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Asia Mining

In Mongolia, a New, Penned-In [Mineral] Wealth – by Dan Levin (New York Times – June 27, 2012)

http://www.nytimes.com/

TAVAN TOLGOI, Mongolia — “All you need to mine here is a shovel,” said an awe-struck Indian investment manager as he stood behind a barrier, along with dozens of international mining industry executives and other eager investors, gazing at the immense coal pit gouged out of the rust-colored earth below.

Coal may have lured the foreigners to this stretch of the Gobi, but that is just part of the buried treasure to be found now that this nation of livestock herders has started digging in earnest. Mongolia has not only enough coal to fuel China’s huge demand for the next 50 years, but also vast troves of copper, gold, uranium and other minerals the world covets.

While Mongolia may be blessed by geology, it is cursed by geography. Landlocked between China and Russia, its three million people face a geopolitical quandary: Every path to prosperity leads through their mighty neighbors’ territory. And Moscow and Beijing intend to make Mongolia pay dearly for the privilege.

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Chinese demand for Chile’s copper holds strong – by Pav Jordan (Globe and Mail – June 26, 2012)

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.

Global copper goliath Chile says Chinese demand for the metal is holding up despite a slowing of China’s economic growth, signaling a continuation of market dynamics that have driven consumption for over a decade.

“We have not seen a relevant decrease with respects to the Chinese market,” Chile’s deputy mining minister, Pablo Wagner, said by telephone from Santiago.

Mr. Wagner pointed to forecasts for a rise in overall copper exports in 2012 of between 5 per cent and 6 per cent over the year-earlier period. “Signs of demand, shipments and inventories, continue to be solid.”

Chile exports about 53 per cent of its copper to China, giving it one of the clearest insights into the demand patterns of the giant Asian economy that has devoured the red metal as it fuels booming economic growth and urbanization. Chile is also home to the world’s largest copper company, state miner Codelco, which is a key business partner of China.

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Glencore buys into seafloor mining – Peter Koven (National Post – June 16, 2012)

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

The world’s largest commodity trader has endorsed speculative undersea mining as a handful of entrepreneurs continue to try to put the industry on the map.

Vancouver-based DeepGreen Resources Inc. has struck a deal with Glencore International Inc. under which the commodity giant agreed to buy 50% of the nickel and copper DeepGreen plans to produce from a seafloor project located west of Mexico.

DeepGreen is a private company founded by David Heydon, the man who built industry leader Nautilus Minerals Inc. and kick-started the underwater mining business. He has planned to take DeepGreen public in Toronto for more than a year, and Glencore’s commitment is a potential catalyst to attract investors to an IPO. The offering has already been delayed because of weak market conditions.

Mr. Heydon views the Glencore deal as evidence that DeepGreen – and seafloor mining as a whole – need to be taken seriously.

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Halcyon days fading for Asia-Pacific mining companies-S&P – by Dorothy Kosich (Mineweb.com – May 04, 2012)

www.mineweb.com

S&P warns if China’s slowdown proves to be severe, it could take the wind out of commodities prices sails. Even with a soft landing, steel and aluminum producers will still weaken.

RENO (MINEWEB) –  A key threat to the stable outlook of the mining sectors is a rise in inputs costs,” Standard & Poor’s credit analysts warned in a recent industry report card on Asia-Pacific metals and mining companies.
 
“A tighter labor supply and likely higher energy prices will pressure the profitability of many commodity producers. Metal producers will also be wrestling with more expensive raw materials,” the analysts advised.”
 
“For Asia-Pacific steel and aluminum companies, we forecast a negative outlook. Margins in this subsector will struggle with softening demand due to a global slowdown and abundant supply.”

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India Struggles to Deliver Enough Power [coal shortages]- by Vikas Bajaj (New York Times – April 19, 2012)

http://www.nytimes.com/

NELLORE, India — India has long struggled to provide enough electricity to light its homes and power its industry around the clock. In recent years, the government and private sector sought to change that by building scores of new power plants.

But that campaign is now running into difficulties because the country cannot get enough fuel — principally coal — to run the plants. Clumsy policies, poor management and environmental concerns have hampered the country’s efforts to dig up fuel fast enough to keep up with its growing need for power.

A complex system of subsidies and price controls has limited investment, particularly in resources like coal and natural gas. It has also created anomalies, like retail electricity prices that are lower than the cost of producing power, which lead to big losses at state-owned utilities. An unsettled debate about how much of its forests India should turn over to mining has also limited coal production.

The power sector’s problems have substantially contributed to a second year of slowing economic growth in India, to an estimated 7 percent this year, from nearly 10 percent in 2010. Businesses report that more frequent blackouts have forced them to lower production and spend significantly more on diesel fuel to run backup generators.

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China mineral stocks running low – China English News (April 22, 2012)

http://www.xinhuanet.com/english/

BEIJING, April 22 (Xinhua) — China is running short of 25 kinds of mineral resources, including 11 that are crucial to the country’s economy, said a senior official on Sunday.
 
