Gupta entered the public eye in Australia when he spent almost $700 million to rescue embattled steel business Arrium from bankruptcy last year, buying the company’s steelworks via his firm, Liberty House, which partnered with his father’s company, SIMEC, to for the GFG Alliance.

Now SIMEC, acting as the mining division of GFG, will acquire the Tahmoor coal mine, Glencore confirmed on January 2.

In a short statement, the commodities giant said it would sell the underground coal mine to SIMEC, subject to approval from the NSW Government, within the first quarter of 2018.

“It will be business as usual until then,” Glencore said.

“The acquisition of the Tahmoor mine is an exciting step forward in our stated strategy to create fully-integrated, end-to-end businesses in Australia, from raw materials and energy right through to high-value finished products ready for market,” Gupta said.

In an interview this week with AFR, Gupta said his ambitions in Australia extended far beyond the Whyalla steel operation, with plans for a major energy division to take advantage of high energy prices on Australia’s east coast.

“Our energy business is probably going to be the largest business we do in Australia,” Gupta was quoted as saying.

The British businessmen also reflected on administrator KordaMentha’s handling of Arrium after its collapse, praising the work done by the financial firm.

“Given what they are, I think they did a pretty good job,” Gupta reportedly said. “We’re reaping the benefits of that now.”

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Mineral Resources, an ASX-listed miner, wants to expand its Yilgarn iron ore project via two new project areas, in a move that would add 15 years to the mine’s life.

But the State Government scuttled those plans late in December, announcing it would not grant approval for the two new mining areas.

Mineral Resources said the government’s refusal to allow it to expand would force it to wrap up operations at Yilgarn over the next 6 to 12 months, meaning roughly 400 jobs could be lost.

“The decision is disappointing for MRL and will be particularly so for the local Yilgarn community and businesses who have supported us since our operations commenced in 2010,” the miner said in a statement on December 21.

“The decision will also negatively impact the wider state as it will bring an end to the material revenue the Yilgarn operation contributed to state coffers in the form of royalties, port fees and general economic activity.”

McGowan this week stood by the rejection of the expansion plans by the state’s environmental body, which said the three-billion-year-old banded iron formations in the proposed mining areas were too ecologically important for the project to proceed.

“I didn’t want to be the premier who destroyed something that is unique around the world,” McGowan was quoted by the AFR.

“We don’t chop down our old growth forests, we don’t harpoon whales, we don’t drill for oil in Ningaloo reef. We are not going to knock over that mountain range.

“It was a hard call because Mineral Resources is a very good company and they wanted to continue to employ people on that site, but once it’s gone, it’s gone forever.”

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Healthy demand for the product, which is used in steelmaking, drove the benchmark price up 33% in November.

And according to The Australian, BHP’s Australian minerals boss Mike Henry has described the company’s recent medium-term guidance of 48mtpa of coking coal from Queensland as “light”.

In fact, the company could be set to advance plans for two of its low-cost open pit expansion projects in Queensland, which could add over 20mtpa to that production figure.

Given BHP cites cash costs for its coking coal operation at US$59 a tonne – and trending downwards – it makes sense the miner would look to capitalise on recent high prices as soon as possible.

“There is no sign of weakness in the coking coal market,” ANZ analyst Daniel Hynes was quoted as saying by The Australian.

“While Chinese buyers have been relatively subdued, Japanese and Indian buyers have been very active in recent days.

“Continued constraints on Queensland exports have seen steel mills become increasingly desperate to secure any available cargoes in the market.”

BHP is said to be investigating a potential expansion at its Blackwater mine, which would add around 4mtpa to its coking coal capacity.

After this, it could add 5.7mtpa of capacity to its Caval Ridge mine and wash plant, and as much as 15mtpa via expansions at its underground mines at Goonyella and Wards Well.

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While Asia has abundant LNG supply, the region MIFF lacks the right infrastructure and commercial arrangements to develop the necessary LNG supply” networks to sustainably meet rising demand. AG&P’s Derek Thomas explains.

With the demand for cleaner and cheaper sources of power rapidly increasing across Asia, developers are seeking efficient, low cost and reliable ways of distributing alternative energy sources to coal and heavy-fuel oil.

If an estimate by the International Energy Agency’s New Policy Scenario is to be believed. Asia’s growth in Total Primary Energy Supply is expected to increase from 4406 Mtoe in 2014 to 6998 Mtoe in 2040.

In this scenario, governments and companies are exploring ways of reducing their dependence on coal, which continues to be used in many power generation processes by committing to liquefied natural gas (LNG) as a key component of their energy mix.

