MMR - DAILY- 19th August 2014.indd

Tu e s d ay 1 9 , Augus t 2014
News &
Report Analysis
Currency Market
Precious Metal
Base Metal
Energy Market
Event Update
 Russian gold production to
overtake Australia
 JSW Steel has acquired Welspun Maxsteel
in a Rs 1,000-cr deal
 Bhushan Steel lenders take charge
of company’s affairs
 Govt to impose safeguard duty on
seamless pipes, tubes to curb imports
 Surat diamond bourse project gets a fillip
2
Tuesday 19, August 2014
Daily
MMR Landed Prices
London Metal Exchange : Monday 18, August 2014
Pr. Sell
(1)
Morning Session
Buy
Sell * (2)
Afternoon Session
Buy
Sell
Kerb
Change
(2) - (1)
Value
Stk(tns)
change
$/ton
Rs/ton
Copper Grade A
Spot
6852.50
6909.50
6910.00
6939.00
6940.00
6885.00
57.5
1,41,275
MMR LP
4,53,578
3-mth
6845.00
6886.50
6887.00
6911.00
6912.00
6867.00
42.0
-25
14-D MA
4,59,573
PP (HCL)
4,65,499
Average
10-days - 6970.70
20-days - 7041.10
30-days - 7060.90
Tin High Grade
Spot
22400.00
22415.00
22425.00
22414.00
22415.00
22403.00
25.0
12,790
--
--
3-mth
22425.00
22400.00
22420.00
22449.00
22450.00
22449.00
-5.0
0
--
--
--
--
Average
10-days - 22388
20-days - 22412.30
30-days - 22328.80
Lead
Spot
2194.50
2200.00
2200.50
2006.00
2207.00
2207.00
6.0
2,15,675
MMR LP
1,49,030
3-mth
2203.00
2207.00
2208.00
2218.00
2219.00
2219.00
5.0
-100
14-D MA
1,51,506
PP (HZL)
1,63,300
Average
10-days - 2228.40
20-days - 2229.40
30-days - 2210.90
Zinc Special High Grade
Spot
2260.00
2262.00
2262.50
2276.00
2276.50
2283.00
2.5
7,37,400
MMR LP
1,58,136
3-mth
2264.50
2271.00
2273.00
2284.00
2285.00
2282.00
8.5
-450
14-D MA
1,61,852
PP (HZL)
1,72,200
Average
10-days - 2309
20-days - 2345.10
30-days - 2327.80
Aluminium
Spot
1980.00
1994.00
1995.00
2017.00
2018.00
1996.00
15.0
48,80,125
MMR LP
1,51,884
3-mth
1989.00
1994.00
1995.00
2017.00
2018.00
2002.00
6.0
-12650
14-D MA
1,53,448
PP (Nalco)
1,62,400
Average
10-days - 2029.60
20-days - 2012.70
30-days - 1986.90
Aluminium Alloy
Spot
2000.00
1990.00
1990.50
1992.00
1993.00
2012.00
-9.5
32620
3-mth
2015.00
2000.00
2005.00
2009.00
2010.00
2020.00
-10.0
-40
Average
10-days - 1985.60
20-days - 1982.30
30-days - 1980.70
Nickel
Spot
18505.00
18415.00
18420.00
18539.00
18540.00
18572.00
-85.0
3,24,984
--
--
3-mth
18555.00
18450.00
18475.00
18624.00
18625.00
18657.00
-80.0
2256
--
--
-Copper
Aluminium
-01-Aug
24-Jul
Zinc
Lead
14-Aug
14-Aug
Average
10-days - 18563
20-days - 18821.30
30-days - 18913.30
Note: 1. MMR LP = MMR Landed Prices, excluding excise duty. 2. PP = Producer Prices ex-smelter, excl. excise
Minor Metals ($/LB)
Antimony
99.65%
9,600
Cadmium
99.80%
90.00
Cobalt HG Moly.oxide
99.80%
14.00
14.25
Tantalite
30% Ta2O5
99.00
Titanium Ferro-vana
Con. Ti02
600.00
24.90
Silicon
2,050
Week ended Avg of Steel Prices: 09/08/2014 (Incl. Excise duty)
Sponge Iron
Pig Iron
Mandi
28,600 HMS
33,900 CRP(LSLP)
Mumbai
30,200
33,000
Kolkata
29,300
-
Indicative Domestic Market Rates (Rs./kg)
Mumbai
14-Aug
Chennai
29,900
32,200
MS Ingots
Bhiwandi
38,600
Comex Copper (cents/lb)
Prev
Delhi
14-Aug
Prev
-522.0
-522.0
452.0
517.0
452.0
517.0
Alum Ingot
Zinc Slab
Lead Ingot
Tin Slab
Nickel (4x4)
Scrap
Copper Heavy
Copper Uten.
