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Vedanta’s Zambia unit expansion plans continues despite tax increase

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Vedanta’s Zambia unit expansion plans continues despite tax increase

Vedanta Ltd.’s Zambian unit will press ahead with expansion plans even as the government of Africa’s second-biggest copper producer increased mining royalties, and has undertaken not to fire any workers.“Our actions are designed to sustain and create jobs, grow the economy, and contribute more to the treasury.”

The assurance by Konkola Copper Mines Plc, following a meeting between management and government officials on Monday, is an about turn after the company announced earlier this month that the new taxes made some operations unviable and cut output at its Nchanga smelter. First Quantum Minerals Ltd. on January 23 also scrapped plans to fire workers in response to the higher payments.

“There will be no loss of jobs at our sites as a result of the new tax regime,” Venkatesan Giridhar, Konkola’s acting chief executive officer, said in an emailed statement Tuesday. “Our actions are designed to sustain and create jobs, grow the economy, and contribute more to the treasury.”

The company is spending as much as $1 billion on the development of the Konkola Deep mine in Chililabombwe in the country’s copperbelt and setting up a new refinery. Konkola was renewing its focus on Konkola Deep and would ensure further investment in the short to medium term, Giridhar said.

Finance Minister Margaret Mwanakatwe, who attended Monday’s meeting, announced in her budget speech in September that mining royalties would rise by 1.5 percentage points across the board from Jan. 1. The previous tax rates ranged from 4 percent to 6 percent, depending on the copper price. The government also introduced a 10 percent charge if the metal climbs above $7,500 a metric ton.

The Chamber of Mines, which represents companies including Vedanta, First Quantum, Glencore Plc, and Barrick Gold Corp., warned that the move could lead to more than 21,000 job losses and operators cutting $500 million in capital spending over the next three years.

Reuters.

Gold prices rose to their highest since May

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Gold prices rose to their highest since May

 Gold prices on Wednesday held near eight-month highs hit in the previous session on concerns over U.S.-China trade relations and ahead of the U.S. Federal Reserve’s policy decision, where interest rates will likely be kept unchanged.

FUNDAMENTALS

* Spot gold was steady at $1,311.41 per ounce by 0050 GMT. Prices rose to their highest since May 15 at $1,311.98 on Tuesday. U.S. gold futures rose 0.1 percent at $1,310 per ounce.

* Traders await possible clues from the Federal Reserve on whether it might pause from its current rate-hike campaign. Fed policy-makers began a two-day policy meeting on Tuesday.

* The Fed raised interest rates four times last year.

* Some U.S. central bank officials have said they will be patient in raising rates given the stalemate over global trade, the U.S. federal government shutdown, and waning business and consumer confidence.

* Fed policymakers are expected to release a policy statement on Wednesday at 1900 GMT, followed by a press conference with Fed Chairman Jerome Powell.

* Gold tends to rise on expectations of lower interest rates, which reduce the opportunity cost of holding non-yielding bullion.

* Adding to investors’ jitters were criminal charges against China’s Huawei Technologies Co. Ltd. for violating U.S. sanctions against Iran.

* Investors fear the charges could complicate high-level trade talks set to begin on Wednesday where China’s Vice Premier Liu He will meet with U.S. Trade Representative Robert Lighthizer and others.

* British lawmakers rejected most amendments that aimed to keep Britain from leaving the European Union without a deal, reviving worries of a chaotic withdrawal from the trading bloc that would damage the UK economy.

* Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1.01 percent to 823.87 tonnes on Tuesday from Monday.

* Swiss jewellery imports rose by two-fifths over the course of the year to 16 billion francs ($16.1 billion), as more gold jewellery — mainly heading for smelting, or refining — poured into the country, primarily from the United Arab Emirates.

* Swiss gold exports fell last year to their lowest since the records became public in 2012. Imports slipped to their weakest since 2014, customs data showed on Tuesday.

World markets slip on China worries; dollar steady ahead of trade talks

* Jitters over global growth and a possible pause to U.S. monetary tightening are expected to set gold prices up for gains in 2019, a Reuters poll showed on Tuesday, but the metal will struggle to break above recent highs.

