Zinc to outperform copper in 2013

Zinc prices are likely to see the greatest percentage increase of the base metals this year followed by copper.
Mr Alec Kodatsky mining analyst of CIBC said ,"We have the price deck essentially flat but for the sake of how the numbers work we have zinc and copper up slightly with zinc up the most on a percentage basis. However, both metals are also expected to see surpluses in 2013.”
Mr Kodatsky said that zinc is lacking sufficient demand to offset the supply levels while new copper projects set to come on stream in 2013 are predicted to push the copper market into surplus as well. Zinc closed at USD 0.970 per lb on the London Metal Exchange up USD 0.961 per lb the day before and higher than 2012's average price of USD 0.887 per lb.

  Copper demand to grow 5pct in 2013 – SCC

US based Southern Copper expects strong growth in China and other emerging economies this year to boost copper demand by 5%. Mr Raul Jacob CFO of SCC said , "Demand has been repeatedly affected by macroeconomic factors but at present we perceive a more positive environment as some of these issues have been resolved or are perceived to have a more positive outlook from now on." Mr Jacob said that Chinese copper demand alone is predicted to see an 8.5% increase in 2013. On the supply side we think that several structural factors such as labor, technical problems and other issues are still affecting copper supply, reducing the net impact of production coming from new projects and expansions. SCC produced a total of 651,908 tonnes of copper in 2012 and has set 2013 guidance at 650,000 tonnes. The company operates mines and metallurgical facilities producing copper, molybdenum, zinc, silver and gold in Peru and Mexico.

  Govt to sell stake in Balco, Hindustan Zinc through OFS

The government is considering a proposal to use the offer for sale (OFS) route for selling its residual stake in Hindustan Zinc (HZL) and Balco. “It is a transparent mechanism that will allow for competitive bidding and ensure the best prices to the government,” said a person familiar with the development. The move would enable not only Vedanta Resources, which is the majority stakeholder of the two companies, but also ordinary investors to bid for shares. The finance ministry was earlier also considering using the e-auction route to sell its residual stake in the two firms. The government currently holds 29.5 per cent stake in HZL and 49 per cent stake in Balco, but is planning to exit from both companies. The government had sold controlling stake in them between 2001 and 2003.
“There is little sense for the government to hold on to these two firms. A further disinvestment in them would also help raise much needed resources to finance the deficit,” the official said. Early last year, Vedanta Resources had offered ` 17,275 crore for the government's remaining stake in HZL and Balco.
The government's recent success in the OFS for disinvestment in public sector units is also one reason for the move. Apart from the ONGC issue last year, recent stake sales such as NMDC and the just concluded Oil India Ltd has found overwhelming response. To make the OFS process more transparent, market regulator Sebi last month had allowed disclosing the indicative price throughout the trading session.
However a definite timeline for the stake sale has not been finalised. “It may happen this fiscal or it could be pushed to 2013-14,” the official said. Govt working towards IFCI stake said that the government is readying a proposal to sell stake in the state-owned financial institution IFCI. The move comes soon after the company's board was restructured after four of its directors resigned from the board in late December. Sources said the government is now finalising a proposal to this end. “It is an option before the government and would help the company's growth,” said an official. The government currently holds 55.57 per cent stake in IFCI after its board approved the conversion of ` 923 crore worth of optionally convertible debentures issued to the government into equity shares at par.

  Likely Rio Tinto, BHP Billiton production cuts may wipe out Nickel, Aluminium surplus : Barclays

Nickel and aluminium markets have been in surplus for some time on account of production indiscipline, but the forecasted surplus for 2013 may be wiped away on account of potential write downs Rio Tinto and BHP Billiton, according to Barclays Research. Both Rio Tinto and BHP Billiton have been impacted by high costs and lower prices. In the event of a write down on nickel assets at BHP Billiton, it will wipe out 43 kt of surplus, Barclays said.
Gayle Berly, analyst with Barclays said: “If media speculation about a potential write down at BHP Billiton's Australian alumina and nickel businesses is true it could put bauxite and alumina capacity at risk (raw materials for aluminium) as well as 56Kt of refined nickel production. If BHPB was to close all of this production, it would wipe out our forecast nickel surplus for this year of 43Kt.” Rio Tinto's Production Capacity Part of the write down on Rio Tinto assets occurred due to failed sale of Pacific Aluminium. The facility processes 1.1 Mt of aluminium. Other Rio smelters at France (350 Ktpy), Sebree Smelter 200 Ktpy (highest cost smelter) are under risk. If all of Rio's Australasian smelters were shuttered it would make a huge dent to Barclays forecast of 1.8 Mt aluminium surplus this year.
Governments of France and Australia might step in to prevent a crisis. “In sum, while the scale (if any) of production cuts would determine the market and price impact, at the very least the message such cuts would send could help to define the cost support for nickel and aluminium prices,” Gayle Berly said.

