Author: yinghui

Tropicana is looking to the coal sector for an innovative approach to extend its mine life, in a joint venture with owners AngloGold Ashanti and Independence Group to use “strip mining” principles in open-pit coal mining.

If the concept proved feasible, Tropicana’s two main pits, and other satellite pits could be turned into a singular pit that would rival the size of the Super Pit in Kalgoorlie.

AngloGold Ashanti Australia senior vice president Mike Erickson says the success of the project depends on whether there is enough gold between the two pits to justify linking them up.

“In my mind it is like the Golden Mile [in Kalgoorlie] with the consolidation of all those ore bodies that were owned by different parties,” Erickson said.

“I think it is very much a defining moment [for Tropicana]. You would then be cementing a 20-year mine life, a major centre and it would be very significant. It is a massive step change.”

The study would also seek to determine whether mining costs could be lowered enough to make it feasible and what engineering and equipment would be required, with completion expected by the end of 2016.

Tropicana produced 118,204 ounces in the September quarter at an all-in sustaining cost of $US674 an ounce and was one of the key international operations credited for adding lower-cost ounces to the company’s production base.

At the end of September, AngloGold’s net debt was $2.3 billion compared to $3 billion at June 30 after it used funds from the sale of its Cripple Creek & Victor mine in Colorado to repurchase high-yield bonds.

AngloGold abandoned plans for a $2.5 billion demerger last September after investors fought the move.

Famed Australian economist Saul Eslake has voiced his scepticism about the possibility of another mining boom, saying there may never be another like the last.

Speaking at the International Mining and Resources Conference in Melbourne yesterday, Eslake said the downturn in commodity prices had probably not yet reached the bottom of the trough, SMH reported.

With the last boom tied the economic boom in China, Eslake told the mining business community that there was little prospect of that being repeated in the future, and that despite growth in other nations, none could match the impact of population growth in China.

“The countries that are still to develop are much smaller than China and India are, they are not, in most cases, starting from as far back on the development curve as China was in 1979 or India was in 1991, and most of them are much more self-sufficient in commodities than China or India ever were,” he said.

“So it could well be, in my view, that the commodities boom Australia has just experienced in the last 12 or so years is the last of its kind in human history unless unforeseen technological developments ordain otherwise.”

Eslake predicted that iron ore and coal would continue to experience further downside for the next one to two years.

“In the case of iron ore and coal in particular I don’t think we have seen the bottom of prices yet even though there may be some basis for being a bit more optimistic about the outlook for base metal prices,” he said.

“In the case of coal Australia is not necessarily in the most favourable position in international cost curves, and maintaining Australia’s competitive position in coal and in other energy commodities, LNG among others, will be a major challenge for the boards and managements of Australian companies this year and for the forseeable future.”

Phil Arnall, the new chairman of mining services firm Bradken, recently predicted the mining sector downturn was likely to last until 2018, with the company basing all planning on that outcome.

Bradken shares hit a record low on Tuesday, dropping 4.2 per cent to 91c at close of trade; 12 months ago Bradken was trading at $3.85.

The new chairman of battling mining services and engineering firm Bradken says the downturn in the mining sector is likely to last until 2018 and the company has done all of its strategic planning based on that bleak scenario.
Phil Arnall, who took over as chairman from Nick Greiner on Tuesday at the completion of Bradken’s annual meeting in Newcastle, says business is even softer than it was in June this year, when the company opted for a $70 million balance sheet injection from Chile’s Sigdo Koppers and private equity firm CHAMP, and embarked on merger talks that ultimately amounted to nothing.
Mr Greiner, a former NSW premier from 1988 to 1992, had served on the board since 2004 and his departure comes as Bradken shares hit a record low on Tuesday after the company revealed a continued poor outlook and said that subdued order intake from customers would mean sales revenue in 2015-16 would be below 2014-15.
Bradken shares tumbled to 89¢ in intra-day trading before closing at 91¢, down 4.2 per cent for the day. Bradken shares were at $3.85 this time a year ago.
Managing director Brian Hodges, who is preparing to depart at the end of calendar 2015 after 18 years running the company, told Fairfax Media after the meeting on Tuesday that orders were at low levels but had stabilised.
“Order intake’s been relatively lower but stable,” he says.
Mr Hodges also says that Bradken is progressively selling off about $30 million in surplus assets, mainly property holdings, to cut debt in a difficult market.
Two other Bradken directors, Eileen Doyle and Peter Richards, resigned from the board on November 6. New York hedge fund Litespeed Management holds 11.9 per cent of Bradken and has been increasingly influential.
Mr Arnall said in his speech to shareholders the “last few months have been very sobering” and “we have felt the discontent of our shareholders”.
“Partly as a result of this, there has now been significant change to our directors,” he said. The search for a replacement for Mr Hodges was continuing for a “suitable person” to replace him by the end of the year.
Sigdo Koppers and CHAMP had a 60-day exclusivity period to try and hammer out a merger deal with Bradken from June, 2015. But the merger talks were officially called off at the start of September with the Bradken board refusing to grant a request to extend the 60-day period.
Mr Greiner was in an uncomfortable position because he had dual roles at both CHAMP and Bradken. He is deputy chairman of CHAMP. He removed himself from discussions on the merger proposal by appointing a three-person independent committee from Bradken

