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Massive mineral exploitation in Tibet caused recent mining disaster – by Yeshe Choesang (The Tibet Post International – April 10, 2013)

http://www.thetibetpost.com/

Dharamshala: – The environmental researchers of the Central Tibetan Administration (CTA) based in Dharamshala Wednesday said China’s large-scale exploitation of mineral resources in Tibet caused the recent disaster that killed more than 80 Chinese miners.

‘On Friday, 29 March 2013, Chinese state media reported that 83 miners including two Tibetans have been buried after a major landslide hit part of the Gyama (Ch:Jiama) Copper Polymetallic Mine at 6.00 AM local time. As of 4 April, 66 miners have been confirmed dead and 17 are reported missing, believed dead,’ CTA environment desk said in an assessment report of the recent landslide event in the Gyama Valley, near Tibet’s capital Lhasa.

“The workers were reportedly asleep in their tents when they were buried by a mass of mud, rocks and debris, three kilometres wide and 30 metres deep. The landslide occurred in the Pulang Valley in Siphug Village of Tashi Gang Town of Central Tibet,” the report said.

The Tibetan administration said that “Tibet’s rich mineral deposits have become a resource curse for the local residents and ecosystem. Since the late ’60s, these mineral deposits have been exploited in various scales, mostly under poor environmental norms and regulations. As for the minerals extracted, copper, chromium, gold, lead, iron and zinc are the minerals of greatest interest to Chinese and other foreign miners operating in Tibet.”

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Canadian uranium industry a step closer to trading with India – by Henry Lazenby (MiningWeekly.com – April 10, 2013)

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

TORONTO (miningweekly.com) – The Mining Association of Canada (MAC) said it supported the Canadian Nuclear Safety Commission and India’s Department of Atomic Energy finalising and signing the Appropriate Arrangement for Nuclear Cooperation agreement on Monday, which placed the Canadian uranium industry one step closer to trading with India.

“This is tremendous news for Canada’s uranium mining industry, which is the second largest in the world. This puts Canada in position to capitalise on growing global demand for nuclear energy and opens up the uranium sector to India, which is a large and strategic emerging market for the commodity as a key source of power,” MAC president and CEO Pierre Gratton said.

Finalising the arrangement followed on the heels of the Agreement between the Government of Canada and the Government of India for Cooperation in the Peaceful Uses of Nuclear Energy.

The arrangement outlined the tracking, monitoring and reporting requirements that would ensure the material is used for peaceful civilian purposes only. It was the next step towards full implementation of the Nuclear Cooperation Agreement (NCA) between Canada and India, which was signed in 2010.

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Mongolia Scolds Rio Tinto on Mine Costs as Yurts Replaced – by Michael Kohn and William Mellor (Bloomberg Businessweek – April 09, 2013)

http://www.businessweek.com/

Outside, it’s minus 30 degrees Celsius as a February wind blasts across the Central Asian steppe and through the Mongolian capital, Ulaanbaatar. Inside Government House, President Tsakhia Elbegdorj delivers a televised speech that simultaneously warms his people and chills foreign investors.

The country’s 76 legislators have convened to debate the future of one of the planet’s richest copper and gold mines, Oyu Tolgoi, which is 66 percent owned by London-based Rio Tinto Group (RIO) and 34 percent owned by the state. Elbegdorj tells them Rio Tinto has let the project’s total cost balloon by $10 billion. The higher expenses, which Rio Tinto disputes, would diminish and delay profits the government shares in, Bloomberg Markets magazine will report in its May issue.

“The time has come for the Mongolian government to take Oyu Tolgoi matters into its own hands,” Elbegdorj says to cheers from the lawmakers. His demands include giving Mongolian employees more management positions on the project, which is scheduled to begin exporting copper concentrate by June.

Few things matter more today in the political and economic life of this landlocked country of 2.8 million people than foreign investment to develop its mineral wealth.

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China Failed Mining Deals Top $45 Billion on Hanlong Bungle – by Helen Yuan and Elisabeth Behrmann (Bloomberg News – April 9, 2013)

http://www.bloomberg.com/

Sichuan Hanlong Group’s botched $1.2 billion bid for Australia’s Sundance Resources Ltd. (SDL) brings the value of China’s recent failed mining deals to $45 billion, a record that’s prompted stricter Chinese scrutiny of acquisitions.

Chinese companies attempted $107 billion worth of mining takeovers over the past five years, with about $45 billion, or 42 percent by value, of deals ending in failure. Of $562 billion of deals proposed globally in the same period, $180 billion, or 32 percent, didn’t proceed, according to data compiled by Bloomberg.

The collapse yesterday of the bid for Sundance, seeking to develop a $4.7 billion iron ore project in Africa, comes after a string of failed investments by Chinese companies, including the demise of a $19.5 billion investment in Rio Tinto Group in 2009. Regulators under China’s new leadership team of Xi Jinping and Li Keqiang have told state-owned companies that overseas takeovers will face a more stringent approval process.

“Chinese regulators are probably going to allow fewer deals to go through as they become more discerning,” Jonathan Li, a corporate partner at Clayton Utz, said in a phone interview from Melbourne. “The market will come to expect that when a deal involving a Chinese acquirer is announced, all the internal Chinese approvals will already have been obtained.”

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Excerpt from “The History of Mining: The events, technology and people involved in the industry that forged the modern world” – by Michael Coulson

To order a copy of The History of Mining, please click here: http://www.harriman-house.com/products/books/23161/business/Michael-Coulson/The-History-of-Mining/

THE RISE OF THE GULAGS AND NORILSK

The Soviet years of central control and direction saw a major push to develop the vast country into an economic powerhouse to match the West. These were the Stalin years and the expansion of the mining industry was often achieved by the use of labour transported to the Gulags of the eastern USSR. In these transportations dissident professional and manual workers alike were settled in camps, often for decades, until the death of Stalin in 1953 led to most of them being closed by 1960.

The Gulags had a number of key political functions, but economically they played an important role in the establishment of heavy industrial complexes for steel, manufacturing and mining, including mining of coal, iron ore and base metals. Gold production was also an important activity given that the rouble was unconvertible and the USSR was not a major manufacturing exporter like Germany or the UK, but was from time to time a heavy importer of food stuffs and advanced machinery, and therefore in need of convertible assets.


 

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‘Common ground’ sought in mega-mine dispute – by Don Cayo (Vancouver Sun – April 2, 2013)

http://www.vancouversun.com/index.html

Mongolia, Rio Tinto both have reasons to settle in time to meet June deadline

A cost overrun of a couple of billion bucks at Oyu Tolgoi (Turquoise Hill), Mongolia’s new mega-mine, is no doubt significant even to a big company such as Rio Tinto with sales last year topping $50 billion.

But to a “little” country like Mongolia – which may have a land mass about twice the size of B.C., but has barely more than half the number of people and a much smaller fraction of our wealth – it’s a staggeringly large sum. It accounts for fully a fifth of last year’s GDP – in relative Canadian terms, the equivalent of about $350 billion.

Which goes a long way to explain the tension between the company, a two-thirds partner in Vancouver-based Turquoise Hill Resources, which owns the just-opened world’s largest copper mine in remote Mongolia, and the country, which has a 34-per-cent stake.

Mongolia’s parliament signed on in 2009 to borrow a third of the money to fund a $4.2-billion project, says parliamentary president Zandaakhuu Enkh-bold, who was in Vancouver last week at the end of a cross-Canada visit.

“If at that time they had told us the cost will be $6.2 billion, then we would have thought twice,” he said in an interview with The Vancouver Sun.

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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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