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INSIGHT – Young nation Kyrgyzstan fights over gold at top of the world – by Dmitry Solovyov (Reuters India – April 3, 2013)

http://in.reuters.com/

KUMTOR, Kyrgyzstan – (Reuters) – In an impoverished young nation with a habit of overthrowing its rulers, the future now balances on a mountain of gold at the top of the world, where the air is so thin collapsing visitors may be rushed to a pressure chamber for oxygen.

After two revolutions in eight years, nationalists in Kyrgyzstan are threatening to return to the streets to topple another government unless it expropriates the Kumtor goldmine, a treasure they say was sold off too cheaply to foreigners.

Parliament in the remote ex-Soviet Central Asian state has set a deadline of June 1 for the government to renegotiate – or repudiate – a deal struck in 2009 with Canadian firm Centerra Gold (CG.TO) to operate the mine.

A state commission said the Canadian firm has been paying too little to run the mine, and accused it of inflicting environmental damage leading to $457 million in fines.

Three lawmakers were convicted last week of trying to seize power in the country by force after leading demonstrations late last year demanding the mine be renationalised.

Prime Minister Zhantoro Satybaldiyev, who took his job last September as a technocrat pledging to alleviate poverty in the country of 5.5 million, says compromise is vital and banishing Centerra would dash hopes of winning more foreign investment.

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Russia, South Africa Seek to Create OPEC-Style Platinum Bloc – by Ilya Arkhipov & Franz Wild (Bloomberg.com – March 27, 2013)

http://www.bloomberg.com/

Russia and South Africa, countries that hold about 80 percent of platinum group metal reserves, plan to set up an OPEC-type trading bloc to coordinate exports.

“It can be called an OPEC,” Russian Natural Resources Minister Sergey Donskoy said late yesterday in an interview in Durban. “Our goal is to coordinate our actions accordingly to expand the markets. The price depends on the structure of the market, and we will form the structure of the market.”

South Africa mines about 70 percent of the world’s platinum and Russia 40 percent of its palladium, a metal from the same group used to cut car pollution, Johnson Matthey Plc (JMAT) said in a 2012 report. Other nations would be able to join the group. The U.S., Zimbabwe and Canada are among producers of the metals. The Organization of Petroleum Exporting Countries is an oil cartel.

Platinum and palladium prices rose following yesterday’s comments by Donskoy. South Africa and Russia signed only a “framework” accord, he said, with details yet to be decided.

“We are now forming working groups to work out joint actions on this market,” Donskoy said. “There will be a meeting in the summer to discuss mechanisms in detail.”

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Mongolia investment slump pushes govt to move on new rules – by Sonali Paul (Reuters India – March 27, 2013)

http://in.reuters.com/

MELBOURNE, March 27 (Reuters) – Mongolia is starting to take steps aimed at arresting a slide in investment in its crucial mining sector, looking to curb uncertainty over regulations that has been blamed for stalling copper and coal projects. Even so, miners remain cautious.

Regulatory concerns peaked last month when Rio Tinto threatened to delay the start-up of the $6.2 billion Oyu Tolgoi copper and gold mine, until it resolves a dispute with the government over their investment agreement.

The mine is due to start selling copper in June and could make up a third of Mongolia’s economy by 2020, producing 425,000 tonnes of copper and 460,000 ounces of gold a year.

“At the higher echelons…there’s at least the recognition that something’s wrong and needs to be fixed,” said Elisabeth Ellis, Ulan Bator-based partner at law firm Minter Ellison, which advises mining and mining services firms.

Foreign direct investment dropped 17 percent to $3.9 billion in 2012, according to the Bank of Mongolia’s balance of payments, coinciding with a string of moves by the government that deterred investments in copper and coal.

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BRICS chafe under charge of ‘new imperialists’ in Africa – by Pascal Fletcher (Reuters India – March 26, 2013)

http://in.reuters.com/

DURBAN, South Africa – (Reuters) – “BRICS, Don’t Carve Africa” reads a banner in a church hall in downtown Durban where civil society activists have gathered to cast a critical eye at a summit of five global emerging powers.

The slogan evokes the 19th Century conference in Berlin where the predominant European colonial states carved up the African continent in a scramble historians see as epitomising the brash exploitative capitalism of the time.

Decades after Africans threw off the colonial yoke, it is the turn of the blossoming BRICS group of Brazil, Russia, China, India and South Africa to find their motives coming under scrutiny as they proclaim an altruistic-sounding “partnership for development, integration and industrialization” with Africa.

Led by that giant of the emerging powers, China, the BRICS are now Africa’s largest trading partners and its biggest new group of investors. BRICS-Africa trade is seen eclipsing $500 billion by 2015, with China taking the lion’s share of 60 percent of this, according to Standard Bank.

