Kinross Gold’s Mauritanian desert storm -by Nicolas Johnson (Globe and Mail – May 8, 2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

The Tasiast gold mine in the Mauritanian desert was the biggest acquisition in Kinross Gold Corp.’s 19-year existence and one of the biggest takeovers in the history of the gold industry.

It was to have been the centrepiece of the Kinross portfolio, transforming the Toronto-based company into one of the fastest-growing gold miners in the world.

Instead, the $7.1-billion acquisition of Red Back Mining Inc. has bludgeoned Kinross’s stock and balance sheet. The company took a $2.49-billion writedown in February, angering investors and leaving the company’s chief executive officer battling to retain his credibility. Shares of the miner have lost about half their value since the August, 2010, deal.

On Wednesday morning, at Kinross’s annual meeting in Toronto, president and CEO Tye Burt will get another chance to convince shareholders that the biggest bet of his career will pay off. The miner reports earnings a day earlier, on Tuesday.

Read more

Iamgold takes aim at the gold mining big leagues – by Pav Jordan (Globe and Mail – April 20, 2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Steve Letwin, chief executive officer of midtier gold miner Iamgold Corp., practically rubs his hands in glee as he talks about plans to propel the company into the major leagues in as little as five years.

With his Toronto-based company sitting on $1.4-billion in cash and with zero debt on the balance sheets, Mr. Letwin lays out a plan to nearly double production by 2017 from the current 850,000 ounces, with most of that to come from acquisitions, including one in coming months that will likely be worth between $400-million and $500-million.

“If we can’t pull the trigger on something in the next three months that makes sense for our shareholders we haven’t done our job,” said Mr. Letwin, a 30-year resource industry veteran who has broken ground from Canada to Colombia to deepest Africa.

“And if we’re going to buy, we’re going to buy now. These equities are ridiculously cheap, some of them.”

Read more

Ivanhoe CEO Loses in Rio ‘Chess Game’ Over Mongolia Mine – by Christopher Donville and Liezel Hill (Bloomberg.com 0 April 19, 2012)

http://www.bloomberg.com/

Twelve years after beginning his quest to build a copper mine in Mongolia’s Gobi Desert, it’s checkmate for Robert Friedland.

Ivanhoe Mines Ltd. said yesterday the billionaire investor resigned as chief executive officer, along with other top executives at the Vancouver-based company. It said Rio Tinto Group agreed to ensure funding of the $6 billion Oyu Tolgoi project’s construction. The accord means Rio is free to appoint Ivanhoe’s management, cementing control of the company three months after increasing its stake to 51 percent.

“Friedland’s lost the chess game with Rio,” John Stephenson, a fund manager in Toronto who oversees about $2.7 billion at First Asset Investment Management, said in an interview.

Oyu Tolgoi — which means “turquoise hill” in Mongolian – – is just the latest of several chapters in the often controversial career of Friedland, who holds a 14 percent stake in Ivanhoe. A one-time mentor to Apple Inc. co-founder Steve Jobs, Friedland, 61, has raised funds for mines in North America and Asia since the mid-1980s and led the C$4.3 billion ($4.3 billion) sale of the Voisey’s Bay nickel deposit in Canada in 1996. His next adventure may be developing mines in Africa.

Read more

Iamgold’s growing investment in Burkina Faso – by Geoffrey York (Globe and Mail – April 14, 2012)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

ESSAKANE, BURKINA FASO – This is a dangerous land. Just across the border are the Sahara wastes where Islamist terrorists and separatist rebels roam free. Inside the country are gangs of bandits and the occasional violent riot by drunken soldiers.

Yet it’s also a land where Canadian miners are eagerly investing hundreds of millions of dollars. The gold belt of northern Burkina Faso, like other regions of West Africa, has emerged as a new favourite haunt for Canadian mining companies, despite a vast array of security risks.

Less than four years after its arrival, Toronto-based Iamgold Corp. (IMG-T12.55-0.13-1.03%) has become the biggest private employer in Burkina Faso with 2,200 employees. It plans to invest a further $600-million over the next three years to expand its mine and double its processing capacity.

