Rio Tinto tells China to brace for Q1 ore hike   China November iron-ore imports up 25.5% to 57.38mt   Chinese crude steel output to reach 620 million tonnes in 2010   Uranium spot price could rise in Q1, as utilities return to the market   Indonesia sees higher 2011 coal, tin output, fall in copper   Rio Tinto and Ivanhoe unveil deal on Oyu Tolgoi funding   Ivanhoe likely to put itself on block   Cameco: Uranium price gains are demand driven   China gold imports soar six-fold on investment demand   Uranium on the move   Cameco to supply uranium to China's nuclear power company   Chinese miners explore foreign mines   China's rare-earth exports plunge 77% in October after reduction in quota

       Behre Dolbear & Co., Inc., minerals industry advisors, publish a weekly E-newsletter for the mining industry covering a broad range of commodities including base and precious metals, coal, industrial minerals, diamonds, ferrous metals, and construction materials from a variety of sources. Here are some of their recent observations on mining activity in China:

Rio Tinto Tells China To
Brace For Q1 Ore Hike - Sources

       Global mining giant Rio Tinto has notified Chinese steel mills that it will raise contract iron ore prices by 7.6% in the first quarter of 2011, two sources told Reuters on Friday.
       A trading source said Rio Tinto, the world's second-largest iron ore miner, has informed several leading Chinese steel mills about the imminent price change. An iron ore buyer at a leading steel producer confirmed the 7.6% figure and said China's mills would have no choice but to accept it when the time came.
       The Steel Index (TSI) calculated that Rio Tinto charged $128.76/t for its 61.4% grade iron ore in the fourth quarter. With a hike of 7.6%, prices would rise to $138.55 in the new year, according to Reuters calculations.
       Brazil's Vale and Australia's BHP Billiton, which together with Rio Tinto control about 70% of global seaborne iron ore trade, are expected to follow with similar price increases in the New Year. The first-quarter price for 2011 will be based on average prices from September to November 2010.
       Contract prices fell in the fourth quarter of the year after spot market prices fell in the preceding calculation period. The China Iron and Steel Association has opposed the new system, but has permitted individual steel firms to negotiate contract prices with the three dominant miners separately.
       An official responsible for iron ore buying at a large mill said many smaller steel producers were moving away from the quarterly price regime in favour of more flexible monthly deals.
       - December 10, 2010 (Reuters)

China November Iron-Ore
Imports Up 25.5% To 57.38MT

       Imports of iron-ore surged 25.5% to 57.38-million tons in November, official data from China's customs authority showed. The figure represented a 12.4% increase on November last year, with buyers seeking to rebuild inventories for winter.
       Many traders have been rushing orders through before a much-anticipated contract price rise for the first quarter of 2011.
       Imports in October stood at 45.7-million tons, but analysts said it was not a true reflection of demand for the month, with many deliveries pushed forward to September to avoid the week-long National Day holiday beginning on October 1. Imports from January to November totalled 560.6-million tons, down 0.9% from last year.
       The China Iron and Steel Association said last month that total imports for 2010 were unlikely to exceed last year's 627.8-million tons, but increases were still expected in the last two months of the year to replenish stockpiles.
       Steel product imports rose 21.1% month on month to 1.38 million tons, while exports rose 1.7% to 2.91-million tons, customs said.
       - December 10, 2010 (Reuters)

Chinese Crude Steel Output
To Reach 620 Million Tonnes in 2010

       21st Century Business Herald reported that the Ministry of Industry and Information Technology predicted that China crude steel output this year will reach 620 million tonnes.
       Mr Luo Bingsheng Vice President of CISA said that structure adjustment should be accelerated in the whole industry within the 12th Five Year Plan to make China a powerful steel country.
       He said more effort should be put in industry restructuring and consolidation with a view to raising the concentration of the industry and accelerating the upgrade of the industry.
       During the 11th Five Year Plan period, China was ever ranking first every year in the world with its crude steel production and was increasing the proportion which has energetically supported the rapid and sound development of the national economy. Statistics shows that in 2009, China yielded 568m tons of crude steel, accounting for 46.6% of the total of the world and even overrunning the aggregate amount of the 20 countries which followed it in the output list.
       In January to October period 2010, the country rolled out 525 million tonnes of crude steel up by 10.7%YoY. MIIT predicted that the whole year is likely to see 620 million tonnes. The output of crude steel eyed an average annual growth of around 12% in the past five years.
       The top ten steel mills in China contributed 35.4% of crude steel in 2005 and raised the proportion to 43.5% in 2009, seeing an increase of 1.6% annually on average. In 2010, the industry concentration will be further improved with quite a few industrial consolidations.
       - December 11, 2010 (SteelGuru/Century Business Herald)

