Australia/New Caledonia/Papua New Guinea Mining – Page 117

Glencore slams Australian report that it paid zero tax in three years – by Henry Lazenby (MiningWeekly.com – July 3, 2014)

July 4, 2014

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

TORONTO (miningweekly.com) – Global diversified mining giant and commodity trader Glencore has condemned a recent report by Australian media company Fairfax Media, claiming that through aggressive tax structuring, Glencore had paid zero tax over the past three years, despite earning income of A$15-billion.

Business and technology news website Business Insider had published an internal email to staff by Glencore’s coal CE, Peter Freyberg, in which he dispelled the media speculation surrounding its tax payments, saying that the firm had paid A$400-million in corporate income tax since 2011.

He also said Glencore had paid A$8-billion in royalties and taxes, including A$2-billion related to corporate income tax, in Australia since 2007.

“As you will be acutely aware, for much of this period the resource industries in which we participate have faced significant challenges including low commodity prices, high input costs and a robust Australian dollar.

“Profitability is significantly lower than during the preceding four years – the reality is that a significant proportion of Australia’s coal mines are currently operating at a loss and although we run an efficient business, we are not immune to the market conditions.

COLUMN-Copper is unexpected victim of Indonesian export ban – by Andy Home (Reuters India – July 3, 2014)

July 3, 2014

http://in.reuters.com/

The opinions expressed here are those of the author, a columnist for Reuters.

(Reuters) – When Indonesia banned the export of unprocessed minerals in January of this year, the consensus view was that the most significant impact would be on the nickel and aluminium raw material markets in that order.

Copper barely warranted a mention.

Analysts at Macquarie Bank, for example, issued a research note on January 14, two days after the ban came into effect, examining the implications in a question-and-answer format. The only reference to copper came in the 19th bullet point under the telling heading: “Have copper producers been let entirely off the hook?”

Six months on, though, and one of the country’s two giant copper mines is on care and maintenance and the other has cut production by half. There have been no concentrate exports since January.

Not only is this the single biggest hit to copper mine supply this year but it is acting to accelerate a fracturing of the copper concentrates pricing model.

Both Freeport McMoRan, which owns and operates the Grasberg mine, and Newmont Mining, major stakeholder in and operator of the Batu Hijau mine, appear to have been blind-sided by the January rule changes.

NEW CALEDONIA: Is a Vast Marine Sanctuary Any Use if You Can’t Police It? – by Ian Lloyd Neubauer (Time Magazine – June 29, 2014)

July 2, 2014

http://time.com/

Tiny New Caledonia relies on a handful of French ships to patrol a marine reserve twice the size of Texas

For the first half of June — until the U.S. declared an even bigger one — the tiny, French semiautonomous territory of New Caledonia boasted the largest nature reserve on earth.

Covering a vast 1.3 million-sq-km region of the South Pacific, the Natural Park of the Coral Sea was established on May 28 to protect the world’s second largest coral reef and its attendant lagoon. Already safeguarded in parts by a UNESCO World Heritage listing, this wonderland is a nursery for 25 kinds of marine mammals (including sea cows and humpback whales), 48 species of shark and five different marine turtles. It also spawns vast numbers of pelagic fish, 3,000 tons of which make it into the Pacific every year – an important food source for tens of millions, and a source of employment for thousands of people living in the region.

But before most people had even heard of the creation of the Natural Park of the Coral Sea, U.S. President Barack Obama went one better by using his executive powers to create an even larger marine park in the south-central Pacific on June 17. Known as the Pacific Remote Islands Marine National Monument, it protects 2 million sq km of ocean and a smattering of islands and atolls between Hawaii and American Samoa from commercial fishing.

Obama’s announcement made world news, while New Caledonia’s barely received a mention. Perhaps that’s because the U.S., while sketchy on the details, has the hardware and manpower to enforce the no-take rule at the core of any national park.

Nautilus Minerals Inc says it’s poised to begin undersea mining following dispute settlement – by Peter Koven (National Post – June 26, 2014)

June 26, 2014

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

A lot of investors won’t believe it until they see it. But Nautilus Minerals Inc. maintains it is back on track to become the world’s first company to mine metals under the sea.

“It’s been a very exciting year,” chairman Geoffrey Loudon said at the company’s annual meeting in Toronto on Wednesday. “A lot of things have happened that we’ve waited an awful long time for.”

Most significantly, the company settled a two-year dispute with the government of Papua New Guinea (PNG) over ownership of its Solwara 1 copper-gold project in April. The dispute was a giant black cloud over the company.

