Statoil has transfered operatorship of the Vilje field in the North Sea to Marathon Oil Norge. The agreement does not involve any change of stakes in the production licence (PL 036D). The Vilje development includes two subsea wells tied in to the Alvheim production vessel. The field is located some 20 kilometres north-east of the Marathon-operated Alvheim field. Coming on stream on 1 August 2008 Vilje is expected to produce 21 000 barrels of oil per day in 2012. An investment decision for Vilje South development has been made in the licence. First oil is expected at the end of 2013. The licensees in PL 036D are Marathon Oil Norge AS (46.90 percent interest), Statoil Petroleum AS (28.85 percent) and Total E&P Norge AS (24.24 percent).

Enbridge, the largest transporter of Canadian oil exports, has outlined its US$3.2 billion expansion plans of pipeline systems in across North America. The company targets to increase transportation capacity for Western Canadian crude oil to be moved across the country to Eastern refineries, preventing bottlenecks in the Mid-US. The expansion includes a full reversal of the Line 9 pipeline which is Sarina (Ontario) to Montreal. The company intends to spend US$2.6b on the expansion of the Mainline, the largest pipeline system transporting Canadian crude oil to the US. Another US$400m will be spent on the expansion of the Southern Access pipeline which connects Superior (Wisconsin) with Flanagan. The expansion will increase the pipeline’s capacity from 400kbpd to 560kbpd. The remainder of US$200m will be invested into the Alberta Clipper pipeline connection Hardisty (Alberta) and Superior. Capacity will increase by 375% from 120kbpd to 570kbpd. The expansions are expected to be completed in 2014. The Line 9 pipeline project is subject to the approval from the National Energy Board, Canada's energy regulator Canadian refineries are paying a premium of to US$20/bbl to obtain crude imports. The constructed pipeline will support these refiners to obtain cheaper Canadian and US Bakken crude oil and as such improve Canadian refiners’ competitiveness.

Enterprise Products Partners and Enbridge have completed the reversal of the Seaway pipeline which is connecting the Houston Area (Texas) which with Cushing, Oklahoma. Cushing is a significant storage hub for domestically produced crude oil and also the delivery point for NYMEX WTI contracts. The recently seen increase in US crude production saw historical inventory highs at the delivery point, pressuring WTI prices. Seaway is now transporting crude oil to the refinery at the Gulf Coast area, which will most likely support WTI prices and reduce the Brent-WTI spread. The companies have announced to expand the pipeline’s capacity even further to 400kbped from 150kbpd until the first quarter of 2013.

In Western Australia’s State budget, a planned $339m injection into the Oakajee Port and Rail Development project has been pushed out another year to beyond 2015-16. The funds have been instead diverted to a Special Purpose Account rather than disappearing off the budget altogether. The project continues to face lengthy delays. Mitsubishi Corporation took control of the Jack Hills Iron Ore and Oakajee Port and Rail Development projects in Western Australia after Murchison Metals could not fund its share of the project.

ArcelorMittal announced the sale of its Skyline Steel and Astralloy ("Skyline Steel) to Nucor Corporation ("Nucor") for approximately $605 million. The transaction includes 100% of ArcelorMittal's stake in Skyline Steel's operations in the NAFTA countries and the Caribbean. The transaction is expected to be completed by the end of the June quarter 2012. Skyline Steel is a premier steel foundation distributor serving the US, Canada, Mexico and the Caribbean and is a wholly-owned subsidiary of ArcelorMittal. Skyline Steel distributes high quality products to service the most challenging applications in the construction and infrastructure industries, including marine construction and bridge and highway construction. AME believes the decision is in line with ArcelorMittal's strategy of focusing on core assets and reducing net debt.

