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Australia/New Caledonia/Papua New Guinea Mining

Australia’s ambitious new coal frontier blown off track – Rebekah Kebede (Globe and Mail – September 4,2012)

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.

PERTH – Reuters – Tumbling coal prices and tough financing threaten to derail tens of billions of dollars of planned investment in Australia’s Galilee Basin, a so-far untapped reserve with the potential to make the country the world’s top thermal coal exporter.

Emboldened by record coal prices in recent years, Australian mining magnates have teamed up with Chinese and Indian groups such as GVK Power and Infrastructure Ltd. and Adani Enterprises to develop huge mines in Galilee, a remote outback area in Queensland state.

They had big plans: five developments to ramp up production to more than 180 million tonnes by the end of the decade, double Australia’s current annual thermal coal exports. In addition, rail lines and ports to ship the coal, mostly to Asia.

But efforts to open up Galilee have been shaken by a 20-per-cent slide in Australian benchmark coal prices since the start of 2012 to just over $90 per tonne, as China’s demand has cooled.

Delays will mean Australia will miss out on overtaking Indonesia as the world’s No.1 thermal coal exporter and wipe out a big chunk of future coal supply.

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Cameco acquires BHP Australian uranium deposit for $430-million – by Pav Jordan (Globe and Mail – August 28, 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.

Cameco Corp. is growing its uranium holdings even as other players back away from an industry stuck in a low-price trough for over a year. Saskatoon-based Cameco, already the world’s largest publicly traded uranium producer, announced plans to buy the Yeelirrie uranium project in Western Australia for $430-million (U.S.), adding one of the country’s top undeveloped uranium deposits to its portfolio.

It was the second acquisition by Cameco since May, when it reached a deal to buy nuclear fuel broker Nukem Energy for about $300-million, including debt.

“We believe Cameco could be using the current period of disillusionment with uranium and the nuclear industry to build an inventory of larger projects that could find their way into the company’s development pipeline over the next decade,” Greg Barnes, an analyst with TD Securities Inc. in Toronto, said in a research report on Monday.

Global uranium demand is expected to grow over the next decade with ballooning needs around the world for clean energy to generate electricity, particularly in China and other fast-growing economies.

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Just the Pits [mining] – by Peter Koven (National Post – August 25, 2012)

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

The consensus view right now is that all companies in the mining industry are struggling because of high costs and falling commodity prices. This isn’t entirely true.

Take Amec PLC, the giant resource project management and consulting firm. In its latest financials, the U.K.based company reported a 37% jump in year-over-year revenue, along with a 25% rise in diluted earnings per share. And in Australia, mining services firms made headlines this week by reporting their best results.

“The order book has been maintained at record levels. We see continued demand for our services, and this has not been significantly impacted by the ongoing economic uncertainty,” Amec said.

Those results from a major industry services firm are a total disconnect from mining companies themselves. Over the past several weeks, miners have reported significant drops in profit, deferrals of key projects, and firings of chief executives who failed to boost the stock prices.

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As profit falls, BHP pulls back on new mines – by Pav Jordan (Globe and Mail – August 23, 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.

BHP Billiton Ltd. has put major project decisions on hold as the world’s biggest miner adapts to slumping demand for commodities and reins in soaring production costs.

Reporting the first annual fall in profit in three years on Wednesday, BHP said it delayed the $20-billion (U.S.) open-pit expansion of Olympic Dam, a huge copper and uranium project in southern Australia.

The Anglo-Australian mining giant also said no other major project approvals are expected in the current fiscal year, including for Jansen, the $12-billion Saskatchewan potash project slated to become the world’s largest producer of the crop nutrient.

Mining companies are showing the bruises of slowing global commodities demand as key consumer China buys less coal, copper, iron ore and other commodities amid softening economic growth. Profits are also being squeezed as costs to build and operate mines rise at their fastest rate in a decade, especially for labour and energy.