BRICS leaders persist in presenting their group – which represents more than 40 percent of the world’s population and one fifth of global gross domestic product – in the warm and fuzzy framework of benevolent South-South cooperation, an essential counterweight to the ‘old’ West and a better partner for the poor masses of the developing world.

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Mines & Money Hong Kong – Overview of a very positive event – by Lawrence Williams (Mineweb.com – March 25, 2013)

http://www.mineweb.com/

A retrospective overview of Mines & Money Hong Kong which took place last week and encompassed some very interesting presentations and panel discussions.

LONDON (MINEWEB) – What a difference 12,000 km and a couple of weeks makes in the junior mining sector. Mines & Money Hong Kong (MMHK) proved to be a much more upbeat event than this year’s PDAC was in Toronto. The doom and gloom which pervaded the latter just didn’t seem to be so prevalent in Hong Kong.

Maybe this was a function of the companies attending – the PDAC attracts juniors in all states of financial strength from the haves to the have-nots attending almost as a last desperate throw of the dice in hope of raising just a little money.

Those having to cover the expense of exhibiting in Hong Kong probably have a little more financial strength in any case – and the show was dominated by Australian juniors rather than Canadian ones and the ASX has perhaps not suffered quite the meltdown experienced on the TSX-V, although juniors have indeed having to nurse their wounds there too.

What is also pleasant after the horrendous crowds at the PDAC is that MMHK was a far more relaxed event – and that there was a broader range of keynote and featured speakers definitely draws an appreciative audience in, although the auditorium definitely thins out for the 10 minute long presentations allowed for the junior companies trying to present their wares to hoped for investors.

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Bre-X saga staggers to an end – but its mystery stands – by Paul Waldie (Globe and Mail – March 21, 2013)

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.

Bre-X Minerals Ltd. collapsed in 1997 amid allegations its massive gold find in Indonesia was a fraud, prompting a flurry of police investigations, regulatory probes and lawsuits seeking up to $5-billion in damages for shareholders. Now, 16 years later, the saga is petering out with shareholders no richer and the mystery about what happened at Bre-X’s gold find in Busang still unsolved.

Deloitte & Touche Inc., the bankruptcy trustee charged with recovering money for investors, has given up its legal action against several former Bre-X executives, banks and other companies involved in the gold project. In court filings, Deloitte argued it had run out of money to pursue the case and probably wouldn’t win anyway. A class-action lawsuit launched in Ontario on behalf of shareholders has also run out of steam and will likely be dropped now that the trustee’s case has ended.

“This motion is the anticlimax of the Bre-X saga,” Ontario Superior Court Justice Paul Perell said in agreeing to discontinue the trustee’s case this month. An Alberta court is expected to make a similar ruling in May on the trustee’s request to end the case there as well.

“That’s pretty much it,” said Calgary lawyer Clint Docken, who has been involved in various cases on behalf of investors for years. Mr. Docken said the trustee’s suit was the best chance shareholders had to recover something.

“What has the trustee got to show for 16 years of litigation? Almost nothing,” he said. “Biggest fraud in Canadian history and no accountability. It’s very sad. We’ll never know [what happened].”

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Groia ground down but defiant after Felderhof’s Bre-X trial – by Trish Saywell (Northern Miner – December 26, 2012)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Early in 2012, the Law Society of Upper Canada convicted Toronto securities lawyer Joe Groia of “incivility” during his defense of John Felderhof against quasi-criminal charges laid by the Ontario Securities Commission of insider trading and issuing false or misleading information. (Felderhof was never charged with a criminal offence.) The geologist hired Groia in 1997, the trial began in 2000, and in 2007 Justice Peter Hyrn cleared Felderhof of all eight charges. Groia, who faces a four-month suspension and $250,000 in costs, recently sat down with The Northern Miner to discuss the Bre-X trial and its aftermath.

The Northern Miner: What are some of the points you’d like to make about the Bre-X case?

Joe Groia: John Felderhof’s case illustrates beyond any doubt that Bay Street convicts people — you’re guilty until proven innocent — and even then, it’s not altogether clear how you go about rehabilitating yourself.

TNM: Felderhof was called a pariah, and you were called a pariah for defending him.

JG: The regulators needed to charge and convict someone, and John’s bad luck was that he was the last man standing, and therefore he was the fellow who faced the hurricane. For the 10 years of that trial, the attitude on Bay Street was: ‘Well, of course John is guilty. If he wasn’t guilty, why would he have been charged?’ I think the Ontario Securities Commission directly and indirectly did a lot of things that contributed to that mindset.

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Why China is Tunneling a Mind-Boggling 800 Miles in 2 Years – by Frank Holmes (U.S. Global Investors – March 18, 2013)

http://www.usfunds.com/

Would it surprise you to discover that China is planning to add 800 miles to its subway system over the next two years? That’s the distance equivalent to building a network from Dallas to Chicago in less time than the U.S. Congress can resolve a budget!

