Search metals commodity reports

China is expected to keep supporting strong coal prices to allow coal companies to deleverage. Steel reforms there have led to higher capacity utilization rates and greater demand for high-quality coking coals. These factors will mean more stable demand for seaborne coals. As a result, we extended the period of strong pricing to 2021 - before it falls closer to marginal costs. The long-term outlook is dominated by demand growth in India and the need for projects to come online to meet demand.

Karara is a magnetite mine in the Midwest region of Western Australia. The project was developed by Karara Mining Limited; a 50:50 joint venture between Gindalbie Metals, a listed Australian mining company  and Chinese steelmaker Anshan Iron and Steel (AnSteel), which also has an offtake agreement for 100% of production over the life of the mine. Karara Phase 1 has a concentrate capacity of 8.8Mtpa. In early 2016, Ansteel stated that it was no longer able to provide funding support for Karara putting the continuation of mining in jeopardy.

Chinese authorities have taken an increasingly stringent stance on zinc mining since 2015 in an attempt to raise the environmental and safety standards of mine operation. Further ongoing inspections could continue to hinder output growth, restricting the potential for closed mines to restart. In this insight, we have quantified the impact from the tightening of environmental and safety standards. Such impact has resulted in industry consolidation and a change in dynamics between small and large-scale mines. We also look at future projects and analyse how consolidation might prove to be a driver for output growth.