Like many other Canadian investors, the company sees its future in West Africa’s fast-growing mining sector, rather than in the older mines of South Africa, even though the South African industry is still bigger.

Read more

In Ghana, a mining activist fights the gold goliaths – by Paul Carlucci (Toronto Star- April 7, 2012)

The Toronto Star, has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

 TARKWA, GHANA—Whether on billboards along the roads or embroidered on shirt collars, mining companies are ubiquitous in this jungle hub of Ghana’s Western Region.

Their presence is sometimes lost behind the lazy-leafed plantain trees, drooping palm fronds, and steep, green hills encasing the town, but a mountain of waste rock obscures much of the horizon.
 
“They take the gold and leave these kinds of things,” says Daniel Owusu-Koranteng, executive director and co-founder of the Wassa Association of Communities Affected by Mining (WACAM).
 
Ghana, once known as the Gold Coast, is the continent’s second-biggest producer of gold, after South Africa. It is also home to significant deposits of bauxite, manganese, aluminum and diamonds.

Read more

Impose $100/t raw chrome [South Africa] duty soonest, Ruukki urges – by Martin Creamer (MineingWeekly.com – March 30, 2012)

www.miningweekly.com 

JOHANNESBURG (miningweekly.com) – South African ferrochrome aspirant Ruukki has urged the South African government to impose a $100/t duty on the export of raw chrome from South Africa with the utmost urgency.
 
Speaking at an industry conference in Hong Kong, Ruukki enterprise director Dr Danko Konchar called for industry consolidation to protect jobs and maximise South Africa’s chrome resource endowment.
 
Ruukki currently exports raw chrome directly to China and sells a diverse range of chrome products internantionally into the the stanles steel and steel sectors. His plea follows years of requests to government to halt the South African ferrochrome industry’s demise in the face of rising Chinese production from raw South Africa chrome ore.
 
Konchar told the conference that the fundamental challenge for South Africa was to create a competitive ferrochrome industry capable of protecting, sustaining and creating jobs while growing its global market share.

Read more

Gilbertson ‘very, very bullish’ on platinum-group metals – by Martin Creamer (MiningWeekly.com – April 2, 2012)

www.mineweekly.com

JOHANNESBURG (miningweekly.com) – Mining industry doyen Brian Gilbertson, who has been involved in several landmark industry-making investments, foresees South Africa’s platinum endowment as providing the potential for yet another industry-making surge.
 
Besides the outlook of growing demand and struggling supply, there is a snowballing conviction that South Africa could and should become the first mover in creating a kind of ‘Platinum Valley’ that emulates the great Silicon Valley success of the US – and Gilbertson’s Newco is willing to stride towards that potential goal, with the full backing of the State-owned Industrial Development Corporation (IDC), exciting new technology that is poised to assist in adding value and a local community leader who is champing at the bit to see that it happens in his area.
 
“Being a miner and a beneficiater will allow shareholders to participate in the entire value chain,” Newco’s Arne Frandsen tells Mining Weekly Online in a video interview (see attached).
 
The IDC, which currently has R100-billion-plus on its balance sheet, is part of a special task force that, together with the R23-billion Newco, is driving the beneficiation initiative.

Read more

[State capitalism] Is it a rival to market capitalism? And how does it affect the natural resources industries? – by Keith Campbell (MiningWeekly.com – March 30, 2012)

 www.miningweekly.com

Since the start of the current global economic crisis in 2008, there has been renewed interest in the concept of ‘State capitalism’, as distinct from ‘market capitalism’. (The term ‘liberal capitalism’ is shorthand for ‘liberal democracy plus market capitalism’.)
 
This interest is centred on China more than any other country, in part because of the country’s ability (so far) to ride out the crisis, in part because of the key role it has played in keeping the global economy running while the developed West has been stagnating and in part because China is, unlike India or Brazil or South Korea, not a democracy. This last factor creates the impression of a ‘Chinese model’ of autocracy plus State capitalism that can be compared and contrasted with the ‘Western model’ of liberal capitalism.
 
