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Asia Mining

Children Toil in India’s Mines, Despite Legal Ban – by Gardiner Harris (New York Times – February 25, 2013)

http://www.nytimes.com/

KHLIEHRIAT, India — After descending 70 feet on a wobbly bamboo staircase into a dank pit, the teenage miners ducked into a black hole about two feet high and crawled 100 yards through mud before starting their day digging coal.

They wore T-shirts, pajama-like pants and short rubber boots — not a hard hat or steel-toed boot in sight. They tied rags on their heads to hold small flashlights and stuffed their ears with cloth. And they spent the whole day staring death in the face.

Just two months before full implementation of a landmark 2010 law mandating that all Indian children between the ages of 6 and 14 be in school, some 28 million are working instead, according to Unicef. Child workers can be found everywhere — in shops, in kitchens, on farms, in factories and on construction sites. In the coming days Parliament may consider yet another law to ban child labor, but even activists say more laws, while welcome, may do little to solve one of India’s most intractable problems.

“We have very good laws in this country,” said Vandhana Kandhari, a child protection specialist at Unicef. “It’s our implementation that’s the problem.”

Poverty, corruption, decrepit schools and absentee teachers are among the causes, and there is no better illustration of the problem than the Dickensian “rathole” mines here in the state of Meghalaya.

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Miners look to Asia for partners and financing – by Pav Jordan (Globe and Mail – February 28, 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.

When Fortune Minerals Ltd. began courting capital markets to fund a giant coal project in British Columbia two years ago, chief executive officer Robin Goad knew he wouldn’t be sourcing the funds locally.

Canadian banks were saying Fortune should get long-term supply agreements with Asian customers before they were comfortable financing the $800-million project.

“Well, we thought, if we are going to have to get [agreements], why don’t we just partner with the guys who want the stuff,” said Mr. Goad, who sold a 20-per-cent stake in the Arctos coal project to South Korea’s Posco a year later, marrying Fortune’s need for capital to the giant steel maker’s need for the metallurgical coal to produce steel.

“We didn’t need a bank,” he said in a recent interview. The Posco deal marked a growing trend of Asian customers turning to Canada – where publicly listed companies control some 10,000 projects worldwide – to guarantee supplies of the commodities needed for their booming economies.

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Rio Tinto Said to Clash With Mongolia Ahead of Meeting – by Yuriy Humber and Elisabeth Behrmann (Bloomberg Businessweek – February 26, 2013

http://www.businessweek.com/

Rio Tinto Group’s crucial meeting with Mongolia tomorrow follows weeks of disputes over control of the world’s biggest copper and gold mine under construction, according to two people familiar with the situation.

Financing for the $6.6 billion Oyu Tolgoi mine runs out in three days and tomorrow’s talks to extend the funding come amid allegations of unpaid taxes, and frozen and then unfrozen bank accounts that raise doubts about the project’s future.

Mongolia’s government blocked some of London-based Rio’s bank accounts in the capital Ulan Bator over unpaid tax claims, said the people, who asked not to be named because the information isn’t public. The accounts were unfrozen yesterday, the people said. That move may help improve relations at the talks, one of the people said.

President Tsakhia Elbegdorj this month criticized Rio for cost overruns and said Mongolia wants more control of a project that will represent 30 percent of the economy once in full production. Rio, the world’s second biggest mining company, has considered suspending work until these issues are resolved, two people familiar with the matter said last month. Oyu Tolgoi is scheduled to start production in June.

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China’s interest in Africa picking up as its economy recovers – by Keith Campbell (MiningWeekly.com – February 22, 2013)

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

The year 2011 saw a staggering increase in Chinese mining investments in Africa. Whereas these had totalled some $1.5-billion at the end of 2010, by the conclusion of 2011 the figure had rocketed to $15.6-billion. Africa has become the site of almost 75% of Chinese foreign mining investment. The China Mining Association (CMA) reported that, worldwide, Chinese companies invested in 284 mining companies during 2011. These figures exclude the oil and gas sector.

Economic upturn

China needs minerals and metals to feed its economy. From 1999 to 2009 the country’s real gross domestic product (GDP) grew at an annual average rate of 10.3%. The Asian giant has become the second largest economy in the world, and, according to The Conference Board’s “Global Economic Outlook 2013” (January 2013 Update), accounted for 16.4% of global economic output last year. (The US contribution was 18.2%; in rather sharp contrast, India was responsible for 6.3%, the whole of Latin America for 7.7%, Russia and Central Asia and South East Europe 5.9%, Africa 3.3% and the Middle East 3.7%. As for Europe – defined as the European Union plus Iceland, Norway and Switzerland – that contributed 20.3%, while the figure for the Euro area was 13.8%.)