The country will face a serious shortage of mineral resources by 2020 as it consumes an increasing amount of them to promote its industrialization, urbanization and agricultural modernization, Minister of Land and Resources Xu Shaoshi told Xinhua in an exclusive interview to mark the 43rd “Earth Day.”
 
The prediction was based on surveys of recoverable reserves of 45 kinds of major minerals, Xu said, adding that China will have to sharply increase imports of minerals in short supply to meet demand over the next 10 to 20 years.
 
Over the past 15 years, China registered double-digit growth in the consumption of mineral resources. More than half of the country’s petroleum, iron ore, refined aluminum, refined copper and leopoldite were imported, according to the minister.

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Ivanhoe CEO Loses in Rio ‘Chess Game’ Over Mongolia Mine – by Christopher Donville and Liezel Hill (Bloomberg.com 0 April 19, 2012)

http://www.bloomberg.com/

Twelve years after beginning his quest to build a copper mine in Mongolia’s Gobi Desert, it’s checkmate for Robert Friedland.

Ivanhoe Mines Ltd. said yesterday the billionaire investor resigned as chief executive officer, along with other top executives at the Vancouver-based company. It said Rio Tinto Group agreed to ensure funding of the $6 billion Oyu Tolgoi project’s construction. The accord means Rio is free to appoint Ivanhoe’s management, cementing control of the company three months after increasing its stake to 51 percent.

“Friedland’s lost the chess game with Rio,” John Stephenson, a fund manager in Toronto who oversees about $2.7 billion at First Asset Investment Management, said in an interview.

Oyu Tolgoi — which means “turquoise hill” in Mongolian – – is just the latest of several chapters in the often controversial career of Friedland, who holds a 14 percent stake in Ivanhoe. A one-time mentor to Apple Inc. co-founder Steve Jobs, Friedland, 61, has raised funds for mines in North America and Asia since the mid-1980s and led the C$4.3 billion ($4.3 billion) sale of the Voisey’s Bay nickel deposit in Canada in 1996. His next adventure may be developing mines in Africa.

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Friedland resigns from Ivanhoe Mines in Rio Tinto shake-up – by Peter Koven (National Post – April 18, 2012)

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

After running out of options in a multi-year chess battle with Rio Tinto Ltd., there was nothing left for Robert Friedland to do but walk away.
 
In doing so, he leaves behind a $10-billion company that he built from scratch, and the satisfaction that he defied the skeptics and developed a mine in a country that very few investors believed in.
 
In short, Ivanhoe Mines Ltd. was another big win for Mr. Friedland, though his involvement ends with a creeping takeover instead of the premium, all-cash bid that investors have come to expect from Friedland stocks.
 
Mr. Friedland resigned from Ivanhoe Wednesday, as did the entire management team and six other board members that were not appointed by Rio Tinto. The move, which is part of a sweeping agreement between the two companies, paves the way for Rio to take control of all aspects of the giant Oyu Tolgoi project in Mongolia.

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Massive Mongolian mine raises environmental fears – by Josh Tapper (Toronto Star – April 11, 2012)

The Toronto Star, has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Economic project led by Canadian miner Ivanhoe a boon – except it’s soaking up valuable water

Buried in the Gobi Desert, Mongolia’s economic future rests on a massive mining project called Turquoise Hill.

Known locally as Oyu Tolgoi, the copper and gold mine, co-owned by Vancouver-based Ivanhoe Mines Ltd. and the Mongolian government, is expected to balloon the Central Asian country’s GDP — an estimated $13.28 billion in 2011 — by more than 30 per cent when it starts full production later this year.

But the economic boon is also, for some, an environmental nightmare as the project will allegedly soak up valuable water resources in the already-arid Gobi. While reports vary, the mine plans to use up to 920 litres of water per second.

Dugersuren Sukhgerel, executive director of local NGO Oyu Tolgoi Watch, said lack of water is the “No. 1 issue” in the region.

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The real reason why Canada is cozying up to Burma’s dictators [resources] – by Thomas Walkom (Toronto Star- April 7, 2012)

The Toronto Star, has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Now we know why Foreign Affairs Minister John Baird was so anxious to trek to Burma last month. Baird showed up in the southeast Asian country ostensibly to argue for human rights and, in particular, to laud the military dictatorship for letting dissident leader Aung San Suu Kyi and her supporters contest seats in Burma’s army-dominated legislature.
 
But recent rumblings from world capitals confirm that the real reason was the usual one: resources. Resource-rich Burma is subject to strict economic sanctions by Western countries. Big companies — and particularly big oil companies — are lobbying hard to have those sanctions lifted.
 
And Canada hopes to have its firms front and centre when the great barbecue begins. The fact that Burma’s military-backed leaders allowed any opening toward democracy — and that Suu Kyi gave them her imprimatur — offers Western countries the excuse they need to let trade and investment rip.
 
The United States has already lifted some sanctions against Burma. The Financial Times reports that more will be relaxed soon.

