As Goldman backs off, Citi says chase iron ore rally to $100

China's 27 largest steel companies saw a 15.7% decrease in the first-half profits from a year earlier for a combined profit of $1.6 billion, according to the Shanghai-based researcher Wind Info, as soaring iron ore costs squeezed margins. The woes of China's steelmakers, which have been switching to cheaper low grade ore to cut costs as prices top $180/tonne, are in stark contrast to profits at miners. Last week results for BHP Billiton showed its iron ore division accounted for the bulk of its record $22 billion in profits. BHP, Vale and Rio Tinto – control nearly 70% of the 1 billion tonne annual iron ore seaborne trade and dominate price talks.

Sinocast reports China's market for rare earths has begun to see negative effects of its crazy growth this year with an increasing number of downstream players finding it difficult to make deals despite price cuts. Prices of certain elements such as cerium used to polish TV screens and lenses are down 10% over the summer after months of break-neck price hikes. Reuters reports China is in the midst of a crackdown on illegal miners and processors and the busy black market trade that have sprung up, but has struggled to impose a REE production cap, with actual annual output exceeding official quotas by 40% to 50% since 2007.

China said on Wednesday that it would appeal against a World Trade Organisation ruling that it illegally restricted exports of certain rare and speciality metals and minerals including bauxite, coking coal, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus and zinc. The United States, European Union and Mexico argued that the minerals are key inputs for numerous industries and any cut in supplies could lead to sharp spikes in world prices. The complainants fear a similar situation to rare earths where the price of certain elements have tripled thanks to export cuts and China's virtual monopoly on production.

China Daily reports local land and mineral resource officials in the Qinghai province estimate that the Dachang gold mine in the Tibetan autonomous prefecture of Yushu is likely to become one of the largest gold mines in Asia with 300 tonnes in proven reserves. The geological exploration was conducted jointly by Qinghai mining development bureau and TSX-listed Inter‐Citic Minerals with a total investment of $31.3 million. The project is at an elevation of approximately 4,500 meters and consists of five exploration licenses covering some 279 square kilometers. Tiny Inter-Citic says it allocated $6.3 million in exploration expenses for this year.

Silvercorp Metals has achieved record silver production and record sales from its Chinese operations for the first quarter of the 2012 financial year. The company recorded 1.6 million ounces of silver production, up 15% from the same period a year ago. Revenue was US$69.7 million which was 90% more than the same quarter last year. The silver figures were achieved from the four mines at the Ying Mining Camp in Henan Province. The company is well on track for the fiscal year 2012 production guidance of 5.6 million ounces.

China COSCO (Ocean Shipping Group Co) Holdings Company, the country's top shipping conglomerate, on Friday reported a loss of CNY 271 billion (USD 432 million) for the first half of 2011, registering a massive decline of 176.8% YoY. Image is from geograph.org.uk

Copper futures declined in New York on concern that moves to curb credit growth and tame inflation by China, the world’s biggest consumer of the metal, may reduce demand for raw materials.

China's coal mine safety watchdog said on Friday it had completed a manned experiment of a permanent underground chamber that can shelter miners in case of an accident as part of its efforts to reduce mining casualties.

Shaanxi Coal Industry plans an initial public offering in Shanghai to raise up to 17.3 billion yuan ($2.7 billion) in what could be China's biggest IPO this year. The China Securities Regulatory Commission (CSRC) said late on Thursday that it would review Shaanxi Coal's IPO application on August 29.