  UC Rusal smelter to produce wire rods

Following the Russian aluminium giant's approval of a $25 million modernization programme at its Bogoslovsk Aluminium Smelter, the company has announced plans to produce 33kt of aluminium wire rod. The modernization programme will be funded by the Vnesheconombank at 7% interest and the reason behind the move to produce wire rods is simple: the Sverdlovsk region is experiencing a shortage, according to the regional government's chairman, Alexander Petrov. Plans are also afoot to produce aluminium lithium alloys for the aerospace industry in collaboration with the Kamensk-Uralsky Metallurgical Plant and using aluminium from the Bogoslovsk smelter. Using aluminium lithium alloys can reduce the weight of aircraft structures by 30%, claims Petrov. UC Rusal has signed a two-year power agreement with Rosenergoatom at a price of $0.03/kWh. The Bogoslovsk smelter is the power provider's biggest customer and is a fully integrated producer of aluminium, alumina, aluminium silicon and aluminium-magnesium alloys.

  Nalco 'not keen' on selling alumina to Vedanta

Despite being offered 'top dollar' for alumina it doesn't need, Vedanta rival Nalco is still hesitating over the former's offer, which obviously isn't as tempting as the ailing India aluminium producer first thought. Last month, as promised, Vedanta closed its alumina refinery at Lanjigarh due to a lack of bauxite. Now it seems that Nalco has an exportable alumina surplus of nearly 1Mt and stands to gain ` 250 crore from striking a deal with Vedanta. Unfortunately for Vedanta, however, the fact that Nalco is an arch rival means that Nalco would rather export it's spare alumina than sell it to Vedanta. Vedanta is baffled by Nalco's reticence, claiming that the deal would save Nalco up to $22 per tonne on alumina transportation costs at a time when Nalco's Q3 net profits were down 96.4% when compared with the same period the previous year. Vedanta has even offered Nalco a 7% to 10% premium on its export alumina price but has not managed to strike a deal. Vedanta has been beset with problems ever since a deal struck with the Odisha Mining Corporation for the supply of bauxite from the Niyamgiri hills hit problems. The ecologically sensitive nature of the area led to a Government ban and while the company then sought to buy bauxite from other Indian states it was hit with logistical, regulatory and procedural problems.

Vale updates on copper production

In 2012, copper production was 291,531 tonnes decreasing by 3.5% against 2011 also reflecting the longer than expected temporary suspension of mining operations in Sudbury during Q1 2012. Copper output in Q4 2012 totaled 81,000 tonnes 19.9% higher than Q3 2012 primarily due to maintenance stoppages in the Sudbury and Thompson mines in the previous quarter and the start up of Salobo.
Production of copper in concentrates from the Sossego mine at Carajás totaled 27,800 tonnes. The SAG mill underwent scheduled maintenance during 4Q12, which resulted in lower output relative to Q3 2012 and Q4 2011. We received the operating license for Salobo on November 6th 2012. We are currently ramping up production to full capacity and Q4 2012 copper output reached 7,900 tonnes while gold production was 13,000 troy ounces. Salobo II is expected to come on stream in H1 2014. Salobo I and II have an estimated total nominal capacity of 200,000 tonnes of copper in concentrates. Gold, produced as a by product is expected to reach an average annual production of 286,000 oz over the next ten years peaking in 2016 at 327,000 oz. Lubambe, in Zambia is also ramping up, delivering 3,221 tonnes of copper in concentrates on a 100% basis. In Q4 2012, production from our Canadian operations, excluding copper ores purchased from third parties, was 33,000 tonnes rising 38.1% on QoQ basis as the scheduled maintenance shutdown in Sudbury and Thompson was concluded. Output at Tres Valles in Chile was 3,800 tonnes of copper cathodes in Q4 2012 and totaled 14,100 tonnes in 2012 increasing by 16.8% QoQ and 59.7% on a yearly basis as a result of the ramp up to nominal capacity.

  Aluminium consumption set to rise through to 2020

Consumption of aluminium is set to rise between now and 2020, according to a recent market report. According to Roskill Information Services, global production of aluminium has grown by an average of 6.6% between 2002 and 2011 and by 18.4% in China. Consumption growth over the same period was 5.9%. On the downside, 'inventories overhang the market', claims Roskill. The report says that the industry will be stretched by rising production costs and low prices throughout 2013.
Where raw materials are concerned, world production of bauxite and alumina is growing with Australia the largest bauxite producer accounting for almost 70Mt in 2011. Production in China, Indonesia and India has grown and Asia now accounts for a staggering 45% of global supply. Alumina production increased from 80Mt to 96Mt between 2007 and 2011. Additional refinery capacity is planned over the next three years with another 14Mt coming on stream in China alone. China, says Roskill, is now the largest producer of alumina, although poor quality bauxite domestically has meant that Chinese imports of aluminium's raw material have risen considerably over the past five years – mainly from Indonesia, although recent export curbs from the country, which are being phased in over the next two years, leaving the door open for other bauxite producers.