There has been considerable debate about the rival merits of these ‘models’ in recent times. Thus, renowned British historian Niall Ferguson, who teaches at Harvard University, in the US, had a recent article on State capitalism in the US academic journal Foreign Policy. In late January, The Economist, of London, had a cover and special report devoted to State capitalism. The topic has also been addressed in the past couple of months by The Wall Street Journal and Bloomberg Businessweek. And these are only some, albeit prominent, examples.

Read more

South Africa’s stricken ferrochrome industry eyes Canada’s Canpotex as potential turnaround model – by Martin Creamer (MineWeekly.com – March 16, 2012)

 Mining Weekly is South Africa’s premier source of weekly news on mining developments in Africa’s most important industry. Mining Weekly provides in-depth coverage of mining projects and the personalities reshaping the mining industry.

South Africa’s once mighty chrome-to-ferrochrome industry, now threatened by an unexpected local oversupply of raw ore, is looking to get itself back on its feet by emulating what the Canadians did 40 years ago for their then teetering but now thriving Saskatchewan potash industry.
 
South Africa’s ferrochrome business is losing market share to China hand over fist and has been forced to temporarily shut furnaces left, right and centre.
 
Once the proud holder of a 50% share of the global ferrochrome market, the local industry now finds that China is stealing the show – ironically, with the help of South African ore.
 
China hosts no chromite deposits of its own, but imports the ore it needs from a string of countries.

Read more

South African ferrochrome in meltdown, urgent intervention needed – by Martin Creamer (MiningWeekly.com – March 16, 2012)

 Mining Weekly is South Africa’s premier source of weekly news on mining developments in Africa’s most important industry. Mining Weekly provides in-depth coverage of mining projects and the personalities reshaping the mining industry.

South Africa has a long-standing chrome value chain that sustains 200 000 jobs and R42-billion a year in gross domestic product (GDP), but the industry speaks with one voice when it says that it is in meltdown mode.
 
If things go on like this, it could shed 60 000 to 80 000 of those jobs and lose its once dominant market position to China, despite China having no chrome of its own.
 
The contribution of the ferrochrome industry to South Africa’s GDP could plunge to R23-billion, and chrome ore prices could collapse.
 
On the environmental protection front, global carbon dioxide (CO2) emissions from production would rise by at least 15% a ton as a result of the displacement of capacity from the world’s most efficient South African smelters to the world’s least efficient energy-sapping and CO2-spewing Chinese smelters.

Read more

Threatened ferrochrome eyeing Canada’s potash turnaround model – by Martin Creamer (MiningWeekly.com – March 13, 2012)

 Mining Weekly is South Africa’s premier source of weekly news on mining developments in Africa’s most important industry. Mining Weekly provides in-depth coverage of mining projects and the personalities reshaping the mining industry.

JOHANNESBURG (miningweekly.com) – Stability can be brought to South Africa’s ferrochrome industry by creating a marketing organisation for ferrochrome similar to the Canpotex marketing arm that boosted potash in Canada, the South African ferrochrome industry says in a brochure handed to the media.

The stricken ferrochrome industry says that Canada in 1972 faced a similar situation in potash to what South Africa is facing in chrome – a long-term potash price depression.

It was then that Canada formed Canpotex, a marketing and logistics company that sells and delivers Saskatchewan potash to international markets as a wholly owned entity of potash producers.

“The Canadian potash industry provides an excellent case study,” says the South African ferrochrome industry in the nine-page handout to analysts, investors and journalists at the presentation of the results of the black-controlled Merafe Resources, which is part of a chrome-to-ferrochrome venture with the London-listed and South African-led Xstrata, the world’s biggest ferrochrome producer.

Read more

Export tax will destroy chrome ore mining [in South Africa] – Metmar – by Martin Creamer (Mining Weekly.com – March 7, 2012)

Mining Weekly is South Africa’s premier source of weekly news on mining developments in Africa’s most important industry. Mining Weekly provides in-depth coverage of mining projects and the personalities reshaping the mining industry.

