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Australia/New Caledonia/Papua New Guinea Mining

Campaign to World Heritage List Cornish mining sites gaining momentum – by Lauren Waldhuter (Australian Broadcasting Corporation – October 6, 2014)

http://www.abc.net.au/news/rural/

An international campaign to have South Australia’s Cornish mining sites World Heritage listed is gaining momentum. In the mid 1800s thousands of Cornish miners flocked to Burra in the state’s Mid North and shortly after to Moonta on the Yorke Peninsula to mine two of the largest copper deposits in the world, at that time.

Philip Payton, a professor of Cornish and Australian Studies from the University of Exeter in the United Kingdom, says the sites deserve global recognition by the United Nation’s heritage organisation (UNESCO).

Cornwall’s own mine sites are already World Heritage listed but Professor Payton says that only tells part of the story. “It’s not really complete until people recognise that actually there’s an international linking,” he says.

“That it’s a global story and if places like Burra and the copper triangle don’t feature in that somehow, the experience in Cornwall is diminished.”

It’s estimated 500,000 Cornish migrants left England between 1815 and the start of World War I, as the once booming mining industry on their home soil slowed down. But their advanced mining skills were an asset to other projects emerging all over the world. “They were cutting edge,” said Professor Payton.

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UPDATE 3-BHP aims to slash iron ore costs to become cheapest supplier – by Silvia Antonioli and Sonali Paul (Reuters India – October 6, 2014)

http://in.reuters.com/

LONDON/MELBOURNE, Oct 6 (Reuters) – BHP Billiton aims to cut its iron ore production costs by more than 25 percent and squeeze more tonnes from its mines as it aims to overtake rival Rio Tinto as the world’s cheapest producer, the world’s largest miner said on Monday.

BHP, the No. 3 iron ore producer behind Brazil’s Vale and Rio Tinto, outlined the cost-cutting and expansion plan even as iron ore prices have slumped 42 percent this year, as it sees demand picking up over the medium term.

“We will continue to squeeze the lemon because at the end of the day it’s just so value accretive,” Jimmy Wilson, the head of BHP’s iron ore division, told reporters in a video conference ahead of an analyst tour of its West Australian mines.

Miners’ focus has shifted to cost cutting as iron ore prices have dropped from about $190 a tonne in 2011 to less than $80 now, sinking to five-year lows as supply growth from the mega producers has exceeded demand growth by more than two to one.

BHP said it aims to cut production costs, excluding freight and royalties, to less than $20 a tonne in the medium term, from $27.50 for financial year 2014. That compares with Rio Tinto’s cash cost of $20.40 a tonne in the first half of 2014.

“The name of the game in the past was volume above and before everything else. Now cost is much more important and we are finding a lot more opportunities,” Wilson said.

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No rebound in copper till after 2016 – by Rowan Callick (The Australian – October 2, 2014)

http://www.theaustralian.com.au/business

THE falling copper price — which has held its value much better this year than its metal peers, down just 8 per cent so far — will not bounce back any time soon, due to a series of one-off developments in China, which consumes 40 per cent of the world’s production.

That is the verdict of Michael Komesaroff, a leading Australian expert on China’s mining industry — a former Rio Tinto executive in Asia, who then worked for a major Chinese resource corporation — writing in new analysis for China-based GavekalDragonomics.

Over the past 10 years, he says, China’s consumption of ­refined copper has almost trebled, while consumption in the rest of the world has contracted by 6 per cent.

The metal’s high value to density ratio and the ease with which it can be stored for long periods has resulted in its widespread use as collateral in China, being pledged against relatively low interest hard currency loans.

This practice was driven by the People’s Bank of China raising in 2010 the reserve requirement for the commercial banks, effectively tightening domestic credit.

Mr Komesaroff says: “Speculators, mainly small and medium-sized companies with access to copper, pledged their stocks as collateral against US-denominated letters of credit issued by the domestic banks.

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Supply a critical issue for suitors of Nickel West – by Tess Ingram (sydney Morning Herald – October 3, 2014)

http://www.smh.com.au/

Possible buyers for BHP Billiton’s Nickel West business are scrutinising the sector’s junior miners as they weigh up the potential for long-term supply for one of its key assets, the Kalgoorlie smelter.

The sale of the Nickel West business has been under way for some months and industry sources suggest interested buyers have been narrowed down to resources giants Glencore and Jinchuan Group.

Any buyer of the West Australian assets would have to work with local nickel producers to secure supply for the smelter, which has run about 10 per cent under capacity and at a high cost for BHP, with industry suggesting that either a secure offtake agreement or an acquisition of a local player is highly likely.

