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China Molybdenum looks for more overseas mining acquisitions

Source: www.chinamining.org  Citation: Bloomberg  Date: August 20, 2014

Li Chaochun, chairman of China Molybdenum.

China Molybdenum, the mainland`s biggest producer of the metal, is seeking more acquisitions after the success of its US$820 million purchase of a Rio Tinto Group copper mine in Australia.
    
"We`ll prefer mining assets in developed countries or regions with stable political conditions," said Li Chaochun, the chairman of the company, which is based in Luoyang, Henan province. "We are bullish on copper over the long run. It is one of our investment priorities. We`re also studying other metals."
    
Buying the Northparkes mine, its first overseas copper acquisition, helped the mainland producer diversify into precious and base metals, as it seeks to become a global mining company.
    
China Molybdenum, which started a team looking for overseas assets in 2008, last week reported a 66 per cent jump in first- half profit as Northparkes added to production.
    
"Diversification will help the company achieve stable growth by avoiding price risks on a single metal," said Wang Min, a rare-metal analyst with Beijing Antaike Information Development.
    
Shares in China Molybdenum have climbed 59 per cent this year, outstripping the 7.1 per cent increase in the benchmark Hang Seng Index. The stock closed 0.72 per cent lower at HK$5.48 yesterday.
    
Molybdenum is mainly used to make speciality steel tougher and resistant to rust. Demand for that application might continue to expand at the 10 per cent growth rate of the first half as the mainland sought to shift its production mix to more valuable steel grades, Li said.
    
"Higher speciality steel grades require more molybdenum," he said. "China`s increasing demand for high-strength alloys, used from offshore drilling platforms to oil pipelines, and molybdenum chemicals used in refining catalysts, will push up the metal consumption over the long run."
    
While molybdenum mines were opening up, smaller and inefficient mines were set to be closed, restraining the supply increase together with government measures to raise environmental standards against processors, Li said.
    
China might gradually remove its export quotas on tungsten and molybdenum by the middle of next year, Li said, after a World Trade Organisation panel determined in March that the country did not adequately justify its restrictions.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: m.balanzskin.com.

Mining giant announces demerger

Source: www.chinamining.org  Citation: Xinhua  Date: August 18, 2014

BHP Billiton, world largest mining company, said on Friday that it was pushing ahead with a demerger of its non-core assets to create a new 14 billion Australian dollar ($13 billion) resources giant.
    
BHP Billiton said in a statement that it was pursuing options " to make the company simpler and more productive".
    
"We believe that a portfolio focused on our major iron ore, copper, coal and petroleum assets would retain the benefits of diversification, generate stronger growth in cash flow and a superior return on investment," the statement read.
    
"By increasing our focus on these four pillars, with potash as a potential fifth, we will be able to more quickly improve the productivity and performance of our largest businesses."
    
"A demerger of a selection of assets is our preferred option."
    
The board is expected to release more information about the demerger when it reconvenes next 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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: m.balanzskin.com.

China`s July refined copper output jumps 19% on year to 634,000 mt

Source: www.chinamining.org  Citation: Platts  Date: August 19, 2014

China`s refined copper output was 634,000 mt in July, up 18.9% from around 533,000 mt recorded in July 2013, an official from state-owned nonferrous metals information division Beijing Antaike said Monday, citing data from the National Bureau of Statistics.
    
The July output was up 1.7% from June`s production of 623,428 mt. The Antaike official said that the higher output was in line with an increase in capacity this year.
    
China`s copper capacity is expected to rise to around 10 million mt in 2014, up about 11.1% from 2013.
    
Meanwhile, based on Antaike`s earlier statement, Platts calculated that the production totaled 4.11 million mt for January-July, up 8.4% year on 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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: m.balanzskin.com.

China`s July coal output declines on year, but rises on month to 301 mil mt

Source: www.chinamining.org  Citation: Platts  Date: August 19, 2014

 China`s July coal production fell year on year but rose slightly from June on improved sales amid higher air-conditioning demand, Fenwei Energy reported, citing the latest official data released on Friday.
    
China produced 301 million mt of raw coal in July, down 1.63% year on year but up 1.01% from June, the first rebound after three straight months of declines over April to June, data released by the China Coal Transport and Distribution Association showed.
    
Over January-July this year, China`s coal output reached 2.163 billion mt, down 1.45% year on year, the association said.
    
