Freeport Indonesia ramping up output at world's No. 2 copper mine

Freeport McMoRan Copper and Gold Inc was ramping up production at its Indonesian unit, a company spokeswoman said, six weeks after a deadly tunnel collapse at the world's No.2 copper mine halted operations. Trade union workers at the Grasberg mine in remote West Papua were also returning to production work, while postponed pay talks with the Arizona-based firm have been resumed, a union official added. Freeport Indonesia employs about 24,000 workers, of which three-quarters belong to the union. Freeport stopped production at Grasberg on May 15, a day after a training area in a tunnel caved in, killing 28 people. Planned pay talks were also put on hold last month. The company said it had slowly resumed open-pit mining after receiving approval from the Indonesian government, although underground production remained closed. Exact details on shipments or how much of open-pit production capacity was being operated, and that this was currently being assessed internally were initially not known. The open-pit mine normally produces around 140,000 tonnes of copper ore per day, while output from underground operations is 80,000 tonnes. Freeport was forced to declare force majeure on shipments due to the prolonged closure of the mine. Previously, union officials had demanded that all probes into the accident be completed before production was allowed to resume, and that they wanted to evaluate the final investigation report and see if Freeport implemented all recommendations. Production activity at Grasberg open-pit mines have resumed and workers are back working at the mining sites, Papua-based union official Virgo Solossa said. The Freeport Indonesia management had not consulted the union when asking workers to return to their duties, Solossa said, adding that the government would be held accountable should there be any further accidents at the mining site.

Japan copper-alloy product output falls for seventh month

Japan's output of copper and alloy fabricated products declined 2.5 percent in May from a year earlier, dropping for a seventh month as demand remained subdued, an industry group said. Production, including sheets and tubes, was 63,680 metric tons last month, compared with 65,340 tons a year ago, the Japan Copper & Brass Association said. Output totaled 65,279 tonnes in April, down 3.7 percent from a year earlier. The country's trade balance fell for the 11th straight month as a weaker yen boosted the costs of imports, a Finance Ministry report showed. The yen has fallen 11 percent against the dollar this year following Prime Minister Shinzo Abe's unprecedented monetary stimulus. “Shipments to major consuming industries such as cars and semiconductors still remained subdued, while deliveries to the export industry rose for a second month as the yen weakened,” said Keizo Tani, association research manager. “Production has gradually recovered as the size of monthly declines from a year earlier has shrunk from a 5.4 percent drop in March.” Japan's trade deficit was 993.9 billion yen ($10.4 billion) last month as imports gained 10 percent, the finance ministry report showed. The shortfall was the third largest on record and the biggest ever in May. The country's export also increased 10 percent in May from a year earlier, the most since 2010. Copper wire and cable shipments climbed 2.1 percent to 54,200 tonnes in May from a year earlier, increasing for the first time in six months on a pick-up in deliveries to construction companies, the Japanese Electric Wire & Cable Makers' Association said. Deliveries were 54,945 tonnes in April, down 1.9 percent from a year earlier.

Jinduicheng Molybdenum's Yukon mine to cut output

Yukon Zinc Corp., the Canadian metals producer controlled by China's Jinduicheng Molybdenum Co., said it will cut output at its Wolverine mine by 40 percent after a drop in zinc and silver prices. Yukon Zinc will also reduce jobs at the mine and its Vancouver headquarters, the company said in a statement on its website. The company will review the changes in 90 days, it said. With current market conditions, these actions were necessary to responsibly stabilize the company's finances and put Yukon Zinc on a realistic path forward, Yukon Zinc Chief Executive Officer Jingyou Lu said in the statement. Wolverine, in Yukon, produces zinc, copper, lead, gold and silver. Ore processing reached the mine's design capacity of 1,700 metric tonnes a day in the first quarter.

