BP and Hess Come Up Dry in Blow to Nova Scotia's Hopes for New Offshore Frontier 14 Nov 2018
The drilling partnership between BP and Hess have come up dry at the Aspy D-11 well in ultra-deepwater waters of the state of Nova Scotia, Canada. Located 330km from state capital Halifax, the Seadrill West Aquarius rig drilled the well to a depth of 7,400m and did not encounter commercial quantities of hydrocarbons. The well was one of a planned seven wells that the Hess-BP Canada partnership had planned over a four-year drilling programme lasting until 2022. The exploration programme is in four deepwater licence areas issued by the Canada Nova Scotia Offshore Petroleum Board (CNSOB) in 2012. The well will be plugged and abandoned. BP Limited and Hess Corporation each hold an equal 50% stake in the licenses. Going forward although it is yet known if the result will alter the future of the work programme. The disappointing results follows a similar outcome in Nova Scotian waters from Shell Canada whose Monterey Jack E-43 wildcat well in 2017 and Cheshire well in 2016 also came up dry. The cost of Shell’s two exploratory wells was estimated at around US$1bn. Shell Canada’s partners in the project were ConocoPhillips Canada East Coast Partnership and Suncor Energy.
Golding Receives Early Contractor Involvement at Fitzroy's Ironbark No.1, QLD 14 Nov 2018
Australia contract miner NRW Holdings Limited’s wholly owned subsidiary Golding Contractors has secured an Early Contractor Involvement (ECI) at Fitzroy's Ironbark No.1 Mine in Queensland, Australia for undisclosed amount. The contract is expected to start in the June Quarter of 2019 and covers detailed design, costing and project scheduling for the civil and mining services required to develop the site. The scope of the ECI includes bulk excavation and box cutting stabilization, portal installation, haul roads, site access roads, dams and associated civil infrastructure.
Fitzroy received the mining lease for the project early this month. Fitzroy is completing the feasibility study and approval process to construct an underground longwall at the mine. The mine will extract an average of 2.6Mtpa ROM over a mine life of 20 years and produce around 2.1Mtpa of saleable product, of which 54% will be mid-volatile hard coking coal, and 46% premium thermal coal. All production will be sold to international customers.
Rosebud Expansion Expected to Get the Green Light, Despite Company in Bankruptcy 14 Nov 2018
Montana regulators issued a draft acceptability determination and set a US$13.7m rehabilitation bond for the proposed expansion of the Rosebud Mine on 5th of October 2018, 4 days before the owner Westmoreland Coal Company filed for Chapter 11 bankruptcy.
The expansion plan has been underway for 7 years and is in the last stages of the approval process before the acceptability determination becomes final.
Montana regulators advised that bankruptcy is irrelevant to the approval process, but the application will be rejected if Westmoreland fails to meet the rehabilitation bond set by the Department.
Rosebud is an open-cut mine that produces around 8Mtpa thermal coal. The mine has a reasonable strip ratio of under 6:1 and long-term supply agreements with local power stations. The proposed expansion would extend mine life by 19 years with addition 60Mt of coal reserves.
Roy Hill Signs a Second MoU with Marketer in China 14 Nov 2018
Roy Hill Holdings has signed a second MoU with an iron ore marketer in China. The agreement is with Xiamen ITG Group Corporation Ltd (ITG) which supplies iron ore and coal to steel mills and distribution for finished product as well as price, volume and logistic optimisation advice to steel mills across China. ITG is also shareholder of Fujian Sansteel Group.
Roy Hill and ITG have agreed to work to expand the use of Roy Hill iron ore at Sansteel and also promote Roy Hill’s iron ore to other steel mills in China in light of their experience
and expertise in using the product.
Roy Hill previously announced an MoU with Angang Group International Trade Corporation.
AME estimates that around 60% of Roy Hill’s production is delivered to China.
EVRAZ to Increase Capacity at Tashtagol UG Mine, Russia 14 Nov 2018
Russian integrated steel producer EVRAZ has commenced an upgrade of its Tashtagol underground mine in Kemerovo Oblast, central Russia.
The company will spend RUB6.8bn (US$100m) to lift production from 2.2Mtpa to 3.25Mtpa of 61% Fe concentrate by the second half of 2019.