During the same period, China`s coal sales -- which comprise mostly domestic sales and some exports -- stood at 2.053 billion mt, down 1.54% year on year, with July sales falling 1.84% year on year but edging up 1.62% month on month to 288.6 million mt.
    
Key state-owned mines -- owned by the central and provincial governments -- produced 1.164 billion mt of coal in the first seven months this year, with July output edging up 0.6% year on year but down 1.81% month on month to 165.4 million mt.
    
Fenwei Energy is a leading provider of coal market information in China.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: m.balanzskin.com.

Zijin Mining not optimistic on gold and copper prices

Source: www.chinamining.org  Citation: scmp.com  Date: August 18, 2014

Zijin seeks to boost efficiency downstream and pursue acquisitions amid falling gold prices.

Zijin Mining, China`s largest gold processor, will counter falling gold and base metal prices by boosting output, improving efficiency in downstream operations and seeking opportunistic acquisitions.
    
The president of the Fujian-based miner, Wang Jianhua, said on Monday that he was not optimistic that non-ferrous metal prices would see any significant increase in the second half of the year, given relatively weak global demand.
    
"With this in mind, we will focus our effort in the second half on technological and internal management improvement, as well as developing new large-scale projects," he said.
    
The company`s Zijinshan mine, which accounted for 32 per cent of output from its own mines, saw output fall 4.2 per cent year on year in the first half. Compared with output in the first half of 2012, it was down 38 per cent because the metal content of the mine is fast declining as easy-to-mine resources are depleting, although a layer of copper ore lies beneath the gold belt.
    
"In the next few years, Zijinshan will undergo a transitory period towards copper mining, but the profitability of copper does not necessarily have to be less than that of gold," Wang said. "The key is a good understanding of the resources."
    
On Sunday night, Zijin posted a 1 per cent year-on-year rise in first-half net profit to 1.1 billion yuan (HK$1.4 billion).
    
Excluding investment income, asset impairments and gains and losses on the value of its assets, underlying pre-tax profit dropped 22.9 per cent to 1.79 billion yuan.
    
Gold contributed 38.4 per cent of Zijin`s operating profit in the first half, down from 55.8 per cent last year, while copper contributed 39.4 per cent, up from 32.9 per cent. The contribution of iron ore, zinc and other metals also rose.
    
Gold processing turned in a profit of 13.5 million yuan, compared with a loss of 261 million yuan last year, while the loss on copper refining narrowed to 78.8 million yuan from 278 million yuan.
    
Zijin has not changed its 34-tonne full-year gold output target for its own mines, which was set early this year, or the 140,000-tonne target for copper output.
    
First-half gold output grew 6 per cent year on year to 15.6 tonnes and that of copper rose 14 per cent to 70,436 tonnes.
    
The average selling price of gold from its own mines fell 14.7 per cent in the first half, while unit production cost grew 2.3 per cent due to the declining gold content of ore from Zijinshan.
    
The average selling price of copper from its own mines dropped 12.6 per cent, while unit production cost declined 5.2 per cent.
    
Wang said Zijin would seek to acquire exploration rights and mining projects with good potential and manageable geopolitical risks. It spent 1.3 billion yuan on acquisitions in the first half 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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: m.balanzskin.com.

Coal prices set to stay low on mainland China for next 12 months

Source: www.chinamining.org  Citation: www.scmp.com  Date: August 18, 2014

Mainland miners have been urged to cut their coal output.

Mainland coal prices are expected to stay low for at least the next 12 months after a protracted slump, weighed down by weak demand, environmental constraints, domestic oversupply and rising imports.
    
While further downside is limited as leading domestic miners cut back on output to prevent prices from sinking to loss-making levels, according to some analysts, a meaningful recovery is some way off.
    
Analysts at ANZ last month slashed their forecast for this year`s average seaborne power-station coal by 4 per cent to US$74 a tonne, next year`s by 7 per cent to US$78 and that of 2016 by 11 per cent to US$82, saying "coal markets are awash with coal at a time of soft demand".
    
"But falling new mine investment [in Australia and Indonesia] should mean tighter supply and better prices in 2016 and 2017," it said in a research report.
    
The two nations account for most of the mainland`s coal imports, which, although accounting for only 9 per cent of consumption, has grown robustly in the past few years.
    