* Palladium prices are tipped for their highest year ever, forecast to average $1,200 an ounce in 2019 before falling back slightly in 2020, a Reuters poll showed. 

Reuters.

Angola to hold first diamond auction

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Angola to hold first diamond auction

Angola is planning to hold its first diamond auction this week, inviting around 35 companies to bid for seven stones as the world’s fifth largest producer moves to make the sector more lucrative for producers and the state.

The stones, selected for their rare quality and size, were produced by the Lulo project operated by Australia-listed Lucapa in the northeastern province of Lunda Norte.

“It’s our conviction that the final result of this auction will show to our society and the wider world our total commitment to transparency and innovation in the commercialisation of diamonds in Angola,” Minister of Mineral Resources Diamantino Azevedo said on Monday.

The auction on Thursday will use a sealed system by which interested parties submit their offers electronically without knowing what others have bid. This model is proven to garner the highest price, Azevedo said.

The new system, part of wider reforms in the commercialisation of diamonds in Angola, has been welcomed by producers who long complained they were not getting fair value for their stones.

Producers were previously obliged to sell through an opaque government marketing system to buyers selected by the Angolan state, a process they said resulted in prices well below international levels.

Angola has vowed to increase diamond production and per carat value, aiming to become a top 3 producer by 2021, as part of an attempt to diversify its economy away from a dependence on oil.

Reuters

Small scale miners ordered to inspect mining claims

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Small scale miners ordered to inspect mining claims

Government has urged small-scale miners to regularly inspect their claims and warned that it will not hesitate to forfeit mining claims from miners who will not do so.

In a letter directed to Zimbabwe Chamber of Mines chief executive officer Isaac Kwesu and Zimbabwe Miners’ Federation chief executive officer Wellington Takavarasha, Mines and Mining Development secretary Onesimo Moyo said small-scale miners were violating mining regulations.

“Ministry of Mines and Mining Development is hereby bringing to your urgent attention that some of the miners under your membership are not inspecting their mining claims in terms of the Mines and Minerals Act (Chapter 21: 05),” part of the letter, which is also copied to Mines minister Winston Chitando, reads.

“The ministry wrote to them, advising them to inspect their mining claims in order to retain their mining rights. Some of the miners ignored both provisions of the law and the courtesy reminder letter from the Ministry of Mines and Mining Development,” Moyo said.

In terms of the Constitution of Zimbabwe, Moyo said the Mines and Mining Development ministry had an obligation to collect statutory mining fees revenue for the benefit of the citizens.

He said sections 260, 263 and 264, among others, of the Mines and Minerals Act (Chapter 21: 05) provided for forfeiture of mining tittles due to failure to obtain an inspection certificate.

“However, the Ministry of Mines and Mining Development out of courtesy is, hereby, appealing to your organisations to advise your members on the importance of renewing their mining statutory fees, debts will be handed over to the Office of the Attorney-General for further management, even after forfeiture,” he said.

Moyo said government would not hesitate to enforce provisions of the Mines and Minerals Act (Chapter 21: 05) without further courtesy notice.

“In view of the above, may you please advise your members accordingly,” he said.

Contacted for comment, Takavarasha said: “We need them to comply and see the importance of paying those fees, but it’s a win-win situation. Both parties have to win. You have to see why people are not paying,” he said.

NewsDay

Global economy to influence oil prices

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Global economy to influence oil prices

Oil prices this year will be influenced primarily by the health of the global economy, which is why prices have closely tracked equity and bond markets in recent months.

U.S. shale production growth, the policy of OPEC and its allies, U.S. sanctions on Iran, and the threat of sanctions on Venezuela may all have an impact on the price of a barrel.

But that impact will be secondary and it is more likely to be crude prices that determine what happens with U.S. shale, OPEC+ policy and U.S. sanctions.

Predict what will happen to the global economy and the movement of oil prices in 2019 should become clear (“Weakening global expansion amid growing risks”, International Monetary Fund, Jan. 21).

GLOBAL ECONOMY

Business sentiment is buckling under pressure from the deteriorating relationship between the United States and China, as well as tightening financial conditions in the form of higher borrowing costs and falling equity prices.

