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World

  • The Australian Foreign Investment Review Board has approved a transaction that gives China’s Baosteel a 15% stake in the diversified miner Aquila Resources. Controlling 43.9 million shares, for a subscription price of A$285.6-million,  the Chinese company becomes the second-largest shareholder in Aquila.

  • Acknowledging that they and other iron-ore producers had at times upset their major customer China,  BHP Billiton has said that Beijing realised it had “to play with the big boys”. In a parting shot at Chinese anger over high iron ore prices and over BHP’s plans for a $116-billion iron-ore joint venture with rival Rio Tinto, outgoing BHP chairman Don Argus said China needed to get over any hostility.

  • China Shenhua Energy Co., the nation’s biggest coal producer, has said profit in the first nine months rose 14.6 percent on increased output. Net income climbed to 26.03 billion yuan from 22.7 billion yuan a year earlier, while sales rose 13.7 percent to 88.15 billion yuan.

  • United Company Rusal, the world’s top aluminium producer, has said international banks have agreed to restructure half its $7.3-billion debt. Rusal, controlled by businessman Oleg Deripaska, said in September that it had won another extension for restructuring its debt repayment to foreign and Russian banks.

  • Norilsk Nickel plans to start mining coal with BHP Billiton, the world’s largest miner, in the Russian Arctic from 2015, the first production to result from a three-year-old alliance between the mining giants. Their development of the Syradasai deposit could eventually produce more than 15 million tonnes of coking coal for the steel industry, as much as Russian market leader Mechel produced last year.

  • Lower metal prices pushed first-half profit of Norilsk Nickel, the world’s largest nickel and palladium miner, down sharply, but the results beat analyst forecasts. Net profit attributable to shareholders fell 84% year-on-year to $419 million, above an average Reuters poll estimate of $349 million. “Revenue from metal sales declined by 54% due to the global commodity market prices being significantly below prior year levels,” Norilsk said in a statement.

  • China and Russia, in a bid to repair ties strained by a trade spat this summer, signed contracts valued at several billion dollars but didn’t reach a breakthrough in protracted negotiations on a deal to supply Russian gas to China. Among issues discussed during a recent visit to Beijing by Russian Prime Minister Vladimir Putin was the prospect of settling trade between the two neighbours in their domestic currencies -- part of China’s efforts to bolster the yuan as a regional currency.

  • Though recent wild currency swings could delay the day of reckoning, many economists expect Japan to cede to China its rank as the world’s second-largest economy sometime next year, as much as five years earlier than previously forecast. The reversal of fortune will bring an end to a global economic order that has prevailed for 40 years, with ramifications across arenas from trade and diplomacy to, potentially, military power. China’s rise could accelerate Japan’s economic decline as it captures Japanese export markets, and as Japan’s crushing national debt increases and its aging population grows less and less productive — producing a downward spiral.

  • From Pakistan to Angola to Kyrgyzstan, China is using its enormous pool of foreign currency savings to cement diplomatic alliances, secure access to natural resources and drum up business for its flagship companies. Foreign aid — typically cut-rate loans, sometimes bundled with more commercial lines of credit — is central to this effort.

  • Last December, the Russian mining industry felt beleaguered by the global recession after it had contracted by 5% in real terms in 2008. The predicament of a number of the country’s biggest mining and related metals companies was such that, in January, there was a widely reported plan to merge them, and have the Kremlin take a 25% share in the resulting group in return for writing off their collective debts, which came to more than USD27 billion, most of which was owed to State-owned banks. Had the megamerger gone through, it would have created a group with a market capitalisation of between USD70 billion and USD100 billion, sales of USD60 billion, and earnings before interest, tax, depreciation and amortisation of USD23 billion. But it did not happen. Reportedly, the idea was vetoed by the Russian Government, apparently because it did not wish to take on the accumulated debts of the companies concerned.

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