HSBC raises 2013 copper price outlook on tighter market

HSBC has raised its 2013 copper price forecast saying it expects positive sentiment to drive prices for the metal in a structurally balanced market. The bank lifted its 2013 forecast for the average cash copper price to USD 8,000 per tonne from USD 7,500 to reflect the metal's relatively good start to the year.
Analyst Mr Andrew Keen said that copper, perennially described as fundamentally tight actually finished 2012 posting a gain in inventories. This market remains balanced in our view and this is enough to keep prices high when sentiment is good.
Benchmark three month copper futures on the London Metal Exchange were at USD 8,066 per tonne at around 1000 GMT. HSBC raised its aluminum price forecast by about 5% to USD 2,250 per tonne but maintained its view that prices would remain around this level due to a continued structural surplus.
Mr Keen said that it would not take a revolution in the rate of global demand growth to fix the structural surplus in aluminum. He expects aluminum to be in 5.9 million tonnes surplus over the 2012 to 2016 period, with the excess absorbed by a compound annual growth rate of 6.2% for global demand and the market could be brought back into balance in one good year of demand.
Three months aluminum on the LME was at USD 2,056 per tonne. The bank also raised its iron ore price forecasts for this year to USD 123 per tonne from USD 105 earlier saying that the market was probably driven by seasonal restocking by Chinese mills and short term concerns over supply.
The bank said however that it believes the lack of marginal cost support will see weakness for iron ore later in 2013. Chile's state copper commission, Cochilco earlier said Chile is seen producing 5.596 million tonnes of copper this year up 3% from 2012 levels as heavy investment in mines in the world's No 1 producer pays off.
Cochilco said that a pick up at state copper producer Codelco's century old Chuquicamata deposit and the launch of its Ministro Hales mine at the end of the year will help lift output of the metal which is used in construction and power generation & transmission. But analysts have warned that several factors deteriorating ore grades delays to key energy and mining projects and operational woes threaten forecast production jumps.

Production record for Gulf Aluminium smelters

Current GCC operating smelters Alba, Dubal, Emal, Qatalum & Sohar have collectively produced 3,739,290 tonnes of primary aluminium in 2012 which constitute 9% of total world production compared to 3,488,357 in 2011. The GCC which also has thriving aluminium downstream industries has become one of the main center for aluminium production and most active regions in the world as regards to aluminium business. Accordingly, a number of industries that are associated with the aluminium business have established their base in the Gulf. This includes power generation manufacturer, suppliers service providers, maintenance and logistics organizations. Mr Mahmood Daylami GAC Secretary General said, “Aluminium industry is now one of the main economic drivers for the Gulf contributing to jobs creation, establishment of small and medium size industries and contribution to the community development.” Future developments includes Maaden operations with an annual capacity of 750,000 tonnes per annum, Maaden is an integrated operation that includes Bauxite mining and Aluminium refinery as a raw material to produce aluminium in the smelter along with the Rolling mill. The project construction is completed and is in the startup phase. Emal which started its operations in 2010 has also embarked an expansion project to increase its production capacity from 800,000 in 2012 to 1.3 million tonnes by 2014.

Hydro to cut costs by $300 per metric tonne

As aluminum producers reduce expenses and cut capacity to boost earnings in the wake of falling demand and depressed prices, Norwegian producer Norsk Hydro says it will cut costs at its fully-owned smelters by $300 per metric ton by the end of this year based on 2009 levels. Eivind Kallevik, Hydro's recently appointed chief financial offer says that world aluminium demand growth, excluding China, will be in the region of three to four per cent in 2013. The USA's largest aluminum producer, Alcoa, believes global demand growth will grow to seven per cent following a fourth quarter net profit of $242 million. The US light metal giant attributed its success to China's economic recovery and a corresponding drive in demand for more office buildings, cars and beverage cans. Hydro will report its fourth-quarter results on 12 Feb, but Kallevik is not expecting a quick improvement.

Ningbo Shimao Copper orders CONTIROD® plant from SMS Meer

Ningbo Shimao Copper from Zhejiang Province, China, has placed an order with SMS Meer, Germany, for the supply of a complete casting and rolling plant of the CONTIROD® type for the production of copper wire rod. The company is thus strengthening its position in the copper business. Ningbo Shimao is a Chinese producer of copper cathodes Grade A, copper wire rod and special copper cables. The CONTIROD® line is intended for the new plant in the Bin Hai Industrial Zone near Yuyao, Zheijang Province. The high-performance wire rod line can produce 225,000 t of quality copper wire rod per year from cathodes. The CONTIROD® line is designed for an output of 35 t per hour and will thus be one of the larger ones of its kind in China. It comprises a gas control system on the shaft furnace for the melting of copper cathodes and a modular Hazelett twin-belt caster for a casting cross-section of 90 mm x 70 mm. The line operates with a highly flexible 12-stand rolling mill. Due to the newly designed Lambda gas control system and the usage of variable-frequency controlled drives for blowers and mill stands this CONTIROD® plant is, with fuel consumption figures of 300,000 kcal/t and 42 kWh/t, one of the most economical and ecological of its kind. Commissioning of the plant is scheduled for November 2013.