THE Yarrabee mine in QLD’s Bowen Basin could almost double pulverised coal injection coal production by 2016 after a $520m investment if its owner Yancoal is allowed to merge with Gloucester Coal. The mine would ramp up its production of saleable PCI coal to 4.6Mt/y to take advantage of the forecast premium that PCI will enjoy over other metallurgical coals and its ongoing demand from Chinese customers of Yancoal’s parent company Yanzhou. Yarrabee is located 150km west of Rockhampton and 280km northwest of the Port of Gladstone and produces a low-volatile PCI coal which is used in steel making. The mine has reserves of 57Mt and resources of 170Mt. The investment would also increase the proportion of saleable coal to ROM coal from its present 2.4Mt:3.1Mt to 4.6Mt:5.8Mt, ensuring higher margins from the open cut mine. Yancoal is positioning the mine for further growth by seeking to lock in rail and port infrastructure access.

Contractor John Holland has signed an MoU with Isaac Plains Coal Management to negotiate final contract terms on a one-year mining services contract extension at the QLD mine, valued at approximately $200m and starting from July. The company will also begin negotiations on an additional three-year agreement and will work with IPCM to finalise contract terms and scope of work for a full service mining operations contract for work at the Isaac Plains open cut coal mine. Isaac Plains is currently a joint venture between Brazilian giant Vale and Aquila Resources. Earlier this month Aquila gained Foreign Investment Review Board approval for offloading its 50% stake in the Isaac Plains mine for $430m to Japan’s Sumitomo group. John Holland’s scope of work will include clearing, topsoil stripping, drill and blast, truck excavator waste removal, coal mining, rejects haulage, dump profiling and rehabilitation works. Approximately 3.6Mt of run of mine coal will be moved and will pass through the mine over the next 12 months.

Chinalco has begun the construction of its 2 x 300MW power station project for its Baotou smelter in Inner Mongolia. Chinalco acquired the power station project from Inner Mongolia Guodian Energy in early 2012. It is further reported that East Hope Group’s aluminium smelter in the same province has a captive power station and is enjoying a discount of RMB 10 cents/kWh (about US 1.5 cents/kWh) for its power bill as compared to Chinalco’s Baotou smelter. AME expects the Baotou smelter’s power cost to decrease, potentially starting from 2014, after the completion of the power station.

$176m, of a total $443m to be allocated over time, has been assigned to the Mid-West energy project in Western Australia’s state budget. The project is due to become one of the most significant electricity transmission projects in Western Australia and support the development of new magnetite supply from the Mid-West region.

Port Pirie's lead and zinc smelting operation will face more stringent limits on emissions. The new licence conditions issued from the Environment Protection Authority (EPA) is expected to be received in the next few weeks. These conditions include stricter lead emission limits and an environment improvement program. Nyrstar has indicated its intention to redevelop the smelter and will be keen to gain federal and state support. AME will continue to follow the progress of the new regulations.

ANGLO American’s Drayton mine hopes to recover an extra 1.4Mt of coal by extending its disturbance footprint by an extra 36.5 hectares in the environmentally sensitive Upper Hunter Valley of New South Wales. The mine lodged an environmental assessment with the NSW Department of Planning and Infrastructure for extensions of the northern, eastern and southern areas of the site and from beneath an existing industrial dam. The company is also seeking approval to change the approved equipment fleet to utilise 30 180-tonne trucks, instead of the previously proposed 25 haul trucks consisting of 14 280t trucks and 11 180t trucks, due to both supplier availability and operational constraints. Anglo American has also been working for more than two years on the $500m Drayton South project, which is expected to replace the existing Drayton mine when it closes in 2017 and provide continued employment for some of the 500 existing Drayton workers.

POSCO India will set up an 8 million tonne capacity steel plant near Paradip, Orissa instead of the originally planned 12 million tonne per year steel plant. The locals in India opposed the size of the land required for a 12 mt capacity steel plant so POSCO had to downsize the facility. The Government will decide on the revised MOU. Total investment of the project amounts to INR 520 billion ($9.56 billion).

Osisko Mining reports that its Canadian Malartic mill has been returned to operational status. The grinding circuit is currently operating on a reduced basis. The number 4 cyclone set is currently under repairment and it is expected to be returned to operation within one week time.

Worsley Alumina refinery has been reported that the plant will reach its full capacity in the first quarter of 2013. The capacity of the refinery has recently been expanded from 1,100ktpy to 4,600ktpy but the ramp up only started in late 2011.