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BHP Billiton puts $68-billion worth of projects on hold as profit plunges – by Elisabeth Behrmann and Jesse Riseborough (Bloomberg News/National Post – August 22, 2012)

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

BHP Billiton Ltd., the world’s biggest mining company, put approvals for about US$68 billion of projects on hold after second-half profit plunged 58% as metal prices declined and costs rose.
 
Net income dropped to US$5.5 billion in the six months ended June 30 from US$13.1 billion a year ago, according to Bloomberg calculations that were confirmed by the Melbourne-based company. That beat the US$3.5 billion median estimate of four analysts surveyed by Bloomberg.
 
BHP doesn’t expect to approve any spending on major projects this fiscal year, including the Olympic Dam expansion, which would have created the world’s largest uranium mine, the company said Wednesday. It joins Rio Tinto Group and Xstrata Plc in booking declining profits amid sluggish global growth.

“Given current investor sentiment towards high-capex, long-dated projects, the move not to approve Olympic Dam and Outer Harbour will be taken positively,” Richard Knights, an analyst at Liberum Capital Ltd., told Bloomberg. “The problem for BHP management is at some point they will have to weigh up the market’s desire for short-term returns and their prerogative as a major mining company to commission long-dated projects.”

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Indigenous worker numbers skyrocket in mining – by Gian De Poloni (Australian Broadcasting Corporation News – July 31, 2012)

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

The number of Indigenous people working on major mining projects in Western Australia has skyrocketed over the past five years.

In the resource-rich Pilbara region, big companies like Rio Tinto, BHP Billiton, Chevron and Fortescue Metals are keen to hire as many Aboriginal people as they can, and they are keen to work. Brendon Kelly is a 40-year-old Indigenous man with five children living in Port Hedland.

BK, as he is known to his mates, decided three years ago he wanted to be a part of the biggest mining boom the country has ever seen. He undertook a course with Ngarda Civil and Mining, one of the largest Indigenous training groups, and now works as a drill and blast engineer at BHP’s Yarrie iron ore mine, about 200 kilometres north-east of Port Hedland.

“There are four Aboriginal people on our crew, it’s pretty multicultural out here on site at the moment,” he said. “It’s a really good thing, the more the better.” BK is urging others to consider getting training. “There’s better security and independence for yourself and your family,” he said.

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BHP said to delay Olympic Dam expansion – Bloomberg News (National Post – July 30, 2012)

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

BHP Billiton Ltd., the world’s biggest mining company, will delay approval of a $33 billion mine expansion in Australia for two years because of falling commodity prices, The Australian newspaper reported.
 
The company will delay a decision until 2014, the newspaper said, citing a document prepared by an unidentified consultancy. The document was prepared with knowledge from BHP staff, the Australian said.
 
The board of Melbourne-based BHP Billiton has been due to decide on proceeding with the Olympic Dam copper-uranium-gold mine expansion by the end of this year. Chief Executive Officer Marius Kloppers warned in May that rising costs and easing commodity prices may change the economics of certain projects.
 
“We will inform the market when decisions have been taken,” Antonios Papaspiropoulos, a spokesman for BHP Billiton, said by phone today. He declined to comment on the boards’ previously stated end-year decision deadline.

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Australian exploration spending hits record US$1.09bn – by Dorothy Kosich (Mineweb.com – June 18, 2012)

www.mineweb.com

Despite the levying of carbon pollution and mineral resources rent taxes, Australian mineral exploration spending achieved a record in the quarter ending March.

RENO (MINEWEB) – Spending on mineral exploration in Australia reached a record A$1.09 billion (US$1.09bn) in the March quarter-the first time more than a billion dollars has been spent on exploration in a single quarter.
 
In his weekly Treasurer’s Economic Note issued Sunday, Australian Treasurer Wayne Swan observed “In fact, exploration expenditure has risen by about 35% since a price on carbon pollution was announced, and nearly 80% since the Minerals Resources Rent Tax was announced.”
 
