Sibanye scraps planned closure of loss-making South African mines

Reuters reports ArcelorMittal has pulled out of its joint $5 billion bid with US giant Peabody Energy for Australian coking coal miner Macarthur, just days after the target's top shareholder accepted the offer and left the Indian steelmaker with a higher than expected cost. Some observers were skeptical when Peabody and Arcelor raised their bid at at time coking coal prices have been falling and according to a new report could pull back to $240/tonne towards the end of next year. Now that it is flying solo Peabody may have to raise cash to fund the transaction. The deal also comes amid the planned introduction of an onerous carbon tax next year and rising labour costs in Australia thanks to the strong Aussie dollar.

FairStar Resources (ASX:FAS) will spend $300 million to build a a mining operation at its Steeple Hill iron ore project in Western Australia. The company, which made the announcement on Monday, plans to recover alluvial iron ore deposits in phase one of the project, followed by a drill and blast operation for hard rock hematite in phase two and the recovery of magnetite in phase three. The company says it will not seek joint venture partners.

As the price of iron ore continues to tumble, Chinese buyers of the crucial steelmaking ingredient are backing away from quarterly contracts in favour of cheaper monthly contracts or spot prices. Weakness in the market is “accelerating the move to shorter pricing methods and closer to spot,” said Rio Tinto CEO Tom Albanese, speaking to analysts in Sydney today, Bloomberg reported. While most (86%) of Rio's third-quarter sales were priced quarterly, Bloomberg quoted one JP Morgan Chase & Co. analyst saying that given that spot prices are lagging below quarterly contracts, "it would not be surprising to see some contracts reneged on" and therefore more movement towards spot prices.

Helicon Group, an Australian medical company, will spend $3 million to develop a cancer therapy that relies on magnets and iron ore. Nanoparticles of iron ore are injected into a tumour while a magnet is used to heat the tumour and destroy it. Fabio Pannuti, Helicon Group's chief executive, said the treatment is still in its early stages.

One of the Seven Great Wonders of the World is being threatened by mining. Reuters reports that legal and illegal mines operating below the Great Wall of China are tearing chunks of the wall away and allowing the historic landmark to crumble: About 200 km (124 miles) southwest of Beijing, in rural Laiyuan county in Hebei province, dozens of small mines are threatening the stability of the centuries-old wall as prospectors dig for copper, iron, molybdenum and nickel, state news agency Xinhua reported. Some mines have excavated within 100 meters of the wall.

The rout in industrial metals has claimed another victim: iron ore. On the same day that copper tumbled nearly 7% for its biggest slide in a month, Bloomberg reports that iron ore's largest decline in 15 months is showing no signs of recovery, according to analysts:

Reuters reports Outokumpu said it expected to report a significant operating loss in its final quarter as weak demand and prices continued to hit margins forcing the stainless steel maker to cut up to 1,300 jobs in an effort to reduce costs after brought on by the declining value of its raw material inventories. While Europe's woes have been well-documented, the Finnish multinational's announcement is further evidence of a changing dynamic in the iron ore and steel market. On Tuesday Chinese steel mills forced the world’s number one iron ore producer Vale to bend over contract pricing after falls in the spot iron ore price.

Rio Tinto said it expects its Simandou iron ore project in Guinea to begin producing by mid-2015. The company has approved $211 million in continuing studies and $1.12 billion to purchase equipment and fund early earthworks. The Australian reports Rio saying the $9.8-billion project is gaining momentum with construction works well underway: Work has started on the marine offload facility near the preferred port site of Ile Kabak, 50km southeast of the capital Conakry, which enables the introduction of heavy equipment for construction.

BHP Billiton (NYSE:BHP) had a record quarter for iron ore production, the company announced today, with shipments from Western Australia reaching 173 million tonnes, a 28% increase over the same period last year. Quarterly production records were also achieved at New South Wales Energy Coal and Illawarra Coal in both Australia, Cerrejon Coal in Colombia, and the Alumar refinery in Brazil.