In 2015, when the infrastructure build-out is complete, China’s subway track alone will be a mind-boggling 1,900 miles, according to JP Morgan.

The Asian giant has been in the midst of constructing the world’s largest transportation system, laying mile after mile of high-speed rail and subway track. According to the World Metro Database, Beijing and Shanghai currently have the longest metro and subway systems, with about 275 miles each. The city of Guangzhou in China also falls in the top 10, with 144 miles of rail, beating Paris’ network length of 135 miles.

This ambitious program is part of the pragmatic solution to help 1.3 billion residents move around the country efficiently and reduce the increasing problem of air pollution due to car emissions in big cities including Beijing.

The circulating reports and photos of Beijing’s smog have recently become a dark cloud hanging over the country’s remarkable achievements, but it’s not a new issue. In the winter, smog conditions can seem much worse.

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Hindalco, Vedanta in race to buy Rio Tinto’s Iron Ore Company – by Dev Chatterjee (Business Standard – March 15, 2013)

http://www.business-standard.com/home-page

Rio Tinto is selling the Canada-based company to reduce its debt

Mumbai – Two of India’s biggest conglomerates, Hindalco, owned by Aditya Birla Group and Vedanta of Anil Agarwal are in race to buy Rio Tinto’s Iron Ore Company based in Canada, bankers say. Apart from these two Indian conglomerates, metal companies from across the world are in the race to buy the company which is valued at close to $1.7 billion.

Bankers said both groups are interested in the company which has iron ore reserves in Canada and a railway line to transport the ore. At present initial talks are on, a banker said. In January, billionaire L N Mittal sold off his 15% stake in several iron ore mines to South Korea’s Posco for $1.1 billion. Rio Tinto has hired Credit Suisse and Canadian Imperial Bank to sell its 59% stake. Rio Tinto is selling the company to reduce its debt.

In an interview to this newspaper, Vedanta Chairman Anil Agarwal had said the group is actively looking at iron ore, oil and gas and coal reserves all over the world. “We want Sesa Sterlite to be as big as Rio Tinto and we will buy energy resources including coal and iron ore reserves wherever we get the right opportunities and valuation,” he had said. Agarwal had not hinted at any specific target but said they are open to all opportunities.

When contacted, a top official of Vedanta group said today they have not made any bid for Iron Ore Company. A Birla spokesperson refused to comment on “market speculation.”

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Iron ore at 3-month lows, headed for worst week since 2011 – by Manolo Serapio Jr. (Reuters India – March 15, 2013)

http://in.reuters.com/

SINGAPORE, March 15 (Reuters) – Iron ore sank to its weakest in three months and was headed for its biggest weekly loss since October 2011, hurt by a drop in buying interest from top importer China amid poor steel demand.

Iron ore, the main steelmaking raw material, has shed more than 10 percent this week given a steel surplus in China that confounded market hopes for a pickup in demand from March.

But a sharp rebound in Shanghai steel rebar futures on Friday, which tracked gains in equities, may help stabilise the
iron ore market.

Chinese mills produced crude steel at a record rate of 2.2 million tonnes a day in February in anticipation of a pickup in construction, which accounts for half of the country’s steel demand, from this month.

But record stockpiles of steel products pointed to slow demand. Inventory of steel products held by traders in China reached a record 22.3 million tonnes as of March 8, with long steel products accounting for about 14.1 million tonnes, according to industry consultancy Mysteel.com.

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Myanmar villagers protest mine – by Yadana Htun (Globe and Mail – March 14, 2013)

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.

MONYWA, MYANMAR — The Associated Press – Myanmar opposition leader Aung San Suu Kyi met with rare public scorn Wednesday as she tried to justify an official report endorsing continued operation of a copper mine opposed by many local residents in northwestern Myanmar.

Ms. Suu Kyi travelled to Monywa township on Wednesday to talk with protesters about the report of a commission she led to investigate the Letpadaung mine’s operations and a police crackdown on a protest there last November that left scores of people badly injured.

The report, made public Tuesday, said honouring the mining contract with a Chinese joint venture outweighed villagers’ demands that mining operations be halted because of alleged social and environmental problems. It only mildly criticized police, despite the injuries caused to protesters, mostly Buddhist monks, by the use of incendiary smoke bombs.

More than 700 protesters shouted denunciations of the report as Ms. Suu Kyi’s motorcade passed between visits to four villages.

Raising their fists in the air, protesters yelled: “We don’t want the commission,” and “To stop the Letpadaung copper project is our duty,” shouting louder as Ms. Suu Kyi’s car came closer. Sandar, a protester from Alaltaw village, said the report neglected the troubles the mine caused local residents.

