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Nissan
Copper executes GDR issue to expand into Middle East and
North Africa |
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One of
India's leading manufacturers of semi-finished copper
products and copper alloys, Nissan Copper Limited, have
successfully concluded placement of 5,000,000 Global
Depository Receipts (GDRs) at US$ 4.48 per GDRs
(Representing 25,000,000 equity shares of Rs. 10 each).
Further, the company has approved and allotted 5,000,000
GDR and 25,000,000 underlying equity shares of Rs. 10
each representing the said GDR. The GDRs will be listed
on the Luxembourg Stock Exchange.
Speaking on this development, Ratan Mardia, Managing
Director, Nissan Copper
Limited stated, "We are looking to explore and expand
into new markets in
the Middle East and North Africa. This offering would
support the funding of
this business exploration and expansion."
Nissan Copper Limited is a leading manufacturer in
semi-finished copper
products. Established during 1989 with an objective to
manufacture copper
tubes they have extended their production into
manufacturing copper ingots,
coils, bus bars, strips, sections, profiles, flats,
billets, bars, rods,
tubes and pipes being used in diverse sectors. |
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Novelis plans US$300 million expansion |
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In a
move that could continue turnaround of the company,
Buckhead-based international aluminum producer Novelis
plans to invest US$300 million to expand its aluminum
rolling operations in Brazil. This is a reflection of
the company’s strengthened financial position, enabling
it to make significant strategic investments to support
future growth. The company called the project “the
largest single capital investment Novelis has made since
the company was launched five years ago.” Novelis was
spun off as an independent public company in 2005 by
Alcan Inc., the Canadian aluminum producer, and its
headquarters were established in Atlanta. The company
struggled with financial reporting issues and other
problems, and in 2007 was bought by Hindalco Industries
Ltd. Novelis, which had US$8.7 billion in revenue in
fiscal year 2010, has 11,600 employees, including more
than 100 in Atlanta, and operates in 11 countries. It is
the world’s largest producer of rolled aluminum and the
largest aluminum recycler. Much of its business is in
aluminum beverage cans. The company reported net income
of US$405 million for fiscal year 2010, compared to a
net loss of US$1.9 billion for the same period a year
ago. |
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Norilsk
recommends US$1.3 bn dividend payout |
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The
board of Norilsk Nickel recommended a bumper US$1.3
billion dividend on 2009 results, enabling its
shareholders, including two Russian tycoons, to cash in
on the mining giant's return to profit. Despite the fact
that the company has a recommendation to pay out 20-25
percent of net profit, it was decided to pay 50 percent,
or US$1.325 billion. Norilsk also said it planned to
issue 100 billion roubles of bonds as part of a
long-term borrowing strategy. In the short-term,
however, the company plans to pay back US$1.8 billion of
debt by end-June. The fact that dividends are back on
the agenda at the world's leading nickel and palladium
miner is a further sign that a recovery is under way
among Russian miners, who were hard hit by declining
demand for base metals when the economy soured at the
end of 2008. Norilsk posted a return to profit in 2009,
as it cut costs and avoided a repeat of one-off charges.
Before the 2008 loss, the company which supplies 20
percent of the world's nickel had generally paid out a
quarter of net profit as dividends. |
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Global nickel production to rise |
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Global
production of primary nickel may rise 9.3 percent to
1.53 million tons in 2011, moving the market into
surplus. Consumption may be 1.51 million tons next year.
Consumption this year may be 1.435 million tons,
outpacing supply of 1.4 million tons. Nickel prices have
dropped 22 percent from this year’s high of US$27,595 a
ton on speculation European efforts to curb government
debt will erode economic growth and China may step up
measures to reduce asset bubbles. Demand for the metal,
used to help protect steel from corrosion, will probably
exceed supply by 36,000 tons in 2010, the first deficit
since 2006, Sumitomo Metal Mining Co. said recently.
