Vale has now increased its participation in Belvedere to 75,5% from 51%.

AMCI, Vale and joint-venture partner (JV) Aquila Resources jointly own the project.

Vale stated that its preliminary estimates have found that once it was fully developed, Belvedere could reach a production capacity of up to seven-million tons a year of coking coal.

“Investment in the coal business is an important part of Vale’s growth strategy,” the Brazilian mining giant said.

The Belvedere coal JV currently holds an on-site resource in excess of 3,8-billion tons, of which 1,5-billion tons is classified in the indicated category, and 2,3-billion tons in the inferred category.

Subject to the completion of all necessary feasibility studies and the receipt of regulatory approval, the Belvedere project is planned to start exporting coal by 2014.

Vale has coal operating assets and a portfolio of exploration projects in Australia and Colombia, and minority interests in two JVs in China. Vale was also developing the Moatize project in Mozambique and has mineral exploration initiatives in several other countries.

That marked the end to four consecutive years of dwindling output as lower grades at aging mines and labor strikes hit output of one of the main revenues-earners of the Chilean state.

The total did not include output from El Abra which is a joint venture between Codelco and a private company.

The state miner [CODEL.UL] produced 1.46 million tonnes of copper during the same period the previous year.

The giant miner produced 21,500 tonnes of molybdenum, a metal used to strengthen steel, in 2009.

The opencut iron-ore mine would initially produce 20-million tons a year, increasing to 25-million tons by 2011.

“This is a great day for Rio Tinto and for the Pilbara,” said Rio CEO for iron-ore and Australia, Sam Walsh.

“Mining in the Robe Valley has been an integral part of the north-west economy for decades, and this new mine will ensure it continues to contribute to the benefit of the wider community.”

The Robe River joint venture (JV), in which Rio held a 53% share, started construction of the mine and rail extension in November 2007.

The mine would employ about 220 people, drawn progressively from the existing work force at Robe River’s main deposit, Mesa J near Pannawonica, and new employees.

The total high-grade reserves across the Mesa A/Warramboo deposits are estimated at around 249-million tons, with a total mine life of 11 years.

It would sustain production of the Robe Valley pisolite ore at 32-million tons a year, as production from the Mesa J deposit decreased.

Rio noted that the first full-length train left the mine late on Friday, following the 49-km rail extension to connect to the Deepdale railway running from Pannawonica to the Cape Lambert port.

In 2007, when the investment into the Mesa A/ Warramboo project was announced, Walsh noted that the new mine was “integral” to the Pilbara production platform underpinning Rio Tinto’s rapid expansion of its global network of assets.

Walsh noted that the mine demonstrated Rio’s strategy for substantial investment in high-quality, long-life, and low-cost assets.

The balance of the Robe River JV belongs to investment firm Mitsui, which holds 33%, Nippon Steel, which holds 10,5%, and Sumitomo Metal Industries, which holds the remaining 3,5%.

According to Rio Tinto’s website, Robe River is the world’s fourth-largest seaborne trader in iron-ore and sells primarily into Japan, Europe and Asia.

“The raw materials industry is highly concentrated and suppliers in recent years have had significant pricing power,” ArcelorMittal said in its 20F annual report published at the Securities and Exchange Commission.

“Further consolidation among suppliers — for example, the announced iron ore joint venture between mining companies BHP Billiton and Rio Tinto — would exacerbate this trend.”

The world’s three largest iron ore miners — Brazil’s Vale, Rio Tinto and BHP Billiton — accounted for nearly 70 per cent of the world’s sea-borne traded iron ore market in 2008.
Rio Tinto and BHP announced near the end of last year plans to create an iron ore joint venture that would reduce production costs and produce iron ore more quickly by combining mining operations in Western Australia. Sales and marketing would be kept separate from the joint venture.

Steelmakers around the world, particularly those that depend on other miners for a substantial portion of their iron ore requirements, are adamantly opposed to the merger.

The World Steel Association and other regional steel associations have all urged relevant authorities to reject the joint venture on grounds that it would concentrate too much iron ore pricing power in the hands of an even smaller group of mining companies.

Yesterday, Australia’s biggest steelmaker, Bluescope, lashed out at BHP-RIO iron ore merger and BHP’s plan to scrap annual iron ore pricing. Click here to read the story by The Australian’s Matt Chambers.

ArcelorMittal is likely to be less affected by the joint venture than some of its peers since it benefits from substantial captive sources of iron ore and coal. In 2009, ArcelorMittal was 60 per cent self-sufficient in iron ore and 20 per cent self-sufficient in metallurgical coal, another ingredient used in steelmaking.