169.0
192.0
140.0
1,590.0
1,245.0
169.0
192.0
140.0
1,590.0
1,245.0
176.0
200.0
137.0
1,600.0
1,250.0
176.0
200.0
137.0
1,600.0
1,250.0
485.0
445.0
485.0
445.0
---
---
Copper Mixed
Brass Utensil
Brass Huny
Brass Sheet
Alum Utensil
-336.0
-353.0
133.0
-336.0
-353.0
133.0
437.0
-326.0
142.0
437.0
-326.0
142.0
Virgin Metals
Copper Pat
Copper W/Bar
Delhi
30,200
-
Jul'14
Aug'14
Sep'14
Rate
310.30
310.90
312.00
Change
0.6
0.6
0.6
Kanpur
38,000
Durgapur
34,400
Comex Al (cents/lb)
Rate
-
Change
-
Precious Metals : Indicative Rates
Metal
Gold Std
Silver
Gold
Silver
Gold
Silver
Market
Mumbai
Mumbai
London
London
Comex
Comex
Unit
Rs./10g
Rs./kg
$/tr.oz.
$/tr.oz.
$/tr.oz.
$/tr.oz.
18-Aug
28,650
44,000
1296.75
19.59
1304.50
19.49
Prev
28,750
44,200
1313.55
19.86
1308.80
19.87
Forex: Aug 14, 2014 (Rs/Unit Currency)
Buy
USD
60.82
60.73
EURO
81.34
GBP
101.44
101.30
SGD
48.82
—
—
AUD
56.65
YEN
0.5937
0.5926
SFR
67.10
Sell
81.23
48.74
56.59
66.99
Buy
Sell
Customs Notified Rates: August 08, 2014 [Rs.(Imp/Exp)]: US$ 61.85/60.85;Pound Sterling 104.55/102.25;Euro 83.05/81.10
U.S. stocks finished with strong gains Monday,
helped by deal news and easing Ukraine-Russia
tensions. A better-than-expected reading on
the housing market also boosted sentiment
and kicked off a big week for economic data.
The S&P 500 rose 0.9%, to close at 1,971.74. The
Dow Jones jumped 175.83 points to finish at
16,838.74. As a result, Asian stocks got a lift from
an upbeat day on Wall Street, while the dollar
got some help as U.S. Treasury yields pulled
away from recent lows on upbeat U.S. housing
data and hopes of progress in the Ukraine crisis.
Nikkei was leading the pack by 0.89%, while
Hang Seng moved up by 0.62% and Kospi was
slightly in the positive by 0.04%.
USD/INR - 14/08/14
Spot
17:00
16:00
15:00
14:00
13:00
Forecast
Previous
USD Building Permits
1.00M
0.97M
USD CPI m/m
0.1%
0.3%
easing of geopolitical tensions. The euro traded
at $1.3361, holding just above a nine-month
low of $1.3333 set earlier this month. The dollar
fetched 102.61 yen, having maintained its slow
rebound from a low of 101.51 hit on Aug 8. The
Australian dollar is steady at $0.9318 but could
see some volatility if the minutes due out on
Tuesday of the Reserve Bank of Australia's last
policy meeting contain any surprises.
