India

After more than four years of languishing, some hope’s been rekindled in India’s iron ore mining sector.

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Ore production jumped 22% between April and October, according to figures released by the government. Iron ore production stood at 100 million metric tons during the resurgence, against 81 mmt during the same April to October period a year ago. What’s brought even more cheer is the news that exports, too, jumped 9 times their previous level, to 9 mmt from last April to September, as compared to 1 mmt, the same period last year.

Export Taxes

With a steep price hike in global markets aided by protectionist measures for the domestic steel industry, will India see a resurgence in iron ore exports? Not so fast.

India has plentiful iron ore stockpiled but taxes are holding up exports. Source: Adobe Stock/nikitos77.

The protectionist measures imposed by India’s government previously included an export duty tax of 30% on high-grade iron ore. Many within the mining sector are of the opinion that the export tax must go, or at the very least be reduced, to boost exports. Read more

Anti-dumping actions were once again a hot topic this year. Back in February India imposed a minimum import price for nearly all foreign steel entering the country. This was only one of many anti-dumping actions taken this year with both the U.S. and European Union tightening tariffs this year. — Jeff Yoders, editor

It’s a problem that’s dogged almost all the major economies as well as developing nations – the dilemma of steel cheap imports. Steelmakers in the U.S. have, in the past, not only cried foul at the World Trade Organization but also imposed steep anti-dumping duties on cheap imports from China, Korea and India making their way into the U.S. market, thus further depriving an already-stressed out market.

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A few days ago, as reported by MetalMiner, seven EU nations asked the European Commission to intervene to stop cheap imports of steel, particularly from China and Russia.

India has imposed a minimum import price on most steel products. Source Adobe Stock/Jovanning.

India has imposed a minimum import price on most steel products. Source Adobe Stock/Jovanning.

In India, a market where steel consumption continues to grow bucking global trends, the situation is no different. So, finally giving in to the loud protests by domestic steel companies against cheap imports, the Indian government recently imposed a minimum import price (MIP) ranging from $341 to $752 per metric ton on 173 steel products as a “temporary” measure.

Minimum Import Prices

The MIP conditions are valid for six months from the date of the notification or until further orders, whichever is earlier. The MIP, though, will not be applicable on imports under the advance authorization scheme and high-grade pipes used for pipeline transportation systems in the petroleum and natural gas industry are exempt.

The move seems to have gone down well with a majority of the steel trade bodies and a large section of India’s steel industry, but some have called it simply a band-aid for the hemorrhaging steel sector.

India’s domestic steel production between April-January 2016 dropped 1.8 % to 75.66 million mt, while imports rose 24.1% to 9.3 mmt. Consumption grew 4.2% to 65.91 mmt. For domestic steelmakers, apart from the MIP, the import duty has also been raised to 10% for flat products and 7.5% for long products.

The rationale behind the MIP was explained by Steel Secretary Aruna Sundararajan, in an interview with The Economic Times. She said the move would give India’s steel industry much-needed breathing space to get healthy.

Emergency Measure

Over the last couple of years, India had seen a spurt in steel imports, leading to a decline in prices. According to the Steel Secretary, India had over 400 mmt of surplus steel. All that surplus has put the domestic steel industry into distress.

While imposing the MIP, the Indian government also took care to ensure that downstream users were not affected. That’s why certain categories of steel — required by end-user industries — not manufactured in India, were exempted.

The government’s decision to impose MIP will, however, reduce the benefit of lower commodity prices for automobile companies, according to many experts. Also, according to the engineering goods exporters’ body, EEPC India, the MIP will lead to further erosion in engineering exports. It has thus sought from the government a compensatory mechanism to make up for the increased raw material price (about 10%) for the distressed exporters, mostly in the small and medium-sized enterprises segments.

The Indian government has dubbed the MIP an “emergency provision.” In the next six months, it will be looking at anti-dumping duties  and moving toward more stable, longer-term measures. It will also be keeping a close watch on imports after the MIP, as well as the response of domestic steel companies and consumers.

India is becoming a growing powerhouse in the base metals industry and — although producers seem more intent in expanding outside the country, witness Aditya Birla’s smart acquisition of Novelis — the country has the two significant advantages that encourage an expectation of rapid domestic growth. These are low current per capita consumption and the world’s fifth-largest domestic reserves of bauxite.

Obstacles to India and Base Metals

Assured rapid domestic growth is not a slam dunk, though. Power costs in India are high and competing demands for power in a country with a severe shortage of generating capacity mean refiners have to build their own captive power stations to ensure continuity and price competitiveness.