However, while Asia has abundant LNG supply and demand, the region still lacks the right infrastructure and commercial arrangements to develop the necessary LNG supply networks to sustainably meet this rising demand.

Tackling the challenges

LNG demand centers in countries like the Philippines. Indonesia and India are anticipating rampant power demand in the coming years. Unlike developed countries with an established gas pipeline network, the demand centers in these markets are spread across islands, long coastlines and vast river systems, creating the need for faster, more pragmatic and scalable infrastructure solutions to drive LNG uptake.

These needs could be efficiently addressed by a market integrator to break existing silos between LNG suppliers and buyers, bringing all parties across the complex LNG value chain together to drive projects forward and deliver greater economic value for customers. So far, despite the strong LNG supply and demand, projects have been taking off at a slow pace.

As well as the geographic and technical constraints, lack of progress is in part due to the gradually-evolving federal ecosystems in emerging economies. Many countries still need to establish a regulatory framework that sets clear policies for the LNG industry and guidance for the development of an efficient LNG supply chain.

Governments could also consider offering tax or other incentives to newer players to enter the LNG market, which would have the added benefit of stimulating investment in the sector, thereby generating growth. Without more reliable power sources. Asian markets face a looming power shortage. The LNG industry must, therefore increase its efforts to establish smaller, scalable and flexible infrastructure packages that can be deployed rapidly and affordably to bring LNG projects online.

Driving the market forward

If progress in the LNG sector remains slow, access to power will become a major problem across the region within the next 10 years. Estimates by KPMG suggest that in the Philippines, demand for power will increase by 50% to 29,330 MW by 2030. This would mean a shortage of 13,000 MW in the power generation and transmission markets.

To circumvent this, the Industry requires an investment of US$25 billion by private companies in the next 14 years. Similarly, in Indonesia, the government is aiming to install 70,000 MW of new power capacity by 2024, which will require funding of about $83.5 billion: according to the Asian Development Bank.

To meet such massive demands, collaboration between financial, and engineering, procurement, and construction experts across the industry will be necessary. One type of collaboration we also expect to see more of in the future is in the commercial area as investment grows.

An example of this in action is AG&P’s recent joint venture with the Risco Energy Group, a renowned energy investment company in Indonesia: which brings commercial expertise to the infrastructure development table. Through this joint venture, AG&P will be able to not only design, engineer and manufacture assets, but offer flexible commercial arrangements including financing a project or chartering and leasing some of the assets to maximize end-to-end operational efficiencies.

Another area ripe for development is LNG distribution between remote islands and inaccessible onshore locations across Southeast Asian markets. Here, we expect to see the emergence of fleets of lower cost: small delivery shuttles, probably less than 7500 cu m, capacity to enable fast and efficient inter-island transfer of gas from larger LNG hubs to smaller, dispersed receiving terminals.

We also anticipate significant growth in the financing and building of land-based delivery vehicles, such as LNG-fueled trucks. India is one country where this sector is witnessing rapid growth. The emergence of the supporting LNG infrastructure is critical to LNG adoption in these industries as the first step is to break-bulk the LNG and transport it in smaller volumes to make it more accessible for customers.

The availability of a smaller scale LNG delivery network through break-bulking will enable both distributed power generation and a variety of industrial applications in various manufacturing and processing facilities. We see a ready market for LNG storage, transport, regasification, and power solutions to transfer LNG from where it is abundant, such as in the major gas hubs, to where it is scarce, such as in the fast-growing Southeast Asian economies.

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Speaking at the recent Australia Domestic Gas Outlook Conference in Sydney, Sims called for new and more diverse sources of gas supply into the domestic market.

Just as Australia’s gas market has been opened up to a significant amount of international competition, several state governments are making it harder for new gas developments to take place.

The result is a new norm where domestic gas buyers – including major industrial customers – have to compete on an international level, and buy gas at a significantly higher cost than in the recent past.

“The outlook for gas supply is now even worse than it was a year ago,” Sims said. “Indeed, our worst fears are being realised.”

He said while the word “crisis” can be overused, the scarcity of available gas on the east coast has seen prices increase above historic levels as much as fourfold.

These price increases, he said, have seen a significant reduction in gas used for electricity generation, and are expected to flow through to significantly higher prices for residential customers.

“The most important problem, however, perhaps the real crisis, is the difficulties faced by industrial companies who rely on gas as a feedstock or as an energy source.

“Some are experiencing difficulties gaining supply; all are, or seem likely to, face huge price hikes that will perhaps permanently damage their businesses.”

He said Australia has a surprising number of industrial companies for whom gas makes up 15-40% of their costs.

