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iron ore

NUM, Solidarity sign three-year wage agreement with Assmang

Trade unions the National Union of Mineworkers (NUM) and Solidarity have secured a three-year wage agreement with iron-oreand manganese miner Assmang at its operations in the Northern Cape.

Assmang, a joint venture between Assore and African Rainbow Minerals, operates the Khumani iron-ore mine, the Beeshoek iron-ore mine and the Black Rock manganese mines.
The agreement will see lowest-earning mineworkers across the operations receive an 8% increase in the first and second year and 7% in the third year.

The lowest paid employee currently earns R15 284.88 on a total package, which will increase to R16 507.67 on the 8% increase in the first year, the NUM said in a statement on Tuesday.

The agreement also outlined the payment of a one-off R10 000 tax-free cash allowance for the members, an increase in family responsibility leave to five days and maternity and medical-related travel assistance provisions.

Assmang will also pay an underground allowance of R600 a month for the first year, R650 for the second year and R700 for the third year.


Source: Mining Weekly

Kumba Iron Ore, union reach wage deal

JOHANNESBURG – South Africa’s Kumba Iron Ore, a unit of Anglo American, and a major union have signed a three year wage deal giving workers an increase of much as a 10% a year, the National Union of Mineworkers (NUM) said on Friday.

NUM, which is the majority union at all of Kumba’s operations, said workers would get an annual pay rise ranging between 7% to 10%.

The parties also agreed a once off payment of R25 065 ($1 905) for all employees covered by the agreement.

NUM in May tabled wage hike demands of 12.5% to 16% with Kumba.

The pay deal is good news for the troubled mining sector in South Africa. Investors have been rattled in recent months by labour unrest, policy uncertainty and depressed commodity prices.

Coal producers and unions agreed in June to retain a collective bargaining framework for wage talks in 2017, defusing friction after NUM threatened to go on strike if mining firms negotiated on a company-by-company basis.

Source: Mining Weekly

Iron seen in low-$40s by Citi as supply grows, demand peaks

SINGAPORE – Iron-ore may extend a slump into the low-$40s as supplies swell and demand reaches a short-term peak amid steel mill restarts and ramp-ups in China, according to Citigroup, which cut its forecasts by as much as 20% over the next year.

The nadir in prices may occur in six to eight months, analysts including Tracy Liao wrote in a report received Monday. Iron-ore is seen at $51 a metric ton in the third quarter compared with a previous estimate of $64, and at $48 in the final three months of the year, down from $60.

The raw material has sunk by more than a third since rising to almost $95 in February as global output increases, with miners such as Vale SA in Brazil and Australia’s Roy Hill Holdings Pty boosting capacity, and China’s efforts to curb financial leverage hurt demand. The pullback in iron-ore is in contrast to surging prices of steel reinforcement bar, and Citigroup estimates that mills have ramped up output to a maximum because of the robust margins.

“Chinese blast furnace utilization and its associated iron-ore demand reached a near-term peak,” the bank said in the report dated June 19. “We foresee more downside risks to iron-ore prices and anticipate the near-term trough to occur in the fourth quarter and first quarter.”

Ore with 62% content at Qingdao was at $56.30 a dry ton Monday, up from $53.36 on June 13, the lowest in almost a year, according to Metal Bulletin.

Even with prices dropping, global supply continues to rise, according to Citigroup, which forecasts a surplus of 118-million tons in 2017 after a glut of more than 60-million tons last year. Ongoing expansion by large miners, notably Vale’s biggest project S11D and Roy Hill, will probably contribute about 60-million tons of additional supply this year, the bank estimates.

Iron-ore will probably trade at about $55 for the next few months, according to Barclays, which said in a note on Monday that the momentum behind the sell-off has abated and further stabilisation in the benchmark price is likely. Futures in Singapore and China extended gains.

Citigroup reduced its price targets for BHP Billiton and Rio Tinto Group while keeping buy ratings on both, according to a separate report received Monday. The bank downgraded Fortescue Metals Group to sell from neutral, saying the producer faces a “double whammy” of lower prices and higher discounts for low-grade products.

Miners’ shares were mixed in Sydney. Rio’s shares fell 0.1% to cap a fifth straight day of declines, while BHP was little changed. Fortescue gained 1.3%. The trio are Australia’s largest shippers.

Source : Mining Weekly

Structural supply side changes, growing demand support rising vanadium prices

VANCOUVER – Surging vanadium prices so far this year are underpinned by structural supply side changes and stable, growing demand from most end uses, analysis by independent market intelligence firm Roskill has found.

Since falling to a 12-year low of $13.5/kg of ferrovanadium in the fourth quarter of 2015, prices have seen a slow but steady turnaround to end 2016 at $22/kg. The New Year 2017 saw price recovery gather momentum, with the first-quarter average exceeding $25/kg, and with prices reaching above $28/kg in April and May, according to the fifteenth edition of Roskill’s ‘Vanadium: Market Outlook to 2026’ report.

Roskill states that the recent price rises have in part been underpinned by structural changes on the supply side of the market. Vanadium feedstock production peaked in 2013 and has since declined year-on-year.