The global economic expansion has been losing momentum since the middle of last year, and there are signs the slowdown has worsened in recent months, with risks skewed to the downside.

So oil consumption, especially middle distillates such as diesel, which are closely linked to freight transportation and industrial activity, is likely to grow more slowly in 2019.

Lower crude prices and the introduction of new pollution regulations on shipping fuels will offset some of the implied slowdown, but consumption growth is still set to slacken.

The extent of the slowdown depends on whether global growth starts to accelerate again, settles into an extended soft patch, or falls into an outright recession.

The difference between each of these three scenarios amounts to several hundred thousand barrels per day (bpd) of consumption growth, dwarfing all other influences on oil prices in 2019.

Much will depend on whether the United States and China can successfully de-escalate their economic conflict and whether financial conditions (including equity prices, yield curves and credit availability) ease.

U.S. SHALE OUTPUT

U.S. production of crude, lease condensates and gas liquids surged by more than 2 million bpd in 2018, the largest one-year increase reported in any single country in the history of the oil industry.

The frenzied shale boom coupled with signs of slowing consumption growth and unexpectedly generous U.S. sanctions waivers on Iran’s oil exports to push the market towards a large surplus in the fourth quarter.

The result has been a sharp drop in prices which has already prompted OPEC, and especially its principal member Saudi Arabia, to cut production sharply.

Lower prices are also expected to moderate the growth in U.S. shale production this year and next, albeit after a delay, as the industry completes the large number of new wells started during the 2018 boom.

The U.S. Energy Information Administration forecasts growth in petroleum liquids supply will slow from 2.22 million bpd in 2018 to 1.73 million bpd in 2019 and 1.24 million bpd in 2020.

But the speed and depth of any slowdown in U.S. shale production is uncertain and likely to depend critically on what happens to prices and thus the economy.

OPEC PRODUCTION

The Organization of the Petroleum Exporting Countries and its allies have announced plans to cut their combined production by 1.2 million bpd to prevent the oil market from becoming oversupplied.

The group’s early and aggressive production cuts appear to have removed much of the near-term surplus in the oil market and boosted sentiment.

Hedge funds and other money managers have stopped selling futures and options linked to Brent crude and European gasoil and become small buyers of both since the start of the year.

Spot Brent prices have found a floor above $60 per barrel, up from $50 in late December, and the structure of futures prices has swung from contango to level and even a small backwardation in the front-month.

Higher spot prices and firmer calendar spreads have caused some OPEC policymakers to conclude the market rebalancing process is over.

But if the global economy falls into an extended soft patch or even a recession, OPEC and its allies will probably have to make further cuts to prevent a surplus re-emerging.

Likewise, if U.S. shale production does not slow as quickly as anticipated, OPEC+ will come under pressure to cut output further.

On the other hand, if the economy grows strongly, and/or shale production slows sharply, the resulting market tightening will encourage OPEC+ to unwind some of its output restraints.

Like the shale producers, OPEC’s production policy will ultimately be contingent on the health of the global economy and the rate of oil consumption growth in 2019.

U.S. SANCTIONS

The United States has pledged progressively to tighten sanctions on Iran’s oil exports after the White House decided to pull out of the nuclear agreement reached in 2015.

The first phase of sanctions has proved less aggressive than expected after the United States granted generous waivers to some of Iran’s largest customers in Asia.

The White House seems to have responded to concerns about the lack of spare capacity in the oil market to replace exports lost from Iran and the resulting upward pressure on oil prices.

U.S. policymakers have proved sensitive to the impact of higher oil prices on fuel costs for motorists and the state of the economy.

But the initial waivers were granted for only six months so they will have to be extended, narrowed or terminated by May.

Oil market analysts have speculated about whether the next round of waivers will be tougher or if they will be terminated completely. In practice, the last round provides a route-map for U.S. decision-making.

White House decisions will be conditional on the availability of spare capacity and prices, which in turn makes them dependent on the state of the oil market and the economy.

If the global economy remains sluggish, OPEC is still restricting output, and oil prices remain relatively low, the White House may take the opportunity to narrow the waivers or remove them altogether.

If the global economy is accelerating, OPEC is unwinding its production cuts, and oil prices are rising again, the White House is likely to be less aggressive.