Nevertheless, the steelmaker still purchases a significant portion of its raw materials under long-term supply contracts, and therefore depends on outside sources such as Vale for iron ore.

The three miners are expected to seek a 40 per cent rise in annual benchmark prices in 2010, according to industry analysts, after agreeing to a 28 per cent to 33 per cent cut in annual prices during 2009 when the global economic demand took a bite out of steel demand.

Vale and BHP have also signalled their desire to push towards a short-term iron ore price system rather than an annual benchmark system where prices are negotiated annually between the world’s three largest miners and Asian steelmakers, the world’s largest steel producers.

ArcelorMittal said in its report that such a move toward spot iron ore sales rather than long-term fixed-price contracts would cause steelmakers to “face increased exposure to production cost and price volatility, which may in turn reduce their access to reliable supplies of raw materials”.

The company said any prolonged interruption in the supply of raw materials or energy, or increases in costs which ArcelorMittal cannot pass on to its customers, could adversely affect its business, financial condition, results of operations or prospects.

“The raw materials industry is highly concentrated and suppliers in recent years have had significant pricing power,” ArcelorMittal said in its 20F annual report published at the Securities and Exchange Commission.

“Further consolidation among suppliers — for example, the announced iron ore joint venture between mining companies BHP Billiton and Rio Tinto — would exacerbate this trend.”

The world’s three largest iron ore miners — Brazil’s Vale, Rio Tinto and BHP Billiton — accounted for nearly 70 per cent of the world’s sea-borne traded iron ore market in 2008.

Start of sidebar. Skip to end of sidebar.
Related Coverage
New chief for BHP iron ore division Perth Now, 7 days ago
Iron prices tipped to soar The Australian, 26 Jan 2010
BHP eyes ore joint venture Herald Sun, 19 Jan 2010
China’s giant iron discovery The Australian, 24 Jun 2009
EU backs China’s ‘monopoly’ call Perth Now, 10 Jun 2009

End of sidebar. Return to start of sidebar.

Rio Tinto and BHP announced near the end of last year plans to create an iron ore joint venture that would reduce production costs and produce iron ore more quickly by combining mining operations in Western Australia. Sales and marketing would be kept separate from the joint venture.

Steelmakers around the world, particularly those that depend on other miners for a substantial portion of their iron ore requirements, are adamantly opposed to the merger.

The World Steel Association and other regional steel associations have all urged relevant authorities to reject the joint venture on grounds that it would concentrate too much iron ore pricing power in the hands of an even smaller group of mining companies.

Yesterday, Australia’s biggest steelmaker, Bluescope, lashed out at BHP-RIO iron ore merger and BHP’s plan to scrap annual iron ore pricing. Click here to read the story by The Australian’s Matt Chambers.

ArcelorMittal is likely to be less affected by the joint venture than some of its peers since it benefits from substantial captive sources of iron ore and coal. In 2009, ArcelorMittal was 60 per cent self-sufficient in iron ore and 20 per cent self-sufficient in metallurgical coal, another ingredient used in steelmaking.

Nevertheless, the steelmaker still purchases a significant portion of its raw materials under long-term supply contracts, and therefore depends on outside sources such as Vale for iron ore.

The three miners are expected to seek a 40 per cent rise in annual benchmark prices in 2010, according to industry analysts, after agreeing to a 28 per cent to 33 per cent cut in annual prices during 2009 when the global economic demand took a bite out of steel demand.

Vale and BHP have also signalled their desire to push towards a short-term iron ore price system rather than an annual benchmark system where prices are negotiated annually between the world’s three largest miners and Asian steelmakers, the world’s largest steel producers.

ArcelorMittal said in its report that such a move toward spot iron ore sales rather than long-term fixed-price contracts would cause steelmakers to “face increased exposure to production cost and price volatility, which may in turn reduce their access to reliable supplies of raw materials”.

The company said any prolonged interruption in the supply of raw materials or energy, or increases in costs which ArcelorMittal cannot pass on to its customers, could adversely affect its business, financial condition, results of operations or prospects.

Company insider Chris Campbell has been named Mr Ashby’s replacement as head of iron ore.

Mr Campbell has been with the BHP Billiton group for 20 years and has experience in marketing, business development and project management, the company said.

His appointment will become effective as Mr Ashby’s workload in connection to the Rio Tinto joint venture increases, expecting in coming months.

BHP Billiton is the world’s largest resources company, with the iron ore division one of the main profit drivers.

