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Barrick Gold Corp, Ivanhoe Mines Ltd sell stakes to China’s Zijin in Papua New Guinea, Congo mines – by Peter Koven (National Post – May 26, 2015)

The National Post is Canada’s second largest national paper.

Canadian miners Barrick Gold Corp. and Ivanhoe Mines Ltd. have both struck deals with Chinese miner Zijin Mining Group Co., which is investing a total of US$710 million in their projects.

Zijin, one of China’s largest gold and copper producers, will buy half of Barrick’s 95 per cent stake in the Porgera gold mine in Papua New Guinea for US$298 million. And it will buy just under half of Ivanhoe’s 95 per cent stake in the Kamoa copper project in the Democratic Republic of Congo for US$412 million.

The two transactions are the direct result of work by John Thornton and Robert Freidland, the respective chairmen of Barrick and Ivanhoe. Both men have very deep business ties to Asia.

Thornton, who became Barrick’s chairman last year, has put a priority on forming partnerships with Chinese companies, and negotiations with Zijin have been going on for several months. There were also talks around Zijin becoming a partner on the failed Pascua-Lama project, though no agreement has been struck to date.

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Sweden to relocate entire city to meet China’s energy needs – by Dominic Hinde (Washington Times – May 24, 2015)

http://www.washingtontimes.com/

KIRUNA, Sweden — To feed China’s growing appetite for raw materials, this venerable mining town 90 miles north of the Arctic Circle is poised to become a cutting-edge Tomorrowland as it prepares to move buildings, residents and even a century-old wooden church to a new location a few miles away.

“These will be the first to go,” said Kjell Torma, editor of KirunaTidningen, the local newspaper, pointing to a row of red brick apartment blocks surrounded by construction fences. “If you want a cheap kitchen fan or some radiators, get in there.”

Over the next 10 years, Kiruna officials plan to demolish the apartments and most other buildings in this town of 18,000 residents and then rebuild them as far as three miles away — all part of an ambitious $375 million project to make way for the expansion of a giant iron mine as demand from China has suddenly made extraction here worth the investment.

But officials aren’t constructing an exact duplicate of Kiruna, founded in 1900 as the most northerly town in Sweden. With funding from Sweden’s state-owned mining company — Luossavaara-Kiirunavaara AB, or LKAB — officials in Kiruna aim to create one of the most environmentally friendly cities in Europe.

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NEWS RELEASE: Barrick Announces Strategic Partnership with Zijin Mining Group

All amounts expressed in US dollars unless otherwise indicated.

TORONTO, May 26, 2015 — Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (“Barrick” or “the company”) today announced that it has formed a strategic partnership with leading Chinese mining company Zijin Mining Group Co., Ltd (“Zijin”).

As a first step, Zijin will acquire 50 percent of Barrick (Niugini) Limited (“BNL”), the company which owns 95 percent of and manages the Porgera Joint Venture gold mine in Papua New Guinea. In addition, Barrick and Zijin have signed a long-term strategic cooperation agreement which outlines the intent of both companies to collaborate on future projects and joint investments, leveraging the strengths of each company.

“A twenty-first century mining company with global reach and the intention to become an industry leader must, by definition, have a distinctive relationship with China. This is particularly true in our industry, where China has become both the largest producer and consumer of gold, and a major source of capital and expertise for the mines of the future,” said Barrick Chairman John L. Thornton. “Our partnership with Zijin is the first step in a long-term strategic relationship with one of China’s leading mining companies—a multi-faceted partnership that will provide significant opportunities to work together on an ongoing basis as we continue to create value for our respective owners.”

“A strategic partnership with Barrick is an excellent fit for Zijin and a powerful combination as we look to expand our business globally outside of China. Our companies have complementary expertise and experience and share a common vision for creating long-term value for our owners,” said Zijin Chairman Chen Jinghe.

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Indian PM breathes life into Posco’s stalled project – by Ajoy K Das (MiningWeekly.com – May 21, 2015)

http://www.miningweekly.com/page/americas-home

KOLKATA (miningweekly.com) – South Korean steel major Posco’s plans for securing iron-ore resources for its $12-billion Indian investments have been thrown a lifeline through the intervention of Indian Prime Minister Narendra Modi.

The project, which has been hanging fire for over a decade, was given a nudge following the Prime Minister’s two-day Seoul summit with Korean President Park Geun-hye, followed by a meeting with Posco CEO Kwon Oh Joon earlier this week.