Gulf smelters to boost production capacity to 5 million metric tonnes by 2014

Gulf smelters plan to boost their capacity to 5 million metric tonnes by 2014 – up 40% from around 3 million tonnes in 2012, according to Mohammed Bader-Eddin, show director of Aluminium Middle East.
According to Bader-Eddin, global demand for the light metal will reach 70 million tonnes by 2020 and the Gulf is set to account for 13% of world production by the end of 2013, thanks to aggressive investment and the latest advanced technology.
An estimated 80% of the Gulf's output is exported, said Bader-Eddin, and Gulf investments in the aluminium industry are likely to hit $55 million by 2022, the year Qatar will host the World Cup. This figure comprises $22 billion for the UAE; $7 billion for Saudi Arabia and Kuwait; and $5.7 billion in Qatar. The Gulf also benefits from its location with easy access to markets in Europe, the USA and the Far East
Reflecting such growth is Aluminium Middle East, formerly Aluminium Dubai, which, unsurprisingly, will be held in Dubai 23-25 April this year. According to Bader-Eddin, the event will provide a world class interactive platform for key industry players to check out the latest developments and innovations as well as discuss investments in new smelters and expansion plans across local and regional markets.
"GCC countries are currently working hard to achieve their future aspirations and consolidate their leading position in the region and the world by primarily increasing their annual productivity and adding new capacity," said Bader-Eddin.

Russia's Norilsk 2012 nickel output up 2%

Norilsk Nickel, the world's largest nickel and palladium miner, said its nickel output was 300,340 tonnes in 2012, up 2 percent from the previous year. Palladium output was down 3 percent, year-on-year, at 2.73 million troy ounces, it said in a statement. Russian Arctic mining giant added that its copper production was down 4 percent to 363,763 tonnes, while platinum production decreased 2 percent to 683,000 ounces. In 2013 Norilsk is targeting the production of 230,000-235,000 tonnes of nickel at its Russian assets and 45,000-50,000 tonnes of nickel in Australia, Botswana, South Africa and Finland, the company said. The outlook for copper production is 355,000-360,000 tonnes in Russia and 5,000-6,000 tonnes of copper in concentrate and semi-products at international divisions. The output of palladium in 2013 is expected to amount to 2.60-2.61 million ounces at the Russian divisions and 25,000-30,000 ounces abroad. The outlook for platinum output is 640,000-650,000 ounces in Russia and 15,000-20,000 ounces overseas.

Zinc treatment charge up

Zinc treatment charges by contract are forecast at $225 a tonne, up almost 18 percent from $191 a tonne last year, Citigroup Inc. said. Benchmark zinc treatment charges for 2013 should be settled in the next few weeks, David Wilson, an analyst at Citigroup, said in a report dated. The group is forecasting a favorable outcome for the smelters due to high concentrate inventory coupled with a surplus concentrate market.

Higher TC / RC : A relief for Indian copper smelters

Indian copper smelters are set to gain from around 10 per cent higher treatment and refining charges negotiated by global peers for January – March quarter this year. Higher Tc/Rc reflects a recovery in copper mine supply after years of deficit. Pan Pacific Copper, Japan's biggest copper smelter, has successively negotiated more than 10 per cent increase in Tc/Rc for 2013 from global miner. Similarly, China's leading smelter, Jiangxi Copper, has also won increase in the charges from global miner Freeport McMoRan Copper. The fees for Japan have climbed from $63.5 a tonne (Tc) and 6.35 cents per pound (Rc) last year, reports said, putting the 2013 figure above $69.85 and 6.985 cents, within the $65-$75 and 6.5-7.5 cents range expected by traders. China's Jiangxi Copper and global miner Freeport McMoRan Copper and Gold settled Tc/Rc at $70 per tonne and 7 cents per pound, up 10.2 per cent from $63.5 and 6.35 cents in 2012. This sets the benchmark for the rest of global smelters including India's Hindalco Industries and Sterlite Industries to get higher realization for converting copper concentrate into virgin finished products like cathodes. Consequently, Indian companies are set to get better fee as Tc/Rc this year. “After the worse last year, higher fee for smelters is a good news for Indian copper smelters. Tc/Rc was very low last year which probably had hit the lowest in five-six years,” said a senior Sterlite Industries official. Tc/Rc is the only fee which a smelter has relies upon as a major source of income. Such fee goes up when miners increase their output in anticipation of higher demand and push the same to smelters for conversion. It goes down when miners reduce their output in anticipation of lower demand and smelters keep looking for it for running their smelters smoothly. “Tc/Rc is the only income for copper smelters. In India, copper concentrate mines are restricted only to the public sector Hindustan Copper. Hence, Sterlite Industries and Hindalco Industries depend upon copper concentrate supplied by global miners. Consequently, their income fluctuates depending upon availability of copper concentrate for conversion and smelters' negotiating capability with global miners for Tc/Rc,” said the official. Pukhraj Sethiya, an analyst with PricewaterhouseCoopers, said, “The higher treatment and refining charges from miners to smelters would improve the margins for the merchant smelters though for integrated smelters, impact may not be material. At the same time, the increased treatment and refining charges are also expected to push up the price of copper.”