Both mining and plant construction then run into problems of land ownership and poor supporting infrastructure. Both issues that could be addressed if there was the political will and, as such, can be said to be self-inflicted. That’s cold comfort to producers struggling to get projects approved and developed on budget. So, maybe, it comes as no surprise that producers have been lobbying hard for protection against imports.

Sources: Bloomberg and World Bureau of Metal Studies

According to industry sources quoted by the Economic Times of India, imports of aluminum have increased by 159% in 2015 compared to 2011 levels. Possibly more worrying for the industry is that the country is importing more than 50% of aluminum consumed. While India has annual aluminum consumption of 3 million metric tons, half of that is supplied by imports. India’s production capacity is 4 mmt. Read more

Six years its first proposal, Indian mining giant Adani seems as if it’s finally ready to start its $16.5 billion coal project in Queensland, Australia.

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The company recently secured the approval for a permanent rail line for what’s known as the Carmichael project. An official statement by the company said Queensland’s Coordinator-General had given “the latest, and final, secondary approval” for about 19-and-a-half miles of permanent track, as well as a 300-bed camp.”

The permission will add to the nearly 242 miles of heavy haul track connecting the mine to Abbot Point port. Chief Executive of Adani Australian, Jeyakumar Janakaraj, said in a press statement, “We are particularly focusing on the construction of our planned near-400-kilometer (248 miles) rail line to be constructed between the Carmichael mine and our bulk port facility at Abbott Point near Bowen.”

When fully operational, the mine will reportedly be the largest in Australia, involving the dredging 3.53 million cubic feet of soil near the Great Barrier Reef Marine Park. The project will ensure Adani a steady supply of coal to be used for electricity generation, benefiting a hundred million Indians.

The proposed project ran afoul with green groups in Australia, quickly taking on a “jobs versus ecology” dimension. As per some claims, the project is likely to create at least 11,000 jobs, and the company has promised to farm these out to locals, and not bring in labor from abroad.

After getting approval, Adani Group Chairman Gautam Adani met Australian Prime Minister Malcolm Turnbull, amid protests from groups in Melbourne. Adani has said the project will start in the new year.

Supporters of the project insist mines such as these will provide an economic stimulus to North Queensland.

Matt Canavan, Minister for Northern Australia, was quoted in a section of the media as saying this would be the first time a new minerals basin would be opened up in 40 years.

Adani also announced that it will set up regional centers for providing vital support services for the project and associated infrastructure and headquarters for its rail and port operations.

Townsville would become Adani mining’s regional headquarters, while the Mackay-Bowen area would become the regional headquarters for its rail and port operations. Adani said its shift to the regional Queensland centres would allow it to more directly harness local skills.

The project has faced a lengthy environmental approval process and a number of court challenges. Earlier, this year, it finally got Queensland government approval to mine. Some say, however, that while the Carmichael mine has the final government approvals, there are still a few hurdles it has to surmount.

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An appeal has been lodged with Australia’s full Federal Court seeking to overturn the Commonwealth approval, and is due to be heard in March.

India has brought the world’s largest solar power plant online.

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At the end of November, the world’s biggest solar power plant was completed in the southern part of India and its already generating power.

Spread over 2,500 acres in the Tamil Nadu province, the new solar plant replaces the Topaz Solar Farm in Riverside County, Calif., as the largest solar power farm in one location in the world. The Indian solar farm can generate 648 megawatts of green electricity, while Topaz generates 550 mw. India aims to power about 60 million homes by using solar energy by 2022. The Tamil Nadu plant, built by Adani Power, can light up about 150,000 homes. India aims to produce 40% of its electricity from renewables by 2022. Read more

India’s mining sector has the potential to contribute as much as $70 billion to the country’s economy by 2030 and generate about 6 to 7 million jobs, believes the country’s industry association, the Confederation of Indian Industry.

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A report titled, Mining Opportunities – Realizing Potential was recently released by the CII, though with an added a cautionary note: clearances “still remain an impediment for a smooth transition from auction stage to implementation stage.”

Mining Reforms Having an Effect

The current Modi government initiated reforms in the mining sector, which underperformed during the previous regime, many say, due to red tape. One of the most important steps was the clearance of the National Mineral Exploration Policy (NMEP) by the government in.

NMEP has the following main features for facilitating exploration in the country:

  1. The Ministry of Mines will carry out auctioning of identified exploration blocks for exploration by the private sector on a revenue-sharing basis. If exploration leads to auctionable resources, the revenue will be borne by the successful bidder of those auctionable blocks.
  2. Creation of baseline geoscientific data as a public good for open dissemination free of charge.
  3. A National Geoscientific Data Repository was supposed to be set up to collate all baseline and mineral exploration information generated by various central and state government agencies and also mineral concession holders and to maintain these on a geospatial database.

