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Rio Tinto seeking price premium for iron ore heading to China

Source: Xinhua     Citation: Xinhua      Date: December 20, 2016

SYDNEY, Dec. 20 (Xinhua) -- Rio Tinto Ltd.`s seeking of a new pricing mechanism for its iron ore with Chinese customers is justified given the dramatic lift in coking coal prices, chief executive Jean-Sebastian Jacques believes.

Rio Tinto is currently in negotiations with steel makers Baosteel Group and Shougang Group over a new pricing mechanism for its Australian ore, however the key customers haven`t yet agreed to the terms.

Speaking via video link from Singapore to a Chinese media delegation visiting Rio`s iron ore operations center in Perth, Jacques defended the company`s position as steel makers manage the burden of higher coking coal prices "very carefully." Coking coal has jumped 300 percent to more than 300 U.S. dollars over the past 12-months.

"They are looking for high quality iron ore products, and therefore the demand for high quality iron ore products is very high," Jacques said.

"What Rio Tinto is doing is to say for those specific products where the supply/demand balance is unbalanced, and then the price mechanism should kick in.

"Therefore our product -- because it`s helping with the managing of the blast furnace -- should attract a premium."

It`s a risky proposition given Brazilian giant Vale`s new S11D mine which received Brazilian regulatory approval earlier in December will ship directly to China and the sale of its 46.6 percent stake in the tier one Simandou asset in Guinea to major shareholder Chinalco Mining Corporation International.

Unlike Vale, Chinalco won`t become a direct competitor into the Chinese market, Jacques believes, given financing for the project was unable to be secured in the two years prior to offloading the "world class" asset, even with some Chinese partners to pursue potential options.

Jacques is confident Rio`s relationship with Chinese steel producers that`s been forged since the 1970s will also be its advantage, remembering November`s "pretty emotional" function in Beijing celebrating the partnership with those who signed the early contracts for the rust colored dirt.

"You could see the body language and the emotion, it was absolutely fantastic," Jacques said.

"That`s really a testament of the quality of the partnership between China and Rio Tinto."

Instead, maintenance of the "value over volume" strategy and the optimization of free cash flow in an ultra-competitive and over supplied iron ore market is top priority given the unsustainable 86 percent year-to-date surge of benchmark prices to just over 81 U.S. dollars per ton.

The high prices are allowing marginal operations to come back into the system, impacting the pricing "twilight zone" where the supply-demand relationship is so close, any news whether good or bad will move the market quite quickly, Jacques said.

"The only thing that can influence (Rio Tinto) is the quality of our business which is about being low cost, providing the right quality produce, and managing the relationship with our customers in China in a very careful manner that is a win-win partnership," Jacques said, commenting on how he is approaching the high price environment.

"That`s the only thing we can do, and that`s what we`re doing at this point in time."

Thus, progress on Rio`s productivity drive to cut 5 billion U.S. dollars of costs out of the business is well underway.

Train haulage operations have cut cycle times from 42 hours to 35 with minor improvements across all sectors, such as the half-second improvement per two-car dumping cycle at Cape Lambert`s train unloaders, for a 20 - 25 minutes improvement per 236-car train. Dumping constitutes 10 percent of a train`s cycle, a large time improvement for the 35 trains that pass through Rio`s Pilbara port operations each day.

Further advances in automation remote operation across the Pilbara is also improving efficiency by removing labor factors that impact production and transport.

Rio`s AutoHaul program has also entered its next testing phase after suffering setbacks earlier this year. Twenty AutoHaul trains are currently operating on the network under driver supervision, with full program rollout expected in 2018.

It`s all managed from Rio`s iron ore operations center in Perth where the progression from remote operation to automation of what was previously only possible in science fiction films is becoming ever more probable over the next two decades.

These operational gains makes Rio the "best partner for China" across the company`s entire portfolio, including bauxite and diamonds, Jacques said, trumpeting the giant`s recently approved 10-year strategy which focuses on the Chinese market.

"We believe that Rio Tinto is the best partner for China on the back of the quality assets, the quality of the long term partnership and the quality of the technology we`re deploying," Jacques said.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2017 will be held at Meijiang Convention and Exhibition Center in Tianjin China in September23-25, 2017. We invite you to join the event and to celebrate the 19^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2017, please visit: m.balanzskin.com.

China`s crude coal average daily output sets record high in Nov

Source: Xinhua     Citation: Xinhua      Date: December 16, 2016

BEIJING, Dec. 15 (Xinhua) -- China`s crude coal output was the highest of the year in November as the coal shortage started to ease, official data showed Thursday.

Average daily output reached 10.3 million tonnes in November, up by 1.2 million tonnes from October and surpassing ten million tonnes for the first time this year, according to the National Bureau of Statistics (NBS).