But there are significant hurdles ahead. For one thing, Toronto-based Nautilus still needs to secure a ship, something it has been talking about for many years. At the meeting, chief executive Mike Johnston said that should be a done deal by November, with Nautilus either chartering a ship or buying one.

Following that event, he laid out a path that could bring the company into first production as soon as 2017. And once Solwara 1 is mined out, Nautilus can theoretically move its ship and seafloor mining equipment over to the next deposit.

UPDATE 2-Australia cuts 2015 iron ore, met coal price forecasts – by James Regan (Reuters India – June 25, 2014)

June 25, 2014

http://in.reuters.com/

SYDNEY, June 25 (Reuters) – Australia revised down its 2015 iron ore and metallurgical coal price forecasts as rising output of two of the country’s biggest export earners outstrips demand, raising concerns for mining companies already struggling with shrinking profit margins.

Robust growth in export tonnages meant Australia would still post an 11 percent rise in total export earnings for mineral and energy comodities in 2013-14, the Bureau of Resource and Energy Economics (BREE) said in a quarterly update.

Analysts warn, though, that Australia’s powerful mining industry is facing a prolonged stretch where commodities will fetch prices well below those of the now-defunct mining boom years. BREE lowered its price forecast for iron ore to an average $94.60 a tonne in 2015 from a previous forecast of $100.80, citing growing competition to sell into China’s steel market.

Although steel production in China is forecast to increase in 2015, competition among iron ore exporters to sell their additional production is expected to intensify, it said, while a strong Australian dollar would also drag on local miners.

“This will draw a sharp focus towards managing costs and enhancing productivity in the sector,” said Wayne Calder, deputy executive director of BREE.

BHP looks to cut thousands of jobs from its iron ore division in WA – by Graeme Powell (Australian Broadcasting Corporation – June 24, 2014)

June 24, 2014

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

Mining company BHP Billiton is looking at cutting thousands of jobs from its iron ore operations in WA. The miner has already announced the loss of 500 jobs in recent months, including 100 at its headquarters in Perth.

The ABC understands up to 3,000 jobs could go from BHP’s iron ore division, which currently employs 16,000 people. A BHP spokeswoman said external consultants have been employed to conduct a review in order to cut costs.

The ABC understands many of the jobs losses will involve contractors whose positions are coming to an end and their contracts will not be renewed.

BHP says it has been open about the review and holds regular meeting with workers to keep them updated. The spokeswoman says the job cuts are necessary to ensure BHP Billiton remains a competitive, world-class operation.

In a statement released to the ABC this morning, BHP defended the proposed job cuts. “BHP Billiton Iron Ore regularly undertakes improvement initiatives and organisational reviews. We have engaged external consultants to assist with this process.

Rinehart family feud risks iron ore project, says daughter Bianca – by Andrew Burrell (The Australian – June 24, 2014)

June 24, 2014

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

GINA Rinehart and her warring children risk losing control of their most valuable asset a $10 billion stake in the Hope Downs iron ore project to mining giant Rio Tinto as part of the long-running legal battle that has engulfed the family.

In a hearing to begin today, Mrs Rinehart’s eldest daughter Bianca, 37, will attempt to convince NSW Supreme Court judge Paul Brereton that she is the best choice to replace her mother as trustee of the family trust, which holds 23.4 per cent of the family company Hancock Prospecting.

The Australian understands she will also argue that Mrs Rinehart’s bid to install a corporate trustee, rather than allowing Bianca to manage the trust, could jeopardise Hancock Prospecting’s ownership of its 50 per cent stake in the Hope Downs mine in the Pilbara.

This is because such a move might trigger a change-of-control provision in an agreement between Hancock Prospecting and Rio Tinto, which stipulates that the family company must be owned and controlled by direct descendants of Mrs Rinehart.

It is understood that lawyers for Bianca will argue that Rio Tinto could contend that change of control could occur, which would lead to complex litigation or the forced sale of the Hope Downs asset.

UPDATE 1-“King Coal” in Australia faces rising investment backlash – by James Regan (Reuters India – June 24, 2014)

June 24, 2014

http://in.reuters.com/

MAULES CREEK, Australia, June 24 (Reuters) – A farmer’s habit of rising before dawn finds Cliff Wallace alone most mornings while a rag-tag army of anti-coal activists camped in tents and tee-pees on his land catch a few more hours sleep.