While these policy changes have been welcomed overall, there has been some criticism over the implementation. The CII report, for example, talks of the “inordinately long time that is required for obtaining this clearance and the cumbersome process involved therein.”

Why Can’t Companies Start Mining Faster?

The report was recently released at the International Mining and Machinery (IMME) and Global Summit 2016. It said that the Environment and Forest clearance processes take a long time and added that there was significant room for improvement in the clearance system in terms of efficiency, speed of decision making, predictability and transaction.

There’s also unexpected criticism from another quarter on the new mining policy. A report in the DNA newspaper, quoting global miner Anglo American PLC, said the Indian auction system discourages foreign direct investment as the auction process does not provide adequate risk-reward incentive.

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In the report, John Vann, group head of exploration at Anglo, said the auction system makes it difficult to see India competing with other countries where Anglo American invests. According to him, the granting of licenses rather than auctioning off mines would give confidence to foreign investors.

For some time now, a debate over the use of rebar, specifically or Glass-Fiber Reinforced Plastic (GFRP ), instead of other forms of steel reinforcement, has been on in Asian industry circles.

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Recently, two events seemed to inflame this ongoing debate. Galvanized rebar was part of the topics taken up for discussion at an international meeting on galvanized steel in India, while a research report, released about the same time, talked of the latest trends in the market in the increased use of GFRP rebar.

rebarforconcretepour_550

Galvanized steel is the gold standard for construction rebar such as this rebar web waiting for a concrete pour. Can glass-fiber reinforced plastic seriously compete? Photo: Jeff Yoders.

The second international galvanizing conference in Kolkata in eastern India saw participation from a cross section of zinc and alloy industries, including the U.S. Delegates talked about ways to expand the zinc market in India and also how to use zinc in automobile industries, fertilizers, and in rebars.

Zinc in Construction

The Indian Government is showing some interest in the role of zinc in building important infrastructure such as bridges. India’s demand for galvanized steel structures will keep rising because of its growing infrastructure. Steel becomes rust-proof (or corrosion resistant, as the industry says) when coated with a layer of zinc, hence galvanization. If done properly, galvanization extends the useful life of rebar and other products for decades. Read more

Welcome back to the MetalMiner week-in-review! This week we’ve got in-depth reporting on China and market economy status, India getting tough on aluminum imports and Canada… well, you’ll see what happened in Canada.

We Know Gold Prices Have Gone Up… Butt This is Ridiculous

The theft of about $140,000 worth of gold ($180,000 in Canadian dollars) from the Royal Canadian Mint, was supposedly an inside job… in more ways than one.

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After a trial that concluded in Ottawa on Tuesday, Leston Lawrence, a 35-year-old employee of the government mint in Ottawa, stood accused of foiling the facility’s high security and smuggling out 18 7.4-ounce pucks — this is Canada, after all — worth about $6,800 each. He sold most of the pucks, cooled into the size of a purity testing dipper used at the mint, to an Ottawa Gold Sellers retail store at a nearby mall. The accused criminal mastermind also had four more of the pucks in a safe deposit box.

AdobeStock_John_Takai_security_gold

“Go ahead, scan me with the wand. Nothing to see here.” Source: Adobe Stock/John Takai.

The question the Royal Canadian Mounted Police, or the Mint, couldn’t figure out is how he got past the state-of-the-art security that featured full-body metal detectors and secondary screenings with a wand for anyone that tripped the first scan?

Before Lawrence was fired from the Mint and arrested in 2015, investigators also found a tub of Vaseline in his locker. While the wand scanners can pick up even small pieces of metal in a person’s clothes, security officials from the Mint said they probably would not detect dipper-sized gold pucks that were forced between someone’s buttocks using the vaseline.

Ewww, Canada. Read more

India will complete the second phase of its mining auctions later this month, after the first round last year received a lukewarm response. Going under the hammer will be gold, diamond and iron ore mines.

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Mines in five provinces — Karnataka, Andhra Pradesh, Madhya Pradesh, Rajasthan and Jharkhand — will be auctioned. This time, there are 14 iron ore mines, 12 blocks of limestone and one block each of gold, diamond and copper. While some analysts have predicted a better response than last time to the iron ore mining auction, the limestone blocks may not see much action because of the cement market slump.

Round One

In the first round of the auction, the states offered 47 mines bearing minerals such as gold, iron ore, bauxite and limestone.

They were able to auction seven mines in that phase, earning the government billions of dollars over the next 50 years. However, 17 blocks were not sold due to an insufficient number of initial bids on account of factors such as quantity and grade of ore and low quality of the mineralization studies, among other reasons.