Coal processing group Sedgman has consolidated its presence in the Bowen basin of QLD after winning a $27.7m contract with the BHP Billiton Mitsubishi Alliance to upgrade the coal preparation plant at the Saraji open cut mine. The upgrade is scheduled for completion in the second quarter of 2013 and comes after the company won the contract for BMA's giant Caval Ridge project.

General Electric is proposing to merge with Industrea through a scheme of arrangement that values the Australian underground mining equipment manufacturer at $470m. GE offered to acquire 100% of Industrea issued shares at $1.27 cash per share as Industrea announced its 2012 NPAT forecast of $40-45m compared with $47.9m for the 2011 financial year. Industrea chairman David Beddall said the acquitision price represented a 48% premium to the previous close. He added that the board of Industrea intended to vote in favour of the scheme, unanimously recommending all shareholders to vote in favour. The industrea board also negotiated the ability to sell its Industrea mining services division (IMS) separately, in which case Industrea shareholders would be entitled to receive any net proceeds from the sale of the division above an agreed value in addition to the $1.27/share. The board will commission an independent expert to consider whether the proposal is in the best itnerests of Industrea shareholders.

The first copper cathode was produced at China Nonferrous Metals' 42ktpy Muliashi copper project in Zambia in late April. The Muliashi SXEW copper project located 10km north of Luanshya is part of China Nonferrous' Lauanshya&Baluba operations. Construction of the project started in March 2010 and was completed in December 2011. AME estimates the Muliashi project will ramp-up to its full capacity by early 2013 and will add around 20kt of copper output to the Luanshya&Baluba operations in 2012.

Doe Run Peru has submitted revised restructuring plan to its board of creditors in a final effort to avoid liquidation. The initial restructuring plan was rejected in the previous month, and subsequently, creditors voted to commence operation liquidation. This liquidation could result in the La Oroya facility being run by another company, outright liquidation of the plant, or approval of the revised restructuring plan. AME will continue to follow the outcomes of the Doe Run Peru situation.

Steel Authority of India Ltd intends to develop iron ore and coking coal mines in Mongolia with the assistance of the local government. A Memorandum of Understand (MoU) was signed in May with the Mongolian Ministry of Mineral Resource and Energy to explore potential opportunities in both the mining and steel sectors. The government will provide information on iron ore and coal deposits to SAIL and options of location and size of steel manufacturing facilities for pre-feasibility studies.

Chinese resource and steel companies have been invited by the Indian government to set up pelletising plants to take advantage of fiscal incentives. In March, the Indian government reduced the import duties on plant and machinery for the beneficiation and pelletising of iron ore to 2.5% from 7.5%. A similar cut was made on the import duty of mining survey and prospecting equipment. A Memorandum of Understanding has been signed between Chinese Iron and Steel Association and Steel Authority of India Limited to facilitate the development of pelletising plants in India by Chinese steel producers. Steel producers can secure a zero duty on the export of pellets from India by setting up a plant in the country.

Brazil's second largest oil company by market value, OGX, has announced the commerciality of a portion of the Waimea Complex Conteúdo da Página, namely the oil field Tubarão Azul. This field is the company’s first offshore field a dislocated in the shallow waters of the Campos Basin. OGX holds a 100% interest in this block. TOGX has conduced various test over the last five years and finally the OCX-26HP well has confirmed excellent permoporosity reservoir characteristics. The company estimates a total recoverable volume of 110 million barrels of oil from Tubarão Azul Field over the concession period’s production phase.

Brazilian billionaire Eike Batista’s conglomerate EBX will list its Colombian coal mining offshoot, known as CCX, on the Sao Paulo stock exchange on May 25. Four other EBX group companies are already listed on the BM&Fbovespa exchange. The company has large certified reserves and $450m in cash – its creation and listing are part of EBX’s plan to separate its mining of Colombian coal from a JV between MPX and Germany’s E.ON. Every MPX share entitles its owner to one share in CCX as part of the transaction. MPx confirmed the viability of the Colombian underground coal project San Juan and estimated coal reserves there at 671.8Mt, assuring production of more than 25Mt/yr for 20 years. Coal resources at the CCX project site are estimated at 5,200Mt.