Stainless steel production may be 31.5 million tons in
2011, growing from 29 million tons this year. |
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Chile copper output up 6.4 pct |
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The
world’s largest copper producer, Chile reported 6.4
percent rise in the red metal output in April 2010
from the same month a year earlier. In March, Chile’s
copper output rose 5 percent from the same month in
2009, according to data released by the country’s
commerce department recently. Chile’s copper industry,
the backbone of its economy, emerged virtually
unscathed from a February 27 earthquake that killed
hundreds of people and battered the wood pulp,
fishing, fruit and wine industries. |
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Breakaway to sell Scotia, Kambalda West nickel projects |
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Australia-based Breakaway Resources plans to sell its
Scotia and Kambalda West nickel projects in Western
Australia to focus on exploration projects in the
Leinster district, reports said. Breakaway has appointed
corporate advisory firm PCF Capital to assist it with
the divestment of the two projects. The Scotia project
covers an area of about 238 km2, including about 40 km
strike of the nickel sulphide bearing Scotia ultramafic,
which hosts the historic Scotia mine and the Saints
nickel target, as well as several near-surface nickel
geochemical anomalies. The mineralisation at the Scotia
mine consisted predominantly of disseminated nickel
sulphides with the production of some 147,000 tons of
nickel from ore with an average grade of about 2.2
percent nickel by underground methods during the 1970s
to a depth of about 360 metres. The Kambalda West
project comprises three tenement blocks for a total
combined area of 44 km2. The project encompasses a
series of nickel prospective ultramafic units, which
host the historic Spargoville nickel camp on the
southern two mining leases. These deposits produced some
14,000 tons of nickel between 1975 and 1993. |
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Hindalco to raise Rs 7,500 cr debt for Mahan Aluminium |
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The
AV Birla Group’s flagship company, Hindalco
Industries, plans to raise about Rs 7,500 crore of
debt under the project finance route to achieve
financial closure for Mahan Aluminium, a smelter-power
plant complex that boasts of a 359-ktpa aluminum
smelter and a 900-MW captive thermal power plant in
Madhya Pradesh. The project with an estimated capital
expenditure of Rs 9200 crore is estimated to commence
commercial production by September 2011. The company
plans to give the mandate to the banks in the next
month. Once the debt syndication is launched, it is
expected to take about two months to tie up the fund.
SBI Capital Markets is likely to get the mandate for
the debt syndication. The Kumar Mangalam Birla-promoted
company plans to set up five projects in two phases at
a cost of Rs 40,000 crore in the next three years. In
the first phase, it will set up one refinery and two
smelters. First is Utkal Alumina Refinery, a
1.5-million ton per annum (mtpa) project in Orissa, to
produce alumina from bauxite and expected to be ready
by September 2011. The alumina, raw material for
producing aluminium, will be then fed to two smelters,
Mahan Aluminium and Aditya Aluminium. Hindalco plans
to fund 30 percent of its total capital expenditure
through equity infusion and internal accruals. It
raised Rs 2,900 crore by selling fresh equity in a
qualified institutional placement in November. It is
now tying up the debt component for these projects.
The financial closures for Utkal Alumina Refinery was
achieved recently, with raising of Rs 4,900 crore of
debt out of the total project cost of Rs 5,600 crore.
SBI Capital Markets, IDBI Bank and ABN Amro did joint
syndication for the transaction. Now, it is the turn
of Mahan Aluminium, as both projects are linked and
are scheduled to be completed in September 2011. The
second phase includes setting up another 1.5-mtpa
alumina refinery in Orissa called Aditya Refinery by
June 2013. This will be followed by another
smelter-power plant complex with a capacity of 359
ktpa, powered by a 900-MW captive thermal power plant
in Jharkhand. This will be also ready by June 2013. |
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Codelco reports rise in copper output |
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Chile’s Codelco reported 3.2 percent rise in copper
output to 383,280 tons in the first quarter from last
year as the world's top producer seeks to maintain
output at aging mines. Codelco produced 371,355 tons
of copper during the first quarter of 2009. Codelco's
output increase in the first quarter was due to
higher-than-expected ore grades at mines, more
processed mineral and higher recovery in treatment
plants. The company is expected to produce slightly
above 1.7 million tons in 2010, similar to output last
year when Codelco marked its first annual increase
since 2004. It was difficult to predict copper prices
due to current market volatility amid Europe's debt
woes, but said prices should stay at current levels in
the short to medium-term. However, copper demand is
expected to remain strong and prices to hold at
current levels. The state giant sees no problems in
financing its US$2.3 billion investment plan for this
year, but had no intention to issue debt in the
short-term. The current production levels of the
company are guaranteed over the next three years.