Ibris Group plans $1.8 bln Indonesian nickel smelter

Ibris Group, a Singapore-based miner, announced plans to build a $1.8 billion nickel pig iron plant in Sulawesi, the latest in a series of smelter projects after Indonesia began tightening controls on ore exports. Indonesia, the world's top nickel ore exporter, has been pushing for greater returns from its resource wealth. In 2009, it imposed a ban on unprocessed ore exports after January 2014. The government, which has faced widespread criticism from miners and metal importers over the rules, has indicated it may relax the ore export ban for companies with smelter projects, however. Singapore-based Ibris, which expects to export around 3 million tonnes of nickel ore this year, triple its 2011 level, plans to build the Rotary Kiln Electric Furnace smelter in two stages, with a total budget of around $1.8 billion. Ibris signed a memorandum of understanding with China's Yong-Xing Alloy Material Technology Taizhou Co. Ltd., which will invest in the project. In the first pilot stage, the development of two modules is expected to be completed in eight months, Yong-Xing Alloy Materials General Manager Yizheng Zong said. The project is the first investment Yong-Xing has made outside China, Zong said, adding that Yong-Xing would also take some of its production. China consumes around 27 million tonnes of nickel pig iron a year, Zong said. If the pilot stage is successful, the companies plan to roll out 38 more modules, which could take up to four years to complete. The full project is expected to produce 600,000 tonnes of nickel pig iron a year with a nickel content of around 8 percent. The plant is expected to process 6 million to 8 million tonnes of nickel ore per year, some of which the company plans to obtain from other miners in the area. Much of Indonesia's mining industry has been hoping for a relaxation in the 2014 ban and of the 20 percent tax on ore exports, Ibris Nickel Chief Operating Officer Agus Suhartono said.

Japan Q3 aluminium premiums set around $250/t

Japan's term aluminium premiums for shipments between July and September were mostly set around $250 per tonne, compared with $248 to $250 in the previous quarter, four sources directly involved in the talks said. Japan is Asia's biggest importer of aluminium and the premiums for its imports, agreed each quarter, set the benchmark for the region. The moderate increase reflects a perception among suppliers that conditions have improved in Japan under Prime Minister Shinzo Abe's $1.4-trillion stimulus programme, but the final premium was down from initial requests for an increase to $252-$254 from producers. Buyers were pushing hard to keep the premium in line with the April to June quarter as they do not believe that so-called Abenomics has stoked demand, sources said. Producers wanted to raise premiums even as little as $1 because they said Abenomics will help boost demand, but buyers don't believe that is a good reason as demand has not picked up and inventories at Japanese ports are increasing, said a source at a buyer. A source at one of the suppliers said most deals were booked at $250 with some at $251. Some buyers are still holding out for a premium below $250, according to three sources. Spot premiums are at around $250 in Asia, according to two trading sources. Premiums reached record highs last year as although the global aluminium market is in a surplus, most of the material is tied up in financing deals and is not available to market.

Nickel market in 32,900 tonne surplus

The global nickel market was in surplus by 32,900 tonnes in the first four months of the year, the latest monthly bulletin from Lisbon-based International Nickel Study Group (INSG) showed. It showed world primary nickel consumption totalled 582,400 tonnes in the year to April, while primary nickel output was 615,300 tonnes. Nickel mine production during the period totalled 639,700 tonnes, down from 685,900 tonnes in the same period last year. Latest figures showed nickel stocks held by producers were at 85,500 tonnes in March, down from 87,200 tonnes in February.

GAM Holding plans to launch physically backed base metals ETFs

Switzerland's largest listed asset manager GAM Holding said it will launch exchange-traded funds (ETF) for industrial metals, backed by physical aluminium, copper, nickel and zinc. Swiss and Global, a fund manager for bank Julius Baer and part of GAM Holding, said the funds would store the four metals in warehouses registered with the London Metals Exchange (LME) in Europe, Asia and the United States. No other details of the funds, known as the JB Industrial Metals Funds, were available. Investors buy shares in ETFs which are backed by physical metal as collateral. The new ETFs are intended to give investors easier access to the metals market without the added costs linked to a market structure known as contango where forward prices are more expensive than the spot. But the news comes as investor appetite for base metals has deteriorated due to concerns that demand from China, the world's biggest copper consumer, will slow. Similar initiatives in the United States have proved controversial as industrial users worry that ETFs will remove a large chunk of the metal from the market and inflate prices. The U.S. Securities and Exchange Commission has given the go-ahead for the world's largest money manager BlackRock and Wall Street bank JPMorgan Chase and Co to launch two separate copper ETFs. But those have not yet been listed and copper fabricators, which use copper to make wiring, are fighting the ruling in the U.S. Court of Appeals in Washington, D.C. The new JB fund will take on ETF Securities, which has launched its own physically backed funds for copper, zinc, nickel, tin, aluminium and lead over the past three years. Its copper fund has only amassed investments representing just under 4,000 tonnes of metal worth about $34 million at the prevailing prices while the aluminium one has just 270 tonnes of metal as collateral worth just under $500,000. That compares with about 31 million ounces of gold - worth $40 billion - held in the largest gold-backed ETF. The timing of the JB launch is not known.

