Archive | Canadian/International Media Resource Articles

Seeing Upside in Iron-Ore Miners – by Diana Kinch (Wall Street Journal – July 25, 2013)

http://online.wsj.com/home-page

Some Investors Say Stocks Have Fallen Too Far, and News Isn’t All Bad

LONDON—Mining stocks are among the worst performers this year, with those exposed to iron ore down sharply amid concerns about overcapacity and sluggish demand from China. But some investors believe the rout could be overdone, with share prices of miners falling much further than market prices for iron ore.

“Right now, we’re moving into the low and everyone’s twitchy; the market’s focused on the third quarter, when we’ll have shutdowns in the Chinese steel industry and a seasonal downwards [move],” said Clive Burstow, manager of Barings’ Global Mining Fund, which holds some $15 million in mining stocks.

Capacity to produce iron ore is set to boom in the next few years as expansion programs planned before the financial crisis start to come on stream. By 2018 there will be an extra 419 million tons of capacity, according to estimates compiled from producers’ data, around 40% above 2012’s seaborne traded levels of just over one billion tons.

About half of the new capacity is expected to come on stream by late 2015, including from new projects by Rio Tinto RIO.LN +0.17% PLC and BHP Billiton PLC in Australia, and from Vale SA VALE5.BR -0.31% in Brazil. Continue Reading →

Akin to railroads of the 1880s, oil pipelines poised to spur Canadian growth – by Henry Lazenby (MiningWeekly.com – July 26, 2013)

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

TORONTO (miningweekly.com) – Canada is expecting a boom in oil production from its prolific Alberta oil sands deposits; however, production from the world’s third-largest proven oil reserves, after Saudi Arabia and Venezuela, is hampered by a lack of sufficient transport to markets, resulting in lower prices for Canadian crude.

In much the same way as the transcontinental railroads of the 1880s acted as economic enablers and opened up the Canadian hinterlands of Manitoba, Saskatchewan and Alberta to settlement and agriculture, so new oil pipelines transporting crude to coastal refineries and markets, and refined petroleum products back inland, are expected to have an enormous economic impact on Canada, driving economic growth.

Canada is desperately seeking alternative oil transport networks to its inadequate rail infrastructure to boost an industry that last year accounted for C$100-billion in exports of oil and natural gas, Al Monaco, the country’s largest pipeline operator Enbridge’s president and CEO, said at a recent Bloomberg Canada Economic Summit, in Toronto.

“It’s a very exciting time to be in the pipeline business. It’s not too often that you get the supply fundamentals and the demand fundamentals lining up extremely well. So, at this point, you’ve got a producer push of volume that wants to get to market. You’ve also got a market pull,” he said. Continue Reading →

Editorial: [British Columbia’s] Prosperity’s temerity – by Gwen Preston (Northern Miner – July 24, 2013)

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. 

I visited Taseko Mines’ Gibraltar mine north of Williams Lake, B.C., in 2008. The company bought the shuttered operation in 1998 and restarted it in 2004. Four expansions later, Gibraltar now employs 700 people, churns out 90 million lb. copper annually and is a major regional economic driver. It’s been a great story for a part of the province that has struggled with mill closures and unemployment.

During that Gibraltar tour, talk kept veering towards the Prosperity project, 175 km south. I remember Taseko president and CEO Russell Hallbauer downplaying the challenges of permitting the new mine. He figured Taseko had earned respect from the locals through Gibraltar and that, combined with a dire need for new economic activity locally, would mean enough support to dial down any voices of discontent.

What Hallbauer could not have predicted was that Prosperity, which happens to sit on lands involved in Canada’s most significant aboriginal land claims court case, would become a rallying cry for almost every anti-mining voice in the province.

Prosperity is a copper-molybdenum porphyry that Taseko wants to open pit mine. There’s a lake beside the deposit — known as Fish Lake, or Teztan Biny — that is one of 13,000 lakes in the Caribou region in the 100- to 150-hectare size range. Continue Reading →

Vale sweetens pot in push to finish Long Harbour (CBC News Newfoundland – July 24, 2013)

http://www.cbc.ca/nl/

Vale is putting on a big push to finish the nickel processing facility in Long Harbour, pledging more cash to workers if they meet revised targets. The company says the project is 90 per cent completed, but finishing the job has been a challenge.

The processing facility is behind schedule. It was supposed to be commissioned by the end of June. The new target is Oct. 31.

Vale spokesman Bob Carter says the project has been plagued by shortages of skilled workers and absenteeism. “Resources that were here, and scheduled to be here, are now moving on to other projects,” Carter said. Continue Reading →

Vale may hire foreign workers to solve Long Harbour crunch (CBC News Newfoundland – July 23, 2013)

http://www.cbc.ca/nl/

Mining giant Vale admits it may have to look outside the country to hire specialized workers to finish its massive nickel processing facility in Newfoundland’s Placentia Bay.