Research from Business News found that five significant ‘greenfields’ mining projected, worth $760 million, have started development in the past year.

Looking ahead to 2017, there might be only one major new mining project although there have been no guarantees.

In Deloitte Access Economics’ latest investment monitor, the value of definite projects (under construction or committed) across Australia fell to its lowest level in four years. This resulted in engineering activity contracting in nine of the past 10 quarters.

Industry veterans who have lived through multiple cycles are not worried, however. Instead, they are laying the groundwork for the next wave of mining projects that will commence when commodity prices and financial markets improve.

The two mega projects still under construction include CITIC Pacific Mining’s Sino Iron project, and Hancock Prospecting’s Roy Hill development.

Roy Hill is on the brink of celebrating its first shipment, while Citic has reported good progress on commissioning and construction activity.

The next greenfields project in iron ore is likely to be Rio Tinto’s Silvergrass mine, expected to cost about $1 billion -resulting in the iron ore majors spending millions each year on sustaining capital expenditure.

A quarry equipment supplier will celebrate a new distribution partnership and its 25th anniversary at an open day event next month.
OPS Group will host the event at its new Jandakot headquarters in Perth, Western Australia from 5 to 6 November, opening the facility up to customers as well as the wider public.

“This is the perfect opportunity for OPS to celebrate both our strong and very proud history, as well as our bright future with the launch of some exciting new product lines and expansions to existing lines,” OPS director Shane Czerkasow commented.

“We expect the schedule to attract a broad cross-section of industry participants and look forward to welcoming a host of international, domestic and local suppliers, customers, industry stakeholders, dignitaries and media to our events.”

In addition to showcasing some of the latest quarrying equipment through presentations and demonstrations – such as the Terex Finlay C-1545 tracked cone crusher, Terex Washing Systems FM120C Fines Master and Tristar crusher and safety tooling – the event will also act as a launch pad for the business’s new division, OPS Environmental Equipment.

The perfect partner
OPS Environmental Equipment will supply products from Terex Environmental Equipment (TEE) and Kiverco Recycling Plant, including trommels and recycling screens equipped with Spaleck-branded technology. The new division will also supply machinery for the wood processing and biomass production sectors.

“The market is really embracing the recycling, wood processing and biomass production segments at present, and we believe the timing is perfect for OPS to enter this space,” OPS group sales manager Kieran Hawkes explained. “Great equipment requires great back-up and support, and we believe this is a well matched partnership that will deliver quality outcomes for customers of these industries.”

Tony Devlin, TEE’s global business line director, also expressed his excitement for the strengthened partnership between Terex and OPS. “OPS’s demonstrated ability to offer innovative, quality products and services makes them the perfect partner to support customers with applications, support and service,” he said.

TEE’s Ecotec range and Kiverco’s recycling plant will be amongst the machinery on show.

Since its establishment in 1989, OPS has expanded to become one of the largest distributors of OEM equipment to the quarrying, mining, construction, earthmoving, recycling, materials handling and materials processing industries.

Through its facilities in Perth, Darwin and Adelaide, OPS distributes equipment to quarries nationwide from manufacturers including Terex Corporation, Telestack, Kiverco, Tristar and Banlaw.