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India not quite the shining knight for coal miners – by Clyde Russell (Reuters India – March 14, 2013)

http://in.reuters.com/

(Clyde Russell is a Reuters market analyst. The views expressed are his own.)

(Reuters) – Rising Indian coal imports are the knight in shining armour for producers from the Americas through Africa to Asia — at least that’s the impression the industry is keen to give.

That India’s coal imports have no option but to rise and the only matter in dispute is by how much, was the consensus of producers and consumers at the Coaltrans India conference this week in this resort state an hour’s flight south of Mumbai.

But is the consensus based more in hope than reality? The thing that is always striking about India’s coal sector, for both domestic production and imports, is that forecasts are rarely correct.

India’s coal demand was around 730 million tonnes in the 2011/12 fiscal year, with about 100 million tonnes of that met through imports. The consensus of forecasts at the Coaltrans event is for demand to rise to about 1.1 billion tonnes by the end of the current five-year plan in 2016/17.

Some of this 370 million tonnes increase in annual demand is expected to be met by state-controlled Coal India, the world’s biggest miner of the fuel.

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Indian government denies iron-ore scarcity – by Ajoy K Das (MiningWeekly.com – March 11, 2013)

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

KOLKATA (miningweekly.com) – The Indian government has denied any scarcity in domestic availability of iron-ore and refuted reports that the country would be a net importer by 2020.

“There will be no shortage of iron-ore, even in 2020, when Indian steel production is projected to rise to 100-million tons a year,” Mines Minister Dinsha Patel said.

“Indian steel production is about 67-million to 70-million tons a year. It requires 1.6-million tons of ore for producing one-million tons of steel. Indian iron-ore production was 210-million tons in 2010 and came down to 167-million tons following a ban on mining in Karnataka. Even then there is no dearth of iron-ore,” he said.

Iron-ore production in the country has been steadily falling in the wake of a ban imposed in the southern Indian province of Karnataka a year-and-a-half ago, and a similar ban across the western Indian coastal province of Goa in October 2012. Mining was currently permitted in the eastern province of Orissa but with severe restrictions on transportation.

Indian iron-ore exports during the ten-month period between April 2012 and January 2013 were down 68% to 16.35-million tons, compared to the corresponding previous period.

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Rio Mongolian Mine Failure Would Be ‘Catastrophe,’ Minister Says – by Michael Kohn (Bloomberg.com – March 4, 2013)

http://www.bloomberg.com/

Mongolia’s businesses could face a “catastrophe,” if Rio Tinto (RIO) Group and the government cannot resolve a dispute over funding the Oyu Tolgoi copper and gold mine, the deputy minister for economic development said.

The two parties met last week to decide on financing the project through this year, yet disagreements on taxes, cost overruns and management control resulted in a one-month stop-gap budget. Rio in March will shoulder all the costs for a mine that at full production will account for 30 percent of Mongolia’s economy.

“Rio is funding the project for daily, weekly, monthly operations but not for the big structural investment,” said deputy minister Ochirbat Chuluunbat at a forum in Ulan Bator today. “It will be a catastrophe if it stops.”
Illtud Harri, a Rio Tinto spokesman in London, declined to comment on whether the company was providing all of the funding for the $6.6 billion Oyu Tolgoi mine this month.

Rio controls 66 percent of the project through its unit Turquoise Hill Resources Ltd. (TRQ) and the Mongolian government the rest. The shareholders are squabbling even as the mine is expected to start commercial production by June. Turquoise Hill rallied 10 percent to C$7.25 in Toronto on Friday after news of the month extension.

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Finland ranked as #1 for global mining investment—Fraser Institute Survey – by Dorothy Kosich (Mineweb.com – March 1, 2013)

http://www.mineweb.com/

742 mineral exploration and development companies surveyed by Vancouver’s Fraser Institute say Indonesia is the worst place to do business out of 96 global jurisdictions.

RENO (MINEWEB) – The mining and exploration companies who responded to 2012/2013 Fraser Institute’s Annual Survey of Mining Companies ranked Finland as the best place to do business, while Indonesia was deemed the worst place for mining and exploration companies.

Along with Finland, the top 10-ranked jurisdictions are Sweden, Alberta, New Brunswick, Wyoming, Ireland, Nevada, Yukon, and Norway. All were in the top 10 last year except for Utah and Norway.

The 10 least attractive jurisdictions for investment are (starting with the worst) Indonesia, Vietnam, DRC (Congo), Kyrgyzstan, Zimbabwe, Bolivia, Guatemala, Philippines, and Greece. All of these jurisdictions except DRC Congo, Greece and Zimbabwe were in the bottom 10 last year.

The jurisdiction deemed to have the best current mineral potential assuming current regulations and land use restrictions is Greenland, followed by Finland, Sweden, Nevada and Saskatchewan. The worst is Bolivia.

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