Asia Mining – “Battle for Minerals” – USA

THIS POST WAS ORIGINALLY PUBLISHED FEBRUARY 13, 2009


In my recent post I focused on China, as a major player, but there are certainly other ones in the area, the United States being, of course very prominent. Let us look at Vietnam and latest news reveal a good performer.
 US public company (listed at NYSE Euronext ) ATI Petroleum (ATIP) seems to be vigorously operating in Vietnam.
One of the noteworthy project is the plan to build 2 nuclear power plants in Vietnam with total capacity of 4,000MW.  The project has been approved by the Congress and a feasibility study had to be submitted to the government in September 2008.  ATIP is also developing its uranium project in Niger – which was discussed with Vietnamese officials in August. Furthermore, ATIP’s President in September 2008 delivered a report at the special session in Hanoi, where he emphasized that new technologies can provide for dramatic reduction of construction period of nuclear plants “from 10 years to 5 years at the cost of about $35 per megawatt-hour, far less than using coal at a cost $40.8/MWh or gas  at a cost of $41.4/MWh”.
ATIP, a subsidiary of American Technologies Incorporated Group has a long-time presence in Vietnam and is engaged in oil and gas exploration on offshore blocks in the northern Gulf of Tonkin since 2000.  Initially ATIP signed a production sharing contract (PSC) for Blocks 102 and 106, covering 14,000 sq. km. (3.5 million acres) off the coast of Hai Phong, Vietnam. Since that time extensive exploratory actuvutes were conducted in some blocks: Yen-Tu, Ha Long, Thai Binh, and Ham Rong, that resulting in the discovery of three new oil and gas fields. As the result it is estimated that there is a high probability of high commercial rate production.
Expanding operations in Vietnam, at the beginning of 2009 increased activities are underway at the development of an ilmenite/titanium reserve deposit with estimated at over 5.5 million metric tons. The area is about 586 hectares and is currently producing Ilmenite, Rutile, Zircon and Monazite in commercial quantities. Presently the company's production capabilities allow for the separating and processing of 4,000 m/t of ore per month. Ilmenite is currently processed by ATI Petroleum on site to a high TiO2concentration of approximately 62%. If this can be processed to produce synthetic rutile with a 94-95% TiO2concentration, it will greatly increase the value of the mineral. At present, ATI Petroleum is able to sell its ilmenite for approximately $120 per metric ton. Synthetic rutile is typically worth four to five times this amount.
It seems that ATIP is now in discussions with Tor Minerals, a worldwide producer of specialty mineral products (that already has its plant in Malaysia) to install Vietnam's first synthetic rutile processing facility. Last week the sample of its titanium dioxide (TiO2) ilmenite sand was delivered to Tor Minerals processing plant in Malaysia to determine the feasibility of converting the ilmenite to synthetic rutile.
  So, new spots on the Asian mineral map are being visible as the time goes on…
UPDATE
As if the US businessmen are reading my blog….. he-he
“It’s time to look at the Vietnamese market, says US executive” – this is the Voice of Vietnam brings to us. A delegation from 15 businesses and academics from the USA Pittsburgh region arrived to Vietnam and are looking “to explore this dynamic Asian market”.  The report also cites Roger Cranville, vice president for global marketing of the Pittsburgh Regional Alliance: “market entry timing is critical, and as part of its long-term opportunity Asian strategy…”

ASIA MINING: Chinese Offensive

THIS POST WAS ORIGINALLY PUBLISHED FEBRUARY 24, 2009


The commentary in yesterday’s People’s Daily says: “China has grown to be a new heavyweight player and stepped into the limelight on the world stage… If the Cold War was 'a tug of war' between East and West, and a showcase of hard power, what we have today, for the first time in history, is a global, multicivilizational and multipolar competition, and a display of smart power”. And true to these words, we see a real display of smart power.
Looking at the world mineral resources market, it is obvious that China has become a dominant ingredient in its structure. About one third of total consumption of majority of metals goes to China. "With the global financial crisis, most companies are becoming cautious of investing in the sector, but with domestic demand increasing in the long term, we are under great pressure this year," Wang Min, vice-minister of land and resources, told a national geological survey conference in Beijing.
There are different options to relieve the country from this pressure. China Daily today reports vast internal potential of the country:  “From 1999 to 2007, a total of 3,795 exploration programs were carried out, with 7.56 billion yuan ($1.1 billion) invested and about 184 companies and bureaus of land and resources involved…” There are more than 1,200 potential mining sites including 20 medium and large ones. And one way is to increase foreign participation in mineral survey and exploitation, as well as attract foreign investors. While the first two things are quite feasible and would be welcomed by international companies, I think, that the investment side might take quite a while.
Thus, the other way is open and is used on full scale – M&A on international scale. This is well reflected in current press reports; I have been posting some references here too. The latest news come from Australia, that in fact my soon turn into some second-grade supplier of resources to China. That is another “beefing up of mining efforts”: after yesterday’s deal with Valin Iron and Steel Group that takes the stake in Fortescue Metals Group Ltd, the latter agreed to increase its supply to up to 4 million tons a year to Valin subsidiary Xiangtan Steel from 2010 onwards, up from 1 million tons a year now – four times higher.
It is interesting to note that financial transactions around Fortescue are far from over – there are reports that several deals are upcoming that include among the others -  sovereign wealth fund China Investment Corporation (CIC) is going to invest more in the company. And there is an Indian trace here too: Valin Iron and Steel Group owns a 33.9% stake of Hunan Valin Steel Company, in which ArcelorMittal also has a 33% equity interest.
This is without a doubt “global, multicivilizational and multipolar competition, and a display of smart power”