Senior officials in the Steel Ministry said that the Indian Prime Minister held a series of talks on bilateral economic issues with Korean political and business leaders, but Posco investments, almost on the verge of being scrapped, did not specifically figure during this visit.

This initially was considered a disappointment, as Posco’s plans to set up a 12-million-tonne-a-year steel plant in the eastern Indian port town of Paradip, in Odisha, linked to the Khandadhar iron-ore reserves, represented the single largest foreign direct investment in the country, the official said.

However, soon after his return, Modi was reported to have pushed for several initiatives aimed at getting the stalled project off the ground.

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China Grows Its South America Influence After Commodity Bust – by Juan Pablo Spinetto and David Biller (Bloomberg News – May 19, 2015)

http://www.bloomberg.com/

China’s interest in Latin American isn’t just about oil and agriculture anymore. As Premier Li Keqiang tours Brazil, Colombia, Peru and Chile for the first time, China is taking advantage of cheaper prices as the commodities super-cycle ends to fast-track its influence in a region that supplies everything from crude to soybeans and copper.

High on the shopping list? Infrastructure, power and banking — credit-hungry industries that would help promote growth. Among the more than $50 billion in mostly financing deals announced in Brazil Tuesday was a plan by China’s BYD Co. to build a solar-panel factory, while China’s fifth-largest bank is taking over Brazilian lender Banco BBM SA.

“Latin America as a whole has more difficulties while at the same time China has increased capabilities,” said Paulo Vicente, a professor of strategy at Fundacao Dom Cabral business school in Rio de Janeiro. “So the environment is ripe for a wave of Chinese acquisitions or investments.”

Chinese companies announced 37 deals and investments in Latin America in the past 12 months, a 37 percent increase from the previous year, according to data compiled by Bloomberg. China is looking to step up investment as its demand for Latin American commodities slows.

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UPDATE 4-Rio Tinto, Mongolia end stand-off to build huge copper mine – by Terrence Edwards and Sonali Paul (Reuters U.S. – May 19, 2015)

http://www.reuters.com/

ULAN BATOR/MELBOURNE, May 19 (Reuters) – Mongolia and Rio Tinto have reached an agreement paving the way for work to resume on a stalled $5 billion underground copper mine that is expected to drive growth for both the country and the global miner.

The Oyu Tolgoi project, which started producing from an open pit mine two years ago, is the biggest single foreign investment in Mongolia, and resolution of the disputes over the second phase has revived hopes for a string of other stalled mining projects.

Rio Tinto’s Turquoise Hill Resources arm owns 66 percent of Oyu Tolgoi, while the Mongolian government owns the remainder. Rio is operator of the project, located in the Gobi desert near Mongolia’s border with China.

Vancouver-based Turqoise Hill shares leapt by as much as 11 percent to C$5.80 on the Toronto Stock Exchange on Tuesday after Rio Tinto announced the agreement on Monday which it said was signed by itself, Turquoise Hill and the government of Mongolia.

Turqoise Hill shares were last trading at $5.49, 4.8 percent higher on the day. “There is no doubt that moving forward with the Oyu Tolgoi project will improve the investment climate in Mongolia,” Prime Minister Chimediin Saikhanbileg said in a statement.

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China is a global economic and political power. Soon, it will be a military one, too – by J.L. Granatstein (National Post – May 15, 2015)

The National Post is Canada’s second largest national paper.

A few days ago, the Office of the Secretary of Defence in Washington issued its annual report on Military and Security Developments Involving the Peoples Republic of China 2015. This is a sobering document, appearing within days of a contingent of Chinese People’s Liberation Army soldiers marching past Russian leader Vladimir Putin and China’s President Xi Jinping in Moscow’s huge Victory Day parade. At the same time, and for the first time, Chinese navy ships are engaging in live-fire exercises in the Mediterranean Sea alongside Russian warships.

The authoritative U.S. document notes that Beijing’s defence expenditures continue to increase by 9.5 per cent a year, as they have done for the past decade. The Defense report concludes that China remains focused on the possibility of conflict in the Taiwan Straits — it has 400,000 soldiers, sailors and air personnel in the area — and in the East and South China Seas, with substantial military buildups also continuing there.

The South China Sea archipelago of the Spratly Islands, claimed by Beijing, are undergoing extensive “land reclamation,” China creating what is now a 2,000 acre landmass out of what were hitherto essentially underwater shoals.