Fingers appear to be pointing towards both Western Areas and Sirius Resources due to the quality of their nickel concentrate and their relative freedom to sign a deal.

Western Areas managing director Dan Lougher confirmed that the company had been in talks with prospective buyers, including Glencore and Jinchuan, but had not yet been approached in regards to an acquisition.

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Reform essential for WA’s future success – by Kevin Skinner (Australian Mining – October 2, 2014)

http://www.miningaustralia.com.au/home

Kevin Skinner works with Field Public Relations.

The government agency charged with driving the reform of Western Australia’s $121 billion a year resources industry says it is essential that the current reforms within the sector continue – and in close consultation with the industry – if the sector is to emerge successfully from the current easing in mineral commodities demand and pricing.

Addressing the Paydirt 2014 Australian Nickel Conference in Perth today, the Director General of WA’s Department of Mines and Petroleum, Richard Sellers, said it was essential however, that any reforms did not add to the cost of doing business in Western Australia, nor detracted from its appeal as a destination for global investment in exploration and mining.

“One of the most successful outcomes to date of our reform is the slashing of the tenement titles approvals processes and backlog to its best level in more than two decades,” Sellers said.

“When you consider there are more than 22 000 active mineral titles operating in Western Australia covering an area of almost 550 000 square kilometres, or just over one fifth of the State’s land mass, the Department’s moves to cut the backlog of outstanding titles applications have seen this drop from more than 18 000 in 2007 to just over 4000 today,” he said.

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End of the Iron Age – by James Wilson and Neil Hume (Financial Times – September 29, 2014)

http://www.ft.com/home/us

A collapse of ore prices throws miners’ strategies into doubt and threatens an industry shakeout

Iron is one of the most abundant elements on earth but pulling it out of the ground efficiently can be a daunting undertaking. Snaking through the low, green hills of southern Brazil is a 530km pipeline, the decisive link in Anglo American’s $8.2bn Minas-Rio project to extract iron ore in the Brazilian interior and ship it from a new Atlantic port. Way over its original $3.6bn budget and two years late, Minas-Rio is finally close to the point of “first ore on ship”.

For years, huge mining projects such as these have formed the backbone of global economic expansion. The world’s most important commodity after crude oil, iron ore has been devoured by Chinese steel mills, emerging as the raw material for an infrastructure-led growth spurt.

But Minas-Rio is about to deliver its first ore into a much less welcoming world. The price of iron ore has plunged more than 40 per cent this year, the worst performance across metals and bulk commodities in 2014. From an average price of $135 per tonne last year, the benchmark iron ore contract sank last week to less than $80 for the first time since the global financial crisis.

“The iron ore market is in the midst of a transition without precedent in recent commodity history,” says Macquarie, the Australian bank.

Behind the change is a big increase in iron ore exports – and not just the 26.5m tonnes that Minas-Rio will bring to market when fully operational in 2016.

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Juniors reap $1bn windfall from big miners’ ‘unloved assets’ – by Paul Garvey (The Australian – October 1, 2014)

http://www.theaustralian.com.au/business

ASSETS unloaded by some of the world’s biggest mining houses for less than $250 million created more than $1 billion in value in months for a handful of junior Australian mining companies.

Data compiled by The Australian shows the recent acquisitions by companies such as Northern Star, Poseidon Nickel and Saracen Minerals have paid for themselves several times over given the share price gains since the deals were ¬announced.

Falling commodity prices and shareholder demands for greater financial discipline have prompted the mining giants to offload non-core assets as part of their efforts to rein in operating costs and reduce debt.

The smaller miners and explorers willing to step in and buy assets in a falling market have been richly rewarded. The Australian’s analysis shows the acquirers enjoyed a surge in market capitalisation that collectively totalled more than $1.3bn at its peak.

While share prices across the sector have fallen in recent months, the combined market capitalisation of the acquirers is still $730.8m higher than their pre-purchase levels.

The acquirers have all comfortably outperformed the ASX 300 Resources Index, which has fallen by 7.2 per cent this year.

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Glencore, Rio Tinto could save $500m by merging coal operations – by Sarah-Jane Tasker (The Australian – October 1, 2014)

http://www.theaustralian.com.au/business

DIVERSIFIED miners Rio Tinto and Glencore could target $500 million in annual savings if they merge their NSW coal operations, analysts on a site tour of the Swiss giant’s assets have flagged.

Glencore, rumoured to be eyeing acquisitions, highlighted the significant synergy potential with Rio Tinto in the Hunter Valley region given the two miners had many adjacent assets.

