TABLE OF CONTENTS
Global Aluminium Growth To Slow In 2012 - Norsk Hydro
Verde's Potash Revolution Comes Down To Cost, Scalability
BHP Billiton Likely to Keep Key Mine out of Potash Cartel
B2Gold Grows Jabali Gold Deposit, Eyes New Resource
Century Iron Mines Finalizes Quebec Venture Pacts with WISCO
Outotec Filters for Copper-Molybdenum Project in
Chile Copper Production Up in October
ArcelorMittal Formally Commences Iron Ore Production in Liberia
BHP Completes Acquisition of HWE Mining
Hunter Ports Plans $2.5bn Coal Terminal at Newcastle Port
Dannemora and Thyssenkrupp Sign Long-Term Supply Agreement
Norsk Hydro ASA sees growth in global aluminium demand slowing next year as a result of economic turbulence that is creating a weak market and pushing many industry players into the red .
Hydro, one of the world's top aluminium producers, said it saw demand for primary aluminium outside China rising by 3-5 percent in 2012, after total demand growth slowed to 7 percent in 2011 from a 19 percent rise a year earlier. Europe's sovereign debt crisis has curbed aluminium demand on parts of the continent and it could take some time before demand improves, the firm's Chief Executive Svein Richard Brandtzaeg said at a capital markets event recently.
"In Europe, the uncertainty relating to the sovereign debt crisis has impacted our customers," he said. "It may take some time before we can see improvement in Europe."
The aluminium sector has been especially weak in the fourth quarter as customers cut inventories amid the economic turmoil.
However, Chinese producers are rumoured to have curtailed yearly production by about 1.5 million tonnes, Hydro's Head of energy and corporate business development Arvid Moss said, which could relieve some of the industry's overcapacity problems.
Verde's Potash Revolution Comes Down To Cost, Scalability
Verde Potash says it can produce KCl from an atypical rock source, a development that, if economical, could upturn potash markets.
A technology with the potential to shake-up the potash fertilizer industry took a step closer to reality recently as Verde Potash reported it had produced potassium chloride (KCl), a typical potash fertilizer, at a pilot plant from non-traditional but potassium-rich source rock, of which it controls some billion tonnes in Brazil.
Potash fertilizers usually come from salts, a mining industry that is dominated by Canpotex, a producer-owned potash cartel in Canada, and the Belorussian Potash Company (BPC). Toronto head-quartered Verde, however, using a proprietary method it calls the Cambridge process looks to wrench the dependence of Brazilian farmers away from such entrenched producers. Verde says its resources could support production as high as six million tonnes KCl a year - just about how much of the stuff Brazil imports. This KCl production plan is part of Verde's two prong strategy which also involves making thermopotash - a novel kind of fertilizer that it also hopes Brazilian farmers may adopt.
"We are still early in this process, but if and when Verde is able to demonstrate the economic viability of its Cambridge process, it could have a significant impact on incumbent potash producers (i.e., PotashCorp, Uralkali, Mosaic, etc.) and the potash market overall," Mackie Research analyst Jaret Anderson told Mineweb. "Verde has referenced the potential for a six million tonne per year KCl operation at its Cerrado Verde site in Brazil..."
The key is cost. Mineweb repports that analysts agreed that Verde's masterplan for a full scale and victorious assault on the Brazilian potash market rides on the cost of production and how easily it can scale-up the Cambridge process to lofty production counted in the millions of tonnes per year. As it stands, the answer to the question of cost is unknown. But it will soon be fleshed out in a scoping study Verde hopes to release in early 2012.
BHP Billiton Ltd. BHP-N is set to disrupt Canpotex Ltd., the world’s biggest potash exporter by volume, by keeping its big new Jansen mine in Saskatchewan out of the marketing cartel.
The Anglo-Australian miner’s relationship with the cartel was a bone of contention in its abortive bid last year for Potash Corp. of Saskatchewan Inc. POT-T, the biggest of Canpotex’s three members.