However, Codelco faces declining ore grades and
growing tensions with the powerful workers’ unions who
have vowed to strike if new President Sebastian Pinera
moves ahead with past pledges to sell part of the
company. The company lost 11,300 tons of copper due to
a massive February 27 quake that briefly cut energy
supplies to some of its mines in central Chile. The
total output did not include output from El Abra,
which is a joint venture between Codelco and a private
company. Adding El Abra, output rose to 402,000 tons
in the January - March period. Its profits pretax and
extraordinary items rose to US$1.48 billion in the
period, more than five times the US$275 million
registered in the same period last year. Codelco
produced 4 000 tons of molybdenum, a metal used to
strengthen steel, in the first quarter compared with
5,000 tonnes in the same period a year ago. |
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China’s copper demand may expand 12 pct |
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Analysts believe that copper demand in China, the
world’s largest user of the metal used in pipes and
wires, may gain as much as 12 percent this year and
prices won’t fall much further. Consumption is still
strong, driven by continued economic growth. Demand,
including refined and scrap copper, may climb to 8.96
million tons. Investor concern Europe's debt crisis
may derail the global recovery and China's measures to
prevent its economy from overheating have hurt
commodity prices, pushing London copper 8.6 percent
lower this month. China's stocks have slumped 19
percent this year as the government restricted
pre-sales by developers and curbed loans for people
buying a third home. It also raised minimum mortgage
rates and tightened down-payment requirements for
second-home purchases to reduce the risk of asset
bubbles. The “moves to tighten credit and cool the
property market have hit sentiment hard, as reflected
in the stock market, but in reality, it has impacted a
little, said a base metal analyst. Transactions for
new homes in Shanghai fell 56 percent in the month to
May 16 from a month ago, to 520,000 square metres.
Still, the average home price in Shanghai rose 21
percent to 24,833 yuan per square metre during the
month. Demand from downstream consumers is very good,
their order books are full, but they are buying
hand-to-mouth because no one wants to hold too much
inventory in these uncertain times. The government
will extend subsidies for trade-in vehicles to the end
of this year. As long as the arbitrage window stays
open, imports will remain high, whether it has to do
with real demand or financing, and this will support
prices. Trading companies often take advantage of the
price difference between London and Shanghai to buy
metal from overseas in order to help fund projects,
such as property investment. China has raised the
deposit reserve requirement ratio for financial
institutions to rein in credit. China’s imports of
refined copper were 1.06 million tons in the first
four months of this year, according to customs data. |
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China to shut down 10 pct of production capacity at its
main lead centre |
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CChina
may shut down 10 percent of production capacity at its
main lead centre this year as part of an environmental
clean up by Beijing that comes as smelter firms
grapple with water scarcity and lower processing fees,
according to a news report.
An estimated 50,000 tons of capacity is expected to be
closed in 2010 among 53 lead smelters in the Shadian
industrial section of Gejiu city in Yunnan province
which has 500,000 tons of lead smelting capacity a
year, local officials said.
Ma Xingkang, a smelter owner and chairman of the
Shadian Nonferrous Metals Association, said that "The
government wants to phase out some capacity and we
have started here."
He said that there would be more closures next year
and the year after in Gejiu, referring to the Beijing
plan to require existing lead smelters to upgrade
technology and reduce emissions by the end of 2010.
It is unclear if the 50,000 ton closure estimate by Ma
is part of Beijing aim to shut 243,000 tons of lead
capacity nationwide this year. Separately, China has a
three year project to close 600,000 tons of lead and
zinc capacity that started last year. |
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Russia may restore copper export duty |
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Russian government may restore an export tariff on
copper and to adjust 5 percent export tariff on nickel
this year, according to Andrei Slepnyov, Deputy
Economy Minister of Russia.
He was quoted as saying that the ministry had sent
this proposal to the government. Russia lifted the
copper and nickel tariffs in February last year to
help Norilsk Nickel and other crisis hit producers but
later restored the nickel tariff. |
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Mines Ministry turns down Nalco’s divestment proposal |
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The
Ministry of Mines has turned down a request from the
Finance Ministry on further dilution of government
equity in the National Aluminium Company Ltd (Nalco),
causing differences to crop up in the government.