Australia has ramped up supply because some miners who committed to costly rail and port facilities built during the commodity boom in 2010 and 2011 are stuck with high payments, and were forced to keep raising output even with prices falling in order to spread the high fixed costs over high sales volume, ANZ said.
    
The bank said further price downside is limited since the current benchmark Australian coal price of around US$70 a tonne is not much higher than the US$60 a tonne break-even production cost of the mainland`s largest and most efficient coal miner Shenhua Group.
    
Prices at the mainland`s largest coal port Qinhuangdao have fallen just over 40 per cent since the downturn in coal prices began in late 2011, and have slid some 22 per cent so far this year.
    
Jefferies Securities analysts said in a research note they believe prices will not materially recover and have yet to bottom out, adding mainland coal demand has "more or less peaked".
    
Increasingly stringent environmental protection regulations mean highly polluting coal-fired power`s competitiveness over subsidised clean energy is slowly being eroded.
    
The latest tightening of emission standards took effect on July 1, forcing operators to spend more to remove pollutants or shut non-complying plants.
    
"As governments globally seek to reduce their carbon dioxide emissions, it looks increasingly likely that `king coal` will lose its crown," ratings agency Standard & Poor`s said in a report.
    
S&P projects the mainland`s coal demand growth to stay at low single-digit percentages before flattening by 2020.
    
Amid oversupply, the mainland`s coal output last year grew 1.4 per cent, or by 50 million tonnes - the lowest in more than a decade, according to data from the China National Coal Association.
    
In this year`s first half, output fell 1.8 per cent year on year. Still, net imports grew 1.5 per cent.
    
The industry`s first-half profit fell 44 per cent from a year before to 51.3 billion yuan (HK$64.48 billion). Of the 36 large miners tracked by the association, 20 were in the red, nine are close to breaking even and over half have cut or delayed paying salaries.
    
Prior to last year, domestic output expanded rapidly after mines were consolidated, and a transport bottleneck was gradually overcome with the completion of new railways.
    
The association`s head, Wang Xianzheng, last month called on miners to cut output by at least 10 per cent to restore the demand-supply balance.
    
The Shanghai Securities News quoted Wang Jinli, chairman of the sales unit of state-owned Shenhua, as saying the company has cut this year`s planned output by 11 per cent.
    
China Coal Energy, the listed unit of the mainland`s second-largest coal miner China National Coal Group, last week said it had cut its raw coal output target for this year by 10 per cent.
    
Given the success of United States energy firms in extracting natural gas trapped in shale rock formations, coal has lost significant market share to this supposedly cleaner energy.
    
If the mainland can emulate the American success, it could quicken coal`s replacement by shale.
    
"A significant decline in coal production and consumption globally is becoming a much more realistic concept," S&P said. "However, the pace and scale of change within the coal industry is far from clear, and investors could potentially remain in the dark for some time."

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: m.balanzskin.com.

China`s refined copper output up, aluminium at record

Source: www.chinamining.org  Citation: Reuters  Date: August 18, 2014

China`s refined copper production rose 1.6 percent month-on-month in July, increasing for the third straight month as smelters expanded capacity. Strong output in the world`s top refined copper producer and consumer could mean end users may cut their demand for imports. Refined copper production stood at 633,518 tonnes in July versus 623,428 tonnes in June, data from the National Bureau of Statistics showed on Thursday.
    
The July output was up 16.5 percent from a year ago. In the first seven months of 2014, production increased 9.8 percent from the same period last year to 4.25 million tonnes. "More new smelting capacity is set to start production in the second half of the year," said Song Xiaolang, Shenzhen-based analyst at Jinrui Futures.
    
About 600,000 tonnes of smelting capacity was likely to come onstream between July and December after less than 100,000 tonnes had started in the first half of the year, Song said. Strong treatment and refining charges (TC/RCs) for imports of raw material copper concentrates also have been encouraging Chinese smelters to boost refined metal production, Song said.
    
TC/RCs are paid to Chinese smelters from foreign sellers to convert concentrates into refined copper and deducted from the smelters` buying prices. Spot clean, standard copper concentrate traded at TC/RCs of about $110 per tonne and 11 cents per pound this week, compared to about $90 and 9 cents in late June, traders said. TC/RCs usually rise when copper concentrate markets are well supplied. Refined copper output may rise further in August although two medium-scale smelters in the north-eastern region of Inner Mongolia were conducting maintenance currently, Song said.
    