The same considerations apply to possible U.S. sanctions on Venezuela’s oil exports, which are likely to be contingent on the anticipated impact on prices and the availability of replacement capacity.

In Venezuela’s case, there is an additional complication because there are few alternatives to the country’s heavy and diesel-rich crudes. Venezuela’s heavy crude cannot be replaced by light U.S. shale production.

If the United States decides to impose primary and/or secondary sanctions on Venezuela’s exports, alternative supplies will have to come from Saudi Arabia, the United Arab Emirates, Kuwait and Iraq.

Spare capacity in these countries may not be enough to cover for tough sanctions on both Iran and Venezuela at the same time while leaving enough to absorb further shocks.

Like everything else, the severity of sanctions on Iran and Venezuela depends on the state of the oil market and the economic outlook.

Reuters.

Significant progress in Muzarabani oil project

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Significant progress in Muzarabani oil project

Independent oil and gas exploration company, Invictus Energy Limited, says it has made significant progress in its Cabora Bassa Project work programme for the quarter ending December 31,2018.

In a quarterly activities report released early this week, the Australia Stock Exchange listed junior miner, said early results from reprocessing of the 2D seismic data are extremely encouraging.

“During the quarter (ending December 2018), the company commenced reprocessing the 2D seismic data, which was transcribed from the field tapes located at the Zimbabwe Geological Survey in Harare.

“The early results from the exercise are extremely encouraging and are providing a significant improvement in the data quality and seismic imaging of the subsurface,” the Company said.

Last year, Invictus released its maiden estimate for the Muzarabani oil project.

The maiden estimate, done by Netherland, Sewell and Associates, Inc, revealed that the project has the potential to produce 3,9 trillion cubic feet (tcf) of gas and 181 million barrels of conventional gas.

According to the estimate, the primary upper Angwa target alone in Muzarabani Prospect places Zimbabwe in “giant scale field potential”.

According to Invictus, the reprocessing exercise, which encompasses the entire Cabora Bassa Basin, is expected to be completed around the end of the March quarter and interim results will be released during the quarter.

“Following this, the seismic dataset will be reinterpreted in preparation for the quantification of additional prospectivity and an update to the independent prospective resource for the entire SG 4571 area,” noted Invictus.

The maiden estimate released early November 2018, excluded the additional prospective horizons above and below the Upper Angwa in the Mzarabani structure as well as further plays and leads within the SG 4571 area.

But this, according to management has the potential to add material prospective resources to the Cabora Bassa Project.

The miner, which is headed by managing director Scott Macmillan, said it had also completed the aeromagnetic data reprocessing, which identified numerous leads and play types in addition to the Mzarabani structure and “will be incorporated to the seismic interpretation”.

More samples acquired

The company said it has acquired additional source rock samples from outcrops located at the western edge of the Cabora Bassa Basin.

“These samples will be analysed and incorporated into an updated basin model.

“Through the company’s continued geological and geophysical studies and results, it has received significant industry interest following road-shows and conferences over the last several months ahead of the planned marketing programme to attract a farm-out partner,” said Invictus.

It said the process to find a farm-out partner is expected to commence following the update to the independent prospective resource estimate for SG4571. 

Business Weekly.

Gold miners target 50 tonnes production

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Gold miners target 50 tonnes production

SMALL-SCALE miners have set a target of producing 50 tonnes of gold this year after successfully surpassing their mark last year.

Zimbabwe Miners’ Federation (ZMF) general council chairman, Mr Makumba Nyenje, said the small scale miners were expecting to surpass the Government target for 2019 by at least 10 tonnes.

“The Government has set a target of about 40 tonnes and as the small scale miners we hope to surpass that target as we always do. This year we are targeting 50 tonnes of gold,” said Mr Nyenje.

He said the equipment from Fidelity Printers and Refiners (FPR) would assist small scale miners in meeting their target.

FPR will this month select companies to supply mining equipment to beneficiaries of its Gold Development Initiative Fund (GDIF). This comes after realisation and complaints from a number of small-scale miners that some of the companies, which it has been dealing with since the establishment of the fund, were delivering improper machinery.