Uranium Spot Price Could Rise in
Q1, As Utilities Return To The Market

       The spot price for uranium is expected to consolidate at the current level of around $60/lb, but prices could increase as utilities come back into the market at the start of the new year.
       The current uranium spot price is 25% higher than the $48/ lb in September and nearly 50% higher than the $40.75/lb in June, Australian equity research firm Resource Capital Research (RCR) noted in its December uranium quarterly report.
       The recent surge was driven by Chinese buying, and the price impact had been exacerbated by the return of financial investors and hedge funds to the uranium market.
       RCR noted that there has also been an increase in market confidence in the growth outlook for Chinese reactor build, following the recent memorandums of understanding and long-term sales agreements announced by the Chinese with Kazatoprom, Areva, Cameco and Paladin.
       The impact of increased demand on the market has coincided with downgrades to production guidance at ASX-listed Energy Resources of Australia's (ERA's) Ranger uranium mine, in the Northern Territory, among other producers, said RCR MD John Wilson.
       The long-term contract uranium price is $65/lb, up from $60/lb three months ago. It stated that the contract price could move higher, potentially $70/lb, which would be important to development decisions at a number of advanced projects, particularly in Namibia.
       - December 9, 2010 (miningweekly.com)

Indonesia Sees Higher 2011
Coal, Tin Output, Fall in Copper

       Shares in Ivanhoe Mines, developing the big Oyu Tolgoi project in Mongolia, fell 14% on Wednesday after the company said it has reached a new agreement with shareholder Rio Tinto, which will result in Rio assuming management of the big copper/gold project, as well as taking a bigger stake in Ivanhoe.
       Ivanhoe said it now expects the Oyu Tolgoi project to cost around $6-billion, $1.4-billion of which will have been spent by the end of this year. Earlier estimates pegged the cost at $4.6-billion.
       The new deal includes support from Rio for a previously disputed rights offering, as well as a six-month suspension of existing arbitration over a dispute between the two parties on Ivanhoe's shareholder rights plan. Assuming all the transactions under the new agreement close and Rio exercises all the Ivanhoe warrants it holds, the group will own 48.4% of Ivanhoe.
       The two companies have also agreed that Rio Tinto cannot increase its holding in Ivanhoe beyond 49% until January 18, 2012. Rio Tinto will immediately exercise $300-million of Series B Ivanhoe warrants that it holds, and will buy 20 million Ivanhoe shares at market price. The shares will be acquired equally from Citibank and Ivanhoe Mines executive chairperson and CEO Robert Friedland.
       Rio has also agreed to work with Ivanhoe on a "comprehensive" finance package for the Oyu Tolgoi project, and will provide Ivanhoe with $1.8-billion in interim financing in the meantime. The Anglo/Australian group has also agreed to exercise all its rights in an Ivanhoe rights offering that is now expected to raise up to $1.2 billion for the Vancouver-based company.
       - December 8, 2010 (miningweekly.com)

Ivanhoe Likely To Put Itself on Block

       Ivanhoe Mines is likely to put itself on the block in a two-step process, which will first see it sell or spin off all its assets except its stake in the huge Oyu Tolgoi copper-gold mine in Mongolia, according to a source familiar with the matter.
       After disposing of all of the assets except for the Oyu Tolgoi stake, Ivanhoe would look for a buyer for the part of the company not owned by its largest shareholder, Rio Tinto , the source said on Wednesday. Ivanhoe is valued at more than $15.5 billion. Ivanhoe's plans could still change, the source said.
       Ivanhoe and Rio Tinto put aside an ongoing spat, agreeing on Wednesday to a new financing plan that moved Oyu Tolgoi a step closer to getting built. Ivanhoe opened the door to other buyers in July by terminating a clause in their agreement that restricted sales to other strategic investors. But Rio still has the right to make its own offer if Ivanhoe decides to sell itself.
       - December 8, 2010 (Reuters)