The first round also came under scrutiny when the comptroller and auditor general of India (CAG), a body that audits all government expenditures, passed certain adverse observations. It said in a report tabled in the Indian Parliament that competition may have been restricted in the auction of 11 coal blocks on account of multiple bids by corporate groups made through joint ventures or subsidiaries.

What Does This Mean For India’s Steel Exports?

The iron ore auction comes at a time when the Indian government is contemplating a relaxation of export duties on iron ore. This has led to protests from the domestic steel industry.

In a representation to the steel ministry, the Indian Steel Association asked the government to continue with a 30% export duty on all grades of ore, to preserve natural resources for domestic use.

The government already cut the export duty on low-grade fines to 10% earlier this year but continued with a 30% levy on lumps.

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India’s ore production is lagging its growth of steel production. Production, according to steel ministry data, fell at a compound annual growth rate (CAGR) of 6.5% in the past five years.

She’s been described as the “green lady,” and The Guardian once called her the “woman who loves garbage.”

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Veena Sahajwalla, a native of Mumbai, is the director of the Centre for Sustainable Materials Research and Technology at the University of New South Wales in Australia

Last weekend, Sahajwalla was on one of her many visits to India, where she addressed a high profile seminar at the Scrap Recycling Conference: Emerging Markets. There, she told delegates about her pioneering effort in making “green steel” from, guess what? End-of-life rubber tires.

Polymer Injection Technology (PIT), a technology that Sahajwalla invented, can be used to recycle tires to replace coal and coke in the making of steel. While the two-day conference saw almost 300 delegates from the scrap and steel industry confab on issues ranging from the world business of recycling to automobile recycling in India, Veena’s presentation seemed to have created the most buzz.

The Indo-Australian scientist insists that her technology could be the answer to the growing global problem of disposal of waste tires globally. The United States, for example, was the largest producer of waste tires at about 290 million a year, but now China and India are giving the U.S. a run for its money because of increasing sales of new vehicles.

Automobile tires are made from a mix of natural and synthetic rubber, and various structural reinforcing elements including metal wires and chemical additives. The PIT introduces a modification into the conventional manufacturing process for steel. The technology precisely controls the injection of granulated waste tire material in conventional electric arc furnace (EAF) steelmaking, partially replacing non-renewable coke. Tire rubber, like coke, is a good source of hydrocarbons, which means they can be transformed in EAF steelmaking.

New South Wales University researched the replacement technology for years and, today, millions of waste tires are being transformed into high quality steel in Australia.

Recently, the same university also showcased a pilot micro-factory that safely transforms toxic e-waste into high-value metal alloys, offering a low-cost solution to what to do with the millions of phones, computers and other e-waste products plaguing India. Sahajwalla was involved in this project, too.

She told the Asian Scientist Magazine recently that a ton of mobile phones (about 6,000 handsets) contained about 130 kilograms of copper, 3.5 kg of silver, 340 grams of gold and 140 grams of palladium, worth tens of thousands of dollars. Sahajwalla explained that she used precisely controlled high-temperature reactions to produce copper and tin-based alloys from tossed out printed circuit boards (PCBs) while simultaneously destroying toxins.

All this is sweet music to the ears of Indian recycling industry. The country is the world’s second-largest mobile phone market, and the fifth-largest producer of e-waste, discarding roughly 1.9 million metric tons of such waste every year. Veena is confident that the PIT can solve India’s waste tyres problem.

India’s Recycled Metal Market

While the global recycled metal market is estimated to touch $476.2 billion by 2024, India’s scrap recycling industry is set to register an annual growth of 11.4% until the year 2020, according to a recent report by Frost & Sullivan. India’s annual scrap consumption was 20.40 mmt; it imports 6.48 mmt of scrap, and is the world’s third-largest importer.

But India’s traditional metals, ferrous and non-ferrous, recycling rate is about 20%, less than the world average. For some years now, the unorganized sector has been demanding that the Indian government accord it “industry” status and implement a metal recycling policy with a view to ensuring fast-track growth.

India has the potential to become one of largest car recycling regions, and the demand for policy was something that was even discussed at the two-day conference here. The Indian government recently proposed offering consumers an incentive of about $375 (almost 25,133 Indian Rupees) for a passenger car handed in to be scrapped in the hopes of boosting recycling rates.

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A few months ago, the state-run scrap metal trading firm MSTC Ltd. signed an agreement with the Mumbai-based Mahindra Intertrade, a part of the Mahindra Group, to set up an auto shredding and recycling plant in India. The joint venture will help meet India’s annual ferrous scrap usage requirement of about 6 mmt.