Bauxite price dip to benefit aluminium cos

Aluminium companies are likely to get a breather in the form of falling bauxite prices driven by the demand slump from China. Bauxite, which is the key raw material to produce aluminium, is usually exported from Gujarat to West Asia and China. However, recent slowdown in China and falling metal prices including aluminium, has led to a fall in imports from the major consumer, China. Exports of bauxite from Gujarat halted in recent months on cancellation of orders from Chinese importers. This will help the domestic producers with cheaper bauxite ore, a top official of Vedanta Aluminium said. He also said due to Chinese buying of bauxite in higher prices from the country, the raw material prices have not dipped despite falling aluminium prices. There was a mismatch between aluminium and bauxite ore prices as China was paying higher price for ore. With lesser demand from China, bauxite ore prices are likely to come down further. Chinese import of bauxite from the country stands at around 5 lakh tonne a month with an average price of $45-50 per tonne. Despite fall in aluminium prices to around $1,720 a tonne from the high level of $2,400 a tonne seen in 2008-09, bauxite prices have not dipped due to building up inventory by China to feed its aluminium units. On this, an analyst from a brokerage firm said falling Chinese demand will help aluminium producers like Vedanta and Hindalco, even to some extent the state-run Nalco. Falling raw material prices will translate into lesser cost of production. And less manufacturing cost will help domestic producers in an environment when the prices of the metal are subdued in the international market. However, secretary general of Federation of Indian Mineral Industries (FIMI) RK Sharma said exports have stopped due to imposition of export duty of 10 per cent on the bauxite ore. When international prices are subdued for the metal, export duty of 10 per cent make domestic raw material uncompetitive in international market, affecting exports from the country.

Trader Ushdev snares copper sales after shutdowns

India's top private-sector metals trader, Ushdev International Ltd, has won a toehold in India's copper market after recent smelter shutdowns, and aims to add zinc and aluminium as it bids to take on big state-linked producers. Ushdev, India's biggest nickel supplier with 40 percent of the market, had pounced on a copper supply squeeze after the two top domestic smelters were temporarily closed earlier this year, managing director Arvind Prasad said. The competition did not have production, so it is an opportunity. The company sold about 2,000 tonnes of copper rods in that one to one-and-a-half months. It has about 100 customers to which the company has supplied. Some are new, but its intent is from there to look at 10 to 15 of them who can then be the back-to-back long-term customers. India's notoriously cut throat metals market is dominated by a handful of major producers such as Sterlite Industries , Hindalco Industries Ltd and Hindustan Zinc , which produce about 90 percent of the country's copper and meet 85 percent of its zinc needs. The recent copper smelter shutdowns could open a window for alternative suppliers such as Ushdev, although major producers are likely to vigorously defend any challenges to their market share. What will happen now is that some of the people who source from Sterlite will now be a bit more careful and keep up relationships with alternative suppliers, said a trader, who declined to be named. Trading companies like Ushdev have only a fraction of the market for metals such as copper and zinc, but hold a much bigger share of the nickel business, where India has little domestic production, and are active in ferrous metals and coal.
Rather than provoking a head-on challenge, Prasad hopes Ushdev can sidestep the big producers by nurturing a new customer base and beefing up its sources of supply of copper, zinc and aluminium to provide a cheaper alternative, Mumbai-based Ushdev, capitalised at $190 million, also has offices in Hong Kong and Singapore, and sources most of its London Metal Exchange (LME) grade metals via Hong Kong-based Noble Group. It snared the copper business when India's top smelter Sterlite closed for two months after complaints over emissions, creating a shortage that was exacerbated when Hindalco shut its Birla smelter for maintenance in May.

Swiss Global expands in industrial metals funds with Trafigura

Swiss & Global Asset Management AG, manager of precious metals exchange-traded products, is expanding into physical industrial metals supplied by Trafigura Beheer BV. The JB Industrial Metals Funds will hold aluminum, copper, nickel and zinc, according to a company statement. They will start this year, according to Stephan Mueller, product developer of the industrial and precious metals funds. Trafigura will sell the metal, stored by its NEMS unit, a warehouse company approved by the London Metal Exchange, he said. This is a new product generation that gives efficiency in an area where there hasn't been efficiency for the last decade or years, Mueller said. That's really single- asset instrument, long-only. We'll store the metal and hold it for investors and nothing else. That's the most important thing. The client has the opportunity to get as close as possible to the prices of copper, nickel, zinc and aluminum. JPMorgan Chase & Co. and Blackrock Inc. have won approval from the U.S. Securities and Exchange Commission to introduce exchange-traded funds linked to copper and have yet to start the products. ETF Securities Ltd. started the first ETPs backed by copper, nickel and tin in December 2010. Assets in the copper fund were 3,600 metric tonnes, according to the company. Global copper production was 20.1 million tonnes last year, according to the International Copper Study Group.
Swiss & Global will first start the subscription period enabling investors to place orders, Mueller said. The products will be only accessible by qualified investors. That generally means investors who have at least 500,000 Swiss francs ($530,673). The cost of investing in the fund will be reduced as much as 75 percent. For example, rent charged for storing aluminum in NEMS's warehouses may be “in the range of 8 cents per ton per day,” Mueller said. That compares with as much as 48 cents a ton charged by LME-approved warehouses, according to the LME website. Commodity investments fell $27 billion in April, the most in 11 months, on record sales of gold ETPs, Barclays Plc said. The LME Index of six industrial metals on the LME has fallen 15 percent this year, and on June 24 was the lowest since June 2010. Mueller said it's possible Swiss & Global will expand the funds into lead and tin.