China remains the largest producer in the world, and despite output dropping between 2014 and 2015, the country still accounted for an estimated 44% of world output in 2016. The biggest producers were Pangang and Chengde.

Russia, the world’s second-largest feedstock producer, has seen production increase and then stabilise in recent years, with nearly all production accounted for by slag production at Evraz Group’s Nizhny Tagil steelworks. As of 2015, Russia represented 20% of feedstock production.

However, the playing field has been fundamentally altered by the absence of production from South Africa – until 2014 the world’s second-biggest source of the industrial metal, accounting for 14% of the market.

The closure of Evraz Highveld’s Mapochs mine, together with the suspension of operations at Vanchem, left the country with only two major producers of vanadium in South Africa: Glencore and Vametco.

The closure of Evraz Highveld in South Africa has significantly reduced global supplies of vanadium feedstock. Further, reports in China continue to suggest tightness in vanadium feedstock availability owing in part to cutbacks in steel output. Ongoing environmental inspections have also impacted vanadium supply. In addition, less material is being shipped from Russia to China following the shutdown of an iron-ore mine, Roskill advised.

Limited feedstock availability has had downstream knock-on effects. The closure of Highveld has impacted production at Treibacher, in Austria, and Vanchem, in South Africa, in particular. There have been several shutdowns in Chinaowing to feedstock shortages. Further, the situation in Russia forced the shutdown of the Jianlong steel mill, in Heilongjiang.

While supply is tight, Roskill understands that demand in China, the world’s biggest consumer of vanadium, has been sluggish.

World apparent consumption of ferrovanadium increased at 8.6% a year between 2009 and 2015. The biggest consumers of ferrovanadium are China, the US, Russia and Japan.

As of 2015, steel applications have been estimated to account for just over 90% of total use of vanadium. Vanadium use in steel can be further subdivided into high-strength low-alloy (HSLA) steel, full alloy steel and carbon steel, with HSLA and fully alloy steels together accounting for over three-quarters of all vanadium consumption in steels.

Nonferrous alloys, mostly in the form of titanium alloys, super alloys and magnetic alloys, are believed to account for a smaller percentage of consumption (4.5%). Chemical applications represented around 3.5% of consumption in 2015 while other applications, including batteries, accounted for the remaining 1%, according to Roskill information.

Analysts expect stable demand growth for vanadium in most applications. Growth in vanadium consumption in steel will be dependent on intensity of use, as well as growth in steeldemand. Vanadium content in steel varies according to type and grade, and differs by producer and region.

This is particularly the case with reinforcing bars (rebar), used primarily in the construction industry. Higher-strength rebar contains more vanadium and, therefore, the more high-grade rebar used globally, the more vanadium is consumed. This means that construction regulations, such as those introduced recently in China, which mandate the use of certain rebar for key applications can considerably impact vanadium demand.

Meanwhile, Roskill pointed out there has been a great deal of interest in the potential of vanadium redox batteries (VRBs) in recent years. According to the report, Roskill estimates that demand from VRBs accounted for less than 500 t of vanadium pentoxide consumption. VRBs will likely achieve commercial success in specific energy storage applications such as load levelling, which will support an increase in market share and in vanadium demand.

“The forecast increase in vanadium demand across several end-use applications will drive higher levels of vanadium supply over the coming decade. Future trends in iron-ore consumption will have a significant bearing on vanadium co-production levels, just as historic increases in vanadium coproduction have as much to do with higher demand for iron-ore as increased demand for vanadium,” analysts pointed out.

Demand for both has been driven by the growth of steel industries, particularly in China, where rapid expansion of steel capacity has led to the development of large, vertically-integrated State enterprises that undertake mining, smelting, processing, and sales and distribution. In 2015, steel output dropped by roughly 3%. Roskill expects further drops in 2016 before a recovery in 2017. Declines in Chinese steel output could have implications for vanadium supply, compounding recent reductions from South Africa.

New supply could be brought on stream to meet rising demand. Few new operations have been commissioned in recent years, except for Largo Resources’ Maracas Menchen mine, in Brazil.

Instead there have been some notable closures, although the assets of three former producers: Evraz Highveld, Vanchem and Atlantic, could potentially be brought back into production on higher demand and price incentives and thus generate additional vanadium feedstock. Alternatively, there are several companies developing projects that are at advanced feasibility stages, but will have to overcome the critical hurdle of securing sufficient financing to start construction, Roskill stated.

Source : Mining Weekly

Kumba wage talks set to begin

Pay talks between the NUM and Kumba Iron Ore are set to begin this week, the trade union said on Wednesday.

“While NUM will keep to its culture of negotiations, it is ready to fight for its demands,” National Union of Mineworkers’ spokesman Livhuwani Mammburu said.

He said the demands would be made public once its members had finished their meeting.

“We are looking forward to positive and matured negotiations to deal with real demands.”

Mammburu said the NUM was the majority union at all three of the company’s mines: Sishen, Kolomela, and Thabazimbi.

Kumba spokesman Gert Schoeman said the company would comment once negotiations were underway.

Source – Sowetan Live