Mines Minister BK Handique said his ministry was not
in favour of any further equity dilution in the
Navratna PSU. The Nalco board had earlier expressed
views against disinvestment. But, on the request of
the Ministry of Finance (Department of Disinvestment),
the Mines Ministry had asked the board to consider the
matter again. The Department of Disinvestment, which
comes under the Ministry of Finance, had asked the
Mines Ministry to consider 10 percent disinvestment in
Nalco, a proposal that was forwarded to the firm's
board for further deliberation. The Ministry of
Finance had made a reference to the Ministry of Mines
in March 2010 to consider disinvestment of 10 percent
equity, out of the remaining 87.15 percent of the
total paid-up capital held by the government in Nalco,
Handique had earlier said in Parliament. His statement
comes days after Orissa Chief Minister Naveen Patnaik
said that his party, the Biju Janata Dal, would oppose
any move by the central government to disinvest Nalco.
Many non-Congress political parties and trade unions
are also opposed to the move. State BJP President Jual
Oram had even threatened to “hit the streets” if the
centre took any such step. The state-owned company
reported a five-fold jump in its net profit to Rs
391.48 crore for the fourth quarter ended March 31,
against the year-ago period. The company has cash
reserves of about Rs 4,300 crore. According to the
disinvestment plans, the Union government intends to
garner as much as Rs 40,000 crore this financial year
by selling some of its equity in PSUs such as SAIL,
Coal India, Engineers India and Hindustan Copper. |
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MCX launches zinc mini futures contract |
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Multi
Commodity Exchange of India Ltd (MCX), launched its MCX
zinc mini futures contract. Initially, June and July
contracts of zinc mini will be available for trading and
in due course, more contracts will be introduced. While
the contract specification of zinc mini is exactly the
same as that of the existing zinc contract on MCX, the
tonnage has been reduced to one ton. The current zinc
contract on MCX has a lot size of five tons with an
average daily volume of 1,40,000 tons. There is a
growing demand from the industry, especially the SME
segment, for zinc mini contract which would help them
hedge the zinc price risk. “The Zinc mini futures
contract is an excellent risk management tool for SMEs,
especially those in the galvanising, die casting and
brass industry that have a fairly large consumption of
zinc,” MCX’s Deputy Managing Director, P L Singhal said.
Zinc has seen a surge in demand from the galvanising
industry which uses zinc as a protective coating on
steel to prevent corrosion and rusting. With a boom in
the steel industry, the zinc market witnessed a bull run
during the period 2001-2006. |
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Japan aluminium premiums likely to ease
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Premiums for primary aluminium shipments to Japan in
July-September are expected to ease again, after their
first fall in a year for the current quarter, but
slowly rising demand could limit the size of the drop.
Buyers in Japan, which imports about 2 million tons of
primary aluminium every year, said the premium could
ease to around US$120, while others said a steady
premium of around US$125 could not be ruled out,
reports said. Aluminium term talks started in the
first fortnight of May between suppliers, including
mining giants such as BHP Billiton and Alcoa Inc, and
Japanese buyers such as trading houses and aluminium
mills. Japanese buyers will cite new sources of supply
and a lack of strong Chinese demand - unlike late in
2009 when the term premium shot up due to worries that
UC Rusal would not sell metal into Asia and China
aggressively imported the metal. New supplies are also
coming from the Middle East and supplies in the market
are increasing, while the special factors that drove
the premium up sharply were removed, making it natural
that the premium normalises and falls down to the
level before the surge. China's imports of primary
aluminium were down 92 percent from a year earlier in
April, making the country a net exporter of the metal
for the first time since 2008, while Rusal said last
month it expected it would have metal to offer to Asia
for third and fourth-quarter shipment. In addition,
state-owned Emirates Aluminium expects to hit its
production target of 700,000 tons per year by December
at its new Abu Dhabi aluminium smelter. Japanese are
expecting lower levels, in a range of US$5-10 down
from the previous quarter, but the Japanese
environment also does not call for a sharp drop as
demand has improved from year-earlier levels and is
solid currently. Term premiums for primary aluminium
shipments to Japan for April-June have mostly been
agreed at US$122-124 per ton. A deal around US$115-120
for the third quarter would bring premiums down to
levels agreed in the fourth quarter of 2009, but still
above US$75 for the third quarter last year. Japanese
shipments of aluminium products rose 28.7 percent in
April from a year earlier, industry data showed, with
a robust appetite in China and Southeast Asia
bolstering demand. Aluminium is used in products
ranging from computers to planes. Industry sources
said Japanese consumers had aggressively drawn down
inventories which had piled up during the economic
slump to reduce storage costs, and were now seeing
some tightness in domestic supplies. |
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Hindustan Copper expects cabinet approval for stake sale |
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Hindustan Copper Ltd (HCL) is expecting the cabinet to
approve its plan for a 20 percent stake sale and will
appoint merchant bankers by the middle of this month,
the company's chairman said.