“We believe in taking the price of the day, and so the likelihood is that we would not market through Canpotex,” BHP executive Tim Cutt told the Financial Times. “We’d market in a very consistent manner with the rest of our commodities.”
Canpotex and a similar arrangement among Russian and Belarussian producers control the bulk of world shipments of the food nutrient.
“If you have a large producer that is outside Canpotex, you could see a much different pricing dynamic, depending on how demand is,” said Joel Jackson, an analyst at BMO Nesbitt Burns Inc.
BHP initially said that it would pull Potash Corp. out of Canpotex but, as a political backlash against the bid intensified, it agreed to remain for at least a limited period. Ottawa eventually blocked the $39-billion deal last November on the grounds that it would not provide a “net benefit” to Canada.
Despite that setback, BHP is set to become a leading force in the potash industry, and has repaired relations with the province of Saskatchewan, which led the campaign against the Potash Corp. deal.
“We decided that once we got past the bid, we were still committed to being here,” Mr. Cutt said. “The government respected that, and we’ve had a very positive relationship moving forward.” The company recently moved its Canadian head office from Vancouver to Saskatoon, the commercial centre of Saskatchewan.
According to Saskatchewan energy and resources ministry, BHP has 56 potash exploration permits covering almost 1.44 million hectares, the most extensive land holdings of any company.
Its Jansen project, east of Saskatoon, is expected to receive a final go-ahead next year, with production starting in 2015. BHP has already earmarked $1.2-billion for the project, and has started work on two mine shafts.
It is also evaluating two other projects, known as Melville and Young. If all three are brought to production, BHP’s capacity could reach 16 million tonnes a year.
Potash Corp. has an annual capacity of 11.3 million tonnes, but is two-thirds through an expansion plan that would raise capacity to 17.1 million tonnes in 2015.
Asked to comment on BHP’s non-participation in Canpotex, Potash Corp. responded, “That question is a long way off.”
Mr. Jackson of BMO said that BHP could come under political pressure to reconsider its position toward Canpotex, given that the province’s royalty revenues from potash are based more on price than volume.
“What we’re doing now is developing a business that looks like the one we described during the bid – headquartered in Saskatoon, investing in Jansen and other growth projects, involved in the community and preparing to market its own product,” a BHP spokesman said.
In its latest batch of drilling results from a new mining target in Nicaragua B2Gold cut a series of notable gold intercepts as it moves to update resources and commence open pit mining next year.
B2Gold reported on a few dozen drillholes from the Jabali
vein system, nine kilometers east of B2Gold's La Libertad gold mine. The best
intercepts included as much as 7 meters, true width, @ 26.87 g/t Au and 11
metres @ 13.52 g/t gold.
"These results indicate that the Jabali Zones...continue to increase in size,"
B2Gold stated, suggesting that in its push to update resource in March 2012 it
could grow some ounces. So far B2Gold has outlined about a half million ounces @
4.58 g/t gold at Jabali.
Any resource increase bodes well for B2Gold's Jabali mining plans, which include open-pit mining starting late next year. "This higher grade ore can be trucked to La Libertad mill for processing potentially resulting in higher annual gold production in the near term and going forward," B2Gold said.
Century Iron Mines has finalized its joint venture agreement with WISCO International Resources, a unit of Wuhan Iron & Steel.
Under the definitive joint venture agreement, WISCO Resources will invest an aggregate of CAD 120 million in exchange for a 40% stake in Century's Duncan Lake, Attikamagen and Sunny Lake projects in Quebec.
Mr Sandy Chim president & CEO of Century Iron Mines said “Our successful conclusion of the negotiations with WISCO Resources enables us to expand and expedite the exploration of our Duncan Lake, Attikamagen and Sunny Lake projects with WISCO as our key strategic partner. The funding of these projects under the joint venture agreements will enable us to execute on our significant exploration plans for each of these projects.”