When the protest camp finally awakens, talk around a makeshift mess hall over coal’s impact on global warming competes with analysis of plunging coal prices or the latest bank to come out against investing in fossil fuel extraction.

“It’s a diverse group we’ve got here and in their own way they all want to save our trees from the coal companies,” says Wallace, 62, who grows wheat on land bordering the Leard State Forest, where bulldozing of endangered Box-Gum Woodland trees to develop an open pit coal mine has drawn national attention.

Wallace is happy to host the anti-coal protesters as he is concerned about the impact the mine will have on his farm’s groundwater and says he is “deeply saddened” by the disruption to the region’s animal habitats.

Taking on Australia’s powerful coal sector was once left to environmentalists like Greenpeace and the World Wildlife Fund, but now the anti-coal movement is attracting wider support, from farmers to banks and investment funds striving to be seen as ethical investors and not contributing to global pollution.

Rio Tinto digs deeper for next big discovery – by Brett Winterford (IT News.com – June 23, 2014)

June 23, 2014

http://www.itnews.com.au/

A group of a dozen physicists and geologists from mining giant Rio Tinto and the University of Western Australia is two years away from commercial production of a tool that could dramatically expand the scope of mineral exploration in Australia.

VK1, a collaboration between the mining giant and the university, is an airborne gravity gradiometer that harnesses quantum physics, superconduction, liquid helium cryogenics and aerial survey data to solve the ultimate challenge facing iron ore miners: how can we see underground?

Australia has become a reasonably mature exploration environment, according to Stephen McIntosh, head of exploration at Rio Tinto.

“It is relatively well-explored in the exposed parts of the continent – areas that don’t have cover over the mineral deposit, or some form of material that is younger sitting on top of the mineral deposit.

“The dilemma for Australia is that somewhere between 70 and 80 percent of the continent is covered by something. You actually have to see through a veneer of something to explore underneath the surface – to a mineral deposit a few metres to hundreds of metres below your feet.”

Cold comfort for mining sector – by Robin Bromby (The Australian – June 23, 2014)

June 23, 2014

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

GOLD is up — but not enough. As for the resources sector generally, one veteran says there’s never been a more difficult time.

The yellow metal had a nice bump (thanks, Iraq) and closed at $US1315 an ounce. While gold bugs celebrated, there was some sobering news from Virginia-based resources analyst SNL Metals & Mining. Over the past 10 years, the cost of building a mine has blown out from $US560 an ounce of gold production capacity in 2004 to more than $US2300 in 2013. This was based on a study of 192 mines with minimum output of 50,000 ounces commissioned over that period.

Of course, construction costs are not the only factor in project economics (grades are another) and the increase in the gold price since 2004 dulls some of the pain, but nevertheless it is, one, a stark example of the cost inflation in mining about which we have heard so much and, two, reminds one that new projects are expensive things.

As SNL points out, when it became obvious in 2006 that gold’s rise was no seven-day wonder, producers green-lighted more capital-intensive projects; and, chillingly, SNL notes that capital cost intensity will hit an average $US2400 an ounce this year before pulling back. In other words, good drill results are the easy part. It’s making the development economics right that is harder.

Meanwhile, Peter Strachan at StockAnalysis says he has never seen it so tough, with “the vast majority” of ASX-listed resources companies now the “walking dead, just hanging on by their fingernails”.

China Miners’ Loss Is BHP’s Gain as Iron Prices Slump 44% – by (Bloomberg News – June 20, 2014)

June 20, 2014

http://www.businessweek.com/

Rio Tinto Group and BHP Billiton Ltd. (BHP), two of the world’s biggest iron ore producers, are benefiting as falling iron ore prices pressure smaller rivals in China to shut down.

The price of iron ore has plunged 44 percent from its February 2013 peak on the back of record output. That’s hurting mining companies in China where 20 percent to 30 percent of mines have closed, according to the China Metallurgical Mining Enterprise Association.

The closures are helping Rio Tinto and BHP which, along with Vale SA (VALE5), already control about two thirds of global seaborne supply from their low-cost mines. About $40 billion a year of iron ore is mined in China, the country that’s also the world’s biggest buyer of the steelmaking component.

“Many smaller mines in China have stopped production due to the falling prices,” said Sarah Wang, a Shanghai-based analyst with Masterlink Securities Corp. “It’s the right time for BHP and Rio to seize the opportunity to boost their market share.”

BHP, the world’s biggest mining company, last month also flagged the closure of some Chinese ore mines.‘ “Most of them are smaller ones, while the bigger ones are also starting to be affected,” Liu Xiaoliang, the association’s general secretary, said in an interview. “Almost 70 percent of the ore processing companies have also closed.”

