South Africa's mines minister urges speedy resolution on Optimum mine

Date Mar 09 2018 15:24:46 Source:Reuters

   JOHANNESBURG, March 8 (Reuters) - South Africa's new mining minister Gwede Mantashe said on Thursday the business rescue process being undertaken at the troubled Optimum coal mine had to be done with "speed", but the operation was working again after some employees were paid.

    The Optimum coal mine, which has faced a strike by its workers over unpaid salaries, sought protection from creditors on Feb. 20 with seven other companies owned by the Gupta family, who are accused of corrupt ties to former President Jacob Zuma.

    Zuma and the Gupta brothers deny any wrongdoing.

    Speaking to 702 Talk Radio, Mantashe said he had met with the business rescue practitioners and they were turning the operation around as well as three other Gupta-owned mines that had liquidity problems.

    "They've paid the workers, they've paid the creditors, the mines are operational again," he said.

    A source at the National Union of Mineworkers told Reuters that permanent employees had been paid at the mine but contractors had not yet been paid.

    South Africa's Exxaro Resources Ltd said on Thursday it was interested in acquiring Optimum's coal export quotas but was not keen on the mining assets.

Report by SHMET

Workers at Canada's Iron Ore Company reject two-tier retirement plan

Date Mar 09 2018 15:22:36 Source:Reuters

    March 8 (Reuters) - The Iron Ore Company of Canada (IOC) said on Thursday its workers in Sept Iles, Quebec have rejected requests for concessions from the mining company, which wants to install a two-tier retirement program.

    The 305 mine workers voted 99.2 percent in favor of a strike mandate, to be exercised when they see fit, arguing that the retirement program disadvantages new workers.

    The workers also demanded that a portion of their vacation be considered paid leave instead of vacation days.

    The IOC is majority owned by Rio Tinto, while Japan's Mitsubishi owns 26 percent.


Edited by SHMET

Japan's Kobe Steel names Yamaguchi as president after data fraud

Date Mar 09 2018 15:20:38 Source:Reuters

    TOKYO, March 9 (Reuters) - Japan's Kobe Steel Ltd on Friday appointed the head of its machinery business as its new president and chief executive, looking outside its major steel division for leadership in the wake of a widespread data fraud scandal.

    Mitsugu Yamaguchi, 60, currently executive vice president, will replace Hiroya Kawasaki, who said on Tuesday he would step down from April 1 to take responsibility for the fraud that the company admitted has been going on for nearly five decades.

    Naming a CEO and president from a business segment other than Kobe Steel's mainstay steel business or its general affairs division is rare for Japan's third-biggest steelmaker, which is seeking to change its corporate culture.

    "Under a new management structure, Kobe Steel will move forward with fundamental reforms to the organization and its corporate culture in an effort to restore the trust of everyone as quickly as possible," the company said in a statement.

    Yamaguchi, who will hold a press conference next Friday, faces a difficult challenge to rebuild credibility at the 112-year-old company.

    Kobe Steel, which supplies steel parts to manufacturers of cars, planes and trains around the world, admitted last year to supplying products with falsified specifications to about 500 customers, throwing global supply chains into turmoil.

    Releasing results from a four-month-long investigation by an external committee on Tuesday, it said it had found new cases of impropriety, widening the total of affected clients to 605, including 222 customers overseas.

    The company's steel division is one of eight business segments and accounted for about 40 percent of total sales in the nine months to end-December and about a third of total recurring profit.

    The company's data tampering came mostly from its aluminium and copper division, but some cheating cases were found at the steel divison.

    The Kobe Steel case, one of the country's biggest industrial scandals in recent memory, set off a rash of malfeasance revelations by other Japanese heavyweights, hitting the country's reputation for manufacturing excellence.


Edited by SHMET

Platinum market surplus to shrink to negligible levels in 2018-WPIC

Date Mar 09 2018 15:16:09 Source:Reuters

    LONDON, March 8 (Reuters) - The platinum market will be broadly balanced this year as a drop in supply of the metal trims last year's surplus to negligible levels, the World Platinum Investment Council said in a report on Thursday.

    Falling automotive and jewellery demand and rising supply from number one producer South Africa - source of nearly three-quarters of mined platinum - had pushed the platinum market into a 250,000 ounce surplus last year.

    That will likely fall to just 25,000 ounces this year, the WPIC said in its Platinum Quarterly report for the final three months of last year. 

    Demand is forecast to inch higher after last year's drop, with stronger jewellery and industrial buying offsetting falling consumption by carmakers, who use the metal in catalytic converters.

    Supply is set to decline slightly, however, as South African output eases back, cutting mine supply by more than a forecast rise in availability of recycled metal.

    "Total mining supply is expected to decline by 4 percent to 5.85 million ounces in 2018, mostly owing to reduced output from South Africa following some mine closures in 2017," chief executive Paul Wilson said in the report.

    "An expected rebound in jewellery demand plays a significant role in what is expected to be a tighter 2018 for the platinum market than 2017," he added.




 SUPPLY                          2018(f)              2017


 Mined output                          5,850         6,075

 - South Africa                        4,175         4,370

 - Zimbabwe                              450           445

 - North America                         370           365

 - Russia                                685           715

 - Other                                 170           180

 Change in producer inventory              0            35

 Recycling                             1,965         1,905

 TOTAL                                 7,815         8,015



 Automotive                            3,285         3,395

 Jewellery                             2,505         2,460

 Industrial                            1,750         1,650

 Investment                              250           260

 TOTAL                                 7,790         7,765


 Balance                                  25           250


    * SOURCE: World Platinum Investment Council, Platinum

Quarterly Q4 2017


Edited by SHMET

Congo prime minister says mining code agreed, no room for compromise

Date Mar 09 2018 15:13:21 Source:Reuters

   LONDON, March 8 (Reuters) - The prospect of 25 percent U.S. tariffs on steel imports has raised fears of a global trade war but steel producers outside North America believe they can weather the storm without too much disruption to their business or steel prices.