In late August, the company said that WISCO would invest in three joint ventures to explore and develop the company’s Duncan Lake, Attikamagen and Sunny Lake projects.
Sunny Lake is currently 100% owned by Century, while it has a 51% interest with Augyva Mining Resources at Duncan Lake, with an option to increase to 65%.
Century Iron is an emerging iron ore exploration and development company, with iron ore assets located in Northern Quebec and Labrador.
Outotec Filters for Copper-Molybdenum Project in Chile
Outotec has signed a €26 million contract with Quadra FNX Mining Ltd for the design and delivery of a process solution for the new copper-molybdenum concentrator in Sierra Gorda in northern Chile.
Deliveries of Outotec TankCell e300 flotation cells, concentrate and tailings thickeners as well as filters are scheduled to be completed during 2012.
Outotec will also provide installation, commissioning and start-up services for the delivered equipment.
Chilean government statistics revealed that Chile's copper production in October grew 1% when compared to the October 2010 level to 466,822 tonnes. This output is 6.9% higher than the September level.
Chile is the world's biggest producer of copper accounting for roughly a third of the world's annual copper supply. So production from the country is extremely important to the global copper market as embodied by the copper ETF JJC, according to the National Statistics Institute, but while the MoM numbers were encouraging, copper output from the country is still down YoY in the January to October period by 3.9% to 4,282,357 tonnes.
The Andean country has struggled in recent years to keep growing the absolute level of its copper output. That can be blamed on the aging of Chile's mines forcing mining companies to mine lower grade ores at a much higher per tonne cost.
It is hoped that production will increase in the years ahead as existing mines are expanded and new mines such as the Esperanza project being developed by Antofagasta.
Nonetheless, while Chinese demand for copper seems robust constraints on supply have been a significant factor keeping prices of the key industrial metal supported. Too much production coming online too fast could paradoxically hurt the copper group by creating at least a short term glut of the metal so any weakness from Chile may be a positive for the producers and JJC itself.
ArcelorMittal, the world's largest steel and mining company, recently commenced commercial iron ore production from its mining operations in Liberia. The launch of commercial mining operations represents an important milestone in the recovery of Liberia's economy, which was devastated by 14 years of civil war. ArcelorMittal first entered this market in 2005, realising the potential of the country's rich mineral resources to facilitate repair of the country's industrial and social infrastructure.
Developing a sustainable mining operation in Liberia has necessitated finding solutions to a number of challenges. To date, ArcelorMittal invested 800 million USD in repairing roads and infrastructure, whilst also supporting the need for education and healthcare amongst the local population, through projects including the reconstruction of a 240 km railway, port, hospital and school facilities - developments that will serve local communities as well as enabling the iron ore mining operation to operate efficiently. By 2012, ArcelorMittal aims to ship four million tonnes of iron ore from Liberia each year. A first test shipment successfully took place last week.
Another key element of the company's investment in Liberia was the launch, in January 2010, of the Corporate Responsibility (CR) Forum. Created in partnership with the German international development body Deutsche Gesellschaft Fur Internationale Zusammenarbeit (GIZ), the role of the CR Forum is to promote effective corporate citizenship and good business practice amongst both domestic Liberian companies and other multinationals planning to invest in the country. The creation of this body, which is also chaired by ArcelorMittal, has received credit from campaign groups including the UK-based corporate watchdog Global Witness, underlining the credibility and transparency of the company's strategy.
As part of its wider commitment to minimising the industry's environmental impact, ArcelorMittal also commissioned a team of local and international experts and NGOs to conduct a full biodiversity study in Liberia's Nimba mountain range. It has been the most comprehensive environmental study ever undertaken in Liberia, ensuring that iron ore mining operations do not come at an unacceptable cost to the local ecosystem.
ArcelorMittal also became a member of Multi-Stakeholders Steering Group of the Liberia Extractive Industries Transparency Initiative (EITI) in 2009, having supported this initiative since 2007.