MMX Mineração e Metálicos SA will invest $2.36bn over two years to complete the expansion of the Serra Azul project. Already $100m has been spent on the project located in the state of Minas Gerais. The project is expected to produce 29Mtpa of pellet feed, up from the 24Mtpa originally planned. The mine is scheduled to commence in 2014, producing a product between 57%-58%Fe. The approval of an environmental license in April has allowed the construction of an ore-processing plant. The mine will use a long-distance conveyor belt to link the mine to the railway terminal.

Gloucester Resources and Yancoal Australia claim they could save up to $380m/yr through synergies between their NSW and QLD coal assets if their proposed $8bn merger is approved. The companies state that infrastructure optimisation could deliver up to $205m in savings, coal blending up to $30m in synergies, and corporate savings, tax and procurement savings amounting to $145m. AME expects the merger to be approved.

Victorian high moisture brown coal resources in the La Trobe valley could be converted into an export business to countries including India and Japan using new technology that reduces emissions. Australian company Exergen is bidding for 1,000Mt of brown coal for both export and local supply, with shareholders including India’s Tata power and Japan’s Itoshu. As part of a trial of its technology, Exergen is dumping brown coal slurry down a heated 1km shaft to extract 80% of moisture content and so slash greenhouse emissions. The Victorian government is also keen to promote the export of coal from the La Trobe Valley, which has traditionally been used for domestic power generation.

French oil and gas producer Total has announced that it was able to stop the gas leakage from its Elgin platform, located in the North Sea. The company successfully accomplished this goal by pumping heavy mud into the leaking well. Total will be allowed to start natural gas production from Elgin-Franklin field complex, once UK regulating bodies will give lights to do so. The leak occurred in March 25 and forced to company to power down the platform and evacuate its employees. The Elgin-Franklin field complex is part of the BFOE stream which is used as the underlying product for ICE Brent futures. In March this year, the announcement of this complex going offline, resulted in an immediate fall on the ICE Brent derivates products.

Anglo American CEO Cynthia Carroll has approved CAPEX of $5bn for next year and $3.5bn for 2014. The company has about $100bn of approved and non-approved projects including iron ore, coal, copper and niobium. Anglo plans to increase output by more than 50% by the end of 2014 as it bets demand for the commodities it produces will be buoyed by Asian economic expansion.

A consortium of Japanese companies has been reported to be in talks to purchase a 10% stake worth US $4.4 billion in the Wheatstone project in Australia. The consortium includes Tokyo Electric Power Co (Tepco), Mitsubishi Corp, Nippon Yusen KK, and state-owned Japan Oil, Gas and Metals National Corp (JOGMEC). The involvement of the Japanese companies comes amid Tepco's concerns that the 10% stake, originally set-aside for the company, would be taken by Chinese and other foreign companies as the company struggles to raise capital. Japanese utility companies have been active in searching and securing long term natural gas supply contracts to fuel power thermal plants, as all of the nation's 50 nuclear reactors have been shut down following fears another nuclear crisis. The increase in Asian natural gas by Japanese utility companies have made LNG projects like Wheatstone more secure as production capacity is likely to be fully covered by the time construction is complete.

Apache Corporation has announced first oil and gas production at its Beryl field in the UK North Sea. The B72 well in the field had commenced production at a rate of 11 kbpd of oil and 370 mcmpd of natural gas. The success of the well is an encouraging result that showcases Apache Corp's technical expertise in operating in deep waters. Apache acquired the 50% operating stake in the Beryl field from ExxonMobil only in early 2012. Apache has planned a 3D seismic survey of the field during the summer of 2012. AME expects production at the Beryl field to increase in the near future as the operator drills additional wells.

Hwange Colliery Co. (HWANGE), Zimbabwe’s biggest coal miner, needs $200m to recapitilse, according to Managing Director Fred Moyo. The company has spent $15m rebuilding a coke plant and is having discussions with an Indian investor. Hwange exports coal to India, and plans to ship the commodity and coking coal to neighoburing Botswana, Mozambique, Tanzania and the DCR Congo.