NALCO Celebrates 15th National Technology Day

On the eve of 15th National Technology Day, NALCO organized a talk on 'Test Range Technology' at its Corporate office. As the Chief Speaker, Shri M.V. Bhaskarachary, Associated Director, Integrated Test Range (ITR), DRDO, Chandipur, explained the Test Range Technology, through audio-visual presentation on the different missiles successfully test fired by India so far and highlighted the significance of this technology. Shri Ansuman Das, CMD, NALCO presided over the function and emphasized the importance of National Technology Day and stressed on the role of R&D. He said that there is a need for collaborative research and development to improve our performance. In turn, Shri N.R. Mohanty, Director (Project & Technical), NALCO, said that National Technology Day is an occasion to inspire young minds to work in the field of science and technology. He further emphasized that it is time to sharpen our skills through innovation and invention. At the outset, Shri S.K. Dash, ED (P&T) of the company introduced Shri M.V. Bhaskarachary. Besides NALCO employees, eminent Scientists, Technologists, Engineers, drawn from various organizations participated in the function. On this occasion, NALCO also felicitated three of its officers, namely Dr. B.K. Satpathy, GM(R&D), Corporate Office, Shri S.K. Patnaik, DGM(E&S), CPP and Dr. S.C. Patnaik, Sr. Manager (Lab), CPP, who were associated with the Patent titled 'Process for Preparation of Ultra Fine, Low Bulk density Alumina Tri Hydrate', granted to the Company during 2012-13, with cash prize of Rs.10,000 each and merit certificates.

KLTM tin price ends lower to USD 19150 per tone

Kuala Lumpur Tin Market fell by USD 800 per tonne to close at USD 19,150 per tonne on lack of buying support. A dealer said that the sharp fall in the local tin market was also in tandem with the easier sentiment on the London Metal Exchange which saw the metal's prices decline USD 1,170 per tonne to USD 18,865 per tonne. He said that sellers withdrew when the price fell but some scattered buying helped limit the losses in the local market. At the opening bell, bids amounted to 10 tonnes against offers of 106 tonnes. European, Japanese and local buyers accounted for the turnover of 40 tonnes, against 33 tonnes recorded. The premium between the KLTM and LME widened to US$665 per tonne from USD 285 per tonne.

Indian copper down on global cues

Indian copper prices moved down by 0.22% to INR 422.05 per kilogram in futures trade as speculators offloaded their positions driven by weak global trend. At the Multi Commodity Exchange, copper for delivery in November declined by 95 paise or 0.22% to INR 422.05 per kilogram in business turnover of 450 lots. Similarly, copper for delivery in August traded lower by 85 paise or 0.20% to INR 416.90 per kilogram in 8,184 lots. Market analysts said that speculators offloaded their positions in tandem with a weak global trend as the dollar climbed after better than expected US employment data increased bets that the Federal Reserve will slow record monetary stimulus this year, mainly influenced copper prices at futures trade. Meanwhile, copper for delivery in three months lost 0.6% at USD 6,747.25 per tonne on the London Metal Exchange.

HZL to raise output by 20%

Hindustan Zinc Limited, the country's only integrated zinc producer, is poised to increase output from its mines by 20% to 1.2 million tonnes (mt) over the next three years, at a time when some of the world's largest zinc mines in Canada and Australia are being shut down nudging the global zinc market into supply deficit scenario.

Rusal to boost output at Guinea bauxite project

Rusal, the world's largest aluminium producer, and the government of Guinea have signed a plan to develop the Dian-Dian bauxite deposit which will involve building an alumina refinery and gradually increasing ore output. Hong-Kong-listed Rusal owns the rights to develop Dian-Dian, the world's largest bauxite deposit located in Guinea, West Africa, which it plans to exploit in several stages, the company said. During the first stage, the company will develop a bauxite mine with a capacity of 3 million tonnes per year by 2015, potentially lifting output to 6 million tonnes per year by 2019. An alumina refinery plant with the capacity of 1.2 million tonnes per year is expected to be built in the next six years, under the plan. Its capacity could hit 2.4 million tonnes and bauxite production at Dian-Dian could grow to 12 million tonnes per year, with the exact output growth depending on the global economic situation and Rusal's needs, the company said. "The mutually beneficial nature of our cooperation will improve the investment climate in the Republic of Guinea and raise the competitiveness of Rusal as a leader of the global aluminum industry and one of the largest investors in this African country," First Deputy CEO Vladislav Soloviev said in a statement. Rusal, controlled by billionaire Oleg Deripaska, accounted for 9 percent of global aluminium and alumina production in 2011. The aluminium major markets and sells its products to Europe, North America and South East Asia.