JOHANNESBURG (miningweekly.com) – The proposed $100/t tax on the export of raw chrome ore would destroy the South African chrome ore mining business and allow competitors from other producing countries to benefit, JSE-listed Metmar CEO David Ellwood said on Wednesday.

Ellwood was responding to Merafe CEO Stuart Elliot’s revelation of the proposed imposition of a $100/t export tax as a means of giving the industry “some breathing space” in the short term.

Elliot complained that South Africa’s ferrochrome production was being displaced by Chinese ferrochrome production. “It’s unbeneficiated ore that is leaving the country and growing the Chinese ferrochrome industry at South Africa’s expense,” Elliot said.

Ellwood claimed that the proposed tax represented a 100% tax on the chrome ore production cost and a 300% tax to upper group two (UG2) operations, many of which were community based.

Read more

FRASER INSTITUTE NEWS RELEASE: New Brunswick trumps Alberta as world’s No. 1 spot for mining investment;

February 23, 2012

TORONTO–New Brunswick is the world’s most attractive jurisdiction for
mineral exploration and development in the view of the international mining industry, according to the Survey of Mining Companies: 2011/2012, released today by the Fraser Institute, Canada’s leading public policy think-tank.

“New Brunswick shot to the top of the rankings as miners lauded the province for its fair, transparent, and efficient legal system and consistency in the enforcement and interpretation of existing environmental regulations,” said Fred McMahon, Fraser Institute vice-president of international policy research and coordinator of the survey.

“Combine that with a competitive taxation regime and minimal uncertainty
around disputed land claims and New Brunswick has emerged as a superstar in the view of the global mining community.”

New Brunswick vaulted to first place from 23rd last year, unseating Alberta
at the top of the global rankings as that province fell to third overall.
Quebec, which enjoyed a three-year reign at No. 1 from 2007 to 2010,
continued to lose support among mining executives as it fell to fifth place
from fourth in 2011.

Read more

The principal risks affecting mining in Africa – by Christy Filen (Mineweb.com – February 16, 2012)

www.mineweb.com

Two risk analysis experts shared their views on the principal risks facing investment in mining in Africa on the fringes of the recent Indaba conference in Cape Town.

JOHANNESBURG (Mineweb) –  Government intervention is a recurring theme in an analysis of the top risks for the mining industry on the African continent as identified by experts in their fields.

Ironically the nationalisation research report by South Africa’s ruling African National Congress (ANC) party is entitled SIMS (State Intervention in the Minerals Sector).

Not surprisingly, the risk of war and strife to business is taking a back seat to the instigations of power wielding politicians in an effort to assuage the electorate.

On the fringes of the Invest in African Mining Indaba, Control Risks managing director for southern and east Africa, Dave Butler and Robert Besseling, the head of business development for Exclusive Analysis in South Africa, shared their views on the top risks facing the mining industry on the African continent.

Read more

AngloGold CEO says Warren Buffett just doesn’t understand gold and gold investors – by Alec Hogg (Mineweb.com – February 16, 2012)

www.mineweb.com

Mineweb’s Editor-in-chief, Alec Hogg, interviews AngloGold Ashanti’s Mark Cutifani and hears some forthright views on Warren Buffet’s most recent attack on gold.

JOHANNESBURG –  Anglogold Ashanti’s CEO Mark Cutifani is to local South African gold mining what top South AFfrican asset manager, John Biccard is to the local asset management sector, the man other money managers would most trust to handle their savings. In mining, Cutifani’s astute management has raised the bar for an industry where performance was once measured by volume of rock through the mill rather than gold delivered.

The Australian-born head of Africa’s biggest gold producer has been walking on water lately. He took history’s biggest ever bet on the gold price by closing out the industry’s largest hedge book – at a cost of billions. As the gold price kept steaming ahead, that decision continues to reward Anglogold Ashanti. In the three months to end December it added another $200m to the bottom line.

Cutifani was clearly on a high during our chat this week after the release of his group’s December quarter results. Who could blame him? Apart from that $200m, costs were reasonably controlled, the company got more South African Rands for its gold and the result was a fresh record for profit in any three months. Shareholders joined in the applause when hearing that the yearend dividend was being doubled.

Read more