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China COSCO, Vale sign agreement on iron ore shipping

Source: www.chinamining.org         Citation: Xinhua     Date: March 21, 2016

China COSCO Shipping Corp Ltd and Brazilian miner Vale on Friday signed an agreement on iron ore shipping, the latest cooperation between the two companies.

COSCO`s subsidiary China Ore Shipping will ship around 16 million tons of iron ore for Vale annually for the next 27 years.

 China COSCO Shipping Corporation is a new company formed by the restructuring of China`s top two shipping firms, officially established in February.

By amalgamating COSCO and China Shipping, the new conglomerate has the world`s largest total shipping capacity and the fourth biggest container fleet.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2016 will be held at Meijiang Convention and Exhibition Center in Tianjin on September 22^nd -25^th, 2016. We invite you to join the event and to celebrate the 18^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2016, please visit: www.chinaminingtj.org.

China copper: CIF import premium slips further on high stocks

Source: www.chinamining.org      Citation: Platts    Date: March 17, 2016

The spot import premium for London Metal Exchange-registered brands of copper cathode on a CIF China basis has fallen further, pressured by high stocks in Shanghai Futures Exchange warehouses and little import interest on the lack of arbitrage opportunity, industry sources said Wednesday.  

Platts lowered its CFR China copper premium assessment to $60-$75/mt Wednesday, down from $70-$85/mt last week on lower indications heard.  

A Southeast Asian trader indicated the CIF China premium for copper at $65-$75/mt, down from $80-$85/mt last week, while an east China-based trader heard around $70, down $15-$20/mt on the week.  

"Yes, the CIF China premium is down mainly due to rising stocks in the country. When the Chinese yuan devalued in November-December 2015, there was a good profit margin from buying LME copper at cash price and selling it at the SHFE. China`s copper imports were up, resulting in the high stocks volume in SHFE warehouses. In addition, Chinese domestic demand is still weak as it is not the buying season yet," the eastern Chinese trader added.   

Several Chinese sources also heard of the further fall in the CIF China premium for copper as copper stocks continued to rise in the country.  

A north China-based analyst heard it at $60-$70/mt, compared with $70/mt last week; an east China-based industry source heard at $60-$70/mt, down from $85-$90/mt the previous week; and a north China-based industry source heard an average of $65/mt, down about $5/mt week-on-week.  

"There`s no arbitrage opportunity at the moment. In fact, there`s an import-related loss of Yuan 800-1,000/mt," added the northern Chinese analyst.  

The eastern Chinese industry source and the northern Chinese industry source noted that current copper prices had generally stayed on the high side but were rather rangebound. 

"China`s recent weak industrial output statistics have dampened copper prices. But a weaker dollar has given copper prices some support. The dollar has weakened last night, pending on the announcement from the US Federal Open Market Committee`s meeting due to end later today," the eastern Chinese industry source added.  

China`s value-added industrial output gained 5.4% on the year in the first two months of 2016, the lowest monthly growth since November 2008, official data showed Saturday.  

The 5.4% growth retreated from the 6.8% increase in the Jan-Feb period of 2015 and the 5.9% in December 2015. It was also lower than the 6.1% annual gain seen in 2015, according to the National Bureau of Statistics.  

The weekly SHFE stocks totaled 350,138 mt on Friday, up 14.8% on the week, while LME copper stocks were 174,175 mt, down 6.7%.  

Front-month April 2016 copper futures closed at Yuan 37,390/mt ($5,736/mt) on the Shanghai Futures Exchange Wednesday, up from Yuan 37,170/mt last Wednesday and up from Yuan 37,130/mt Tuesday. 

LMESelect`s three-month copper price was around $4,941-$4,943/mt Wednesday afternoon, while the LME official three-month price was $4,902.50-$4,903/mt Tuesday.  

Chinese spot copper concentrate treatment and refining charges (TC/RCs) continued to be heard steady this week, sources said.

TC/RCs for the clean ore were mostly at $75-$85/mt and 7.5-8.5 cents/lb, while mixed ore stayed above $100/mt and 10 cents/lb. 

TC/RCs are fees charged to miners by smelters to treat and refine copper concentrate to produce copper metal. They typically rise when concentrate supply is ample and fall when supply is tight.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2016 will be held at Meijiang Convention and Exhibition Center in Tianjin on September 22^nd -25^th, 2016. We invite you to join the event and to celebrate the 18^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2016, please visit: www.chinaminingtj.org.