The world was, of course, hit by the Great Recession of 2008/2009, and the downturn is by no means over. And China was also affected. Economic growth for 2012 was 7.8%, the Chinese Academy of Sciences (CAS) has reported. But the second semester of the year saw faster than expected growth. The Chinese government’s growth target for the year was 7.5%. Nevertheless, this was the country’s slowest growth rate since 1999 – the rate for 2011 was 9.3% and for 2010, 10.4%.

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UPDATE 3-Kyrgyzstan sets deadline to revise Centerra Gold deal – by Olga Dzyubenko and Bhaswati Mukhopadhyay (Reuters.com – February 21, 2013)

http://www.reuters.com/

Feb 21, 2013 (Reuters) – Kyrgyzstan has given Centerra Gold three months to redraw terms before ripping up an agreement to run its flagship mine in the Central Asian country, accusing the Canadian miner of “colossal” environmental damage and underpaying the state.

Centerra said it had received a new claim from the government for $315 million for alleged environmental destruction, almost tripling the damages claims that it faces.

Parliament ended two days of fierce debate by passing a resolution on Thursday demanding the government revise a deal struck in 2009, a year before then-president Kurmanbek Bakiyev was driven from power by a popular revolt.

“If within three months our negotiations yield no results, the government will unilaterally cancel the agreement,” Economy Minister Temir Sariyev said during the debate on Wednesday.

Centerra, whose shares have halved since the Kyrgyz government said in June it would review the mine deal, said the 2009 agreement was “solid and transparent” and it had already started talking to the government.

The Kumtor mine, bisected by a glacier 4,000 meters (13,000 ft) above sea level, is the largest gold mine in Central Asia operated by a Western company. It is the industrial centerpiece of the fragile Kyrgyz economy, contributing 12 percent of GDP in 2011.

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Rio Tinto’s Mongolia Copper Dream Awakens 20-Year-Old Nightmare – by Elisabeth Behrmann & Yuriy Humber (Bloomberg.com – February 20, 2013)

http://www.bloomberg.com/

Rio Tinto Group’s Mongolia copper and gold mine looks a dream location sitting next to China, the biggest market. Yet, Mongolia’s bid for more control of the project draws comparison with a Rio mine that went badly wrong.

Mongolia’s government is ratcheting up criticism of Rio’s management of the $6.6 billion project, the landlocked country’s single biggest investment. Lawmakers have argued for a bigger share of profit, while President Tsakhia Elbegdorj wants more management control. He faces elections in June with a fifth of the nation’s 3 million people in poverty despite world-beating economic growth of 17.3 percent in 2011.

Rio has refused government overtures to rewrite the agreement on the mine known as Oyu Tolgoi, raising tensions and comparisons with another Rio copper mine more than two decades ago. That project known as Panguna on the island of Bougainville in Papua New Guinea was shut by local protests and is still the subject of a U.S. court case.

“In Bougainville the community felt, rightly or wrongly, they weren’t compensated adequately for the various impacts of mining they were having to absorb,” said Jeffrey Neilson, a senior lecturer in economic geography at the University of Sydney. Governments in emerging economies “have to be seen to be taking a strong stance and making sure that the benefits of their resource wealth are being shared.”

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Chinese Investment in Canada to Stay Strong, says Ambassador – by Sean Benson (ProEdge Wire – February 12, 2013)

http://www.proedgewire.com/

February 12, 2013 (Source: CBC News) — Canada’s ambassador to China says money from the Asian country is likely to keep pouring into Canadian resource projects.

But Guy Saint-Jacques also says he thinks those dollars will increasingly flow into mining and forestry as well as energy development.

“I expect that the interest will increase on the mining side,” he said in an interview with The Canadian Press after speaking to an audience at the University of Alberta on Monday.

“What I expect also is maybe they will start to get interested in the forestry sector. There’s already investment in pulp manufacturing. I think they are starting to look at potential minority participation in a number of companies.”

Chinese state-owned companies have already staked out a significant foothold in Alberta’s oilpatch — especially in the oilsands after the federal government approved a $15-billion takeover of Calgary-based Nexen by China National Offshore Oil Corp. late last year. PetroChina has also expressed interest in owning a share of the proposed Northern Gateway, which would ship oilsands bitumen to waiting tankers on Canada’s West Coast.

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Barrick has done its best to improve human rights at mine in Papua New Guinea – Globe and Mail Editorial (February 13, 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.

Change hasn’t happened quickly enough in the global mining sector, despite prodding from advocacy groups concerned about environmental sustainability and human rights abuses. But when a mining company responds to pressure and makes changes for the better, that should be acknowledged, not dismissed as an empty public relations gesture.