ALUMINIUM, ZINC ON RECORD Production of primary aluminium went up 1.2 percent compared with last month, hitting a second consecutive record as smelters restarted idled capacity. Aluminium production stood at 1.98 million tonnes in July, compared to the previous record of 1.95 million tonnes in June. The July production was up 7.2 percent from a year ago.
    
In the first seven months, aluminium output increased 7.5 percent to 13.5 million tonnes. Production may rise further due to new capacity. State-backed research firm Antaike expects about 3 million tonnes of aluminium smelting capacity to come onstream in the second half of this year, after about 1.6 million tonnes started up in the first half. China`s refined zinc production also hit a record in July, rising 5.3 percent from a month ago to 515,065 tonnes.
    
The July production surged 10.3 percent from the same month last year. Strong prices encouraged output, industry sources said. The most-active zinc futures in Shanghai rose more than 6 percent in July. Production of refined lead fell 13.6 percent on-month to 349,609 tonnes in July due to seasonal weak demand. Nickel stood at 31,530 tonnes in July versus 33,288 tonnes in June. Refined tin was at 15,889 tonnes in July versus 17,087 tonnes.

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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: m.balanzskin.com.

Natural gas prices go up

Source: www.chinamining.org  Citation: Global Times  Date: August 13, 2014

Two workers check Sinopec`s natural gas facility in Puyang, Central China`s Henan Province. Photo: CFP

China announced Tuesday a 20.5 percent rise in natural gas price for non-residential use, marking another step in a reform to make the gas prices more market-driven.
    
The price hike is expected to boost imports and output of the cleaner fuel in one of the world`s largest energy consumers, analysts said.
    
Effective from September 1, the gas price for industrial and commercial users will increase by 0.4 yuan ($0.06) per cubic meter, the National Deve-lopment and Reform Commission (NDRC), China`s top economic planner, said in a statement on Tuesday.
    
The price adjustment is based on the amount of gas consumed in 2012, while the price for newly added gas consumption will remain unchanged.
    
After the adjustment, the price of non-residential natural gas will rise to 2.35 yuan per cubic meter at gas stations, according to the Xinhua News Agency`s calculation.
    
The price hike also exempted more sensitive consumers such as households and fertilizer producers.
    
This is the second important step to make the gas price fully market-driven by 2015, the NDRC said.
    
The latest hike came after a similar 15.4 percent increase for non--residential gas consumers in July 2013 when the NDRC launched a new pricing mechanism.
    
"The price hike will benefit gas producers including PetroChina and Sinopec as it will reduce losses of their import business," Wang Xiaokun, a natural gas analyst with consulting firm Sublime China Information, told the Global Times on Tuesday.
    
Under the current pricing system, the gas price is artificially kept lower than the cost of imports as the government fears that higher energy prices will lead to inflation that could jeopardize the economy.
    
However, the government-controlled gas prices discourage importers and producers to increase imports and output to meet the country`s growing demand for cleaner fuel.
    
Market-based gas prices will spur gas imports to meet the growing domestic demand for the cleaner fuel, Wang said.
    
China imported 53 billion cubic meters gas in 2013, accounting for about 30 percent of its total gas consumption, and the demand will further grow given the need to fight against air pollution, the NDRC wrote in the statement.
    
Average gas consumption is growing 15 percent annually in China, and the domestic gas output can no longer meet the demand, according to the NDRC.
    
The price hike is expected to add 44.8 billion yuan in revenues for gas importers and producers, yet it will add pressure on the downstream industrial users, Sun Yang, an analyst at chem365.cn, an energy market intelligence service provider, told the Global Times on Tuesday.
    
"This price adjustment will have no impact on consumers as the price for residential users remains unchanged," the NDRC wrote, noting the rise in costs for industrial users will spur industrial restructuring and eliminate redundant energy-consuming capacity.
    
China`s energy consumption per unit of GDP declined 4.2 percent year-on-year in the first half of this year, the largest fall since 2009, official data showed on Tuesday, marking a significant progress in energy saving and pollution control.
    
Even after the price uptick, the natural gas is still competitively priced compared with its substitutes including fuel and liquefied petroleum gas, and therefore the impact on the industrial sector is limited, the NDRC 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 2014 will be held at Meijiang Convention and Exhibition Center in Tianjin on November 20^th-23^rd, 2014. We invite you to join the event and to celebrate the 16^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2014, please visit: m.balanzskin.com.