While Indian Rupee appreciated around 0.7
percent last week owing to fall in Wholesale
price Inflation. Also, flood of soft economic data
sparks hopes of continued stimulus from central
banks supported gains. However, higher-thanexpected consumer inflation and dull June
industrial output capped sharp gains. Also,
weak economic data from China along with
Cash
v/s INR
0.4356
Data releases today
Source : Mecklai Financial
The US Dollar Index (DX) gained 0.1 percent
yesterday after a report showed confidence
among US homebuilders reached the highest
level in seven months, bolstering the case for
an accelerating US economy. However, upbeat
market sentiments led to decline in demand
for the low yielding currency which restricted
sharp upside in the DX. The currency touched
an intra-day high of 81.66 and closed at 81.63
on Monday.
The dollar index held firm at 81.594 on
Tuesday after a solid U.S. housing data and a rise
in U.S. bond yields on the back of hopes of an
Today’s
Crosses
12:00
USD/INR Overnight VAR
Currency Market
Major
Currencies
11:00
9:00
60.75
60.81
60.87
60.93
60.99
61.05
61.11
61.17
10:00
Daily
6 mth
LIBOR
3
Tuesday 19, August 2014
Forward Rates v/s INR (Export/ Import)
August
September
October
January
April
July
0.33
USD / INR
60.73/ 74
60.70/ 71
60.83/ 86
61.29/ 32
61.74/ 78
63.01/ 05
64.31/ 35
65.46/ 50
66.14/ 18
-
ATM Options (put/call)
-
-
-
0.00/0.57
0.00/0.82
0.00/0.99
0.00/1.51
0.00/1.89
0.00/2.24
0.26
EUR / USD
1.3357
81.11/ 13
81.07/ 09
81.25/ 29
81.89/ 92
82.49/ 54
84.23/ 28
86.02/ 07
87.62/ 67
0.18
USD / JPY(100)
102.61
59.18/ 19
59.15/ 16
59.28/ 31
59.75/ 78
60.20/ 24
61.49/ 53
62.81/ 86
64.00/ 05
0.69
GBP / USD
1.6723
101.55/ 58 101.50/ 53
101.72/ 74
102.49/ 26
103.18/ 71
105.19/ 95
107.23/ 01
109.02/ 92
0.08
USD / CHF
0.9069
66.96/ 98
66.93/ 95
67.07/ 11
67.59/ 63
68.11/ 16
69.58/ 62
71.10/ 12
72.45/ 47
3.06
AUD / USD
0.9338
56.72/ 73
56.69/ 70
56.80/ 84
57.24/ 28
57.66/ 71
58.84/ 89
60.06/ 11
61.13/ 18
Source : Mecklai Financial
Tuesday 19, August 2014
Daily
sustained bouts of demand for the greenback
from importers acted as negative factors.
The Indian Rupee appreciated around 0.7
percent last week owing to fall in Wholesale
price Inflation. Also, flood of soft economic data
sparks hopes of continued stimulus from central
banks supported gains. However, higher-thanexpected consumer inflation and dull June
industrial output capped sharp gains. Also,
weak economic data from China along with
sustained bouts of demand for the greenback
from importers acted as negative factors.
Precious Metal
as on August 18, 2014
Market Highlights - Gold (% change)
Gold
Gold (Spot)
Unit
Last
Prev.
day
WoW MoM
YoY
$/oz
1297.2
-0.55
-0.9
0.2
-5.7
Gold
(Spot -Mumbai)
Rs/10
gms
28100.0
-1.40
-1.2
-0.3
-5.7
Gold
(LBMA-PM Fix)
$/oz
-
-
-
-
-
Comex
Gold (Apr’14)
$/oz
1298.8
0.08
-0.8
-0.4
-5.3
Rs /10
gms
28295.0
#N/A
-1.5
2.3
-8.0
MCX Gold
(June’14)
Source: Angel Broking
Gold retained overnight losses to trade
at $1,297.50 an ounce on Tuesday, as safehaven demand for the metal was curbed by
an apparent easing of tensions in Ukraine that
boosted equities and the dollar. Spot gold
prices declined around 0.5 percent yesterday as
the threat of an escalation of tensions in Ukraine
appeared to fade for now, and a rally in global
equity markets and strength in the dollar sent
bullion prices below $1,300 an ounce.
