Kenmare Resources sees record production at Mozambique mine
Mining company Kenmare Resources has reported another record level of production at its Moma titanium minerals mine in Mozambique.
The firm said total shipments of finished product during the three months to the end of September rose by 48% to 280,800-tons with ilmenite, zircon and ore production all increasing.
In a trading update, Kenmare said it was also benefitting from lower production costs and an increased spot price for ilmenite, which is up by 70% in China this year alone.
“Q3 2016 represented a record quarter for finished product output, demonstrating the benefits of stable power supply, increased supplemental mining and higher grades”, Managing Director Michael Carvill said.
“2016 is also expected to be a record year for production of all final products, and for unit costs to be even lower in the second half of the year”, he added.
Source: Irish Times
Rio Tinto and Savannah to start Mozambique operations immediately, after new consortium arrangement gets green light
Savannah Resources Plc has announced a new Consortium arrangement with Rio Tinto covering Savannah’s Jangamo Project and Rio Tinto’s Chilubane and Mutamba Projects, including the Jangamo, Dongane and Ravene heavy mineral sands deposits, all of which are located in a world class, heavy minerals sands province in Mozambique, that will enable Savannah to commence work immediately.
David Archer, Savannah’s chief executive officer said that: “Following consultation with the Ministry of Mineral Resources and Energy of Mozambique we’re delighted to have agreed to a new Consortium arrangement with Rio Tinto, a leading global mining and metals company, that will enable operations to start immediately in a combination on materially the same commercial terms as previously agreed and announced.”
“Agreeing an arrangement that enables exploration activities to be conducted on a unified basis across the Mutamba, Dongane and Jangamo projects makes significant commercial sense, effectively combining three areas which are part of the same, continuous mineralisation trend.
Mutamba/Jangamo includes an established 65mt at 4.2% THM resource and significant expansion potential and an exploration target of between seven and 12-billion tons at a grade ranging from 3% to 4.5% THM”. “Savannah will operate the combined projects and can earn up to a 51% beneficial interest in the combined Mutamba/Jangamo Project in stages by undertaking scoping, pre-feasibility and feasibility studies. Our focus is now on commencing activity on the ground, with a scoping study due to commence immediately and targeted for completion in Q1 2017. Importantly, the projects are located close to existing road, grid power, water, and port infrastructure and Rio Tinto will be providing access to its existing camp, facilities and equipment”.
Commencement of operations is expected to bring immediate new jobs and investment to Mozambique and Inhambane Province. To expedite commencement of Savannah’s operatorship, the company and Rio Tinto have agreed to transfer legal ownership of their projects to a Consortium company only at a future date (which is expected to be subsequent to grant of a mining lease), subject to receiving the prior written approval of the Ministry of Mineral Resources and Energy of Mozambique to transfer of legal ownership in accordance with Mozambique’s mining law and regulations.
Source: Savannah Resources Plc
Savannah Resources raises a further £800,000 via share placing
Copper, gold and lithium explorer Savannah Resources raised further equity on AIM after another share placing to fund development at its mining projects in Oman, Mozambique and Finland. About 23.5-million shares were subscribed to at 3.5p each to raise £825,186 adding to the
£1.42-million raised in September. Private investment bank Al Marjan, the company’s major shareholder, maintained 29.99% of the shares with a subscription of £685,370 in cash.
Savannah’s Chief Executive, David Archer has 5.77% of the shareholding with a subscription of £129,816 and its Chairman Matthew King subscribed for £10,000 worth of shares, representing 0.2% of the company’s total share capital.
The funds raised will be used to finance work on its Oman copper-gold project to help deliver mineral resource updates, licencing documents, and a scoping study, to progress its heavy mineral sands projects in Mozambique following the consortium agreement with Rio Tinto on Tuesday 11 October.