Naval vessels will soon be able to dock there, and an airstrip is all but certain to be constructed. As the South China Sea is thought be ripe for mineral and oil exploitation and as parts of it are claimed by several Asian nations, this is a dangerous flashpoint, an area where Beijing’s “low-intensity coercion” can be expected to increase. In response, the Philippines and Vietnam are doing “land reclamation” projects of their own.

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BCSC clears short seller Jon Carnes of fraud in Silvercorp case – by Peter Koven (National Post – May 15, 2015)

The National Post is Canada’s second largest national paper.

Short seller Jon Carnes has been cleared of fraud allegations by a British Columbia Securities Commission panel, which found his attacks on Silvercorp Metals Inc. were not prohibited. The panel did, however, raise serious concerns with his conduct.

“While we may find Carnes’ conduct unsavory, we do not find it was clearly abusive to the capital markets,” the panel said in its decision. The panel added that it is “not our role to sanction conduct we find morally unsupportable.”

In an interview Thursday evening, Carnes said he was “relieved” by the decision. “That’s always the right word to use in a situation like this,” he said.

He added that he still believes Silvercorp is the party the BCSC should have been targeting, and he thinks the commission should be held “accountable” for its allegations against him. He also disagreed with assertions that there was anything “unsavory” about his actions.

Carnes, a hedge fund manager better known by the pseudonym “Alfred Little,” is one of many short sellers that accused Chinese companies of fraud a few years ago and helped to get them de-listed from North American exchanges.

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Insight – Global glut threatens West African iron ore ambitions – by Umaru Fofana (Reuters U.K. – May 15, 2015)

http://uk.reuters.com/

PEPEL, SIERRA LEONE – Red piles of iron ore and rusting railway wagons in the deserted stockyard at the port of Pepel bear silent witness to a crisis engulfing Sierra Leone’s mining industry and threatening others across West Africa.

The conveyor belt out to the jetty on the slow-moving Rokel river has remained idle for most of the past few months as only a handful of ships have anchored at the moribund port.

At the height of the commodities boom last decade, West African countries became magnets for miners seeking untapped iron ore, diamonds, gold, bauxite and other minerals.

In Pepel, locals anticipated an economic surge for their civil war-ravaged country when London-listed firm African Minerals (AMLZF.PK) started shipping ore four years ago from its Tonkolili mine.

Discovered in 2008 and lying some 200 km (124 miles) to the northeast, Tonkolili is one of the world’s largest iron ore deposits.

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Chinese iron ore mines face ‘annihilation’ as BHP, Rio Tinto, Vale boost output – by Jasmine Ng, Feiwen Rong and Jesse Riseborough (Sydney Morning Herald – May 13, 2015)

http://www.smh.com.au/

Iron ore production in China is poised to shrink further as cheaper imports and faltering demand threaten to close mines supplying mills in the top steelmaker. Most private mines in China have costs that are too high and produce ore of too low a quality to survive, according to Sanford C Bernstein & Co. Output that fell 20 per cent to 311 million metric tons last year would drop to 271 million tons this year and shrink further next year, Goldman Sachs said.

Iron ore retreated 39 per cent over the past 12 months as Australia’s Rio Tinto and BHP Billiton as well as Brazil’s Vale SA boosted low-cost production to cut costs and protect market share, spurring a glut as China slowed. The outlook for supply, and consequences for miners in China, will be in focus on Thursday as executives from the biggest producers address a conference in Singapore. BHP chief executive officer Andrew Mackenzie warned on Tuesday that lower prices were here to stay.

Georgi Slavov, head of basic resources research at Marex Spectron Group, said in an email: “Mines not part of larger cash or credit line-rich steel groups are facing annihilation. Utilization in China keeps dropping, which means more and more mines are struggling to meet the ends and produce.”

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COLUMN-China stimulus, jobs worry may boost some commodity exports – by Clyde Russell (Reuters India – May 11, 2015)

http://in.reuters.com/

LAUNCESTON, Australia, May 11 (Reuters) – China’s efforts to re-energise its economy through interest rate cuts are probably not enough to give much of a boost to commodity import demand, but oddly enough may act to boost some commodity exports.

The People’s Bank of China cut interest rates for the third time in six months on May 10 in the wake of weaker-than-expected trade and inflation numbers.

Analysts are divided on whether the rate cut will have much of an impact, with a seeming consensus that at best it will act to halt the slowing of economic growth, rather than increasing the pace.

For natural resource producers, already pressured by prices close to multi-year lows for several major commodities such as iron ore and coal, even a stabilisation of economic growth around Beijing’s 7 percent annual target would be good news.