Recent criticism by Mining Watch of Barrick Gold’s initiative to assist the women who were raped by local employees of its mine in Papua New Guinea is short-sighted. It has accused the company of “rushing” the women through the claims process, and of forcing them to sign away their legal rights.

That is stretching the truth. In fact, Barrick, the world’s largest gold-mining company, has done its best to clean up the mess at the Porgera gold mine. Since 2011, it has spent 18 months consulting with human-rights advocates and developed an opt-in program of remediation for the victims, offering them counselling, access to micro-credit and medical care. The program is administered by an independent team, including the former chief magistrate of Papua New Guinea.

The women are free to pursue action against any individuals involved but once they settle the grievance procedure with the company, they cannot make further legal claims against it. This seems fair.

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Eramet to kick off $5.5 billion smelting project mid-2013 – by Linda Yulisman (The Jakarta Post – February 09 2013)

http://www.thejakartapost.com/

French mining and metals group Eramet SA, which runs the world’s biggest ferronickel plant, is scheduled to start its US$5.5 billion nickel smelting project in Maluku in the middle of this year.

Executives of Weda Bay Nickel, a subsidiary of the group that will execute the project, revealed the plan after meeting with Industry Minister MS Hidayat and industry officials in Jakarta on Friday, discussing, among other things, a proposed tax holiday and regulations regarding the investment.

The Industry Ministry’s director general for manufacturing-based industry, Panggah Susanto, said the planned smelter on Halmahera Island, North Maluku, was scheduled to begin commercial operations in the middle of 2018.

“The initial investment will amount to $3.3 billion, and later it will likely expand to complete the project to reach $5.5 billion,” Panggah announced after the meeting. About 20 percent of the total investment will be used to finance mining operations.

In the first phase, the smelter is expected to annually produce 35,000 tons of ferronickel and 1,300 tons of cobalt in 2018, while in the second phase it will boost output to 65,000 tons of ferronickel and 3,000 tons of cobalt, according to Panggah.

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Unfeasible deadline for [Indonesian] miners – The Jakarta Post Editorial (February 06 2013)

http://www.thejakartapost.com/

The general mining and coal director general, Thamrin Sihite, has warned mining firms that the government will not reschedule the enforcement of the total ban on exports of unrefined ores due in 2014 although many analysts and investors have argued the deadline is unfeasible.

Anticipating overextraction (overexploitation) of the country’s mineral resources in the run-up to the total ban on unrefined ore exports, the government decided last May to impose an export tax at the flat rate of 20 percent on more than 60 mineral ores in a bid to curb excessive increases in exports.

There is actually nothing wrong nor strange with the regulation. First of all, the ban was stipulated in the 2009 General Mining Law that says that mining companies shall build refining plants (smelters) because they can no longer export unprocessed minerals starting from 2014.

The regulation supports the government policy designed to move mineral commodities higher up the value chain, generating more jobs and maximizing profits from the mining sector without excessively exploiting natural resources. The biggest problem with the enforcement of the mining law is the confusion and uncertainty surrounding the timing and manner of the policy.

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Mongolia’s “ninja” miners help sate China lust for gold – by David Stanway (Reuters.com – April 19, 2012)

http://www.reuters.com/

Please note April, 2012 date, but a great read!

(Reuters) – In a hot, concrete hut filled with acetylene fumes, an elderly Mongolian miner struggles to contain her excitement as she plucks a sizzling inch-long nugget of gold from a grubby cooling pot and raises it to the light.

Khorloo, 65, and her sons spent the day scrutinizing half a dozen CCTV screens as workers at the Bornuur gold processing plant whittled 1.2 metric metric tonnes of ore down to 123 grams of pure gold that could earn the family as much as $6,000.

Near the plant, separated from Mongolia’s capital, Ulan Bator, by 100 km of rocky pasture and mostly unpaved road, life has remained largely unchanged since Genghis Khan’s “golden horde” rampaged across Asia nine centuries ago.

But Khorloo is a member of a new horde of at least 60,000 herders, farmers and urban unemployed trying to extract the riches buried in the vast steppe with metal detectors, shovels and home-made smelters.

In the last five years, dwindling legal gold supplies and a spike in black market demand from China have made work much more lucrative for Mongolia’s “ninja miners” – so named because of the large green pans carried on their backs that look like turtle shells. For thousands of dirt-poor herders, the soaring prices alone are enough to justify years of harassment, abuse and hard labor.

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President Says Mongolia Should Get More Control of Mine – by Michael Kohn & Yuriy Humber (Bloomberg.com – February 5, 2013)

http://www.bloomberg.com/

Mongolia’s President Tsakhia Elbegdorj said the nation should have more control of Rio Tinto Group (RIO)’s Oyu Tolgoi copper and gold project after the government said costs had increased.