“As you know a lot of miners are yet to receive their equipment from Fidelity Printers and Refiners so if all those applicants (miners) are able to access the equipment and put it to optimum use that means we will attain the optimum returns or maximum production levels,” he said.

He urged the Government to continue addressing the problem of gold leakages which were affecting the industry.

“Government should work on plugging out gold leakages, there are reports that what is being channelled to Fidelity (FPR) is probably a quarter of what has been produced and 60 percent is being sold on the black market. Government needs to close those gaps possibly by providing a proper price as it used to do in the past,” he said.

He, however, said lack of skills in terms of identifying mineral deposits and lack of financial capacity were some of the challenges being faced by most small scale miners.

“Most miners do not have the time for queuing at the banks while some simply have a phobia for banks, they just do not want to open accounts except for those who are established. Also, most miners lack expertise on how to survive in the business, some are just in it when the benefits are abundant.The other problem we face is that we are not given our due consideration. Also the stigmatisation is greatly affecting us; small scale miners are treated as omakorokoza, viewed as thieves or people involved in shady deals. The name itself is not clear of the boundaries between those who actually own the mines, the employees and illegal gold panners.”

Last year, the Government had targeted to produce 30 tonnes of the yellow metal of which the figure was surpassed a month before the year ended. Final 2018 production figures are still to be revealed.

The Sunday News

Mining investment on the rise

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Mining investment on the rise

The Mining Affairs Board, a statutory body under the Ministry of Mines and Mining Development, is currently processing applications for Exclusive Prospecting Orders (EPOs) from 11 local and international mining companies, as authorities step up efforts to leverage the country’s vast mineral wealth to support economic recovery and growth.

An Exclusive Prospecting Order (EPO) gives mining companies express rights to search for minerals and peg claims.

The applications under active consideration involve minerals such as uranium, diamonds, lithium and gold in eight provinces across the country.

A fortnight ago, the Mining Affairs Board — through a notice placed in the Government Gazette on January 11 — invited members of the public to comment on the applications.

According to the gazette, Canlite Mining Exploration (Pvt) Ltd has applied to undertake exploration work at three different sites in Matabeleland South.

It also seeks to prospect for minerals that include gold, silver, copper, lead, cobalt, manganese, zinc, nickel, chrome, graphite, lithium and platinum group metals (PGMs).

Further, in Matabeleland South, two companies — Infield Mining Exploration and Pearline Mining Exploration (Pvt) Ltd – have applied to prospect at seven different sites.

“The applicant (Infield) intends to prospect for gold, silver, copper, antimony, lead, cobalt, manganese, zinc, nickel, chrome, graphite, lithium and PGMs within the area which has been reserved against prospecting pending determination of this application,” reads part of the notice in the gazette.

In addition to seeking claims in Midlands and Masvingo provinces, DGL Investments Number Three also intends to prospect for gold, silver, copper, antimony, lead, cobalt, and manganese at three sites in Mashonaland West.

Zulu Lithium (Pvt) Ltd is interested in lithium, copper, tantalite, gold, tungsten and molybdenum in Midlands province.

Another company, Zimthai Tantalum (Pvt) Ltd, wants to prospect for tantalum, niobium, tin, tungsten, and lithium in Manicaland, including gold and copper in Mashonaland West.

Primecraft Investments is eyeing copper and gold in Mashonaland East, while Lambourne Limestone intends to prospect for gold in Masvingo.

Furthermore, Sinamatella Investments wishes to prospect for 23 different minerals including uranium, lithium, beryl, molybdenum, manganese, diamonds and arsenic at three sites in Matabeleland North.

Triminzim (Pvt) Ltd’s application covers gold, nickel and copper at three sites in Mashonaland Central and West.

Similarly, mining giant RioZim seeks to prospect for gold, nickel and copper at two sites in Midlands.

Mining exploration involves gathering information that helps to assess the potential of mineral deposits in an area.

While Zimbabwe has a highly diversified mineral resource base, the country is considered under-explored, with only a handful of mineral deposits known to authorities and mining companies.

Current exploration data was gathered before independence using techniques which are now considered outdated, emphasising the need for further exploration using modern methods.