    While the United States imported 36 million tonnes of steel in 2017, with Canada, Brazil and South Korea the leading suppliers, that was less than 8 percent of global steel market traded volumes of 473 million tonnes during the year.

    Also, while tariffs would price some imports out of the U.S. market, analysts at consultants Wood Mackenzie estimate that at most 18 million tonnes would be diverted to other markets – or less than 4 percent of annual traded volumes.

    "The volume is relatively small and won't have a big impact on prices," said Roberto Cola, vice president of the ASEAN Iron and Steel Council (AISC), which represents steelmakers in Southeast Asia.

    U.S. President Donald Trump said last week the United States would apply 25 percent tariffs on steel and 10 percent on aluminium to protect domestic producers, prompting major trading partners to threaten retaliation. 

    "It's not the commodity, it's the act of unilaterally imposing tariffs. Nobody does that. Usually there's a process, there are trade remedies. This is out of the ordinary. It sohappened there's a strong steel lobby in the U.S," said Cola.

    Chinese steel prices, which drive global prices, are still nearly 40 percent higher than when Trump first launched his "Section 232" investigation in April into whether steel and aluminium imports threatened U.S. national security.

    Capital Economics chief commodities economist Caroline Bain said global markets and U.S. trading partners were on edge

because they feared the new tariffs were the first of many to

come, rather than over concerns about the metals sector.

    The research house expects U.S. steel to end 2018 at $700

per tonne, up from $476 a tonne before Trump was elected in

October 2016, but believes Chinese prices won't be hit because the its steel exports to the United States have collapsed.



    The White House said Trump is set to sign a presidential proclamation to establish the tariffs by the end of the week, with a 30-day exemption for Canada and Mexico which could be extended. 

    Despite the decline in Chinese steel exports in recent years, analysts say Trump's tariffs are first and foremost aimed at China.

    Its industrial expansion created massive overcapacity in the steel sector and surging exports, which forced some producers to export to markets such as the United States, weighed on global steel prices, and hurt U.S. steelmakers.

    The U.S. president has blamed subsidised or unfairly traded industrial goods from China for decimating U.S. industries such as steel and coal and he ran for election on a ticket of restoring blue collar jobs.

    Still, the United States already has 29 duties in place against Chinese steel products. Last year, China's steel exports to the United States fell to just 1 percent of its total steel exports, according to Reuters calculations.

    The China Iron and Steel Association, the powerful industry body in a country that produces half the world's steel, said the tariffs would have little impact. China only exports 0.1 percent of its overall output to the United States. 

    By contrast, steel markets in Europe, a key U.S ally, have more to lose.

    According to European steel association EUROFER, 15 percent of Europe's steel exports went to the United States in 2017. The bloc also fears steel exported to the United States from other countries could be redirected to Europe after tariffs come in.

    Still, analysts say the risks are contained even for Europe as it could be protected from redirected steel thanks to so-called safeguarding measures Brussels is considering.

    "The EU has talked publicly of enacting safeguard duties. Safeguards would replicate the protections in the U.S. and lead to a protected EU market above and beyond what we're looking at today," said Jefferies analyst Seth Rosenfeld.

    He said that when former U.S. President George W. Bush instituted tariffs on steel imports in 2002, EU safeguards fully mitigated the risk of redirected imports and supported gradual but robust growth in the EU steel industry.

    A source at a Europe-based steel producer said while steelmakers might be able to withstand the tariffs, the industry was trying to deter Trump from taking any action that would harm it, hence the strong rhetoric.

    Tata Steel Europe  TISC.NS  told Reuters: "We welcome the announcement of the European Commission that appropriate and swift measures will be taken to safeguard our industry."  

    "The EU must not allow the moderate recovery in our industry to be destroyed by the EU's most important political ally."



    The Steel Exporters Association in Turkey, the sixth-biggest exporter to the United States said it did not expect a significant impact from the U.S. tariffs.

    Russia, the fifth-biggest, said it expected some damage from U.S. duties, but said it would hit less than the EU and China.

    Ratings agency Moody's said Russian steelmakers' exposure to the United States was either insignificant in terms of exports, or stemmed from their ownership of production facilities in the country.

    For Asian steelmakers, Moody's said the tariffs "would be manageable because exports to the U.S. account for relatively small portions of their total steel production".

    It said Korean steelmakers were most exposed, but big firms such as POSCO and Hyundai Steel  004020.KS  would weather the storm because their exports were diversified, or because they relied strongly on their domestic market.

    ArcelorMittal, the world's biggest steelmaker, said while governments were right to take a tough approach to unfair trade, the only way to create a sustainable industry was for "steel-producing nations to work together to address global overcapacity". 

    Faced with heavy domestic pollution and rising trade tensions, China has already cut 115 million tonnes of legal steel production capacity over the last two years, and another 140 million tonnes of illegal capacity.

    The cuts have driven global steel prices 60 percent higher since late 2015, according to consultants MEPS

    The global steel sector is still straddled with excess capacity in China and beyond however, and the U.S. fears China could again export its cut price excess steel if faced with a downturn at home.

Edited by SHMET