"For the book running lead managers, we have issued a
tender. I see no issues with cabinet approval as no
ministry has opposed it," Shakeel Ahmed, Chairman and
Managing Director of HCL said and added both are on
course.
Ahmed said the public issue is expected to be
completed by September or October and the funds raised
would be used for expansion of mines in India and
overseas.
"Our target for the full 20 percent is about Rs 4,000
crore to Rs 5,000 crore, depending on market
conditions and the price recommended by the merchant
banker," he said.
For the issue, the Indian government plans to offload
10 percent of its stake and Hindustan Copper the rest,
Ahmed said.
Hindustan Copper, the third largest copper producer in
India behind Sterlite Industries and Hindalco
Industries, is India's biggest miner of copper ores.
The company, which has mothballed one of its two
smelters since December 2008 as it turned economically
unviable, aims to step up its copper ore, concentrate
and metal output in fiscal 2010/11 that started on
April 1.
Ore output for the fiscal is targeted at 3.6 million
tons against 3.2 million tons in 2009/10.
Copper concentrates and metals production is aimed at
36,000 tons this fiscal year. |
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Atlantic Copper raises exports |
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Spanish copper smelter Atlantic Copper, owned by
Freeport, was raising exports to between 20-25 percent
of output in 2010 from between zero to 10 percent in
past years to compensate for slack Spanish copper
demand said Targhetta, who is also CEO of Atlantic
Copper.
Atlantic Copper was running at full capacity despite
low demand in Spain, he said. The plant produces about
250,000 tons of copper annually.
"Demand in Spain is still weak so we are raising
exports," he said. "There is a recovery in copper
demand in north Europe but not so much in south
Europe." |
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Nissan Copper profit plummets |
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Nissan Copper reported a phenomenon drop in standalone
net profit for the quarter ended March 2010. During
the quarter, the profit of the company declined 56.16
percent to Rs 23.78 million from Rs 54.24 million in
the same quarter last year.
Net sales for the quarter rose 33.44 percent to Rs
680.19 million, while total income for the quarter
rose 35.02 percent to Rs 689.45 million, when compared
with the prior year period.
It reported earnings of Rs 1.57 a share during the
quarter, registering 57.91 percent decline over
previous year period. |
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IFC invests in Ethiopian gold mining |
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The International Finance Corporation (IFC), the World
Bank's private sector lender, said it had invested 3.4
million pounds (US$5 million) in Ethiopia's fledgling
gold mining sector through Nyota Minerals.
Nyota is exploring for gold in Ethiopia and for nickel
in Burundi. It is also looking at gold mining
opportunities in Swaziland and at platinum mining
possibilities in Ethiopia.
"This investment continues our strategy of supporting
early-stage exploration companies with financing and
advice," said William Bulmer, IFC head of Mining.
Ethiopia says it has identified possible reserves of
up to 500 tons of gold in different parts of the poor
country. It now makes US$105 million a year from gold
exports and plans to double that amount within a year.
"Nyota is very pleased to welcome IFC as a shareholder
and partner on the Tulu Kapi Gold Project in
Ethiopia," said Melissa Sturgess, Nyota's Chief
Executive and Chairman.
"We look forward to drawing from IFC's expertise to
help ensure that the progress at Tulu Kapi follows
globally recognised best practices for the mineral
exploration industry, the environment, and for working
with local communities."
Nyota has announced a maiden inferred resource of
690,000 ounces of gold at the Tulu Kapi project 500 km
(310 miles) west of the capital Addis Ababa.
Saudi Arabia's Midroc Gold Co. and Britain's Golden
Prospecting Mining Co. discovered recoverable deposits
estimated at more than 40 tons of gold in November and
were awarded extraction licenses.