Also, SPDR Gold Trust GLD, the world's
largest gold-backed exchange-traded fund, said
its holdings rose 0.26 percent to 797.69 tonne
on Monday.
Base Metal
Base metals on the London Metal Exchange
traded on a mixed note yesterday owing to
rise in risk appetite following news of talks
between Russia and Ukraine that supported
an upside in the base metals. Nickel prices fell
after inventories continued to rise and jump by
2,256 tonnes to a record high 324,984 tonnes,
highlighting an overhang of supply. Zinc rose
after data showed that the metal mainly used
for galvanising steel was in a deficit of 234,000
tonnes in January to June.
Copper prices gained 0.3 percent on
Monday at the London Metal Exchange as some
investors regarded recent losses as overdone.
However, sharp gains were capped after new
home prices in top metal consumer China fell
in July for the third month in a row. Also, Chile's
gross domestic product grew at its weakest pace
since 2009 in the second quarter as investment
waned and a previously rapid expansion in
consumer spending slowed, exerted downside
pressure on prices. The red metal touched an
intra-day low of $6930/tonne before closing at
$6895/tonne.
In today’s intra-day session, copper prices
to trade lower today as the demand concerns
from China continue to haunt as a worsening
property downturn that is increasingly dragging
on the broader economy. However, estimates of
favorable Building Permits and Housing Starts
data from the US in the evenings session will
cushion sharp downside in prices. In the Indian
markets, base metals will trade lower taking
cues from international markets.
Energy Market
Oil prices plunged 1 percent yesterday as
Hedge funds and other big speculators cut
their bets on rising Brent crude oil prices to the
lowest level in two years owing to ample supply
despite fighting in Libya and Iraq. Also, Iraqi and
Kurdish forces recaptured Iraq's biggest dam
from Islamist militants with the help of U.S. air
strikes to secure a vital strategic objective in
4
Tuesday 19, August 2014
Daily
Market Highlights - Crude Oil (% change) as on August 18, 2014
Crude Oil
Unit
Last
Prev.
day
WoW
MoM
YoY
Brent (Spot)
$/bbl
99.3
-1.7
-2.3
-3.8 -12.7
Nymex
$/bbl
Crude (June ’14)
96.4
-1.0
-1.7
-7.7 -10.3
ICE Brent
Crude (May’14)
$/bbl
101.6
-1.9
-1.4
-4.2
-8.0
MCX Crude
(May ’14)
Rs/bbl 5844.0
#N/A
-2.3
-2.6 -12.8
Source: Angel Broking
fighting that threatens to break up the country.
In addition, Global supplies remain ample,
and market participants are now worried that
demand is too low to keep up with supplies.
According to the state-owned National Oil Co,
Libya's production jumped to 550,000 barrels a
day, up from 400,000 barrels a day last week as
reported by Angel Broking.
The API is scheduled to release its weekly
inventories report tonight and US crude oil
inventories is expected to decline by 1.5 million
barrels for the week ending on 15th Aug 2014.
Gasoline stocks are expected to decline by 1.7
million barrels, whereas distillate inventories
are expected to fall by 0.2 million barrels for the
same time period.
Event Update
Aluminium Middle East 2015
Be a part of ALUMINIUM MIDDLE EAST 2015
- the region’s largest aluminium event, focusing
on the growth of the Gulf’s aluminium industry
with investments expected to reach US$55
billion by 2020.
ALUMINIUM MIDDLE EAST brings together
global producers, suppliers and investors
under one roof under the theme of “Forging
Connections… Building Possibilities” to help the
regional aluminium industry reach a new level of
extraordinary growth and cement its position as
a powerhouse of the world aluminium industry.