Total crude coal output reached 310 million tonnes in November, down 5.1 percent year on year. The decline rate was 6.9 percentage points lower than a month earlier.

Coal prices ended a six-month long rising streak driven by supply cuts and rising demands in mid November, with a benchmark coal price falling by about 33 yuan (4.75 U.S. dollars) per tonne in November.

Meanwhile, above-scale industrial crude oil narrowed its output drop in November, while natural gas production reversed previous drops and started to grow.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2017 will be held at Meijiang Convention and Exhibition Center in Tianjin China in September 2017. We invite you to join the event and to celebrate the 19^th anniversary of CHINA MINING with us. For more information about CHINA MINING 2017, please visit: m.balanzskin.com.

Baogang to provide technical support for India`s steel giant

Source: www.chinamining.org     Citation: www.chinadaily.com.cn      Date: November 29, 2016

China will open up more industries, including oil drilling and defense technology, to private investors to cope with slowing private investment growth, Xinhua-run Economic Information Daily reported Monday. 

The government will also lure private investment into strategic emerging industries by setting up industrial investment funds, according to the report. 

Nur Bekri, head of the National Energy Administration, told the newspaper that the reform plan of the oil and gas industry had gained government approval and would soon be released. The sector will open its competitive operations to private investment as per this year`s government work report.

"Access restriction is one of the major factors that constrain China`s private investment, especially in the energy and military industries," said Li Wei, head of the Development Research Center of the State Council.

Private investment is even encouraged in the defense science and technology industries, including China`s Chang`e-4 lunar probe mission, which aims to be mankind`s first soft landing on the far side of the moon in around 2018.

"Widening access for private capital to enter these industries, together with improved regulation, will both boost development efficiency and stimulate private investment growth," Li said

Growth in private investment slowed to 3.2 percent year on year in 2016, 6.9 percentage points lower than in 2015, due to poor performance in manufacturing, service and mining sectors as well as continued price decline of investment in fixed assets.

But the downward trend was reversed after the government moved to spur growth, with private investment recording growth of 6.7 percent in the first two months of the year.

China`s local governments are also working to attract private capital into cash-strapped strategic emerging industries, which have found it difficult to get bank loans as many start-ups are yet to turn patents and intellectual property into profits

As these industries have now become major growth engines in many regions, local governments are considering ways of luring private investment such as public-private partnerships and industrial investment funds, according to the report.

Government-led industrial investment funds are expected to play a guiding role in leading private capitals into the strategic emerging industries, it said.

China aims to increase output of strategic emerging industries to account for 15 percent of GDP by 2020.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2017 will be held at Meijiang Convention and Exhibition Center in Tianjin China in September23-25, 2017. We invite you to join the event and to celebrate the 19^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2017, please visit:

China`s crude oil stocks down 1.9 percent

Source: www.chinamining.org         Citation: Xinhua      Date: November 29, 2016

China`s commercial crude oil inventories declined 1.9 percent month-on-month in October as crude imports fell sharply, data showed Monday.  

Net imports of crude oil fell 12.7 percent in October, while the amount of oil refined increased, bringing stocks down.  

Diesel reserves also dropped due to high demand from autumn farming and construction projects in October. 

However, gasoline stocks rose slightly as the cold weather affected travelling and reduced demand for petrol.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2017 will be held at Meijiang Convention and Exhibition Center in Tianjin China in September23-25, 2017. We invite you to join the event and to celebrate the 19^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2017, please visit: m.balanzskin.com.

Chinese coal prices fall as supply rises to quell speculation

Source: www.chinamining.org         Citation: Shanghai Daily     Date: November 25, 2016

Chinese coal prices fell amid the government`s efforts to replenish supply to dampen speculation. 

Coke prices on the Dalian Commodity Exchange lost 1.6 percent yesterday while coking coal prices fell 1.2 percent. The Bohai-Rim Steam-Coal Price Index, which tracks thermal coal prices in north China and is updated on a weekly basis, dived to a three-week low of 601 yuan ($87) per ton this week.  

The plunge came as "the government`s intervention works," Zhao Menglin, an analyst at Qinhuangdao Ocean Shipping Coal Trading Market Co, told Shanghai Daily. 

Shanxi Coking Coal Group signed long-term collaboration contracts with six major state-owned companies including Baosteel and Shougang Group on Tuesday, witnessed by officials from the National Development and Reform Commission.  

Earlier this month, two major coal groups also signed long-term contracts with five power plants to provide fuel at around 535 yuan per ton.  

The NDRC said the government would help stabilize coal prices in coming months. Coal prices had surged since the beginning of this year to way above the normal trend, according to Cui Yu`e, a steam-coal analyst.  

The Bohai-Rim index rose to a 10-month high on November 2 at 607 yuan per ton, 60 percent higher than that at the start of the year.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2017 will be held at Meijiang Convention and Exhibition Center in Tianjin China in September23-25, 2017. We invite you to join the event and to celebrate the 19^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2017, please visit: m.balanzskin.com.