The Horn of Africa nation has made US$450.5 million
from about 48 tons of gold exports in the last 10
years, according to the Central National Bank of
Ethiopia.
Reliant on agriculture and commodities like coffee and
sesame, the country has posted an above 10 percent
average annual growth rate over the last 10 years.
The International Monetary Fund says Ethiopia's
economy -- which is also attracting interest from
foreign investors in other areas like agriculture,
hydropower, and oil and gas exploration - will grow
more than 5 percent this year.
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Global spot copper refining charges seen low in 2010 |
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Global spot copper concentrate treatment and refining
charges (TC/RCs) are likely to stay low in 2010 and
beyond, a senior executive of US copper mining and
smelting group Freeport-McMoRan Copper and Gold said.
Spot TC/RCs, the fees paid to smelters by mines to
refine copper concentrate into metal, are currently
"well, well below" the levels for long-term refining
contracts, said Freeport-McMorRan Senior Vice
President Marketing Javier Targhetta.
He declined to give a number for spot market levels.
Smelter capacity is larger than concentrate output,
forcing smelters to compete heavily for available
concentrate supplies, he said.
Global copper concentrate supplies were currently
about 1.5 to 3 million tons below smelter capacity, he
said. This reflected between 500,000 to 1 million tons
of refined metal output.
The sharp increase in smelter capacity in recent
years, especially in China, was contributing to weak
TC/RCs, he said.
Copper TC/RCs have been falling in past months in the
key Chinese market and globally.
"The shortfall in concentrates is expected to continue
through 2012 and beyond as planned smelter expansion
outpaces new mine developments," he said and added
that the result is a continuous downward pressure on
TC/RCs.
The fall in TC/RCs was a major problem for smelters.
Spot levels had now fallen to below four percent of
copper prices or an all time low, he said.
"Profits in the copper smelter/refining business have
now declined so much because of over capacity," he
said, adding that any major cost increases for the
refining sector could have a "serious impact on
competitiveness."
Calls for voluntary cutbacks in smelter capacity were
unpractical, he said. "There would be strike
breakers."
Some smelters were raising use of copper scrap as a
feedstock but it was unclear how far this could help
smelters, he commented.
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Xstrata axes investment over tax row |
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Xstrata has axed investment projects valued at A$6.6
billion (£3.8 billion) in response to the Australian
Government’s proposed “Robin Hood” tax on the mining
industry.
The London-listed miner said that it would immediately
halt work on the A$6 billion Wandoan coal mine and a
A$600 million project to extend the Ernest Henry
copper mine. Both projects are in Queensland and had
been expected to create more than 3,250 new jobs.
Xstrata said that its decision was part of an ongoing
review of its Australian operations as a result of the
government’s proposed 40 percent Resource
Super-Profits Tax (RSPT), which has sent mining shares
tumbling over the past month.
Analysts have estimated that the supertax will
increase corporate tax rates for miners in Australia
from 38 percent to 58 percent — the highest in the
world. Rio Tinto and BHP Billiton are also reviewing
their Australian operations but Xstrata is the first
multinational to cancel a project.
The company has already spent about A$300 million on
the mines, but Mick Davis, its Chief Executive, said
that he could not justify further expenditure.
“The RSPT has created significant uncertainty for the
future of mining investment into Australia and would
impair the value of previously approved projects and
exploration to the point that continued investment can
no longer be justified,” he said.
Kevin Rudd, the Australian Prime Minister, had
previously described threats by miners to cancel
projects because of the supertax as “balderdash and
bunkum”. He wants to introduce the tax within two
years.
Rudd has argued that the mining industry has
short-changed taxpayers by tens of billions of dollars
over the past decade.
The proposed tax encouraged Fortescue Metals to
suspend iron ore projects in Western Australia worth
about US$15 billion last month, although these were in
an earlier stage of planning.
Xstrata’s projects were, by comparison, well advanced,
but Davis said that they would not have generated
sufficient return if taxed at the higher rate. “The
government’s decision to change the rules for existing
investments has introduced the significant risk that
any new investment in Australia may again be subject
to tax regime changes without consultation,” he said.
Analysts at Liberum Capital said: “With BHP and Rio
Tinto stating they are reviewing future Australian
investment, the outlook over the next one to two years
for key Australian commodity prices [thermal coal,
coking coal and iron ore] is bullish due to
constrained new supply.”
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