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[State capitalism] Is it a rival to market capitalism? And how does it affect the natural resources industries? – by Keith Campbell (MiningWeekly.com – March 30, 2012)

 www.miningweekly.com

Since the start of the current global economic crisis in 2008, there has been renewed interest in the concept of ‘State capitalism’, as distinct from ‘market capitalism’. (The term ‘liberal capitalism’ is shorthand for ‘liberal democracy plus market capitalism’.)
 
This interest is centred on China more than any other country, in part because of the country’s ability (so far) to ride out the crisis, in part because of the key role it has played in keeping the global economy running while the developed West has been stagnating and in part because China is, unlike India or Brazil or South Korea, not a democracy. This last factor creates the impression of a ‘Chinese model’ of autocracy plus State capitalism that can be compared and contrasted with the ‘Western model’ of liberal capitalism.
 
There has been considerable debate about the rival merits of these ‘models’ in recent times. Thus, renowned British historian Niall Ferguson, who teaches at Harvard University, in the US, had a recent article on State capitalism in the US academic journal Foreign Policy. In late January, The Economist, of London, had a cover and special report devoted to State capitalism. The topic has also been addressed in the past couple of months by The Wall Street Journal and Bloomberg Businessweek. And these are only some, albeit prominent, examples.

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China consolidates position as World No. 1 gold miner – by Lawrence Williams (Mineweb.com – March 14, 2012)

 www.mineweb.com

China’s annual gold production continues to grow comfortably maintaining its position as the world’s biggest gold miner assuming official statistics tell the full picture – which they may not!

LONDON –  The most recent  figures from China’s Ministry of Industry and Information Technology note that China, already the world’s No. 1 gold miner since 2007, continued its dominance in world gold production with output rising last year by 5.89% to  360.95 tonnes.  The most recent statistics also show that the country’s gold mining sector continued to expand in January with a rise of about 3.69% from the same month a year ago, suggesting that we may well see further annual gold mine output growth in 2012.
 
China’s ever-increasing gold output though is still nowhere near the country’s huge appetite for consuming gold which rose to perhaps some 800 tonnes in 2011, although such figures tend to be speculative in nature as the officially reported statistics may not show the true picture.  There does seem to have been a fall-off in demand however at the end of last year and in the first two months of 2012 with official figures for imports through Hong Kong – the main import route – seeming to show a significant decline over the same period a year ago.

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Masterminds – Fool’s Gold [Bre-X Mining Fraud] (Mining Documentary – 2009)

This information below is from Wikipedia, the Free Encyclopedia: http://en.wikipedia.org/wiki/Main_Page

Bre-X was a group of companies in Canada. A major part of the group, Bre-X Minerals Ltd. based in Calgary, was involved in a major gold mining scandal when it was reported to be sitting on an enormous gold deposit at Busang, Indonesia (on Borneo). Bre-X bought the Busang site in March 1993 and in October 1995 announced significant amounts of gold had been discovered, sending its stock price soaring. Originally a penny stock, its stock price reached a peak at CAD $286.50 (split adjusted) in May 1996 on the Toronto Stock Exchange (TSE), with a total capitalization of over CAD $6 billion.[when?] Bre-X Minerals collapsed in 1997 after the gold samples were found to be a fraud.

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Mining: This time it’s different? [Philippine Mining] – by Boo Chanco (The Philippine Star – March 12, 2012)

This column came from the Philippine Star: www.philstar.com

DEMAND AND SUPPLY

The recent well attended public debate over the future of mining in the Philippines was, like the impeachment hearing, quite entertaining. One other similarity: despite the massive dose of information unleashed, it is almost certain no one was convinced to change his opinion on the issue.
 
That’s understandable not only because the debate had become emotional. More importantly, both sides have lost confidence on the capability of government to enforce the rules on mining and government is at the center of the debate.
 
The environmentalists are very skeptical about “responsible mining” because of past and present experiences. They remember Marcopper, exhibit A of government failure to regulate and private sector irresponsibility, and that’s enough to close their minds on “responsible mining”.
 
That’s also my main problem. As a business journalist, I want to believe that “responsible mining” is possible. But every time I think about it, Marcopper always haunts me to the point of doubting.

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Global miners to stay in Indonesia despite change in game rules – by Euan Rocha and Sonali Paul (Vancouver Sun – March 9, 2012)

The Vancouver Sun, a broadsheet daily paper first published in 1912, has the largest circulation in the province of British Columbia. 

Reuters – TORONTO/MELBOURNE – Indonesia’s decision to shut the door on foreign control of its mines has gone down badly with global miners but none are yet threatening to quit the country: the truth is, they no longer have any easy investment destinations to turn to.
 
After a decade of rapidly growing resource nationalism, from stable emerging markets like Indonesia and South Africa to developed nations such as Australia and Canada, doors everywhere are harder, more expensive or just plain dangerous to open.
 
Indonesia’s sudden announcement this week of a new rule capping foreign mine ownership at 49 percent follows a series of international tax grabs and expropriations that have pinched returns in some of mining’s most profitable markets.
 
It has left mining companies few options other than to venture into ever more politically risky territory, including restive parts of Africa. Countries previously seen as too risky, such as Burkina Faso, Congo and Mauritania, are now firmly on their radar.

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