China reaches preliminary agreement with Peru to expand Toromocho copper mine

Source: www.chinamining.org         Citation: Reuters    Date: November 24, 2016

China`s leading mining company Aluminium Corporation of China has reached a preliminary agreement with Peru`s government to expand the Toromocho copper mine, China`s biggest overseas copper project.

China`s state industry supervisor SASAC, which announced the agreement in a statement on Wednesday, did not give details of the expansion plan for the Chinese-owned mine. 

The mine began operation in 2013 and produced 31,407 tonnes of copper and 5,500 tonnes of zinc in the first quarter of this year, but has also faced problems concerning environmental contamination and strikes by workers demanding higher wages.  

China`s President Xi Jinping signed a series of other cooperation agreements with Peru during his visit last week.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2017 will be held at Meijiang Convention and Exhibition Center in Tianjin China in September23-25, 2017. We invite you to join the event and to celebrate the 19^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2017, please visit: m.balanzskin.com.

Coal mining curbs reversed as winter approaches, concern about supply deepens

Source: www.chinamining.org         Citation: Reuters     Date: November 18, 2016

China adopted new rules on Thursday to stimulate coal production as it moved to counter surging prices and after Premier Li Keqiang said the country had to balance demand for heating with efforts to tackle pollution.  

Li`s comments came after the National Development and Reform Commission (NDRC) ruled that all coal mines that abide by production safety rules can operate 330 days a year rather than 276 days previously.  

Analysts and traders said the new limit marked a major step from the Chinese central government to help boost coal supplies. The NDRC capped domestic mining earlier this year in a campaign to reduce excess capacity but this triggered a surge in the price of coal.  

Li told a meeting of the National Energy Commission that reports directly to the cabinet that China must increase the clean and efficient use of coal, according to state radio.  

Higher coal prices have been hurting consumers in China and concerns about supply have growing ahead of expected strong demand during winter.  

"This is the biggest policy adjustment to lift coal production so far," Huaan Futures coal analyst Wang Fei said.  

The new limit will be effective until the end of the winter heating season, NDRC said.  

The country faces uncertainty over the weather outlook in the northern regions, it said, which is contributing to coal supply difficulties.  

Also, some producers have not ramped up production as fast as expected as winter approached, the State planner said.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2017 will be held at Meijiang Convention and Exhibition Center in Tianjin China in September23-25, 2017. We invite you to join the event and to celebrate the 19^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2017, please visit: m.balanzskin.com.

China encourages medium, long-term coal contracts to stabilize prices

Source: www.chinamining.org         Citation: Xinhua     Date: November 09, 2016

China is pushing for medium and long-term contracts between coal producers and buyers to stabilize supply and rein in market volatility as surging coal prices have heated concerns about the industry`s ongoing cuts on excessive capacity.  

Major coal miners Shenhua Group and China National Coal Group Corp on Tuesday inked such contracts with China Huadian Corp and State Power Investment Corp, both thermal power conglomerates.  

The two sides specified the amount of coal supply for the contract length and set a basic price of 535 yuan ($78.87) per ton, with clauses to allow for market-oriented price adjustments. No further details were disclosed.  

The cooperation of State-owned coal and power companies is the latest push by the authorities to ease the current coal shortage.  

"It will help maintain the stability of coal prices and the market," Xu Kunlin, deputy secretary general of the National Development and Reform Commission, said at a press conference Wednesday.  

Xu promised policy support and encouraged more mid- and long-term contracts to be inked in the sectors.  

Coal prices are on the rise due to a temporary supply shortage, as well as temperature drops and speculative activities.  

The Bohai-Rim Steam-Coal Price Index, a gauge of coal prices in northern China`s major ports, rose to 607 yuan per ton last week, the 18th consecutive rise and about 63.6 percent up on the start of the year.  

Xu described the price hike as "irrational." China`s coal reserves generally remained stable as effective production capacity stood at around 5.4 billion tons after outdated and under-performing mines were shut down.  

"We are completely capable of guaranteeing coal supply," Xu said, citing relaxed daily output limits for efficient coal producers and huge untapped potential of clean energy. 

Xu also dismissed concerns that surging prices will have a negative effect on the overcapacity reduction drive.  

"It (the price rise) will not last in the long run and the coal industry is still plagued by overcapacity. The government`s resolution (on excess capacity cut) is unwavering," Xu said.  

China is downsizing its coal industry, planning to cut coal capacity by half a billion tons in the next few years.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2017 will be held at Meijiang Convention and Exhibition Center in Tianjin China in September23-25, 2017. We invite you to join the event and to celebrate the 19^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2017, please visit: m.balanzskin.com.