ALUMINIUM
MIDDLE
EAST
is
a
mustattend
event
for networking,
b u i l d i n g
professional
relationships,
identifying investment opportunities and
getting acquainted with the latest technologies
and best practices from around the globe.
According to industry estimates, aluminium
production in the region is expected to increase
to 5 million tons by 2015, accounting for 17.5
per cent of the total global output and 8.4 per
cent annual growth, making the Middle East
the fastest growing aluminium market in the
world. The aluminium industry contributes
significantly to the region’s efforts to diversify its
economies beyond oil and gas. With widening
scope, facilities and capabilities, the sector has
helped increase foreign trade, create more jobs
and expand regional economies. Spanning
through a wide range of industries, including
transportation, aerospace, aviation, packaging
and construction, aluminium is a prerequisite
for industrialization in the Gulf region.
ALUMINIUM MIDDLE EAST provides the ideal
platform to build professional relationships
and alliances, create partnerships between
energy sources, smelters, mines and logistics
companies and provide an unparalleled
business opportunity to tap into the region’s
booming aluminium sector.
To learn more about the region’s aluminium
industry, join us at its largest dedicated
event taking place at the Dubai International
Convention and Exhibition Centre from 14-16
April, 2015.
For more information, please call Nehme
Shehab, Email [email protected]
5
Daily
News & Report
Analysis
Russian gold production to
overtake Australia
Russia has increased gold production and
could overtake Australia as the world’s second
biggest producer. Russian gold producers'
lobby group, the Gold Industrialists' Union,
has upgraded its 2014 output forecast to 275
tonnes after the industry boosted production
by 26.6 per cent in the first half of the year. At
the same time, exploration in Western Australia
has been cut by 50%. It means Russia could
leapfrog Australia to become the world’s second
biggest gold producing nation behind China.
Gold Royalty Response Group spokesman and
Managing Director of Silver Lake Resources,
Les Davis, said the Russian production forecasts
were likely to have an impact in WA given the
State produces 70 per of the Nation’s gold
exports.
“The big increase in Russian gold production
comes at the same time as gold producers in
Western Australia are putting exploration on
hold,” Mr Davis said. The Australian Bureau
of Statistics says there has been a 50 per cent
decline in total gold exploration expenditure in
WA in the year to March 2014.
Tuesday 19, August 2014
“Almost two and a half years ago the WA
Government launched a review of the royalties
paid for mineral commodities, including gold,”
he said. “High operating costs in WA and low
gold prices have made the sector increasingly
marginal so most gold producers have put
exploration on hold as they wait for the outcome
of the review.”
Mr Davis said Western Australian gold miners
were confronting an increasingly competitive
global market and could not sustain any further
cost increases.
“Our industry has been a mainstay of the
Western Australian economy for more than a
century but we can’t compete if we continue to
face increased cost burdens,” he said.
“We pay our fair share of taxes and royalties
and we are competing in a very tough global
market.”
The GRRG is currently running a public
awareness campaign highlighting the social
and economic contribution made by the State’s
gold mining industry. As the second largest
employer in the resources sector, the gold
industry provides jobs for more than 25,000
Western Australians and contributes $8 billion
to the State’s economy.
The industry is also critical to the growth
of remote communities and pays more than
$300 million in State royalties and taxes to help
build vital community facilities such as schools
and hospitals. Hear more stories from Western
Australia’s gold mining community here.
JSW Steel has acquired
Welspun Maxsteel in a Rs
1,000-cr deal
JSW Steel said it has acquired sponge iron
maker Welspun Maxsteel Ltd in a deal worth
more than Rs 1,000 crore. This is one of the
biggest deals in the domestic steel sector in the
recent times. Both companies have entered into
6
Daily
a definitive agreement for the deal. JSW Steel
would acquire the entire equity shares held by
Welspun Enterprises Ltd in Welspun Maxsteel
Ltd "for an enterprise value of Rs 1,000 crore plus
net current assets", according to a statement. In
the statement, JSW Steel said Welspun Maxsteel
is situated in close proximity to its Dolvi unit,
offering complementary infrastructure and
location to augment the current envisaged
expansions. JSW Steel, which has an installed
capacity of 14.3 million tonne per annum
(MTPA), has a strategic plan to increase its steel
production to 40 MTPA in the long-term.