China should set up gold logistics center in the east

Source: www.chinamining.org         Citation: People`s Daily        Date: March 11, 2016

Thanks the massive inflow of gold from foreign countries and regions in recent years, China`s gold processing industry has been ranked first in the world. According to a recently issued blue book, China should now follow the trend and set up a gold logistics center, China News Service reports on Thursday.

In 2014, China processed 886.09 tons of gold, leading the world and accounting for 30 percent of the world`s total, despite a 24.68 percent decline from the previous year. This information comes from the blue book, which was published by the Ping An Bank funds operations center.

In recent years, a large amount of gold from Switzerland, the United Kingdom, North America, South Africa, plus other Asian countries and regions has been flown into China. Although Europe is still the biggest gold trading center, accounting for 80 percent of the global share, the distribution of China`s gold has already shown a significant "west to east" trend, according to the blue book.

In 2014, the supply of gold in the Chinese gold market amounted to 2,106 tons. Although that number is lower than that of Switzerland, the world leader in gold transactions at 2,208.1 tons, China`s gold exports only accounted for 13.17 percent of its supply this year, which means more than 80 percent of the gold has not been traded ¡ª 3.94 times that of Switzerland. So it is realistic for China to become a new gold logistics center.

 In addition, the blue book pointed out China`s other advantages, such as strong demand and a convenient, nearly completed logistics system.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2016 will be held at Meijiang Convention and Exhibition Center in Tianjin on September 22^nd -25^th, 2016. We invite you to join the event and to celebrate the 18^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2016, please visit: www.chinaminingtj.org.

PDAC 2016: China`s Zijin Mining eyes further global growth after landmark deals last year

Source: www.chinamining.org         Citation: financialpost.com        Date: March 9, 2016

While most of the global gold industry is retrenching, one of China¡¯s leading producers continues to eye big global growth.

"We want to become a global leading company," George Fang, executive director of Zijin Mining Group Co. Ltd., told an audience at the Prospectors and Developers Association of Canada (PDAC) conference in Toronto.

It was a rare public appearance outside China for a Zijin executive, even though the firm has been making headlines around the world due to its aggressive expansion strategy.

State-owned Zijin, formed in 1993, has been looking abroad for gold and copper acquisitions for more than a decade, but has been a very active buyer over just the past few years.

In December 2014, the company unveiled an $81 million investment in Canadian miner Pretium Resources Inc. And in May of last year, Zijin announced two very big investments in Canadian companies. It gave Barrick Gold Corp. US$298 million for a stake in the Porgera mine in Papua New Guinea, and gave Ivanhoe Mines Ltd. US$412 million for a stake in the Kamoa copper project in the Democratic Republic of Congo. Those transactions instantly made Zijin a significant global player.

The two deals come at a challenging time for Western mining companies to raise capital on favourable terms. Zijin is following in the footsteps of many other Chinese resource firms over the past decade, which took advantage of drops in commodity prices to invest billions of dollars in companies around the globe.

Many of those Chinese firms have run into problems with their overseas investments, in part because they have struggled to adapt to business environments outside China. Fang stressed that Zijin wants to learn from its partnership with Barrick in order to become a better global company. The two miners plan to co-operate on future investments.

Fang spoke as part of a China-focused session at the PDAC conference. One of the key themes was that Chinese firms need to adapt to the local environments in which they operate in order to succeed. Michael Laffin, a partner at Blake Cassels & Graydon LLP, said they should focus on retaining and empowering good local employees, delegating some authority and upholding best practices in the local country.

"Tackling the cultural issues is critical," he said.

While Zijin is best known outside of China for its acquisitions, it has faced a lot of criticism within the country for its environmental practices. Most notably, it was blamed for a massive toxic spill in 2010 that reportedly released more than 9,000 cubic metres of acidic waste into a river.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2016 will be held at Meijiang Convention and Exhibition Center in Tianjin on September 22^nd -25^th, 2016. We invite you to join the event and to celebrate the 18^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2016, please visit: www.chinaminingtj.org.

China 2016 crude oil import growth may exceed 800,000 bpd -analyst

Source: www.chinamining.org         Citation: Reuters        Date: March 4, 2016

China`s crude oil imports may rise by more than 800,000 barrels per day this year, boosted by storage needs, robust gasoline demand and fuel exports, an executive from a Beijing-based consultancy said on Thursday.

The jump in imports, if realised, could see China overtaking the United States as the world`s largest crude importer after China`s average crude imports hit a record 6.71 million bpd in 2015, up 8.8 percent from a year ago.

China is expected to import 860,000 bpd more crude this year, Yao Li, chief executive of SIA Energy said at a Platts conference.

 Independent refiners who recently received import quotas, have become a driver of Chinese crude demand and their preference for low-sulphur oil could cause producers from Venezuela and the Middle East to lose market share, Li said.

