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Australia/New Caledonia/Papua New Guinea Mining

Australian mining seen as vulnerable to competition from emerging nations – by Dorothy Kosich (Mineweb.com – September 18, 2012)

www.mineweb.com

Australian mining is losing global market share to rapidly emerging resource-rich economies, says a report from the Minerals Council of Australia.

To download the report, Opportunity at risk, Regaining our competitive edge in mineral resources, go to www.minerals.org.au

RENO (MINEWEB) – Australia’s mining boom is not over, says a study commissioned by the Minerals Council of Australia, but its dynamics have changed and its policy demands are greater and more urgent.
 
The report by the Australian strategy consulting firm, Port Jackson Partners, is the “most detailed panorama yet painted of the burgeoning cost environment in Australia, our deteriorating reputation as a place to do business and the threat this poses to our ability to capture market share and future investment,” said the Minerals Council.
 
In the study, Port Jackson Partners suggest that over the next 20 years, demand for key minerals will increase by between 50% and 200%.  While growth in iron ore demand slows as infrastructure is developed, “there is likely to be new growth in demand for products such as copper, aluminium and other minerals and metals and consumers demand more sophisticated products.”

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Australia miners slam brakes on huge pipeline of projects – by Sonali Paul (Reuters – September 13, 2012)

http://in.reuters.com/

MELBOURNE, Sept 13, 2012 (Reuters) – A $246 billion pipeline of planned mining investments in Australia is on increasingly shaky ground, with nearly half already frozen or likely to be delayed, as miners and lenders wrestle with high costs and sliding revenue.

A sharp fall in iron ore and coal prices, driven by a drop-off in demand from China, has caught many by surprise and forced miners — from the world’s largest, BHP Billiton , down to the smallest — to review their investment plans.

“Anyone who was expecting to bank a project at the levels we were at about eight weeks ago had unrealistic expectations,” said Michael Blakiston, a partner at law firm Gilbert+Tobin, which advises miners and is a director of iron ore company Sundance Resources.

The commodities rout has thrust Australia into a debate over whether the mining boom is over and can no longer be relied on to create jobs, power growth and raise tax revenue in a $1.4 trillion economy that has gone 21 years without a recession. Dumping projects will mean millions of tonnes of future coal and iron ore supplies are stripped from the world market, laying the ground for a swifter price revival if Asian demand rebounds.

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Mining investment to grow ever more complex, costly, industry leaders fear – Baker & McKenzie – by Dorothy Kosich (September 17, 2012)

www.mineweb.com

“Mining jurisdictions must consider their competitiveness to mining investment or risk that investment being deployed elsewhere, said David Ryan of Baker & McKenzie, Australia.

RENO (MINEWEB) –  A survey of 300 mining industry leaders released Monday by the Baker & McKenzie, Australia, Global Mining Group found the common theme across all jurisdictions surveyed is that “investing in mining is becoming more difficult and less certain.”
 
Key themes from the study include the complexity of the legal and regulatory environment, political stability, increase in resource nationalism, and the need for access to infrastructure and skilled labor.
 
One theme that all jurisdictions seemed to have is common is that a majority of respondents said they believe that mining sector investment will continue to be more complicated in the future.

Baker & McKenzie surveyed more than 300 senior mining industry leaders across six key mining jurisdictions-Australia, Brazil, Canada, Indonesia and South Africa-for the report Mining investment-local challenges, global implications.

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Reports of Australian mining boom’s death ‘exaggerated’-PM Gillard – by Dorothy Kosich (Mineweb.com – September 5, 2012)

www.mineweb.com

Australian Prime Minister Julia Gillard ventured into politically hostile territory at the Association of Mining and Exploration Companies to drum up support for her education program

RENO (MINEWEB) – Australian Prime Minister Julia Gillard’s insistence that the Australian mining boom was far from over, struck a discordant note among attendees at the Association of Mining and Exploration Companies convention Tuesday.
 
Last month, Gillard’s Resources Minister Martin Ferguson declared Australia’s mining boom over after the world’s largest mining company, BHP Billiton, delayed the expansion of the Olympic Dam expansion and announced it would not approve any major new projects before June 2013.
 
The same day Gillard delivered her talk, Fortescue Metals Group announced it would cut staff and reduce operating costs, and would revise its FY 2013 capex guidance from US$6.2 billion to $US4.6 billion. The company also said it would defer development of the Kings deposit within the Solomon Mining hub and the completion of a fourth berth at Herb Elliot Port until “iron ore prices return to more sustainable levels.”

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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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