“It’s yet another reality check for those who try to talk down the outlook for our resources sector or make ridiculous claims that important economic reforms are hurting investment,” he stressed.
 
Beginning on July 1, Australia will levy a controversial carbon tax on 294 firms for the A$23/tonne (US$22.96/tonne), with mining companies, steel makers and electricity generators among the largest polluters.

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High-paying mine jobs Down Under bring city woes to sleepy towns – by Jane Regan (Mineweb.com – June 11, 2012)

www.mineweb.com

The property crunch engulfing the little town of Moranbah and other communities around the coal-rich Bowen Basin is one of a growing number of downsides associated with the Australian mining boom.

MORANBAH, Australia (Reuters) – Despite a six-figure salary, Russel Wise is worried he will soon be homeless after receiving an eviction order from the one-room trailer he has rented since taking a job in an Australian coal mine in 2009.
 
“There aren’t too many options around,” says Wise, who like thousands of other Australians, was lured to the little town of Moranbah in the coal-rich northeast by high-paying jobs and in the process triggered a housing crisis of big-city proportions.
 
“The owner wants to build more modern, multi-dwelling units to house more people the mining companies can bring in and out on rotation, so I’ve got to go. Simple as that,” says Wise.
 
The property crunch engulfing Moranbah and other communities peppering the Bowen Basin, a 60,000-sq-km (23,200-sq-mile) moonscape of open pit mines supplying most of the world’s coal for steel making, is one of a swelling number of downsides associated with the Australian mining boom.

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Crisis in Mining – by Richard (Rick) Mills (Ahead of the Herd.com – May 2012)

http://aheadoftheherd.com/

As a general rule, the most successful man in life is the man who has the best information

A combination of mass retirements and increasing natural resource demand from emerging economies has created a crisis in the resource extraction sector – one which is definitely not on investor’s radar screens. 

Currently there is a “massive talent gap” that is going to get worse because the global mining industry is experiencing the biggest wave of workforce retirements in 70 years – the oldest baby boomers turned 65 years old in 2011.

The Mining Industry Human Resources Council (MIHRC) has recently said that about 40% of the resource extraction industry’s workforce is at least 50 years old and one third of them are expected to retire by 2022. 

The organization also forecasts that the Canadian mining industry will face a shortage of 140,000 workers by 2021 – this number of workers being needed just to maintain current levels of production. 

The Petroleum Human Resources Council of Canada warned a severe oil patch labor shortage is looming and that the “patch” will need to hire 24,000 new employees by 2014. 

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Australia trolling for Canadian skills – by Jameson Berkow (National Post – May 4, 2012)

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

CALGARY — Control over scarce resources has spawned more than a few wars throughout history and the fight for skilled labour is simply the latest.

This weekend, dozens of Australian companies will be taking part in a Calgary jobs expo to woo Canadian-trained scientists and engineers to relocate Down Under. The expo, which will move on to Vancouver and Edmonton next week, comes as Canada’s resource sector is struggling to keep skilled workers.

“Right now there is a global war for talent in any resource or mining industry,” Rupert Merrick of Working In Ltd., the Australian company organizing the expo, said during a Thursday news conference. “The skills that they need are not present in sufficient numbers within their own country.”

Australia alone will need to recruit 100,000 skilled professionals to develop more than A$150-billion in mining and liquefied natural gas (LNG) projects set to roll out in the near future. With domestic labour extremely limited, local firms have turned to Canada for talent with great success.

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Mining issues front and centre in Queensland’s electoral bloodbath – by Ross Louthean (Mineweb.com – March 26, 2012)

www.mineweb.com

The incumbent Labor government in the region experienced the biggest political rout in Australia’s electoral history as the country continues to lurch to the right.

PERTH (MINEWEB) –  Even the incoming Liberal National Party (LNP) Premier of Queensland, Campbell Newman, had not anticipated the biggest political rout in Australia’s electoral history when the incumbent Labor Government lost 48 sitting members which prompted outgoing Premier Anna Bligh to quit politics.
 
