ArcelorMittal to gain EU approval for Ilva acquisition

Date Apr 23 2018 13:36:15 Source:Reuters

BRUSSELS, April 20 (Reuters) - ArcelorMittal, the world's largest steelmaker, is on track to win EU antitrust clearance to acquire Italian peer Ilva after agreeing to sell a number of significant assets across Europe, two people familiar with the matter said on Friday.

ArcelorMittal has offered to sell its only galvanised steel plant in Italy, as well as units in Romania, Macedonia, the Czech Republic, Luxembourg and in Belgium.

Sources say that is a far bigger package of sales than originally planned as the company bowed to regulatory demands in its quest to buy Europe's biggest capacity steelplant. The galvanised steel plant in Italy, Piombino mills, for example, makes 800,000 tonnes a year of the product.

The EU competition enforcer has been concerned that the deal may reduce competition in some flat carbon steel products and result in higher prices for customers in southern Europe.

The European Commission, which is scheduled to decide on the deal by May 23, and ArcelorMittal declined to comment.

Steel service centre S.Polo Lamiere said it had provided industry feedback on ArcelorMittal's concessions to the Commission.

"The global feedback was that those remedies were considered sufficient by the different operators in the market, so the feedback the Commission received from stakeholders was positive," its CEO Tomasso Sandrini told Reuters.

The size of the divestments has prompted worries in some countries where the businesses to be sold are located.

Luxembourg Economy Minister Etienne Schneider on Monday wrote to European Competition Commissioner Margrethe Vestager, saying it was regrettable that regulators had demanded hefty asset sales from ArcelorMittal and that Europe needed a strong industrial base.

Vestager said she would make sure that buyers of those assets have the expertise and financial resources to continue operating them.

 Ilva, based in the city of Taranto in southern Italy, has been dogged by charges of corruption and environmental crimes for years - charges that it denies.

 It was also the beneficiary of two loans worth about 84 million euros ($103 million), which it will have to repay to the Italian state after the Commission ruled that these constituted illegal state aid.

  ($1 = 0.8142 euros)



Shanghai steel hits 5-week peak; lifts iron ore, coke

Date Apr 23 2018 13:24:49 Source:Reuters

MANILA, April 23 (Reuters) - Chinese steel futures climbed to their strongest level in five weeks on Monday, supported by falling stockpiles that pointed to a pickup inconstruction demand.

The strength in the steel market spread to raw materials iron ore and coking coal, with iron ore scaling a one-month peak.

The most-active rebar on the Shanghai Futures Exchange rose as far as 3,547 yuan ($563) a tonne, its loftiest since March 16, and was trading at 3,545 yuan by 0257 GMT,up 2 percent.

Inventories of rebar, a construction steel product, had dropped 16 percent to 8.25 million tonnes on April 13 from a five-year high in mid-March, data compiled by SteelHome consultancy showed.   

Some Chinese steelmakers have increase prices over the weekend in anticipation of firmer demand, said an iron ore trader in Shanghai.

Steel demand in China, the world's top consumer, is usually strongest in April and May when the construction sector is at its busiest time of the year.

"The construction steel market may have more room to strengthen," the trader said.

Iron ore on the Dalian Commodity Exchange was last up 2.7 percent at 479.50 yuan a tonne, after earlier hitting 481.50 yuan, its highest since March 22.

Also aiding sentiment on iron ore, stockpiles of the commodity at major Chinese ports dropped for a third week in a row.

They stood at 159.78 million tonnes on April 20, from a record high of 161.68 million tonnes at the end of March, SteelHome data showed.   

Other steelmaking raw materials also rose. Coke jumped 3.4 percent to 1,922 yuan a tonne, having touched a five-month peak of 1,930 yuan initially, and coking coal increased 1.7 percent to 1,170.50 yuan.  

($1 = 6.2967 Chinese yuan)




Ship firm Oldendorff halting Guyana operation due to Rusal crisis

Date Apr 23 2018 13:18:54 Source:Reuters

LONDON, April 20 (Reuters) - German shipping group Oldendorff Carriers is stopping its business in Guyana, the company said on Friday, after the United States blacklisted Russian aluminium producer Rusal, which has a plant in the South American country.

The United States on April 6 imposed sanctions against Russian entities and individuals to punish Moscow for its alleged meddling in the 2016 U.S. election and what theU.S. Treasury Department dubbed other "malign activity".  

Since then, the world's two biggest container lines -Denmark's Maersk and Switzerland's MSC - have suspended trade with sanctions-hit Russian entities.  

Oldendorff, which has a large fleet of dry bulk cargo ships, said in a statement sent to Reuters on Friday it would "fully comply with U.S. sanctions and therefore willbe winding up its business in Guyana in a timely manner", declining to provide any further details.

Rusal's 90 percent owned Bauxite Company of Guyana produced 1.05 million tonnes of bauxite - the raw material used to make aluminium - last year.  

 Oldendorff's website said the group in 2005 signed a long-term contract with an unnamed large industrial client for a bauxite trans-shipment operation on the Berbice River in Guyana.

That operation used purpose-built barges and tug boats to transport bauxite downstream to ocean-going ships.  

Oldendorff said on its website it usually handled the onward transportation of the bauxite to Ukraine, Ireland and the United States.

Rusal, the world's second biggest aluminium producer behind China Hongqiao Group Ltd, is heavily dependent on its international network of mines and refineries.