"China`s crude oil slate will become sweeter and lighter because of production yield requirement and as independent refiners prefer low-sulphur crude due to cost advantage," she said.

"Middle East producers will probably lose more market share. Russian ESPO is the biggest winner."

China`s domestic oil consumption is expected to grow by 410,000 bpd as strong car sales boost gasoline use in the world`s second largest economy, Li said. The estimate is higher than that of the International Energy Agency which sees China`s oil demand growing by 330,000 bpd to 11.51 million bpd in 2016.

SIA Energy`s Li expects Chinese fuel exports to rise by 330,000 bpd this year as local refiners, driven by strong margins, have increased output, although this will be offset by incremental imports of 120,000 bpd, including mixed aromatics for gasoline blending.

Most of the exports will be from state refiners rather than private companies as they have weak trading capabilities, Li said. Private refiners are "more likely to compete in the domestic market", she added.

China is also expected to import 240,000 bpd more crude than last year to fill storage tanks for strategic and commercial purposes, Li said.

 More imports are also needed to replace falling domestic crude production, she said.

Sinopec said in February it will shut four small oilfields this year at Shengli in the eastern province of Shandong as low global oil prices take a toll on output from the country`s ageing fields.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2016 will be held at Meijiang Convention and Exhibition Center in Tianjin on September 22^nd -25^th, 2016. We invite you to join the event and to celebrate the 18^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2016, please visit: www.chinaminingtj.org.

China raises coal bed methane gas subsidy to help fight air pollution

Source: www.chinamining.org         Citation: www.scmp.com        Date: March 2, 2016

Beijing has raised the subsidy for coal bed methane (cbm) production by half from this year to 2020 in a move to encourage exploration and production of the cleaner-burning fuel as part of its air pollution control initiatives.

The subsidy for each cubic metre of cbm ¨C natural gas trapped among coal seams ¨C has been raised to 0.3 yuan in the five years to 2020 from 0.2 yuan in previous years, the Ministry of Finance said in a statement posted on its website on Tuesday.

The move is expected to help struggling producers of the greener but more challenging and expensive to extract natural gas, after Beijing slashed non-residential wholesale natural gas prices by an average of 28 per cent from November following a crash in global energy prices.

 "Many cbm projects are no longer profitable following the recent domestic gas price cut amid slowing demand growth," Nomura Asia-Pacific head of oil and gas research Gordon Kwan said. "This is why China is lending a helping hand to the producers to motivate long-term investment in cbm."

Cbm and shale gas ¨C natural gas trapped between shale formations ¨C are unconventional forms of gas that are free from state pricing, but they have not been immune from price reduction pressure since conventional gas has similar properties to and competes with unconventional gas.

 China is rich in unconventional gas but poorly endowed in conventional gas.

Hong Kong-listed and Shanxi province-based AAG Energy, the first non-state-owned cbm explorer to get Beijing¡¯s permission to enter into large-scale commercial production in 2011, said in January competition from the expected conventional gas price cut forced it to lower its own cbm prices as early as September.

 As a result, its average selling price fell 11.9 per cent to 1.56 yuan per cubic metre in the second half of last year from 1.77 yuan in the first half.

The latest 0.1 yuan per cubic metre subsidy increase is not sufficient to offset the price decline.

 Since 2005, Beijing has offered conventional gas producers preferential policies to entice companies to invest in the nascent sector, including refunds on value-added tax collected from gas sales, exemption from equipment import duties, and free-market gas pricing.

 Last May, the National Energy Administration said the shale gas subsidy would be cut from 0.3 yuan between 2016 and 2018 to 0.2 yuan between 2019 and 2020, as production costs were expected to fall with technological improvement and rising production scale.

 Kwan said "there is a good chance" Bejiing will cancel the cut given the sharp fall in energy prices in the past 18 months.

 "Policies in China do change in exceptional times and no one anticipated earlier that global oil and gas prices could collapse to such depressed levels," he said.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2016 will be held at Meijiang Convention and Exhibition Center in Tianjin on September 22^nd -25^th, 2016. We invite you to join the event and to celebrate the 18^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2016, please visit: www.chinaminingtj.org.

Brent crude price drop takes toll on Yanchang Petroleum

Source: www.chinamining.org         Citation: China Daily        Date: February 24, 2016

A worker checks facilities of Shaanxi Yanchang Petroleum (Group) Co in Wuqi county, Shaanxi province. (Photo/Xinhua)

Shaanxi Yanchang Petroleum (Group) Co, China`s fourth-biggest oil producer by output, may cease production in some oilfields and stop drilling both old and new wells in some areas in response to the sharp plunge in crude oil prices, a media report said on Monday. 