“These have not been quantified but could total close to $500m per annum pretax, and relate to overhead reduction, mining efficiencies, logistics and blending,” Credit Suisse analyst Liam Fitzpatrick said. “Despite this, there appears to have been very limited progress between the two companies.”

Recent media reports have suggested Glencore chief Ivan Glasenberg has Rio on his acquisition wish list, but neither company has weighed in on market speculation.

Glencore kicked off a sell-side analysts tour of its Australian ¬assets this week with a visit to its coal operations, and the head of coal assets, Peter Freyberg, told those on the trip the company had a “synergistic and targeted acquisition strategy”.

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New Caledonian, Chinese companies plan Vanuatu nickel partnership – by James Regan and Cecile Lefort (Reuters India – September 30, 2014)

http://in.reuters.com/

SYDNEY, Sept 30 (Reuters) – The South Pacific islands of New Caledonia and Vanuatu are studying a plan to jointly mine and process nickel ores into refined metal to help produce stainless steel in China.

The acting prime minister of Vanuatu, Ham Lini, has expressed interest in the proposal and has asked the partners to lodge a formal application to construct the smelter in his country.

The move comes as Chinese steel mills scour the Asia-Pacific region for alternative supplies of nickel after top supplier Indonesia imposed a ban on such exports in January.

Under the proposed partnership, New Caledonian company MKM Group and China’s Jin Pei Century Investment (Group) Co Ltd plan to mine low-purity nickel ore in the French Pacific territory and ship it to Santo in northern Vanuatu for smelting.

Media reports in New Caledonia said the project would be owned 51 percent by MKM and 49 percent by Jin Pei. The head of MKM, Wilfried Mai, told New Caledonian television he had advised the Chinese investors to build the plant in Vanuatu.

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Brazilian giant Vale joins Fraser Range nickel rush – by Peter Ker (Sydney Morning Herald – September 30, 2014)

http://www.smh.com.au/

It’s the hottest exploration province in Australia, and now Brazilian mining giant Vale wants a piece of it. Vale’s Perth-based exploration unit is understood to have joined a long list of explorers in the Fraser Range region of Western Australia, in the hope of making a new major nickel discovery.

The region came to prominence after Sirius Resources hit the jackpot with the Nova nickel and copper discovery two years ago, and has since become one of the most active exploration regions in the nation. Most of the companies drilling in the region are tiny ASX-listed hopefuls, making the $US55 billion Brazilian quite the exception.

Vale is the world’s second biggest producer of nickel, behind only Norilsk Nickel of Russia, which decided to quit operating in Australia about 12 months ago.

Vale’s Australian office declined to comment on the strategy behind the move into the Fraser Range, but it is understood the claim area was acquired within the past month, and is located slightly off the main mineralisation trend, on the eastern edge of the range.

The company’s move into the Fraser Range is ironic, given Sirius’ first big nickel discovery in the region in 2012 was notable for the fact that it revealed a type of nickel mineralisation not previously seen in Australia.

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NEWS RELEASE: DIRT WINNERS ANNOUNCED AT RED CARPET EVENT CELEBRATING STUDENTS’ SUCCESS – Friday 26 September 2014

 

http://www.sacome.org.au/

The South Australian Chamber of Mines and Energy (SACOME) is proud to announce the student winners of its unique initiative Dirt TV, following a high profile Awards Ceremony at the National Wine Centre in Adelaide last night.

Sweeping the prize pool was Mining: So good its nearly a crime, by James Haskard and Lachlan Blake, taking out both the BHP Billiton Best Overall Video Award and also the SACOME People’s Choice Award – receiving 30% of total public votes.

Jason Kuchel, Chief Executive of SACOME said “Mining: So good its nearly a crime is a fantastic example of what can be created without high tech equipment, the need for special settings or effects but simply using a clever idea, excellent script and fantastic execution.”

“James and Lachlan rightly took away $6,000 for their efforts, plus another $500 for their school, Concordia College.”

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‘Inconvenient truth’: Australian mining wages too high, says Mitsui – by Amanda Saunders (Sydney Morning Herald – September 26, 2014)

http://www.smh.com.au/

Japanese trading giant Mitsui says Australia’s lagging productivity fails to justify its high mining wages, while tipping a modest rebound in heavily depressed iron ore and coal prices by the end of the year.

Mitsui, which has ploughed $14 billion into investments in Australia in the past decade, also forecast the huge iron ore supply glut would likely correct by the end of the decade, possibly as early as 2017.

Mitsui Australia boss Yasushi Takahashi stressed the importance of ­executing deeper cost cuts at Mitsui’s Australian operations, which include iron ore, coal, and liquefied natural gas.