Lundin CEO allocates $700 million for copper mine purchase

Lundin Mining Corp., a Canadian metals producer, said it's been studying copper acquisitions in eastern Europe and can fund a deal of as much as $700 million. Lundin has copper operations in Spain and Portugal, and a stake in a copper-cobalt deposit in the Democratic Republic of Congo. Producers of the conductive metal, used in wires and pipes, have expanded to take advantage of increasing demand in China. Copper prices have more than doubled in four years. Lundin has no debt, about $275 million in cash and an unused credit facility to help fund any purchase, according to the CEO. The company also expects increasing returns from its Tenke Fungurume Congo mine this year. The producer could tap high-yield debt markets to help fund an acquisition of as much as $1 billion, Dundee Securities Ltd. said in a note. The company enters 2013 in a strong financial condition and with the flexibility to act quickly in an M&A transaction if needed.

Rio to consider halt at Mongolia mine amid Dispute

Rio Tinto Group, the second-biggest mining company, is considering a temporary halt to construction work at its $6.2 billion Oyu Tolgoi copper and gold project in Mongolia as the government demands a greater share of profit from the mine, according to two people familiar with the plans. The London-based company is discussing the suspension to protest the central Asian nation's demands for a bigger stake in the project and new mining royalty rates, said the people, who asked not to be identified because they aren't authorized to comment publicly. A suspension of work, which may halt mining and processing, isn't certain and is among options that managers are discussing in London, one of the people said. “We continue to work together with all stakeholders including the government of Mongolia to bring the benefits of Oyu Tolgoi to all parties,” said Bruce Tobin, a spokesman for Rio in Melbourne. He declined to comment on whether it's considering a temporary halt. The dispute comes as Mongolian Prime Minister Norovyn Altankhuyag's government tries to maintain support for foreign investment amid growing nationalism and wealth disparity. In October, Rio rejected a second move by Mongolia to renegotiate a 2009 investment agreement for the development of Oyu Tolgoi, which is currently the world's biggest copper project under construction.

Tin near double bottom

According to Barclays Plc, Tin this year's second best performing base metal on the London Metal Exchange, is poised to form a so called double bottom, which will help it advance to the highest level since 2011. Mr Dhiren Sarin chief technical strategist for Asia Pacific at the bank said that Tin may gain to USD 25,888 a metric ton next month. That would complete the double bottom pattern and push prices to USD 31,400, the highest level since May 2011, he said by phone from Singapore.
A double bottom is a pattern showing a drop in price, followed by a peak and then another drop to near the same level, followed by a rebound. Tin for three month delivery was little changed at USD 24,950 a tonne in London at 3:31 PM. Singapore time. Prices have gained 6.6% this year, compared with nickel's 9.4% advance. Mr Sarin said, “We expect there to be a surge of buying interest when tin breaches the USD 25,888 level. We're waiting for that break before we turn more bullish.” Prices climbed 22% in 2012, more than any other LME metal, after supply contracted the most since at least 2005. Shipments from Indonesia, the world's biggest supplier, are poised to drop 24% to 75,000 tonne this year, the least in a decade, according to a Bloomberg survey last month.

Peru to see 14pct increase in copper output in 2013

Peru's copper production is expected to grow 14% this year driven by new and expanding mining projects. Scotiabank said that the bank also estimates a copper output growth of 17%, 23% and 20% in 2014, 2015 and 2016 respectively. The increase is led by the expansion of existing projects and the startup of new projects, which are in the construction stage and have their environmental impact study approved. Meanwhile, copper production in the country likely expanded by ten percent in 2012 due primarily to a 33% increase in production at Antamina. Peru is the world's No. 2 copper producer supplying 7.7% of the world's output.

