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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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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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