20.1% year-on-year to CNY121.47 billion in the first half. The company said it produced 155.8 million tons of commercial coal and sold 222.1 million tons, a year-on-year growth of 11% and 16.2% respectively.
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