RUSAL starts rig testing of the industrial

UC RUSAL announced the start of rig testing on the industrial smelting pot based on the revolutionary and unique inert anode technology. Rig tests are being held on 3kA amperage in Krasnoyarsk. For inert anode technology the Company has developed a completely new pod scheme.
Upon success of the rig tests, RUSAL plans to begin production tests on its inert anode pots in 2015 at the Krasnoyarsk aluminium smelter. From 2017 the Company may start shifting its existing smelting capacities to inert anode technology starting at KrAZ.
The current electrolysis process generates CO, CO2 and poly aromatics emissions to the atmosphere whereas the new generation pots produce a tonne of oxygen for every 900 kilogram of aluminium produced. Scaled to KrAZ this figure will reach 900,000 tonnes of oxygen per year. The burning speed of an inert anode is 300 to 400 times slower than that of a traditional carbon anode and discharges only 1 cm to 2 cm per year compared to 1 cm to 2 cm per day by the carbon anode.
The project joined Skolkovo foundation in June 2011. Planned co financing of the inert anode based aluminium production research from the foundation amounts to RUR 750 million till 2015. To date, RUR 130 million has already been provided by Skolkovo.
Mr Viktor Mann UC RUSAL Technical Director said, "Inert anode technology may have a revolutionary impact on the global aluminium industry. Each stage of development brings us closer to a technological breakthrough and we hope to begin switching our smelters, working on the Soederberg technology, to inert anode technology in the next five years, as we build on our leading position in the industry.”

Konkola Copper Mines halts production at one pit

Resources Plc's Zambian unit, stopped producing at one of its open pits near Chingola after a mining contract was not renewed. The contract with Brazilian-owned U&M Mining Services expired on December 31, the Zambian company said. The Nchanga mine, which includes the halted Chingola F&D open pit, produces an average 5,400 tonnes per month of copper in concentrate, according to the company. “We are looking at our options for operating the pit,” Joy Sata, a spokeswoman for Chingola-based Konkola Copper, said by mobile phone. Zambia, Africa's biggest copper producer, is set to reach a record output of 1 million tonnes of the metal this year, according to Vedanta's 2012 annual report. Copper accounts for about two-thirds of the country's export earnings. The U&M contract affects about 700 workers, Sata said. Konkola Copper is involved in wage negotiations for an agreement that was scheduled to be implemented January 1.

UAE shipping more aluminium in recent years

UAE has raised its export of manufactured goods in recent years shipping more aluminium and polymers alongside goods such as gold and minerals. According to data released by the Federal Customs Authority, Polymers used to make packaging, car parts and piping; unwrought aluminium and copper wires all featured in the 10 most valuable commodities exported in the first 7 months of last year. None of those items featured in the top 10 exports in 2008, the earliest year for which detailed non oil data is available. But in the coming years, the Government is keen to raise the level of sophistication of exports to include more capital goods. Used in the manufacture of other products, capital goods such as machinery, components and tools require a higher degree of technology and expertise to make. Their added value usually generates a higher return for an economy than more basic exports. Mr Jean Michel Saliba an economist at Bank of America Merrill Lynch said , “The more you can tap into a higher value-added economy, the more you can create jobs and higher growth. The UAE and the GCC started in a capital and labour intensive way to build the supply side of the economy and now need to create higher value downstream."
The UAE has already made progress in building a manufacturing presence in energy intensive industries where it has a competitive advantage. Borouge, a joint venture between Abu Dhabi National Oil Company and Austria's Borealis has established itself as the country's largest producer of plastics since its creation in 1998.
Emal, a JV between Dubai Aluminium & Mubadala Development, a strategic investment company owned by the Abu Dhabi Government, is building the world's largest single-site smelter at a 6 square kilometre location in Taweelah. But steps to build a capital goods base are at an earlier stage. It is a similar trend throughout the region. Capital goods account for only 6% of exports in the Middle East and North Africa. The bulk of exports are made up of primary and consumer goods accounting for 64% of goods traded.

Antofagasta's cost rises to bite in 2013

Chilean miner Antofagasta said its production costs would jump this year and it would not increase output, knocking shares in a company that has generally beaten other miners in controlling costs. Antofagasta said that this year's cash cost per pound of copper produced, net of byproduct credits, would be 36 percent higher than in 2012 due to greater spending at its two key mines, Esperanza and Los Pelambres.
Analysts attributed the higher costs to increased energy tariffs anticipated at Los Pelambres mine as fixed contracts come to an end, and to greater activity required at Esperanza to extract copper and gold. Cash costs net of byproduct credits last year were 103 cents per pound compared to 101.9 cents in 2011, although they crept up in the fourth quarter to 113.5 cents.
"Antofagasta has done better on average than the sector on controlling costs over the past several years, so this morning's significant increase in cost guidance is a bit disappointing," said Nomura analyst Patrick Jones. Some of the world's biggest miners have had their profits dented by increased costs and weaker prices, prompting them to scale back expansion and raising concerns that a decade-long mining boom is over. Antofagasta said a review of its copper project, Minera Antucoya, was ongoing.
The company halted development at the $1.7 billion project in December to assess escalating costs. Industry heavyweights BHP Billiton and Rio Tinto are also reviewing tens of billions of dollars of new projects as profit margins become squeezed. Copper production last year came in at 709,600 tonnes, beating Antofagasta's full-year forecast of 700,000 tonnes, and 11 percent higher than the previous year.
The company said it was targeting production of 700,000 tonnes for 2013, which analysts at Canaccord said was below their forecast of 715,000-730,000 tonnes.