The project includes a new haulage shaft and underground crushing plant. Mining will use block caving and sublevel caving-and-fill technologies with remote controlled equipment.
The mine has a reserve of 54Mt at 40.3% Fe and production is consumed by EVRAZ”s ZSMK steel works.
Tata Steel Commences Phase II Expansion at Kalinganagar Plant in India 14 Nov 2018
Tata Steel has commenced the Phase II expansion of its Kalinganagar steel plant in Odisha to lift crude steel capacity from3Mtpa to 8Mtpa. Capital expenditure is INR235bn (US$ 3.5bn) and includes investments in raw material capacity expansion, upstream and mid-stream facilities, infrastructure and downstream facilities, including a cold rolling mill complex. Tata Steel expects to complete the project within 48 months. Tata Steel Kalinganagar started production in May 2016 and reached its Phase I capacity target of 3Mtpa in 2017. Completion of the Phase II expansion will bring Tata Steel India operations production capacity to 23.6Mtpa. Tata Steel plans to expand domestic capacity to 26Mtpa by 2023 in response to India’s National Steel Policy.
Comprehensive Plan to Curb Emissions and Rationalise Capacity in Yangtze Delta 14 Nov 2018
The China Ministry of Ecology and Environment has released the “Action Plan for Comprehensive Management of Air Pollution in Autumn and Winter in the Yangtze River Delta Region from 2018 to 2019”. The plan applies to 41 cities and includes directives on rationalisation of capacity as well as on reducing emissions by operational and structural changes.
Cities where PM2.5 exceeded 70mg/m3 in autumn and winter 2017 are required to implement site targeted production controls between 15 Nov 2018 – 28 Feb 2019. Wide ranging directives which will change the structure of the industry include shutting down all merchant coke producers in the region, covering coke ovens operated by Baosteel, Nanjing Steel and Mesihan Steel and implementing ultra-low emission technologies for sintering and steel making.
The plan also orders steel capacity cuts by the end of 2018 for specific sites and operators including Baosteel Shanghai Stainless Steel.
Any relocation or capacity merge or swap must be relocated to coastal areas. The policy of shifting steel capacity to the coast was also included in the steel restructure plan issued by Shandong Province this month which requires 50% of capacity in coastal areas by 2022 and over 70% by 2025.
Atico Increases Resource Estimate for El Roble 14 Nov 2018
Canadian miner, Atico, has increased tis Mineral Resource estimate for its El Roble project in Colombia. Resources for the operation now total 3.6Mt grading 3.6% copper and 2.3g/t gold, an increase of more than 50% from previous estimates. With Atico mining 850tpd at El Roble, AME believes the increase in Resources has the potential to extend the mine life of the operation from 2023 to 2028. In 2018, El Roble is expected to produce 9kt of copper and 8.4koz of gold in concentrate, in line with 2017 production.
Noranda Increases 2018 Guidance for CEZ Smelter 14 Nov 2018
The Noranda Income Fund has increased guidance for its 75% owned 298ktpa Canadian Electrolytic Zinc (CEZ) smelter in Canada. After a strong September Quarter in which the smelter produced 60.2Kt, Noranda increased zinc production guidance for the smelter from 255–265kt to 260–270kt. If Noranda hits its target, which is expected, it will be a year-on-year increase in production of 47%. In 2017, output was limited by a nine-month strike between the smelter and the United Steelworkers union. In the short to medium term, 2019–2022, output is forecast to rise to average 290kt. Concentrate during this period will be supplied by Glencore. Treatment charges will be negotiated annually.
Vedanta Planning to Increase Capacity of Lanjigarh Refinery to 4Mtpa by 2020 14 Nov 2018
Vedanta plans to ramp up production at its Lanjigarh refinery to 4Mtpa by 2020. The proposal was recently approved by Odisha's High-Level Clearance Authority. Ultimately, Vedanta intends to increase capacity at the site to 6Mtpa. Expansion of the Lanjigarh refinery has been long planned with delays caused by difficulties in securing reliable bauxite supply. Vedanta recently secured a long-term bauxite supply arrangement with the Odisha Mining Corporation. The ramp up of production at the Lanjigarh refinery will reduce Vedanta's reliance on imported alumina to nil. Fellow Indian producer Nalco, which operates alumina capacity surplus to its smelter requirements, does not sell to its domestic competitors.