The president of BHP’s iron ore division is in charge of operations in Brazil, West Africa and marketing of the company’s share of the WA joint venture with Rio Tinto.

BHP’s chief of ferrous and coal, Marcus Randolph, said Mr Campbell’s previous roles and deep history in the group would make him invaluable in his new position.

“I am delighted to have Chris on the team and believe that this structure will give additional focus to our non-Western Australia iron ore assets,” Mr Randolph said.
At 9.09am, BHP shares were up 50 cents, or 1.26 per cent, to $40.50.

The UK registered European Nickel has offered Rusina’s investors a scrip deal that would give them four of its shares for every five Rusina shares they held.

The deal would be a 15.5 per cent premium to Rusina’s share price, based on volume weighted average price for both companies during the past 10 days and values Rusina at STG18.1 million ($A32.63 million).

The ultimate price for the takeover deal is capped at STG27.1 million ($A48.86 million), should European Nickel’s shares rise steeply in value.

That price would represent a 73.3 per cent premium to Rusina’s average price for the past 10 days.

Rusina’s directors unanimously recommended shareholders accept the deal, which will leave its investors with 27.3 per cent of the merged company.

“Each director intends to vote all of the Rusina shares they own or control at the date of the scheme meeting in favour of the scheme, in the absence of a superior proposal,” Rusina said in a statement.

Rusina said the merger would create a larger, stronger company better able to grow into a mid-tier nickel producer.

The company boards believed the merger was logical given their joint venture at the Acoje nickel project in the Philippines, Rusina said.

Under the planned deal European Nickel, listed on London’s AIM index, would establish a local listing through CHESS Depositary Interests.

Shares in Rusina were up strongly in early Wednesday trade, and at 1241 AEDT were trading up 0.8 cents, or 8.7 per cent, at 10 cents

Hochschild has advised the Company that it has incurred to date approximately US$1.5 million on exploration of the precious metals area of the Vaquillas Project, and under the terms of the amending agreement, Hochschild has committed to expend a further US$500,000 on exploration of the entire Vaquillas Project by December 31, 2010.

In order to exercise its option to acquire a 60% interest in Vaquillas, Hochschild must incur a total of US$6.0 million in exploration expenditures by December 31, 2013. Hochschild will be making the US$100,000 option payment to the owner of certain of the Vaquillas concessions which is due by the end of this year.

About Iron Creek

Iron Creek Capital Corp. is a Vancouver-based mineral exploration company engaged in the acquisition and exploration of precious and base metals projects in Chile.

    ON BEHALF OF THE BOARD

    "Michael Winn"
    Michael Winn, President

Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release

* Sale of 40% stake marks BHP’s latest exit from nickel

* Stake bought by Philippine partner (Adds details)

MANILA/SYDNEY, Dec 22 (Reuters) – Global miner BHP Billiton Ltd/Plc (BHP.AX: Quote) (BLT.L: Quote) has pulled out of a $2 billion nickel project in the southern Philippines after selling its 40 percent stake to a local partner.

The project was BHP’s only mining venture in the Southeast Asian country and the move could be part of the miner’s plan to exit the nickel business as early as next year after selling two major nickel divisions in four months. [ID:nSGE5BF02J]

In a statement e-mailed to Reuters, BHP said it signed a sales agreement for the stake with Asiaticus Management Corp of the Philippines, which is controlled by Filipino businessman Peter Tan and already owns 60 percent of the undeveloped nickel mining and processing project in the southern Mindanao region.

BHP and Asiaticus had been at odds over when to start commercial production. Asiaticus pushed to begin as soon as possible, while BHP wanted to wait until 2015 at the earliest, Environment and Natural Resources Secretary Lito Atienza told Reuters in a telephone interview.

In 2007, the Philippine government announced that BHP would invest up to $2 billion in the country.

The contract work will be performed at the company’s Western Turner Syncline deposit in the Pilbara region of Western Australia.

Eastern Guruma and NRW will develop a haul road and transport the ore 15km to the Tom Price mine for processing and mixing with other Pilbara Blend stocks.

The indigenous contract will raise Eastern Guruma equity in the joint venture to 35% from 25%.

Over four years an increase in mandated Aboriginal employment will raise 27% each year, with $6m being contributed under the contract for training of Eastern Guruma people.

The project has the potential to become a 50:50 joint venture.

Rio Tinto Iron Ore chief executive Sam Walsh said the project enables a local Aboriginal contractor to build and mine the Western Turner Syncline deposit.