Copper scrap metal exporters to seek clearance from national security

The Ministry of Trade and Industry has directed that with effect from February 1st 2013 companies or persons intending to export copper scrap metals from Ghana must seek clearance from Office of the National Security Coordinator. A statement signed by Mr Nana Akrasi Sarpong acting Director of Communication and Public Affairs of the MOTI said that the clearance should be sought prior to submitting the consignment of the metals to the Ghana Standards Authority for inspection. It explained that the measure was necessitated by the high incidence of disruption of underground communication infrastructure and theft of cables in some major cities of the country to dealers, who subsequently export same as copper scrap.
The statement warned that failure to comply with this directive will imply that the copper scrap metals intended for export will be seized and confiscated to the State and the exporter will also be liable to a fine.

Chalco alumina production hit by bauxite export ban from Indonesia

Aluminum Corporation of China Limited confirms lower alumina production by 1.7 million tonnes following Indonesian bauxite export ban. As the downturn of the aluminum market continued the prices of aluminum decreased by 7% as compared with the corresponding period of the preceeding uear. The grades of the domestic bauxite declined and the restriction on the bauxite export imposed by the Indonesian government lowered the company's production of alumina by approximately 1.7 million tonnes. The lower production and higher price are also resulting 4% increase in the Chalco's cost of alumina production.

Indian copper futures marginally up on spot demand

Copper prices traded marginally higher by 0.30% to INR 440.95 per kilogram in futures trade as speculators created fresh positions driven by a rise in demand in the spot market even as the metal declined in global markets. At the Multi Commodity Exchange, copper for delivery in February declined by INR 1.30 or 0.30% to INR 440.95 per kilogram in business turnover of 12,514 lots. Similarly, the metal for delivery in April shed INR 1.25 or 0.28% to INR 445.95 per kilogram in 748 lots. Analysts attributed the fall in copper futures to pick up in demand from consuming industries in the spot market but a weak trend in overseas markets restricted the gains. Meanwhile, copper for three month delivery fell 0.2% to USD 8,231.25 per tonne on the London Metal Exchange.

Lundin CEO sees potential for USD 700 million copper and mine purchase

Lundin Mining Corporation been studying copper acquisitions in eastern Europe and can fund a deal of as much as USD 700 million.
Mr Paul Conibear CEO of Lundin said, “If we see something opportunistically we have the financial capability to move but we will only do so if it really will add something to us. Our preferences are more copper. Lundin has copper operations in Spain and Portugal and a stake in a copper and cobalt deposit in the Democratic Republic of Congo. Producers of the conductive metal, used in wires and pipes, have expanded to take advantage of increasing demand in China. Copper prices have more than doubled in 4 years.”
Mr Conibear said , “We are a European-based producer so other assets in our backyard would be ideal. We have been spending quite a bit of time in Eastern Europe. Lundin has no debt about USD 275 million in cash and an unused credit facility to help fund any purchase. The company also expects increasing returns from its Tenke Fungurume Congo mine this year.”

Chile Escondida 2012 copper output surges 32pct

Output from Chile's Escondida jumped 31.6% in 2012 from a year earlier as processing work and higher ore grades boosted production in the world's largest copper mine. State copper commission Cochilco said that output from the world's largest copper mine, Chile's Escondida, jumped 31.6% in 2012 from a year earlier boosted by processing work and higher ore grades Escondida, which is majority owned by global miner BHP Billiton produced roughly 1.076 million tonnes of copper last year compared with 817,700 tonnes in strike hit 2011. Two high return projects intended to improve ore grades and increase capacity were completed last year, according to a BHP presentation on its website. The Escondida Ore Access program was completed in the June 2012 quarter and the Laguna Seca debottlenecking project ended in September. The mine's union stunned the copper market in 2011 by staging 2 week work stoppage, sending the mine's output tumbling. Workers at Escondida late last month approved a new contract proposal, calming fears of labor unrest. BHP said that last month the mine was on track to increase its red metal output by 20% in the 2013 financial year. World No. 1 copper producer Chile is also on track to boost output this year, as it seeks to put operational woes dwindling ore grades and labor stoppages behind it. BHP and Rio Tinto which owns 30% of Escondida have approved plans for a USD 4.5 billion expansion of the mine to boost output. Escondida produced 1.086 million tonnes of copper in 2010.