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.”

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.

London Copper steady as Fed stimulus and growth worries weigh

London copper held steady not far off 3 year low hit in late June with slowing demand growth from top consumer China and expectations the United States will rein in stimulus giving little upward momentum to prices. China's copper consumption peaks in the Q2 with demand from factories easing over the northern summer while economic data has given little hope for a robust recovery. The drawback of liquidity from the United States meanwhile means less capital is available to cushion industry in the world's biggest economy and also that less cash is on hand for commodities investment.
Mr Alexandra Knight of National Australia Bank in Melbourne said that "There's still the ongoing concerns about Fed tapering and when that will begin. If you see more positive data out of the US that brings forward the potential tapering date.”
US job growth was stronger than expected in June cementing expectations that the Federal Reserve may start winding down its massive stimulus program as early as September.
Three month copper on the London Metal Exchange was little changed at USD 6,845 per tonne by 0315 GMT up 0.22%. It logged gains of less than 1% in the previous session.
Copper prices have struggled to get any traction after inching away from a three year low of USD 6,602 per tonne reached on June 25. Prices have gained only about 3.7% from there and are still down almost 14% for the year.
The most traded November copper contract on the Shanghai Futures Exchange climbed 0.80% to CNY 49,130 per tonne. China's resolve to revamp its economy for the long term good will be tested this month when a slew of data is expected to show growth is grinding towards 23 year low. Mr Knight said that "Generally we're seeing data coming in below expectations and showing some softening in the Chinese economy and that could have a significant impact on metals demand.”

Avalon Minerals to reveal Scoping Study results for Viscaria copper project

Avalon Minerals is preparing an announcement regarding the updated Scoping Study results for the Viscaria copper project which is located in Sweden, and an update on the company's strategic review process.
The ASX has granted Avalon a trading halt with its shares placed in pre open. Last month in a strategic review Avalon outlined that it will consider the funding requirements for Viscaria to complete a Bankable Feasibility Study along potential joint venture arrangements and strategic partnerships.
The halt will last until the earlier of an announcement being made to the market or the opening of trade on 10th July 2013.

Cuba closes oldest nickel processing plant

Alcoa announced strong operational performance in Q2 2013 offset by special items primarily for restructuring and a legacy legal matter. As a result, Alcoa reported a net loss of USD 119 million or USD 0.11 per share in Q2 2013 which includes USD 195 million of special items.
Excluding the impact of special items, net income was USD 76 million or USD 0.07 per share driven by productivity gains across all business segments and record performance in Engineered Products and Solutions. In the H1 of 2013, Alcoa's value adds businesses accounted for 57% of total revenues and 80% of segment after tax operating income.
The Company reported solid Q2 2013 revenue of USD 5.8 billion, positive free cash flow and lower debt as strong end market demand mitigated an 8 percent sequential decline in London Metal Exchange cash price.
Mr Klaus Kleinfeld chairman & CEO of Alcoa said that “Our businesses showed remarkable operating performance in the quarter with solid free cash flow. In our value add businesses we reached another milestone with record profitability in our downstream business while acting decisively to defy the headwinds of falling metal prices in our upstream businesses. We improved our competitive position by actively restructuring, curtailing, and closing facilities and made progress addressing legacy legal issues.”

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 and 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.