 U.S. sanctions imposed on Rusal have started to cripple the company's extensive string of international operations from Sweden to Guinea to Australia.  


Australia's Newcrest says Cadia open pit approved for tailings storage

Date Apr 23 2018 13:14:32 Source:Reuters

April 23 (Reuters) - Australia's biggest gold miner Newcrest Mining  NCM.AX  said onMonday it has been approved to use the first 200 metres of its Cadia Hill mine's open pit as a tailings storage facility after its flagship mine restarted processing earlier this month.

The permit from the New South Wales Department of Planning and Environment would create enough storage capacity to enable the mine to return to full production rates for about 16 months, the miner said in a statement.

Newcrest said it would update guidance for Cadia, whose operations were shut in early March after damage to a tailings dam wall, in its March quarterly report, due on April 26.

The company restarted processing in early April and said then it expected to reach full mining rates in coming weeks.

Newcrest said on Monday that using the open pit to store tailings would lead to the loss of some gold and copper reserves, but the value of Cadia Hill as a long-term tailings storage solution was much greater than the value of the remaining reserves.

Newcrest shares rose 2 percent in morning trade to a six-week high, compared with a 0.3 percent rise in the broader market. 


Mining firms from China to Canada watch as Greenland holds election

Date Apr 23 2018 13:07:48 Source:Reuters

COPENHAGEN, April 20 (Reuters) - With melting ice expanding access to the Arctic, investors from China to Canada are watching Greenland's election for signs of the political will to get a flagging mining programme on the island back on track.

Greenland is hoping rising commodity prices can help attract foreign investment and get its fragile economy up to speed to realise a long-term goal of independence fromDenmark.

Hype about a possible mining boom in Greenland after it achieved self-rule from Denmark in 2009 faded in a morass of red tape and a commodity price slump around five years ago. It left the economy reliant on fishing and grants from Denmark.

But with the country's sole producing mine starting up last year - a ruby pink sapphire mine operated by Norway's LNS Group - and Canada's Hudson Resource's anorthosityproject due to begin operations this year, locals are again hoping more investments will follow.

Improved access to and from the Arctic island as the ice melts, and a more favourable investment climate, would go some way to alleviate the barriers to business of perpetual winter darkness and temperatures reaching as low as minus 50 Celsius.

With that in mind, a central theme for the new government elected on Tuesday will beto decide whether it wants to shift focus away from Denmark and strengthen economic and diplomatic ties with other countries, including China.

Chinese interest in Greenland comes after Beijing laid out its ambitions to form a "Polar Silk Road" by developing shipping lanes opened up by global warming and encouraging enterprises to build infrastructure in the Arctic.

The main contenders to lead the next government are Prime Minister Kim Kielsen of the social-democratic Siumut party and Sara Olsvig of the left-wing Inuit Ataqatigiit party (IA).

The most recent poll shows that the two parties are likely to continue working together in a coalition.

"A new government led by Kielsen and Siumut but without IA will create more opennesstowards attracting investments, including from China," said Rasmus Leander Nielsen, assistant professor at the University of Greenland in Nuuk.

"IA is more sceptical. They want mining activity, but have more emphasis on the environment," Nielsen said.

Demokraterne, Greenland's third biggest party, and the new Nunatta Qitornai party are also pro-mining.


Greenland, whose capital Nuuk is closer to New York than the Danish capital Copenhagen, is more than three times larger than the U.S. state of Texas. But with a population of just 56,000, it is the most sparsely populated nation on earth.

It has shortlisted a Chinese consortium to expand three airports, causing concern inDenmark which has given its ally the United States wide military access - just one of many sources of friction as independence rhetoric sharpens.

China's Shenghe Resources is also already partnering with Greenland Minerals and Energy to develop a rare earth and uranium project. Ironbark Zinc has asked state-ownedChina Nonferrous Metal Mining Group to help it finance and develop a zinc and lead project.

But development in the mining sector has so far been slowed by a lack of infrastructure and by heavy red tape, observers say. Assistant professor Nielsen said he would consider the uranium project dead if IA formed a government without Siumut.

The previous licence holder to the new ruby mine went bankrupt in 2016, as investorsturned its back on the project that for years failed to secure the necessary approvals.

"I think the politicians are keen to get things moving. But it often drowns in bureaucracy," said Bolette Maqe Nielsen, chairman of Australia's Tanbreez Mining, which for more than six years has been negotiating with Greenland for a rare earth mining project.

The island lacks simple infrastructure, but is betting that the expansion of the three airports by 2022 will help kick-start a wave of economic activity.

"The commodity business cycle is pointing upwards. But Greenland must be alert and ready to act when prices go up, otherwise they might miss the chance once again," said Brian Buus Pedersen, head of the Greenland Business Association.

For now, mostly smaller and mid-sized mining companies such as North American Nickeland Bluejay Mining are actively pursuing projects there, while larger Western industry players stay on the sidelines.

Prime Minister Kielsen and his cabinet travelled to Beijing last year, where he openly courted Chinese investors and officials. The government is also considering opening a representation office in Beijing, following one in Washington in 2014 and the opening of another in Iceland this year.

"To get really large scale projects to happen, it looks like they need Chinese investments," said Ulrik Pram Gad, an associate professor at Aalborg University and a former official in Greenland's government.