Kazakhmys fullyear copper output falls

Kazakhmys Plc , the world's 10th largest copper miner, said full-year copper cathode output fell 2 percent on lower grades. The Kazakhstan-based company said it produced 292,200 tonnes of copper cathode from its own concentrate, down from 298,500 tonnes a year earlier. The average copper grade during the year was 0.95 percent, compared with 1.01 percent last year. Production of gold, which Kazakhmys mines alongside copper, declined 2 percent to 115.9 kilo ounces. Silver output, also a by-product of the company's copper mining operation, fell 4 percent to 12,629 kilo ounces. Shares in Kazakhmys, a FTSE 100 constituent, have lost about a third of their value in the past year.

Crystal gazing copper prices in a year of expected surplus

The price of copper which finds application in large swathes of products from electrical to automobiles to plumbing is seen as the bellwether of global industrial demand. So far this year, the metal has traded in a range of USD 7,920 per tonne to USD 8,250 per tonne but mostly above USD 8,000. Hopes of this kind of price behaviour have led the world's leading miners like Chile's state owned Codelco and BHP Billiton to raise their stakes on global copper demand rising approving major mines expansion projects from South America to Indonesia.
Hindustan Copper, in the midst of a major ore raising capacity to 12.4 million tonnes in the next 5 years from 3.479 MT in 2011 to 2012 is focussed on marketing the metal in concentrate domestically where copper demand will continue to grow at eight to nine per cent a year. To the extent Hindustan Copper lifts concentrate production, our imports of the intermediate material will fall. Selling concentrate locally offers logistical and cost advantages to the company. Research houses are in consensus that most metals will be in surplus in the near term. No doubt, as major copper miners have started reaping the benefits of major investments by way of incremental production, the supply deficit in the past two years should turn into a surplus in 2013.
According to International Copper Study Group, against global refined copper production of 21.14 MT in the current year, the use will be 20.682 MT leaving a surplus of 458,000 tonnes. Last year, the supply deficit was 426,000 tonnes. To some observers, however, ICSG may prove itself to be erring on the side of caution by assuming that demand will grow by only 1.5%. This is in spite of International Monetary Fund scaling down global economic growth to 3.5% from its earlier forecast of 3.6%. Mr Thomas Keller CEO of Codelco said , “Maybe there will be a certain amount of downward pressure, albeit very slight towards the end of the year when there will be a small surplus. World copper market takes guidance from Codelco, which missed the production target of 1.7million tonne for 2012 hurt by dwindling ore grades in ageing deposits. In mid November, Next year we're expecting production to be slightly above what we have as an aim for this year. The Chilean company's ambitious expansion plans involving billions of dollars should lift its production to 2.5 million tonne by 2021. But Codelco, though always in the forefront, is not alone to drive copper production growth in Chile.”

Sterlite Industries Q3 net up

Vedanta Group firm Sterlite Industries has posted 30 per cent growth in consolidated net profit at ` 1,191 crore for the quarter ended December 31 because of improved sales realisations and lower tax outgo. It had posted a net profit of ` 913 crore in the corresponding quarter last year. The total expenditure increased three per cent to ` 9,011 crore, while the tax outgo declined 29.6 per cent to ` 355.5 crore during the quarter.
The interest costs also went up 13 percent to ` 227 crore. Net sales grew 4.3 per cent to ` 10,692 crore during the quarter against ` 10,249 crore in the corresponding quarter last year, a according to a company statement. “Sterlite Industries continues to maintain its strong performance and leadership position,” Chairman Anil Agarwal said. Besides, its subsidiary, Hindustan Zinc, plans to add 1.2 million tonnes per annum new capacity, with an investment of ` 8,000 crore.

Guinea says Rusal's Fria refinery to restart within months

Guinea expects production at aluminium producer Rusal's Fria refinery to restart "within months", thanks to conditions set as part of a deal signed with the Russian group late last year, a senior official said. The 630,000 tonne per year plant has been shut since last April following a labour dispute. The 2006 deal in which the refinery was sold to Rusal has also been under review, as the current government has said the price was too low. The restart of work at the refinery in Fria was a condition of the December deal with Rusal that agreed a schedule for the development of its separate, giant Dian-Dian bauxite deposit, said Ibrahima Camara, vice president of the technical committee reviewing Guinea's mining contracts, on the sidelines of a mining conference. "They committed to restarting Fria as soon as possible," Camara said, adding the restart could take several months, given the lengthy stoppage. A Rusal spokesperson in Moscow said the company was currently "examining the option" of a restart, but declined to comment further. Camara's committee is also reviewing mining contracts that include BSG Resources's contract to mine half of the Simandou iron ore deposit, one of the largest in the world. Work has stopped since BSG's partner Vale put the project on hold last year, citing uncertainties. Camara confirmed the government had received responses to questions it had sent to BSG and would deliver its verdict by March, within the timetable set last year. BSG, part of Israeli diamond billionaire Beny Steinmetz's business empire, said last week that it would consider "all available legal options" including international arbitration, in order to avoid expropriation.