However, for China’s commodity demand to rise in any meaningful way, it’s likely that fiscal stimulus in the form of increased spending on infrastructure and social housing will have to be put in place.

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Shanghai Exchange Seeks Foreign Nickel to Help Ease Shortage (Bloomberg News – May 8, 2015)

http://www.bloomberg.com/

The Shanghai Futures Exchange plans to allow delivery of foreign-made nickel into its futures contracts as it seeks relief from a shortage of domestic supply to the bourse.

Russia’s OAO GMK Norilsk Nickel, the world’s largest producer, is among suppliers the exchange plans to authorize, SHFE said Friday in an e-mailed response to questions. Six brands made by six domestic companies are currently deliverable into the SHFE futures, which started trading in March. That compares with 59 brands for its copper contract and 23 for the London Metal Exchange.

“Shanghai Futures Exchange has been actively seeking to proceed with registration of foreign nickel supply,” the exchange said. Prices below the cost of production for some companies are “the reason they are reluctant to sell, therefore reducing market supply.”

Rules limiting the origin of nickel allowed for delivery in China’s new futures prompted speculation prices may extend gains as sellers seek sufficient supplies to meet the requirements. The metal on the SHFE is up 11 percent since trading started March 27, outpacing the 7.5 percent advance on the LME.

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Don’t count out India for Asia’s top economy – by Gwynne Dyer (Sudbury Star – May 7, 2015)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

The picture of the two Asian giants that most people carry around in their heads shows China racing ahead economically while India bumbles along, falling ever further behind.

People even talk about the 21st century as “China’s century”, just as they called the 20th century the “American century”. But it may turn out to be only China’s quarter-century.

The headline economic news this year is that India’s economy is growing faster than China’s. Not much faster yet, according to the official figures — a 7.5% annual rate for India vs. 7.4% for China — but there is good reason to suspect that the real Chinese growth rate is considerably lower than that.

Anybody who goes to both countries will see that India has a huge amount of catching up to do. The contrast in infrastructure is especially striking: China has 100,000 kilometres of expressways (freeways, motorways); India has only 1,000 km.

The differences in income and productivity are also very big: Gross domestic product per capita in China is between three and five times higher than in India, depending on how you calculate it.

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BHP Wins as Modi Fails to Get India Coal Trains Running on Time – by Rajesh Kumar SinghDebjit Chakraborty (Bloomberg News – May 3, 2015)

http://www.bloomberg.com/

Prime Minster Narendra Modi’s plans to shift India’s economy toward manufacturing and away from agriculture and services are being held up by a coal shortage.

Actually, there’s plenty of coal, just not enough trains to get it to the power plants. While about 200 railway convoys arrive every day at Coal India Ltd.’s depots, Technical Director Nagendra Kumar said the company needs 230 of them. The state-run company supplies more than 80 percent of the nation’s coal.

India will need to upgrade its railway network for Coal India to open more mines and deliver its product, said Deven Choksey, managing director at KR Choksey Shares & Securities Pvt., a Mumbai-based brokerage.

“The infrastructure bottlenecks are stopping Coal India from rising to its full potential,” Choksey said. Coal generates about 60 percent of India’s electricity.

With output climbing at Coal India, the fuel is piling up at the mines. At the same time, slumping global prices mean customers are turning to imports from the likes of Glencore Plc, BHP Billiton Ltd. and Indonesia’s PT Bumi Resources.

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India a year after Modi’s election: The bullish case – by Vaishali Gauba (CNBC.com – May 5, 2015)

http://www.cnbc.com/

Almost a year after the world’s biggest democracy sent a reform-minded, pro-business candidate to its top political office, the bulls still have a case to make in favor of India—at least in the longer term.

Narendra Modi’s election whipped up an optimism that soon played out in India’s markets. The BSE Sensex, India’s chief stock index, shot up roughly 40 percent after his election last year. But things have cooled a lot in 2015, with the Sensex lower by 1.8 percent year-to-date.

But in the longer term, the bulls are still making a case for India. The nation is likely to become an increasingly important source of labor for global corporations. It has the best demographics among the big emerging-market countries, said Jim O’Neill, the former Goldman Sachs Asset Management chairman who famously coined the term “BRIC”—a catch-all for Brazil, Russia, India and China. A strong domestic market and a credible legal system are factors that make India slightly more balanced than China, he said.

“India has fantastic demographics. With urbanization in its early stages, size of the working population and productivity, India has great growth potential,” said O’Neill, now a visiting research fellow at leading European think tank Bruegel.

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