With eight seats in the one-house Queensland Parliament still in the undecided category this morning the Australian Labor Party had five seats and was expected to hold another two while the LNP held 82, the Katter Australian Party (named after firebrand rural politician Bob Katter) has two, and independents retained two.
 
There will be a by-election called for Anna Bligh’s seat after she said Queenslanders had made it clear she was not wanted. Some commentators said this morning that her seat may now well go to the LNP because Australians don’t like by-elections of this type.
 
The swing against Labor was about 16% and political commentators were saying yesterday that Queensland Labor was on the nose for a variety of issues, including financial management.

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Australia finally imposes 30% mining tax – by James Grubel (Mineweb.com – March 19, 2012)

 www.mineweb.com

In a major victory for Prime Minister Julia Gillard’s minority government, Australia’s parliament passed laws for a new 30% tax on iron ore and coal mine profits on Monday, ending a two-year battle with mining companies.

CANBERRA (Reuters)  –  Australia’s parliament passed laws for a new 30 percent tax on iron ore and coal mine profits on Monday after a bruising two-year battle with mining companies, in a major victory for Prime Minister Julia Gillard and her struggling minority government.
 
The tax will affect about 30 companies, including global miners BHP Billiton, Rio Tinto and Xstrata, and aims to raise about A$10.6 billion ($11.2 billion) in its first three years. “This is indeed an historic day for economic reform, and an historic day for a fair go in Australia,” Treasurer Wayne Swan told parliament.
 
The tax, which is being closely watched by other resource-rich countries, is designed to spread the benefits of Australia’s resources boom to other sections of the economy by funding a cut in the company tax rate, higher payments into pension funds, and A$6 billion of infrastructure spending.

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FRASER INSTITUTE NEWS RELEASE: New Brunswick trumps Alberta as world’s No. 1 spot for mining investment;

February 23, 2012

TORONTO–New Brunswick is the world’s most attractive jurisdiction for
mineral exploration and development in the view of the international mining industry, according to the Survey of Mining Companies: 2011/2012, released today by the Fraser Institute, Canada’s leading public policy think-tank.

“New Brunswick shot to the top of the rankings as miners lauded the province for its fair, transparent, and efficient legal system and consistency in the enforcement and interpretation of existing environmental regulations,” said Fred McMahon, Fraser Institute vice-president of international policy research and coordinator of the survey.

“Combine that with a competitive taxation regime and minimal uncertainty
around disputed land claims and New Brunswick has emerged as a superstar in the view of the global mining community.”

New Brunswick vaulted to first place from 23rd last year, unseating Alberta
at the top of the global rankings as that province fell to third overall.
Quebec, which enjoyed a three-year reign at No. 1 from 2007 to 2010,
continued to lose support among mining executives as it fell to fifth place
from fourth in 2011.

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Green Australia Still Experiencing Massive Coal Boom – by John Daly (OilPrice.com – February 21, 2012)

www.oilprice.com

Australia, despite being deeply committed to curbing greenhouse gas emissions GGEs, is nonetheless experiencing a fossil fuel surge.
 
The growth comes despite a carbon tax, due to be implemented later this year, which is deeply unpopular with the country’s mining industry.

According to the government agency Geoscience Australia, in fiscal year 2011 coal exploration spending in Australia surged by 62 percent, with investment in exploration for new coal deposits reaching $520 million, with spending on exploration surging faster than any other mineral commodity. Australia’s coal is abundant and considerably less expensive than other energy sources, with the country’s black coal reserves located primarily in New South Wales and Queensland, along the eastern seaboard where the majority of electricity is generated and consumed.

The country also has substantial reserves of lower-grade brown coal (lignite), located primarily in the Gippsland Basin of Victoria, with Australia possessing an estimated 25 percent of the world’s economic demonstrated resources (EDR).

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