The Yan`an-based company faces huge pressure over soaring cost in terms of oil exploitation, personnel and operation. The cost for oil production at Yanchang stands at about $70 per barrel, against a national average of $40, according to sources quoted by Securities Daily.  

In order to remain profitable, the State-run company also plans to cut capital spending by a total of 3.1 billion yuan ($480 million) this year and merge at least three oil drilling facilities, the report said.  

Yanchang Petroleum lowered its oil output target to 12.2 million metric tons for this year, about 200,000 tons lower than a year earlier, according to a statement on the company`s website.  

The more than 50 percent slump in global crude oil prices since June has badly hit producer`s earnings. Brent crude oil is currently below $30 a barrel, for the first time since May 2009.  

Yanchang Petroleum is not the first firm to respond to the price dive by cutting spending or suspending production.  

Shengli Oilfield, owned by China Petroleum & Chemical Corp, the nation`s second-largest oil major, plans to shut down four oilfields in the country`s eastern Shandong province to stay afloat.  

The company, also known as Sinopec, said the four oilfields are the least profitable projects in the region with only a few tens of thousands tons of production, and the shutdown could save at least 200 million yuan.  

At the same time, Daqing Oilfield, the largest oilfield explored by China`s major oil and gas producer China National Petroleum Corp, reduced crude oil production in 2015 for the first time in seven years.  

Though it is a painful process to make cuts or even suspend production, it is better to act early than leave it, experts.  

"It is a normal practice when oil prices plunge. It is an adaption that oil companies have to make to meet market requirements," said Han Xiaoping, chief executive officer of online energy information portal China5E.com.  

He said the cost for oil exploitation has been rising as some wells are getting old, but oil prices have been plummeting even faster, putting huge pressure on many large oil producers.  

"Oil companies need to bring costs down in line with the current lower oil prices. Many foreign companies have also made plans to sell off part of their assets or even start drilling fewer wells," he said.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2016 will be held at Meijiang Convention and Exhibition Center in Tianjin on September 22^nd -25^th, 2016. We invite you to join the event and to celebrate the 18^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2016, please visit: www.chinaminingtj.org.

More than 1,000 coal mines scheduled to close in 2016

Source: www.chinamining.org         Citation: Reuters        Date: February 23, 2016

China aims to close more than 1,000 coal mines with a total production capacity of 60 million tons this year, as part of its plans to tackle a price-sapping supply glut in the sector, the country`s energy regulator said.

The nation is the world`s top coal consumer but demand has been on the wane as economic growth slows and the country shifts away from fossil fuels in order to curb pollution.

In a notice posted on its website on Monday, the National Energy Administration (NEA) said the closures would form part of the plan released earlier this month to shut as much as 500 million tons of surplus production capacity within the next three to five years.

China has 10,760 coal mines, and 5,600 of them will eventually be required to close under a policy banning those with an annual output capacity of less than 90,000 tons, the China National Coal Association has estimated.

The government has promised to stop approving all new coal mine projects for three years in a bid to control capacity. The country produced 5.7 billion tons of coal last year and has an estimated capacity surplus of 1.7 billion tons, according to domestic news portal sohu.com.

Last year, the supply overhang dragged down domestic coal prices by one-third, but there has been some recovery this year with thermal coal at the port of Qinhuangdao up 2.7 percent at 380 yuan ($58.29) per ton.

Apart from coal, China will also aim to tackle overcapacity in the thermal power sector this year by controlling new projects and cancelling projects in regions with the biggest capacity surpluses.

Utilization rates in the power sector last year fell to their lowest since 1978, with demand failing to keep up with the rapid expansion in capacity.

China will further promote a program that allows suppliers to enter into direct power sales agreements with consumers, and it will also work to reduce power prices this year, according to the NEA.

About CHINA MINING

Since first held in 1999, the scope and influence of CHINA MINING has grown rapidly year by year. As a global mining summit forum and exhibition, CHINA MINING Congress and Expo has become one of the world’s top mining events, and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including geological survey, exploration and development, mining rights trading, mining investment and financing, smelting and processing, mining techniques and equipment, mining services, etc. playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.

CHINA MINING Congress and Expo 2016 will be held at Meijiang Convention and Exhibition Center in Tianjin on September 22^nd -25^th, 2016. We invite you to join the event and to celebrate the 18^th anniversary of CHINA MINING with us.  For more information about CHINA MINING 2016, please visit: www.chinaminingtj.org.