“Australia often makes it hard to be involved in manufacturing. We are now making it extremely difficult, if not impossible, for some,” he said.

Sims called for state governments to reconsider recent tough stances on new gas exploration.

He said the three major LNG developments in Queensland, blamed by many for worsening the crisis, should not be under the spotlight.

“If there is a criticism of the three LNG producers it is that they fell into the usual commodity project trap of assuming then-high $100 plus oil prices would continue, when long run average prices of around $55 would have been a better planning assumption,” he reasoned.

“The three LNG producers, however, could not have foreseen that after their investment decisions were made east coast onshore gas exploration and development would be largely prevented.

“I doubt anyone in the industry expected Victoria to ban all onshore gas exploration and production which has stopped even conventional gas projects; nor could they have foreseen the delays and uncertainty over projects in NSW and the NT.

“It is of course up to Governments to make such decisions.

“Having made them, however, it is difficult to see how people can then criticise the commercial contracts that were freely entered into by the LNG producers at a time when the likely supply outlook was very different.”

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In January, giant US-headquartered engineering firm Fluor Corporation was awarded a front-end engineering, design and optimization (FEED) contract by Danakali Limited in Eritrea, East Africa for the Colluli Potash Project following a competitive tendering process initiated and completed in 2016.

“Fluor will provide a highly qualified design and optimization team with world-class process infrastructure credentials for this important fertilizer project,” said Rick Koumouris, president of Fluor’s Mining & Metals business. “In addition to working with Danakali to maximize project capital efficiency during the study and execution phases of this project, Fluor will bring top-notch project financing expertise and assistance to help Danakali advance this project to the next phase.”

“We are delighted to be working with Fluor as we progress the Colluli project,” said Paul Donaldson, managing director of Danakali. “The combination of Fluor’s values, people, reputation, optimization approach, mining and metals expertise, experience in Africa, and potash-specific experience will benefit the project significantly as it progresses towards construction.”

Colluli is one of the most advanced greenfield sulfate of potash developments in the world. According to Danakali, the project demonstrates outstanding economics including industry leading capital intensity, bottom quartile operating costs, close proximity to the coast and key markets, and good product diversification potential. Sulfate of potash is a high quality potash fertilizer used for farming crop development and yield maximization around the globe.

The Colluli deposit is located in the Danakil region of Eritrea. Colluli is approximately 177 kilometers southeast of the capital, Asmara, and 180 kilometers from the port of Massawa (230 kilometers by road), which is Eritrea’s key import-export entry.

Approval of the social and environmental impact assessment for the project was given by the Ministry of Land, Water and Environment in December 2016. The award of the Mining Agreement and Mining License for the project is well progressed.

Danakali is an ASX-listed company and 50 percent owner of the Colluli Potash Project in Eritrea, East Africa. The company is currently developing the Colluli Project in partnership with the Eritrean National Mining Company (ENAMCO) which owns the other 50% of the project.

Since drilling commenced at Colluli in early 2010, over one billion tonnes of potassium bearing salts suitable for the production of potash have been identified.

Danakili says that the potassium bearing salts of the Danakil have the unique capability of producing a diverse range of potash types including muriate of potash (MOP or potassium chloride), sulphate of potash (SOP or potassium sulphate), and sulphate of potash magnesia (SOP-M or potassium magnesium sulphate).

Sulphate of potash is a highly valued, chloride free, premium potash fertiliser that has limited primary production facilities globally. SOP contains both potassium and sulphur, which are essential crop nutrients.

Following the positive outcomes of a prefeasibility study (PFS) for the production of sulphate of potash (SOP) in February 2015, a definitive feasibility study (DFS) was completed in November 2015, for a two 425,000 tonne per annum SOP module development. The second module is planned for commissioning five years after the first. The DFS results exceeded Danakali’s expectations and the PFS results.

“The Colluli deposit is the shallowest known deposit globally, is located only 75km from the Red Sea coast, and is geographically favourable relative to the key potash markets of the future,” explained Donaldson. “The resource is positively unique.”

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The Brisbane-based, ASX-listed operator disclosed its December quarter above rail volumes on January 18.

Coal volumes were up 5% year-on-year in New South Wales to 12.1 million tonnes, while Queensland tonnes were down roughly 0.5% to 40.2 million tonnes, resulting in an overall coal volume of 52.3 million tonnes in the quarter, up 1%.

The healthy December quarter was not quite enough to balance out a softer September quarter, however, with Aurizon finishing the first half of FY17 on 103.5 million tonnes of coal hauled, down 1% year-on-year.