Eramet Unit negotiates nickel mine

Eramet SA unit PT Weda Bay Nickel, negotiating with Indonesia to set up a $5 billion nickel mine and smelter, agreed on four out of six points in a government review of the company's mining contract. Indonesia will allow Weda Bay to set up the mine and facilities in an area greater than 25,000 hectares (61,776 acres), Thamrin Sihite, director general of coal and minerals at the Energy and Mineral Resources Ministry, said in Jakarta recently. In return, Weda Bay will build the smelter, use local workers and services and continue its business under a new mining license after its 30-year contract expires in 2028, Sihite said. Indonesia began reviewing all mining contracts in January 2012 to ensure they were in line with the country's interests and increased state revenue. A panel, set up to review the agreements, has until December 2013 to complete its work, according to a decree signed by President Susilo Bambang Yudhoyono. “We are still discussing state revenue and divestment,” Sihite said. The government wants the company to pay higher royalty and foreign shareholders to reduce their stake to 49 percent, he said. Eramet, a French mining group, and Japan's Mitsubishi Corp. and Pacific Metal Co. own 90 percent of Weda Bay. Indonesia's state-owned miner PT Aneka Tambang owns the remainder, according to the company's website. Weda Bay's President Director Alain Bernard Henri Giraud met with Sihite to discuss progress on the contract review, the energy ministry said in a separate statement posted on its website. The company plans to build the project in Halmahera island in Indonesia's North Maluku province. It may start operating by 2019, Sihite said. Weda Bay will use 80 percent of its $5 billion investment for smelter construction and the rest for developing the mine, the company said in a statement. It will employ about 2,300 workers, of which 65 percent will be locals. Indonesia limited exports of mineral ore in May 2012 to boost revenue from higher-value processing at home.

Century acquires Rio Tinto Alcan's Sebree smelter

Monterey, California-based Century Aluminum Company has announced that it is buying Rio Tinto Alcan's Sebree aluminum smelter in Henderson County, Kentucky. Sebree employs over 500 people and has an annual production capacity of 205kt/yr of primary aluminum. Michael Bless, Century's president and CEO, said: "We are well acquainted with the Sebree smelter and its excellent management team and talented group of employees. We believe that, with these facilities under common ownership, we will derive real benefits in better serving customers and through improving both operations with the sharing of best practices in safety, technical and operational practices and procedures. My colleagues and I are anxious to welcome Sebree's men and women into the Century group of companies."
According to Bless, Sebree, like Hawesville, is a globally competitive operation 'in every area other than the cost of power', adding that gaining access to competitive energy was crucial for the continued viability of both Hawesville and Sebree.
"We hope that the tentative agreement we have reached for Hawesville will be the first step towards obtaining market priced power," said Bless. Century will acquire the smelter for $61 million in cash (after $4 million in purchase price deductions) and will receive $71 million in working capital, subject to customary adjustments. As part of the transaction, RTA will retain all the historical environmental liabilities of the Sebree smelter and has agreed to fully fund the pension plan being assumed by Century's subsidiary at closing.The transaction is subject to certain closing conditions, including the consent of Kenergy Corporation to the assignment of the smelter's existing power contract, which will terminate on January 31, 2014.

Global recovery to keep copper prices firm

Copper, the oldest known metal is versatile and recognised for its growing contribution to the economy. Today over 400 copper alloys are in use and combined with other metals like zinc and tin, copper makes the alloy harder, stronger and anti corrosive. The average price of copper which remained subdued in 2011, swung between gains and losses in 2012. The debt concerns in Eurozone along with decelerated growth in the major economies of the world, particularly the US and China weighed on the performance of copper in the H1 of 2012. So, the prices of copper on the London Metal Exchange slipped below the USD 8,000 mark between April and June after remaining above it in the early months of 2012. The efforts by the European Central Bank led the prices of copper to strengthen in July after touching an average monthly low of USD 7,438 per tonne in June 2012. The much awaited quantitative easing programme by the US Federal Reserve in September led the prices to move towards the USD 8,000 mark.
The US Federal Reserve announced an unlimited bond buying programme to spur growth and will continue the stimulus measures till the job market improves. The infrastructure spending initiatives by China also increased the usage of metal in the second half of last year. The prices witnessed a fall in November, shadowed by the US fiscal cliff worries among market participants, along with uncertainty over the presidential elections. The re-election of US President Barack Obama created hopes over the resolution of the fiscal cliff. The metal's price started to rise in December with signs of favourable data coming in from China, the major consumer of the red metal. However, concerns over the resolution of the fiscal cliff continued to haunt the market sentiments. A last minute deal among the US lawmakers averted the USD 600 billion fiscal cliff which would have caused automatic spending cuts and tax hikes. The average copper prices on LME gained 5% and ended at around USD 7,991 per tonne in 2012. The other factor that continued to support the upward movement in copper prices was the global deficit that the metal faced last year.

NALCO hikes aluminium prices by INR 5000 per tone

National Aluminium Company Limited has increased prices of all its products by INR 5,000 per tonne. A senior company official said , "We have increased the price of all our aluminium products by INR 5,000 after aluminium gained in the London metal exchange. Nalco products include aluminium ingots, sows and billets.” He said that Nalco is Asia's largest integrated aluminium producer and its sales prices are watched as they generally serve as an international benchmark. The basic price of standard aluminium ingots after the latest revision increased to INR 144,700 per tonne.