The total cost of the Rio Tinto-operated development in southern Mongolia has jumped to $24.4 billion, according to an e-mailed statement from the government, which gave a summary of a Feb. 1 parliamentary discussion attended by the president. London-based Rio had earlier estimated total costs at $14.6 billion, according to the statement.

“It’s time for Mongolia to have Mongolian representation on the management team,” Elbegdorj said at the session on Feb. 1, according to his website. “It’s important that the government takes the Oyu Tolgoi matter into its own hands.”

The president’s comments heighten tension with the second- biggest mining company over the ownership and future development of the project, which is currently the world’s biggest copper mine under construction. Rio is considering a temporary halt to work to protest government demands for a greater share of profit, two people familiar with the plans said last week.

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Document reveals experience of Canadian mine applicants – by Michael Smyth (Vancouver Province – February 3, 2013)

http://www.theprovince.com/news/index.html

Chinese-owned Tumbler Ridge operation received about 300 resumés

The Chinese company that wants to set up an underground coal mine near Tumbler Ridge said it tried – and failed – to find qualified Canadians to work in the mine. But after the company was forced in court to produce about 300 resumés submitted by “unqualified” Canadian job applicants, critics are scoffing at the claim.

“There were obviously qualified Canadians who applied for these jobs, and they were simply rejected,” Brian Cochrane of the Union of Operating Engineers told me Saturday. “Qualified Canadians are being denied jobs developing Canada’s own resources,” Cochrane said.

“It’s outrageous.” HD Mining International received approval from the federal government to bring hundreds of Chinese coal miners to B.C., after Ottawa accepted the company’s argument that no Canadians could do the work.

The Operating Engineers and another union, the Construction and Specialized Workers, challenged the company and the government in court. Last month, the company turned over to the unions hundreds of resumés from rejected Canadian job applicants.

Now, in a document filed last week in federal court, the public is getting its first glimpse at the qualifications of Canadians who applied for jobs with the Chinese company. “There were trained and certified underground miners who applied for these jobs,” said Cochrane.

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Rio Tinto faces tough talks in Mongolia over giant mine – by Terrence Edwards and Sonali Paul (Reuters.com – February 1, 2013)

http://www.reuters.com/

ULAN BATOR/MELBOURNE, Feb 1 (Reuters) – Rio Tinto faces tough negotiations next week in Mongolia, where the government is under pressure to plug a budget deficit and increase its share of the wealth from the $6.2 billion Oyu Tolgoi copper and gold mine.

Oyu Tolgoi, 34 percent owned by Mongolia and controlled by Rio Tinto, produced its first concentrate this week and is on track to start supplying metal and paying royalties by June.

The success of the mine is crucial for both sides as, at full tilt, Oyu Tolgoi will account for nearly a third of Mongolia’s economy, while Rio Tinto is depending on the mine to drive growth beyond its powerhouse iron ore business.

Rio Tinto is not expected to have to give up a bigger share of the mine, but some analysts say it could end up agreeing to provide more funding in areas like infrastructure to remove uncertainty over a project that is expected to produce 425,000 tonnes of copper and 460,000 ounces of gold a year. Rio Tinto and its subsidiary, Turquoise Hill Resources Ltd , last year fended off an attempt by Mongolia to renegotiate their 2009 investment agreement on Oyu Tolgoi.

The government is drafting a law that would require Mongolians to hold at least a 34 percent stake in mines, however talk that this would apply to Oyu Tolgoi has died down.

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Rio Tinto considering halting work at Oyu Tolgoi mine over dispute – by Christopher Donville, Todd Baer and Yuriy Humber (Bloomberg News/National Post – January 31, 2013)

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

Rio Tinto Group, the second-biggest mining company, is considering a temporary halt to construction work at its US$6.2-billion Oyu Tolgoi copper and gold project in Mongolia as the government demands a greater share of profit from the mine, according to two people familiar with the plans.

The London-based company is discussing the suspension to protest the central Asian nation’s demands for a bigger stake in the project and new mining royalty rates, said the people, who asked not to be identified because they aren’t authorized to comment publicly. A suspension of work, which may halt mining and processing, isn’t certain and is among options that managers are discussing in London, one of the people said.

“We continue to work together with all stakeholders including the government of Mongolia to bring the benefits of Oyu Tolgoi to all parties,” said Bruce Tobin, a spokesman for Rio in Melbourne. He declined to comment on whether it’s considering a temporary halt.

The dispute comes as Mongolian Prime Minister Norovyn Altankhuyag’s government tries to maintain support for foreign investment amid growing nationalism and wealth disparity. In October, Rio rejected a second move by Mongolia to renegotiate a 2009 investment agreement for the development of Oyu Tolgoi, which is currently the world’s biggest copper project under construction.

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