The Fortescue Metals Group Ltd (FMG), the world’s fourth-biggest exporter of iron ore, has been forced to scrap a bid to borrow US$2.5 billion (AUS$3.2 billion) as part of a plan to refinance part of its existing debt. FMG’s shares fell 5.3% to AUS$1.865 in Sydney on 18 March 2015, the lowest close since January 2009, after it announced that the sale had been postponed, citing volatile US credit markets and a failure to achieve the terms it wanted. According to Chief Executive Officer Mr. Nev Power, “Debt capital markets were not favourable at this time and as a result we think it is a disciplined and prudent decision to defer the voluntary refinancing at this stage.”

The London Metal Exchange (LME) has published its responses to the legal and logistical consultation process (Consultations) it launched in November 2014 regarding its physical delivery network. The LME also issued a discussion paper including the final two elements of the LME’s warehouse reform package and possible further structural reforms. In addition, a new proposal was put forward to increase the loadout rate of metal at warehouses affected by structural queues, by adjusting one of the parameters of the ‘Linked Load-in / Load-out rule’.

China’s National Development and Reform Commission (NDRC) has approved plans by Sinopec Beijing Yanshan Petrochemical Co. Ltd., a subsidiary of China National Petroleum Corp. (Sinopec), to build a grassroots refinery in the Caofeidian Industrial Zone, Tangshan, Hebei Province. The US$4.3billion refinery will have a crude oil processing capacity of approximately 12 million tonnes per year and will have additional processing units for residual fluid catalytic cracking, hydro-treating, hydrocracking, isomerization, alkylation, and desulfurization. A firm timeline for the project, which initially included a 200,000-b/d refinery scheduled to be commissioned by 2015, has not yet been disclosed.

In January 2015 UK Trade and Investment (UKTI) published “Opportunities for British companies in Burma’s oil and gas sector” (UKTI Report). The report provides an overview of Myanmar’s oil and gas industry, information on recent licence awards, investment opportunities and Myanmar’s production sharing contracts (PSCs). The British Government opened a UKTI office in Myanmar in July 2012 to support responsible British investment and trade.

Myanmar is estimated to possess 3.2 billion barrels of oil and 18 trillion cubic feet of natural gas reserves. Its unproven resources may be vastly greater. Currently Myanmar is the 10th largest producer of natural gas globally – the bulk of which is exported to China and Thailand.

On 31 December 2014 the Chinese Ministry of Commerce announced details of its plan to replace the controversial quota system regulating the export of rare earths with a new resources tax. In August 2014, the World Trade Organisation (WTO) found the quota system to be inconsistent with China’s WTO obligations.

On 22 October 2014, Hong Kong Exchanges and Clearing Ltd (HKEx), the London Metal Exchange (LME), LME Clear Ltd, China Merchants Group Ltd (CMG) and China Merchants Securities Co. Ltd (CMS) signed a memorandum of understanding (MOU) in relation to a strategic alliance concerning product development and services for market users.

On 23 June 2014, following a six month review and consultation period, the London Metal Exchange (LME) announced it plans to maintain and further invest in its 137 year old open-outcry trading “Ring”. The Ring is a physical price formation venue that provides a transparent price discovery process and supports a unique prompt date structure.

Baosteel Resources Australia Ltd (Baosteel) has announced they will not improve their US$1.3 billion takeover bid for Australian explorer Aquila Resources Ltd (Aquila) after Australian miner Mineral Resources Ltd acquired 49 million additional shares in Aquila to take its stake to 12%. Baosteel and its Australian partner Aurizon Holdings Ltd have been seeking to acquire a 50% stake in Aquila’s stalled AUS$7 billion West Pilbara Iron Ore (WPIO) rail and port project and a coal mine in Queensland. The WPIO resource is estimated to be approximately 2 billion metric tons. The offer was made on 5 May 2014 and is set to close on 11 July 2014. (Source: www.mining.com11 June 2014 and The Australian 13 June 2014)

Hong Kong Exchanges and Clearing Limited (HKEx) have announced that it plans to launch its commodities business with four futures contracts that will be traded in its derivatives market.

Rio Tinto (Rio) has announced that it is pulling out of the Pebble Mine copper and gold project in the Bristol Bay region of Alaska. The project is wholly owned by Toronto and New York listed Northern Dynasty Minerals Ltd. (Northern Dynasty). Rio currently owns 19.1% of Northern Dynasty.

Glencore Xstrata PLC (Glencore) is in talks to convert US$900m of debt in Russian oil producer RussNeft OAO NK (RussNeft) into an equity stake of approximately 20%. If the proposed conversion proceeds it will make Glencore one of the largest foreign shareholders in the Russian oil industry. The deal which is subject to the finalisation of due diligence and valuation could complete by the end of 2014. RussNeft, which is owned by Mikhail Gutseriyev, is one of Russia’s largest oil producers. Glencore is RussNeft’s largest customer purchasing oil under a 20-year off-take agreement. (Source: www.ft.com4 March 2014)

Hong Kong listed SouthGobi Resources Ltd(SouthGobi) more than doubled its coal production in 2013 after the resumption of its Mongolian operations. Mining at SouthGobi’s Ovoot Tolgoi mine was halted in June 2012 following a failed takeover bid by Aluminium Corp. of China Ltd, deteriorating market conditions and a corruption investigation. On restarting production in March 2013 SouthGobi announced it had produced 3.06 million tonnes of the 3.2 million tonnes of semi-soft coking coal it had planned to produce by the end of the 2013 and that it expects sales volumes to decrease in the first quarter of 2014 compared to the fourth quarter of 2013 citing national holidays as the reason for the slowdown. SouthGobi is 56% owned by Turquoise Hill Resources Ltd., which is majority owned by the Rio Tinto Group. (Source: Bloomberg News 16 January 2014)