The Sunday Mail

Mining earned more than 3,4 billion

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Mining earned more than 3,4 billion

The mining sector earned more than US$3,4 billion last year, driven by high international metal prices and record breaking output particularly for gold, diamonds, chrome and nickel.

This saw the Zimbabwe Revenue Authority (Zimra) getting over US$95 million in mining royalties.

Statistics gleaned by The Sunday Mail Business showed that the sector had out a solid performance, consolidating its position as a critical pillar of this economy.

Although Minerals Marketing Corporation of Zimbabwe (MMCZ)’s corporate communications executive Ms Pretty Musonza, said the actual figures were not yet ready, told The Sunday Mail Business last week that overall mineral output and foreign currency generation statistics for last year are not yet ready, information at hand shows the sector realising significant growth un earnings.

Ms Musonza revealed provisional figures point to “an increase from the 2017 figures”.

“The figures for last year have not been finalised. They should be ready in the near future,” said Ms Musonza.

“However, I can confirm that indicative figures point to an increase from what the sector achieved in 2017.”

MMCZ, which was established through an Act of Parliament (MMCZ Act Chapter 21:04), is an exclusive agent for marketing and selling of all minerals produced in Zimbabwe except silver and gold.

Figures obtained by The Sunday Mail Business last week from top mining industry sources, show that the country could have generated in excess of US$3,4 billion, up from $2,3 billion in 2017.

Preliminary figures show that Platinum Group of Metals (PGMS) matte rose 33 percent to 15 115 metric tonnes, and generated about US$625,9 million.

In monetary terms, PGMS matte recorded a 17 percent rise compared to 2017.

However, PGMS concentrates output declined 14 percent to 134 316mt from the prior year, and recorded a 10 percent decline in foreign currency generation to US$411,3 million.

Chrome concentrates output increased by 26 percent to 658 306mt and generated US$102,6 million with nickel output also rising by 9 percent to 61 073mt and raked US$59 million.

Output for chrome ore lumpy also jumped by 20 percent to 160 623mt and generated US$16,2 million, which was also an 18 percent surge from 2017.

High carbon ferrochrome (HCFC) declined 26 percent to 287 835mt and brought US$272 million into the country.

The above minerals alone generated just over US$1,4 billion.

Gold output hit a new high of 33,3 tonnes last year, mainly driven by small-scale miners who contributed 21,7 tonnes, and generated US$1,7 billion in foreign currency.

Gold is bought by Fidelity Printers and Refiners (FPR), a unit of the Reserve Bank of Zimbabwe.

The yellow metal’s performance represents more than 65 percent of Zimbabwe’s mineral export receipts last year.

Gold overshadowed tobacco, which raked US$882 million after 253 million kgs went under the hammer.

With diamond output surpassing the 2,4 million carats target to end the year on 2,8 million carats, more money is expected from that sector, and experts see mineral export receipts topping US$3,4 billion.

In the first eight months of last year, lithium posted a 45 percent rise from 34 110 tonnes to 49 359 tonnes; granite rose from 109 600 tonnes to 160 600 tonnes and coal increased by 4 percent from 2,3 million to 2,4 million tonnes.

Zimra gets US$95m from mining royalties

The national tax collector reported last week that the mining sector contributed US$95,67 million in royalties, spurred by a commendable rise in global mineral prices.

The impressive performance of the revenue head represented 6,3 percent jump from the US$73,11 million achieved in 2017.

Zimra’s 2018 revenue report released last week says: “The revenue head (mining royalties) contributed US$95,67 million against a target of US$90 million, translating to a positive variance of 6,30 percent.

“Revenue collections grew by US$30,86 million from the US$73,11 million collected in 2017. The performance of the revenue head was influenced by the movement of international commodity prices.” Mineral prices largely surged in the first and fourth quarters of 2018, thereby enhancing revenue collections.

Zimbabwe benefited from increased output for major minerals such as gold, platinum and diamonds.

Chamber of Mines of Zimbabwe chief executive officer Mr Isaac Kwesu, said the jump in mining royalties was indicative of the growth of the mining sector.