"This acquisition is value accretive to JSW
Steel due to synergies in supplying surplus
pellets to WMSL (Welspun Maxsteel) and use
of DRI (Direct Reduced Iron) from WMSL in
company's steel-making operations at Dolvi
plant," JSW Steel Joint MD and Group CFO
Seshagiri Rao said.
In a regulatory filing, Welspun Enterprises
said Welspun Maxsteel would be sold for an
enterprise value of Rs 1,000 crore in addition to
net current assets as on August 31, 2014.
Meanwhile, JSW Steel said it has surplus
pellets in its subsidiary Amba River Coke Ltd
and the same would be supplied to Welspun
Tuesday 19, August 2014
Maxsteel.
"The cost of production of WMSL is expected
to come down due to replacement of significant
portion of its bought-out pellets with captive
pellets.
"The DRI produced by WMSL shall initially
be used partly by the company's Dolvi unit,
and would be consumed in the entirety post
completion of its ongoing expansion to 5 MTPA,"
JSW Steel said.
Bhushan Steel lenders take
charge of company’s affairs
Lenders moved to take charge of embattled
Bhushan Steel on Monday, appointing three
independent directors to the board, ordering
a forensic audit of account books and seeking
fund infusions from promoters as part of a
"corrective action plan" to ensure the entity
remains afloat. State Bank of India and other
lenders met on Monday to take stock of the
company's affairs following the arrest of its vice
chairman and managing director Neeraj Singal
by the Central Bureau of Investigation over
alleged bribes being paid to Syndicate Bank
chairman and managing director SK Jain to
enhance credit limits.
"The company has to go with the decision of
7
Daily
the banks. We have nothing more to add," said
Nittin Johari, chief financial officer, Bhushan
Steel. State Bank of India, Punjab National Bank
and Life Insurance Corp. of India will nominate
one independent director each.
The consortium of lenders led by Punjab
National Bank has also directed the company
to monetize its non-core businesses to arrange
for cash, said a statement by the bank. As many
as 51 banks have a total exposure of about Rs
40,000 crore to Bhushan Steel. The forensic
audit will be conducted by a reputed audit firm
to be appointed soon. It will examine whether
there was any diversion of funds.
Govt to impose safeguard
duty on seamless pipes, tubes
to curb imports
To provide relief to domestic producers, the
Government has imposed a safeguard duty on
the import of seamless pipes and tubes, which
are used in equipments for power generation,
oil exploration, and bearing industry, besides
others.
BHEL, ONGC and Oil India are among the
Tuesday 19, August 2014
largest consumers of such products, while
Jindal Saw and ISMT Limited are key domestic
producers of these products. BHEL also produces
these products to meet part of its requirement.
Decision to impose a safeguard duty was
taken after petition was filed by domestic
producers.
Safeguard and anti-dumping duties are
imposed when there is a fear that excessive or
cheap import will harm the domestic industry.
Safeguard duty is imposed on import from a
group of countries, while anti-dumping duty is
levied on import from one particular country.
According to a notification issued by the
Central Board of Excise and Custom (CBEC),
safeguard duty will be imposed at the rate of 20
per cent in the first year (August 13, 2014-August
12, 2015), 10 per cent in the second year (August
13, 2015-August 12, 2016) and at the rate of 5 per
cent in the third year (August 13, 2016-February
12, 2017).
This will not be applicable on imports
from developing countries such as Indonesia,
Malaysia, Thailand and South Africa besides
others.
8
Daily
Surat diamond bourse project
gets a fillip
The Surat Diamond Association (SDA) is
bullish about the coming Surat Hira Bourse, a
diamond exchange. Following Gujarat finance
minister Saurabh Patel’s recent visit to Dubai,
“Dubai-based Gold Souk and Dubai Multi
Commodities Center (DMDC) decided to form
an alliance with the state government to help
set up a diamond business in Surat”, said a state
government spokesperson.