Former Xstrata head makes play for BHP Billiton’s nickel – by Rachelle Younglai (Globe and Mail – June 20, 2014)

June 20, 2014

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.

Mining magnate Mick Davis made an initial bid for BHP Billiton Ltd.’s nickel assets in Australia, but his offer was rejected as too low, a person familiar with the matter said.

X2 Resources, Mr. Davis’ privately held company, has been looking for assets to start building itself into a medium-sized miner, and has raised up to $3.75-billion for acquisitions. It is unknown whether Mr. Davis will increase his bid.

Before X2 , Mr. Davis ran Xstrata Plc, a global mining giant. Xstrata grew by buying out its rivals, including Canadian nickel producer Falconbridge, before it was taken over by Swiss-based Glencore in 2013.

X2 , whose team helped create Xstrata, is one of many private equity firms looking for acquisitions amid the downturn in the commodity industry.

Its strategy is to acquire unwanted assets from the senior miners, which have been re-evaluating their businesses and zeroing in on core operations in order to deal with lower metals prices.

According to analysts, BHP Billiton’s nickel assets, known as Nickel West, contributed just 2.7 per cent of the miner’s overall revenue.

RPT-New Zealand may kick start race to mine the ocean floor – by Sonali Paul and Gyles Beckford (Reuters India – June 16, 2014)

June 16, 2014

http://in.reuters.com/

(Reuters) – New Zealand decides this week whether to approve an underwater iron-ore operation that would likely become the world’s first commercial metals mine at the bottom of the sea.

A green light to allow New Zealand’s Trans Tasman Resources Ltd to start iron-ore dredging off the country’s west coast will encourage others looking to mine copper, cobalt, manganese and other metals deeper on the ocean floor but worried about regulatory hurdles.

Along the Pacific Rim of Fire, as deep as 6,000 metres underwater, volcano crusts, “black smoker” chimneys and vast beds of manganese nodules hold promise for economic powers like China and Japan as well as many poor island states busy pegging stakes on the ocean floor.

“A lot of people are watching the Trans Tasman Resources outcome,” said Michael Johnston, chief executive of Nautilus Minerals, which is working on a deep-sea project off Papua New Guinea and is also in talks with New Zealand.

Other countries in the Pacific looking at underwater mining include Fiji, Solomon Islands, Tonga and Vanuatu, which have all issued exploration licenses. Cook Islands in the South Pacific plans to put seabed exploration licenses up for bids later this year.

Iron ore miners brace for hit as commodity price plunges to nearly two-year lows – by Sarah-Jane Tasker (The Australian – June 16, 2014)

June 16, 2014

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

AUSTRALIA’S iron ore producers are likely to take a hit in the market today after the price of the bulk commodity fell to an almost two-year low over the weekend.

The top producers, BHP Billiton, Rio Tinto and Fortescue Metals Group, all saw their share price take a shave at market close on Friday when the iron ore price hovered at a 21-month low of $US91.50 a tonne.

The price of the steelmaking commodity lost more ground at the weekend and is now sitting at $US90.90. The price of Australia’s top export was down over 3 per cent last week, which was the eighth weekly loss in nine.

The iron ore price has now lost about 32 per cent this year, with the profit hit on producers likely to be seen when the next set of financials are released in August.

Iron ore futures in China also slid to a new record low on Friday, falling to their weakest level since the market started in 2009 as consumption of the commodity slows along with the pace of construction activity during China’s hotter summer months.

Solomon Islands nickel ore legal fight nears decision – by James Regan (Reuters India – June 12, 2014)

June 12, 2014

http://in.reuters.com/

SYDNEY, June 12 (Reuters) – A court ruling in the Solomon Islands may finally unlock a large nickel deposit that geologists have known about for half a century but have been unable to exploit because of ownership changes and legal wrangling.

Japanese giant Sumitomo Metal Mining and tiny Australian explorer Axiom Mining are fighting over the Isabel nickel laterite discovery and will submit final arguments to the Solomon Islands High Court on June 23, following a court case that has already run for 88 days.

A ruling is expected soon after and could lead to development of the deposit, at a time when nickel prices have soared following a ban in January on ore exports by Indonesia, the world’s biggest supplier.

Analysts estimate Isabel 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, with a market value of just A$55 million ($52 million), would aim initially to ship unprocessed ore within two years to hungry Chinese buyers to make nickel pig iron.