“I think that it’s a sign that when the sector grows, its contribution to royalties and fiscus and the economy at large, will also increase,” said Mr Kwesu.

“So it (increase in mining royalties) was on the back of improved performance of the industry and output growth relative to mineral prices.

“It was good news for the country. So when the mining sector is growing, its contribution would not be limited to royalties, it also means that it can contribute more to other tax heads such as corporate tax, payee (pay as you earn); its contribution expands. But the principal point remains that as long as the mining sector is in the growth trajectory, it also means it contributes to the fiscus and the economy at large and social being of people.”

2019 outlook

Mr Kwesu contends that mineral output will continue to rise this year, especially if Government addresses the cost of doing business in the country.

“The challenge remains the high cost structure in the industry but as long as we manage to produce cheaply, as long as we secure inputs cheaply, as long as we get capital cheaply, I think the sector is poised to expand output.

“We know that the authorities are doing something about the challenges we face as a sector and the industry continues to engage,” said Mr Kwesu.

He said the mining sector must take advantage of the rising global prices, “otherwise we miss the opportunity”, if the country does not increase output.

“So I think stakeholders, miners and Government, we must do everything possible so that we benefit from the expansion in the global economic output,” said Mr Kwesu.

Government wants the mining sector to generate US$12 billion revenue by 2025.

The Sunday Mail

India thermal coal imports rises

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India thermal coal imports rises

India’s 2018 thermal coal imports rose at the fastest pace in four years, according to two industry sources, despite moves by Prime Minister Narendra Modi’s government to cut imports in a bid to reduce its trade deficit.

Coal is among the top five commodities imported by India, one of the world’s largest consumers of coal, and the rise in imports of the fuel after two consecutive years of decline adds to its trade deficit.That trade gap has been hurting the valuation of the rupee, the worst performing major Asian currency in 2018.

Thermal coal imports jumped 19 percent to 171.85 million tonnes in 2018, the highest since 2014, according to data from American Fuels & Natural Resources. Thermal coal is mainly used to produce electricity.

Imports of coking coal – which is mainly used in the manufacturing of steel – rose at the quickest rate since 2015 – according to consultancy firm Wood Mackenzie and American Fuels & Natural Resources, a trader of U.S. based coal.

India imported 52.26 million tonnes of coking coal in 2018, up 14 percent from 45.93 million tonnes in 2017, the data showed.

The value of all coal imports for the nine months ended December 31, 2018 was 31.4 percent higher at 1.38 trillion Indian rupees ($19.45 billion) than it was in the same period in 2017, according to government data reviewed by Reuters.

The value of India’s coal imports was 1.38 trillion in all of 2017.

Traders say coal imports grew largely due to restrictions on consumption of petroleum coke, a dirtier alternative to coal, in some parts of the country.

“2018 was a booming year for coal imports in India, mostly on the back of demand from cement and small and medium-scale industries in India,” said Puneet Gupta, founder of online coal and petcoke marketplace Coalshastra.

“Higher demand was also fuelled by restrictions on the use of petcoke,” he said. Petcoke consumption dropped about 15 percent in 2018, according to government data.

Imports of coking and non-coking coal totalled 176.65 million tonnes in the April-November period, compared with 156.92 million in the same period last year.

While higher coal imports may be bad news for India’s trade deficit, they are a boon for international miners such as Indonesia’s Adaro Energy, Australia’s Whitehaven Coal , U.S, coal miner Peabody Energy Corp and global commodity merchants such as Glencore.

Indonesia provided more than 61 percent of India’s thermal coal imports, while South Africa accounted for 22 percent and the United States more than 7 percent.

Imports of U.S. thermal coal, which burns better compared with Indonesian coal, almost doubled to 12.46 million tonnes in 2018, according to American Fuels.

The ports of Mundra, Krishnapatnam and Kandla handled about 37.5 percent of all of the the thermal coal imports, according to American Fuels.

The Adani Group, which handles about a third of India’s imported coal, said last year it expects a “reasonable rise in imports” till fiscal year 2021 due to “rail transportation challenges” affecting India’s domestic coal industry.

Analysts say they expect India to be a key market for global miners in 2019 as China’s “war on pollution” will lead to lower demand from that country.

Reuters

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