Escondida copper mine workers reject early wage offer

Workers at the world's biggest copper mine, Chile's Escondida, have rejected an early pay offer made by mine controller BHP Billiton, a union leader said. The risk of a strike appears remote, however, because it is illegal to go on strike in Chile before official pay talks have begun. Collective contract negotiations at Escondida are due to take place after the current contract expires in June 2013. "Workers rejected the company's proposal as they considered it insufficient," union secretary Marcelo Tapia told Reuters. "This was an invitation by the company to have early collective negotiations, which should actually happen in July 2013. We're going to officially inform them on Dec. 28 of workers' rejection of their proposal," he added. BHP was not immediately available to comment. No details were available on the company's proposal or the union's demands. If no early wage offer is accepted, workers and the company will sit down for wage talks as scheduled next year. Escondida's union stunned the copper market last year by staging a two-week strike, sending the mine's output tumbling and raising the specter of an increase in labor action. BHP and Rio Tinto, which owns 30 percent of the mine, have approved plans for a $4.5 billion expansion of Escondida to boost output. Escondida's third-quarter output surged 72.4 percent from a year earlier to 253,800 tonnes, boosted by better ore grades and a low base of comparison from the year-ago quarter. Output in the January-September period was 787,000 tonnes, up 31.6 percent from a year earlier. Earlier this month, workers at the giant Chuquicamata mine of Chile's state-run copper firm Codelco accepted a wage offer with the company.

KCM plans to increase copper production

Konkola Copper Mines will develop 2 large declines tunnels to access new ore bodies at Nchanga underground mine to produce between 6,000 tonnes and 7,000 tonnes of copper in the initial stage. Mr Jeyakumar Janakaraj CEO of KCM said that development of tunnels will start next month with trail mining expected to commence next year. We have decided to do two large declines to access new ore bodies. The project is currently at development stage and will start the development next month while trail mining will start in the next one year. We expect to get between 6,000 tonnes and 7,000 tonnes of copper in the 2013 to 2014 financial year.
Mr Janakaraj said at a press briefing in Lusaka recently that about 500 jobs are expected to be created during the initial stage. The project will significantly enhance copper production as part of KCM's strategy of extending mining lifespan. Increased copper production remains critical for the mine, which produced about 123,000 tonnes in the last nine months of KCM's financial year. He said that we remain focused on increasing volumes and growing the mine and ensuring that every US dollar comes back in the country for re-investment.
KCM has in the last 5 years paid more than USD 500 million in taxes to Government. Its taxes and other royalties are expected to increase further as copper output increases. Meanwhile, Mr Janakaraj has reiterated the mining firm's commitment to uphold good governance practices in its quest to contribute to the economic development of the country. Our focus is extremely governed by good practices. We have informed Government of all our transactions and have never hidden our revenues because it is not our cup of tea.

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.

Cuba closes oldest nickel processing plant

Cuba has closed the oldest of three nickel plants in the country, a local Communist Party leader said, a looming event that had become the talk of the mountain town of Nicaro, in eastern Holguin, where it is located, reports said. Nickel is Cuba's most important export and one of its top foreign exchange earners after technical services and tourism. "This plant's productive role is completed and now it will dedicate its efforts to services," Jorge Cuevas Ramos, First Secretary of the Holguin Communist Party, said in an interview with the provincial television station. A local radio report earlier in the week had also indicated the plant was closed. "After the closing of the René Ramos Latourt plant, its director said only the mineral transportation system would be maintained so it is ready to be transferred to Moa or for a foreign company that might be interested in investing in the area," the report said. The Cuban nickel industry is cloaked in secrecy. National media and officials have yet to mention the plant's closure after operating for around 70 years. Cuba produced 69,700 tonnes of unrefined nickel plus cobalt in 2010, the last official figures available. "This is something that has been on people's minds for a while, because the plant has very old technology and very low efficiency," said an office worker at the plant, who asked to remain anonymous. "We didn't know exactly when it would close, but eventually it would have to because it is not economically sustainable," she said. The Ramos Latour plant had been producing only a few thousand tonnes of unrefined nickel plus cobalt in recent years as the government struggled to keep it open and figure out what to do with Nicaro's 15,000 residents. Cuba will now have two nickel processing plants operating in Holguin, one a joint venture with Canadian resource company Sherritt International and another owned by state-run Cubaniquel, both located in Moa, Holguin. Cuevas, during the interview, said Cuba's Ernesto Che Guevara plant did not meet its 2012 plan, while the Pedro Sotto Alba plant with Sherritt had, without providing further details. Reuters estimates this year's output at around 65,000 tonnes of unrefined nickel plus cobalt.

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.