“It’s an inconvenient truth but Australia’s high wages are not supported by an equally high productivity,” Mr Takahashi said. “The biggest subject we are tackling right now with our joint venture partners is to improve productivity to match up with high costs.”

He pointed to prohibitive labour costs at Australia’s coal mines. Labour made up about 25 per cent of on-site coal mine costs in Australia, compared to 10 to 15 per cent in other key mining exporters, like China, the United States, South Africa and Indonesia.

Australia’s average mining wage was $US122,000 ($138,000), more than double that of the US. “That is a good thing we are seeing high wages in the most liveable country in the world,” he said.

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REFILE-Axiom wins long battle to develop Solomons nickel – by James Regan (Reuters U.S. – September 24, 2014)

http://www.reuters.com/

SYDNEY, Sept 24 (Reuters) – Tiny Australian prospector Axiom Mining has won a three-year court battle against Japanese giant Sumitomo Metal Mining to exploit a major nickel discovery in the South Pacific’s Solomon Islands left idle for more than half a century.

Axiom says the ruling in the Solomon Islands High Court could lead to the nickel deposit, spanning the islands of San Jorge and Santa Isabel, finally being developed within two years, just as nickel prices soar due to an ore export ban by major supplier Indonesia in January.

“We can now re-commence our exploration of the tenement with our partners,” said Axiom’s Australian managing director Ryan Mount, who moved to the Solomon Islands to be close to the project.

Geologists have been aware of the Isabel deposit since 1957 but little development work has been done because of ownership changes and legal wrangling.

Analysts estimate the discovery compares in size or grade to other large South Pacific nickel mines, such as Vale SA’s Goro mine in New Caledonia and the China-owned Ramu mine in Papua New Guinea.

Axiom, along with the local Kolosori and Bungusule landowner groups, was granted a prospecting licence to explore the Isabel site in 2011, but were blocked by an injunction brought through a civil claim by Sumitomo.

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COLUMN-Will the Big 3 iron ore miners have enough time to win price war? – by Clyde Russell (Reuters India – September 24, 2014)

http://in.reuters.com/

LAUNCESTON, Australia, Sept 24 (Reuters) – The recent debate over iron ore has tended to be whether the three mining giants who dominate seaborne supply will win their massive bet that they can drive high-cost producers out of the market.

But a more relevant question is whether they will have the time to achieve their aims. The Anglo-Australian pair of Rio Tinto and BHP Billiton, as well as Brazil’s Vale have flooded the market with their low-cost iron ore, with supply from Western Australia ramping up dramatically in the past year.

This has led to a collapse in the Asian spot price .IO62-CNI=SI to a five-year low of $79.40 a tonne on Tuesday, down 41 percent from the end of last year and 58 percent from the record $191.90 a tonne reached in February 2011.

The main question for the big three is not whether they can drive higher-cost competitors to the wall, but how long their own investors will tolerate the lower earnings as a result of the weak iron ore price.

While the chief executives of the big three haven’t exactly said so in public, they are clearly hoping for a relatively short war and a quick victory, after which iron ore prices will once again rise and stabilise at a higher level. Again, that price level hasn’t been clearly spelt out, but I would imagine the big three have a number in mind somewhere above $90 a tonne, with $110 likely viewed as a ceiling.

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What Australians think about mining – by Dorothy Kosich (Mineweb.com – September 23, 2014)

http://www.mineweb.com/mineweb/

Australians believe mining plays an important role in the prosperity of the nation, but much needs to be done to bolster the industry’s acceptance, trust and support – CSIRO

RENO (MINEWEB) – A CSIRO survey report released Tuesday at the International Mining and Resources Conference in Melbourne, Australia, found “Australians consider that mining is a worthwhile pursuit when you weigh up all the associated benefits and costs”.

However, lead CSIRO researcher Dr. Kieren Moffat noted, “”The survey shows Australians broadly accept mining and that acceptance underpins the social license to operate, but it shows that support is fragile and subject to things like perceptions of mining impacts, governance and the sharing of benefits.”

“Australians across mining, non-mining and metropolitan regions strongly agreed that mining contributes significantly to the economy, to the standard of living, to our way of life and future prosperity,” said Moffat. “Those surveyed in each group also generally agreed that mining creates jobs, opportunities and infrastructures in regions.”

“There are however relatively strong community perceptions that mining impacts negatively on the environment, water quality, agriculture, climate change and the health of local communities,” Moffat advised.

The Australian attitudes toward mining report, authored by Moffat, Airong Zhang and Naomi Boughen, summarizes the findings from a survey of 5,121 Australians about their attitudes toward the mining industry at the end of 2013 and in the first quarter of 2014.

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