Aurizon said guidance for the full FY17 was for between 200 and 212 million tonnes of coal.

Iron ore volumes slipped 8% in the first half to 11.4 million tonnes, with 5.4 million tonnes in the September quarter and 6.0 million tonnes coming in the December quarter.

Freight volumes were down 7% in the first half, from 22.0 million tonnes in FY16 to 20.5 million tonnes in FY17.

But intermodal containers, which are factored into overall freight volumes, were up significantly during the stretch. 100,000 TEUs (the equivalent of a twenty-foot container) were handled in the September quarter, and 112,200 were handled in the December quarter.

The December quarter intermodal figure was up 18% year-on-year, and the overall first-half figure was up 10%.

Aurizon credited the improved intermodal numbers to stronger interstate volumes, following the commencement of a new five-year contract to handle 20,000 TEU per annum for K&S Freighters, which it announced in August.

K&S Freighters was described by Aurizon as a “foundation customer” of its new Port Botany rail shuttle service, which began moving imports from the port to Enfield via rail in August.

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According to multiple reports, Forrest’s wealth has risen by $5 billion this year thanks to the serious improvement in the health of the iron ore market.

Once in charge of FMG, ‘Twiggy’ Forrest now sits on the FMG board and owns roughly a third of the business.

Since opening 2016 at $1.87 on the ASX, Fortescue Metals Group’s share price now sits at roughly $6.50. That means Twiggy’s share in the company has risen from around $1.8 billion to around $6.5 billion in this calendar year alone.

While any rich list is unofficial and hard to properly quantify, Forrest’s surge in wealth almost certainly pushes him to third place in Australia, behind only Gina Rinehart and property developer Harry Triguboff.

Fortescue’s staggering 12-month rise is a product of its cost-cutting drive – which was triggered by the slump in iron ore price – combining of course with the bounceback in the iron ore price seen in the second half of 2016.

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Fortescue Metals Group chairman Andrew Forrest has named the first of the miner’s new very large ore carriers (VLOCs) after his wife, Nicola.

The FMG Nicola was christened at a shipyard in China this week, with Fortescure chief executive Nev Power saying the formal launch of the first vessel was the culmination of a lot of hard work from FMG.

“The VLOC fleet is a natural extension of our supply chain and will play a significant role in increasing efficiencies at our port and lowering costs,” Power said.

“They also reflect and strengthen Fortescue’s close relationships in China, our largest market.”

FMG Nicola was launched from Yangzikiang Shipyard, with a further three VLOCs, FMG Grace, FMG Sophia and FMG Sydney to be launched there in the future. Another four VLOCs have been ordered from the Guangzhou Shipyard.

All eight VLOCs are set to be in service by mid-2018.

“Our partnerships with both Yangzijiang Shipyard and Guangzhou Shipyard International, and the financing transaction with CDB Leasing are great examples of Fortescue’s strong collaboration with China,” Power said.

“We value these relationships very highly and look forward to continued success as we work together on initiatives for our mutual benefit.”

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Bega chairman Barry Irvin announced the company would take the provision to its share of the Bemore joint venture after slow sales from China since the partnership’s inception in January.

“While this time last year supermarket shelves were empty and customers in Australia and internationally were providing ever increasing orders, the combination of a regulation change in China, a supply response to the demand signals and the evolution of supply channels to market now sees significant discounting in the market place and signs of short term oversupply,” Irvin said.

“This change in market circumstances has seen our expected sales not materialise at levels that were initially forecast and some strong headwinds for the partnership particularly in the Australian market.”

Irvin said Bega and Blackmores would keep their joint venture “under constant review,” and said the pair will continue to monitor the performance “as market evolution and circumstances become clearer”.

With the market already battling with a global slump in dairy prices, shareholders were not happy with the latest news.

Bega’s share price dropped from $6.49 on Monday to a $5.73 open on Tuesday, and fell further to a $5.30 open on Wednesday, October 26.

The company’s misfortune comes after the Australian Government’s agricultural statistics bureau released a soft outlook for dairy producers and exporters in 2016/17.

The Bureau said in its September quarter update that while it expected a 1% drop in the total value of Australian dairy exports, despite no forecast change in the overall volume of trade.

The update forecast a slight decline in Australian butter and skim milk powder exports would be counterbalanced by an increase in cheese exports, and stable whole milk powder exports.

Overall dairy exports will be roughly 444,000 tonnes in both 2015/16 and 2016/17, as a result, according to the analysis.

The 1% decline in value, to $2.98 billion in 2016/17, will be due to continued world dairy price declines, the Bureau believes, as a result of increased competition among major suppliers for export markets.

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