Peru to double copper output in two years

Peru will nearly double its copper output in the next two years and will not give up on a $5 billion project by Newmont Mining that has stalled due to community opposition, its mines and energy minister said. Jorge Merino told Reuters the government is looking to loosen the process of awarding permits for mining projects while trying to mediate agreements between companies and locals.
Peru, which has vast mineral resources, is the world's second-largest producer of copper and sixth of gold, but many Andean communities suffers from widespread poverty and worry mining projects will generate pollution but little economic benefit. The administration of President Ollanta Humala said in August it would essentially stop trying to overcome local opposition to U.S.-based Newmont's Conga gold project in the northern region of Cajamarca - nearly conceding defeat in a protracted political battle.
Newmont has said it was temporarily suspending work on the Conga mine while it builds community water reservoirs and seeks local support for the project. "Conga must go forward," Merino said. "We don't have the luxury to lose an investment that big." Mineral shipments make up about 60 percent of Peru's export earnings. Tensions over the spoils of natural resources have threatened to derail some $53 billion in investments over the next decade in the country, South America's fastest-growing economy. But Merino said that many plans are going forward - such as Xstrata Copper's $1.47 billion Antapaccay mine, HudBay Mineral's $1.5 billion Constancia project and the expansion of Freeport McMoran's Cerro Verde copper mine. Southern Copper is also working on a revised environmental plan for its $1 billion Tia Maria project. He said new projects slated to come online through 2014 will allow the Andean nation to churn out an extra 1 million tonnes of copper per year - on top of the 1.3 million it produces now.

NALCO sells 30,000 alumina at around $335/t

The public sector aluminium major National Aluminium Company (Nalco) has sold 30,000 tonnes of alumina at around $335 per tonne on a free-on-board (FOB) basis to a Dubai-based buyer, company sources said. The alumina will be shipped next month, said the sources. India's third-largest aluminium producer's tenders serve as a global benchmark. Nalco last sold 30,000 tonnes of alumina at around $330 per tonne FOB to a Singapore-based buyer in May.

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.

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.

Congo's Gecamines says bigger Ivanplats stake not first priority

Gecamines, Democratic Republic of Congo's state-owned mining company is considering raising its stake in Ivanplats Ltd's Kamoa copper project, though this “is not a priority,” Chairman Albert Yuma said.
The company is focusing first on the financing and development of Deziwa and Ecaille C plants, but not keen on dropping Kamoa. Billionaire Robert Friedland's Ivanplats last year offered the state the opportunity of increasing its stake in Kamoa by 15 percent at market rates, giving it 20 percent of the project in the southern Katanga province.
Friedland has described Kamoa as the most significant copper discovery in Congo in more than a century. Gecamines, based in Lubumbashi, is considering finding a partner to develop two copper sites that may contain 5 million metric tons, Chief Executive Officer Ahmed Kalej said. Gecamines in January this year completed its takeover of the Deziwa and Ecaille C copper-cobalt projects in the after buying out Copperbelt Minerals Ltd's indirect 68 percent stakes.
The sites, located near mines operated by Glencore International Plc and Freeport-McMoRan Copper & Gold Inc., may eventually produce a combined 200,000 tons of copper a year, making them one of Congo's biggest, according to Gecamines. Gecamines borrowed $200 million from a London-based bank to pay for the Deziwa and Ecaille C purchase and is in talks with three lenders for about $1 billion of further financing in the “medium term,” Yuma said.

Aluminum Association reaches record membership with company additions

The Aluminum Association has announced the addition of three companies to the organization's membership. Scotwood Industries, Page Transportation and Alloy Technology Innovations each of which provides goods or services to the aluminum industry will join the Association as Associate members. These additions bring total membership of the Aluminum Association to a record 98 members consisting of 51 producer and 47 associate members.
Mr Patrick Franc Aluminum Association chairman and president and CEO of Tri Arrows Aluminum said that "I'm a big believer in having as many voices as possible included in our membership. These new additions will bring a unique perspective and help the Association continue its critical work advancing the industry and promoting aluminum as the sustainable material of choice."
Additionally, the Association's Executive Committee which provides strategic vision and guidance to the Board of Directors recently elected three new members Mr Etienne Jacques COO for Rio Tinto Alcan Primary Metal North America; Mr Kelly Thomas senior VP and GM, North America Rolled Products at Aleris and Mr Michelle O'Neill VP of Government Affairs and Trade Policy for Alcoa.
Mr Heidi Brock president of Aluminum Association said that "A diverse decision making body representing all aspects of membership is critical to the success of the Aluminum Association. Etienne, Kelly and Michelle each bring fresh ideas to the Executive Committee. They are extremely valuable not only for their respective expertise, but also for their innovative approaches to reaching the Association's goals.”