BHP Billiton has completed its acquisition of HWE Mining Subsidiaries from Leighton Holdings.
The acquisition relates to the mining equipment and related assets that service the Area C,
Yandi and Orebody 23/25 operations. These operations collectively account for almost 70 percent of Western Australia Iron Ore’s total material movement.
BHP Billiton President Iron Ore, Ian Ashby said: “With the legal and due diligence processes now complete, our primary focus moves to ensuring the integration of the highly skilled workforce into the BHP Billiton business in a safe and efficient manner.”
The acquisition is consistent with BHP Billiton’s previously stated intention to move the Western Australia Iron Ore business from contract mining to owner-operator mining.
German-based BASF has received approval for the formation of a new mining venture, BASF Hock Mining Chemical (China) Company Limited, according to a press release.
The company will continue Hock’s existing business activities in the field of chemical injection and cavity filling products for coal mining and other underground applications.
While injection technology has been present in European markets such as Germany for the past 30 years, it was only introduced in China 10 years ago. Through chemical injection and cavity filling, substances such as polyurethanes or other construction chemicals can be introduced into fractured rock, sands, gravel or coal to avoid water or gas accumulation and stabilize cavities in tunnels.
"Both BASF and Hock share the same philosophy on developing high quality safety measures for mining and underground construction projects. I am happy to stay and contribute to the new company,” said Mr. Jingsheng Cui, general manager of BASF Hock Mining Chemical (China) Company Limited and founder of Hock. "With this new joint venture we can match local and international expertise to better serve mining customers in this important growing market."
Hunter Ports Plans $2.5bn Coal Terminal at Newcastle Port
A coal terminal proposed by mining entrepreneur Nathan Tinkler will nearly double current shipments from Australia's Newcastle port, the world's largest coal export harbor, Tinkler's Hunter Ports vehicle said recently.
Unveiling the group's plan for a $2.5 billion coal terminal on the south bank of the Hunter River, Hunter Ports managing director Steve van Barneveld said the plan would cut disruption to residential areas of Newcastle by re-routing a rail line along industrial land.
"Our concept will deliver a massive boost to local jobs and the local economy," he said.
Newcastle is the world's biggest coal export harbor, shipping 108.3 million tonnes of coal during the year to the end of June 2011. Development plans now approaching fruition would see its capacity rise to 211m tonnes in 2015, and the Hunter Ports project would add a further 100m tonnes beyond that.
Earlier this month, Mr Tinkler took control of coking and thermal coal developer Aston Resources through a boardroom shakeup that saw him appointed as chairman of the company.
Aston plans to export its coal through Newcastle, but had initial difficulties getting its full allocation through the two existing coal terminals, which are both owned by consortia of mining companies.
Port Waratah Coal Services, which operates the largest terminal facilities, is dominated by Xstrata and Rio Tinto, while Newcastle Coal Infrastructure Group, which is developing a second site, has BHP Billiton as its largest shareholder.
Dannemora Mineral has signed a five-year off-take agreement with ThyssenKrupp Steel Europe AG to supply at least 200,000 tons av iron ore every year, with an option of supplying up to 300 000 tons. Deliveries are planned to start in the second quarter of 2012, with shipments to Rotterdam, where it will be forwarded for consumption at Hüttenwerke Krupp Mannesmann.
"This agreement with ThyssenKrupp and Hüttenwerke Krupp Mannesmann is yet another important step towards the start of production at the Dannemora iron ore mine. Along with the agreement with Salzgitter, this means that we have now signed agreements for more than one third of our iron ore in full production. I t also means that we have secured our sales for all of our production in 2012," says Staffan Bennerdt, CEO.
McIlvaine Company
Northfield, IL 60093-2743
Tel: 847-784-0012; Fax: 847-784-0061
E-mail: editor@mcilvainecompany.com
Web site: www.mcilvainecompany.com