“It will allow the Eastern Guruma people to develop capacity in mining services, and have increased participation in the resource development taking place on their country,” Walsh said.

“Western Turner Syncline will provide high-grade iron ore which will be processed and blended using existing infrastructure in Tom Price and, together with upgrades of rail and port capacity, will support an increase in our production capacity in the Pilbara to 230 million tonnes a year.”

Rio Tinto, through indigenous contractors in the Pilbara, will spend more than $110m in 2009.

Copper for three month delivery closed on December 24 last year at $US2845/tonne. Last night a similar contract was trading at $US6895/tonne. And, of course, it has been higher than that: on December 2, copper was being traded at $US7125/tonne.

The impact of this more than doubling of the copper price was shown this week when the Chilean copper export figures for November came out: they were 81 per cent up on the same month in 2008.

There was some significant local copper news out today.

A deal involving GBM Resources (GBZ) shows not only the level of interest in copper but also the increasing pace of engagement coming out of Japan, where there is considerable fear of the speed with which China is locking up mineral resources all around the globe.

Start of sidebar. Skip to end of sidebar.
Related Coverage
OZ Minerals, IMX to form SA joint venture Adelaide Now, 29 Nov 2009
Singapore buys into phosphate Perth Now, 10 Nov 2009
BHP boosts Olympic Dam reserves The Australian, 15 Sep 2009
China syndrome again The Australian, 13 Sep 2009
Explorers are go The Australian, 10 Sep 2009
End of sidebar. Return to start of sidebar.

The agreement means that Pan Pacific Copper Co, the world’s largest buyer of copper concentrate, can spend up to $55 million on the development on new GBM projects in Queensland. Once the joint venture documents are inked, Pan Pacific will earn a 51 per cent interest in 16 GBM exploration permits. Pan Pacific can move to 90 per cent by outlaying an additional $40m.

(Last month GBM Resources secured $2.6m in financing by joint venturing its phosphate projects in the Mt Isa region with Singapore-based Resource Kings.)

Quiet toiler Mithril Resources (MTH) has produced some encouraging drill results from what it calls a new, largely untested greenfield copper discovery on its ground east of Alice Springs. Results from four holes were released today; one of those drilled through 146m of mineralisation with an average grade of 0.24 per cent, but with 11.15m of that intersection returning 0.51 per cent.

There were also meaningful cobalt grades. This prospect, called Basil, is a 10km-long trend that has had little work so far.

And Sabre Resources (SBR) seems to be excited by its Kaskara project in Namibia. Sampling has produced assays of up to 16 per cent copper, 14 per cent zinc and 35 per cent lead.

BHP and Rio, in June, signed a nonbinding agreement to establish the JV, which would encompass all current and future Western Australian iron-ore assets and liabilities, with BHP expected to pay Rio $5,8-billion to take its interest in the JV to 50%.

The deal was expected to result in more than $10-billion in synergies.

However, the deal had been heavily opposed by steelmakers, which say that the combined BHP/Rio entity and Brazil’s Vale would control 70% of the world’s seaborne iron-ore exports.

There had also been some speculation that Rio wanted to pull out of the deal.

Nevertheless, the parties had met their December 5 deadline to sign a binding agreement.

“Signing binding agreements brings us one step closer to unlocking the full production potential of our Pilbara iron-ore assets and achieving substantial benefits for all our stakeholders,” Rio Tinto CEO Tom Albanese said in a statement.

He emphasised that the completion of the JV was a priority for the diversified miner in 2010.

“We are very pleased to now have formal and binding agreements in place to develop this important JV. With the history of both companies` attempts to join together these two world-class iron-ore operations in Western Australia at various times, this deal has effectively been more than a decade in the making,” BHP Billiton CEO Marius Kloppers added.

The JV was expected to deliver substantial synergies through the combination of the adjacent mines into single operations; reducing costs through shorter rail hauls and more efficient allocations of port capacity; and blending opportunities, which would improve product recovery and provide further operating efficiencies.

Further, the JV would develop consolidated, larger and more capital efficient expansion projects, while also combining the management, procurement and general overhead activities into a single entity.

BHP and Rio said that they had now also filed submissions with the European Commission and the Australian Competition and Consumer Commission for regulatory approval of the JV.

The regulatory and shareholder approvals were expected to be concluded by the second half of next year.

The companies added that the only changes made between the signing of the nonbinding and the binding agreements, had been the decision not to jointly market their Australian iron-ore.

BHP and Rio announced in October that they would separately market all production from the proposed JV, amid growing concern from the steel industry.