Dinesh Navadiya, president of SDA, said,
“We have not officially heard from the state
government yet. However, the trip has provided
a fillip to the Surat Hira Bourse, in terms of
international reach. So far, we have received
space requirement applications from traders
alone, with about 9,500 bookings for 70,00080,000 sq yards. We hope to hear from the
government on land allotment soon.”
He added there would be additional space
for ancillary services such as banks and financial
institutions.
For diamonds, DMCC has strong ties with
producer markets in Africa, cutting centres in
Asia and consumers in Europe, China and the
US.
Gold Souk is a marketplace comprising
about 300 retailers who trade almost exclusively
in jewellery. These retailers include established
Tuesday 19, August 2014
stores such as Damas, ARY Jewellery, Shyam
Jewellery and Joy Alukkas. At any given point,
the marketplace has about 10 tonnes of gold.
SDA members say for Surat Hira Bourse,
the association aims to attract global diamond
traders, including those from West Asia.
Registration of the Surat Hira Bourse is
underway. Expected to start operations in two
years, the exchange is being set up at a cost
of Rs 2,000 crore. The bourse will bring those
interested in the business of the precious
commodity under one roof.
CIL, NTPC stay away from
ICVL’s Mozambique buy
PSU consortium International Coal Ventures
(ICVL) may be basking at the acquisition of
Mozambique mines from Rio Tinto at a dirt
cheap price, but two major constituents — Coal
India (CIL) and NTPC — have decided to stay
away from the buy.
The move has prompted ICVL to form a
subsidiary company to take over the assets that
include the Benga mine and the Zambeze and
Tete East greenfield coal assets.
Sources have indicated that CIL and NTPC
have not agreed to be a part of the $50-million
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acquisition, a development that stems from
their reluctance to be a part of the ICVL itself.
While the two companies have always remained
cold to the ICVL, they have not pulled out of the
venture formally.
The Mozambique acquisition as well as the
subsequent investments in the venture, pegged
at $300 million, will be funded by ICVL's three
constituents — Steel Authority of India (SAIL),
Rashtriya Ispat Nigam (RINL) and National
Minerals Development Corp (NMDC), a source
said.
ICVL was formed as a special purpose vehicle
(SPV) in 2009 for buying mines in order to
secure coking coal and thermal coal assets in
overseas territories. However, differences within
the venture cropped up over composition of the
SPV and varying requirements of the constituent
partners. While the steel companies in the
venture want to focus on coking coal, a power
company like NTPC is interested in thermal coal.
Rio Tinto to review stake in
closed PNG copper mine
Rio Tinto is set to decide on its stake in a longdormant copper mine in Papua New Guinea's
Bougainville after the passage of a new mining
law on the island, with the company possibly
pulling out of the project after a quarter of a
century.
Tuesday 19, August 2014
10
The interim mining law converts Bougainville
Copper Ltd's mining lease into an exploration
lease. That can be converted to a mining lease
if approved by the autonomous province's
government, which now controls resources on
the island.
"In light of recent developments in Papua
New Guinea, including the new mining
legislation passed earlier this month by the
Autonomous Bougainville Government (ABG),
Rio Tinto has decided now is an appropriate
time to review all options for its 53.83 per cent
stake in Bougainville Copper Limited (BCL)," the
company said on Monday.
Rio Tinto declined to comment on what was
the most likely outcome of its review or how
soon a decision would be made. Selling its stake
would be an option.
A secessionist rebellion on Bougainville in
1989 stopped mining at BCL's Panguna mine.
The mine produced some 3 million tonne of
copper and 9.3 million ounces of gold over 17
years.
The company has been in talks with
the government of Papua New Guinea, the
Autonomous Bougainville Government and
landowners about whether to return. BCL's
chairman said those talks were at a very early
stage.

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