The funds will also be used to define drill targets at its lithium projects in Finland; and provide the company with additional working capital.Application will be made for the shares to be admitted to trade on AIM on 17 October, with a total issued share capital of about 449.4m shares of 1p each with voting rights.
Source: Digital Look
JSPL reopens Mozambique mines to tap rising coking coal price
Jindal Steel and Power Ltd. (JSPL) has reopened its mines in Mozambique from 1 October as the price of coking coal, used in steel production, has surged because of supply cuts in China.
The company, which is in the process of selling some of its assets in the power sector to reduce over Rs40,000 crore of debt, expects the rise in coking coal prices to help improve the performance of its mining operations in the second half of the year.
JSPL, which has mining, steel, power and construction businesses, had reported a consolidated loss of Rs1,082 crore for the June quarter, double the loss it had reported in the year ago period, mainly on account of nearly flat demand for steel and high financing costs.
Ravi Uppal, managing director and group chief executive officer of JSPL, said its unit JSPL Minerale Mozambique LDA has restarted mining operations at the Chirodzi Mines in Tete Province in Mozambique as the global price of coking coal, also known as metallurgical coal, has risen by more than 150% since August. JSPL expects that access to its own coking coal will also give its steel output a competitive edge. India has no coking coal reserves and the entire requirement is imported from markets such as Australia, Canada and Africa.
“Prime hard coking coal (A grade) was in the range of US$85 in August. Today the same is being sold at US$215 per ton. Metallurgical coal accounts for a fifth of the cost of making steel and has a direct impact on the price of steel. Steel price is set to go up”, said Uppal in an interview. JSPL has 4.75-million ton a year steel capacity in India and a two-million-ton capacity in Oman.
While the increase in the price of coking coal in world markets is welcome news for miners, passing on the increased cost of coal may not be easy for domestic steel producers in the face of cheap steel imports from China and from countries with which India has free-trade agreements such as Japan and South Korea.
“Coking coal price has been volatile recently and has witnessed an unprecedented increase since August 2016. Any sustained increase will erase existing thin operating margins of steel producers and further complicate logistics and supply chain management decisions”, said Hemal H. Shah, partner, advisory services, Ernst & Young. Many Indian steel companies are dependent on coking coal from China and it is to be seen whether this price (US$215 per ton) continues to appreciate further creating more uncertainty, added Shah.
Domestic primary steel producers (those who make steel from iron ore) have been depending on protectionist steps taken by the government to sail through a period of excess steel production capacity worldwide. These include imposing minimum import price for select steel products and enforcing a 30% export duty on iron ore exports meant to ensure raw material availability to primary steel producers. Downstream user industries of steel (including secondary steel producers) have been resisting these steps as it impacts their raw material costs.
“The protectionist duties on hot rolled coils and plates have led to a situation where import duty on raw materials is higher than that on finished products. As a result, import of steel-based manufactured items have gone up while import of hot rolled coils and plates has declined between June and August. It adversely affects the Made in India drive”, said S.C. Mathur, executive director of Cold Rolled Steel Manufacturers Association of India.
Uppal of JSPL, however, believes that in the second half of the year, the steel industry is expected to do better. “Demand will go up by 4-5% this financial year. In the first two quarters, it was just 0.5%. In the second half, it is expected to go up by 8%. The industry’s fundamentals are strong. It is just going through a low point”, he said.
JSPL’s Mozambique mine, acquired in 2011, was put under care and maintenance early this year due to a progressive fall in the price of coking coal, which forced global mining majors to close down mines. The company’s mines in Australia have extractable coking coal reserves of 250-million tons, while the mines in Mozambique have extractable reserves of 450-million tons, a fourth of which is coking coal. The company is currently in the process of selling its 1,000 megawatt (MW) power plant at Raigarh in Chhattisgarh to Naveen Jindal’s brother, Sajjan Jindal, for Rs4,000 crore to Rs6,500 crore, depending on the plant securing a power purchase agreement within a specified time.
Source: Live Mint
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