However, Vale says it wants to explore other options first to find such skilled workers as welders and pipefitters for its site at Long Harbour, where the company ultimately intends to process nickel mined at Voisey’s Bay in northern Labrador.

To accomplish that, the company is moving skilled workers from its port site to its main construction site, which the company calls the upper tier. “Because we are short some of those resources, we thought it was best to redirect those resources to the upper tier,” Bob Carter, Vale’s director of corporate affairs, told CBC News. Continue Reading →

Miners pull back on project amid weak commodity prices Vanessa Lu (Toronto Star – July 25, 2013)

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.

With prices still weak, Canadian miners like Teck and Goldcorp are looking for ways to tighten the purse strings, or delaying projects altogether.

With commodity prices still weak, major Canadian mining companies are looking for ways to tighten their purse strings, and in some cases are delaying costly projects.

Teck Resources has pushed back production plans at a coal mine in British Columbia until demand for metallurgical coal recovers. It also announced a copper mine in Chile has been slowed by environmental permits so construction won’t begin until 2016 at the earliest.

“Teck is adapting to current market conditions,” president and chief executive Donald Lindsay told analysts during a conference call Thursday. “We are prudently deferring projects and capital expenditures.”

Patricia Mohr, vice-president and commodity market specialist at Scotiabank, said long-planned copper production is starting to come on stream, after years of no growth, so the move is affecting prices. Continue Reading →

Top 10 gold miners: Shaky earnings and more billion dollar write-downs – by Lawrence Williams (Mineweb.com – July 26, 2013)

http://www.mineweb.com/

As the gold majors begin issuing their latest quarterly statements it is becoming apparent how shaky earnings are at current gold prices regardless of the massive writedowns being taken.

LONDON (MINEWEB) – Yesterday we saw World No. 4 gold miner Goldcorp writing $1.96 billion off its asset values during Q2 and World No. 2 Newmont $1.8 billion. This follows on notice of huge writedowns for the year of around $6 billion at Australia’s Newcrest, the World’s No. 6, and a statement from World No. 3, AngloGold Ashanti, that it would be writing its assets down by between $2.2 and 2.6 billion. The other gold majors yet to report will also likely be taking huge writedowns which will significantly impact June quarter financials.

But it’s not the writedowns which are necessarily the most significant factors to be taken into consideration by shareholders and the gold market itself. It is the actual decline in operating profits, and the all-in sustaining cost of production which should be a primary focus. Write-downs are just book adjustments on asset valuations, but the underlying financial health of the companies, and what they can afford to pay out in dividends, depends on ongoing profitability virtually regardless of the kinds of book financial adjustments that are being seen. Continue Reading →

AFRICA INVESTMENT-South African platinum fund tempts mine investors – by Jan Harvey (Reuters India – July 25, 2013)

http://in.reuters.com/

LONDON, July 25 (Reuters) – South Africa’s platinum sector, already under pressure from rising costs, labour unrest and falling metal prices, is now facing a rival for investment flows — a major new physical platinum fund with unprecedented levels of demand.

The New Gold Platinum exchange-traded fund (NewPlat) has pulled in more than half a million ounces of metal since its launch three months ago, worth 7.6 billion rand ($780 million) at today’s prices. The fund’s holdings currently total more than 543,000 ounces, a level it took the world’s largest platinum-backed ETF, New York-based ETFS Physical Platinum — which holds 611,847 ounces of metal — more than two years to achieve.

A great deal of investment in NewPlat, analysts say, has come from funds in South Africa choosing to seek exposure to platinum prices directly through the physical metal, effectively delivering a vote of no-confidence in South Africa’s beleaguered mining companies.

While shares in South African platinum producers are felt to be unattractive given the industry’s problems, investors have taken account of threats to supply from the mines, and detected tentative first signs of better times ahead for the European motor industry, which uses a lot of platinum in exhaust systems. Continue Reading →

Anglo American silicosis claimants turn to South African courts – by Sherilee Lakmidas (Reuters U.K. – July 25, 2013)

http://uk.reuters.com/

JOHANNESBURG – (Reuters) – A British court has thrown out a lawsuit against Anglo American South Africa brought by miners who contracted the deadly lung disease silicosis when they worked in South Africa, saying it did not have jurisdiction to hear the matter.

A lawyer for the 2,336 miners said on Wednesday many of them planned to file papers in the next few days in South Africa seeking damages against the South African unit of the global mining giant.

“Anglo American South Africa believes that the court correctly found that the English court does not have jurisdiction to hear this claim,” said Anglo American spokesman Pranill Ramchander.

Anglo American (AAL.L), which switched its headquarters from Johannesburg to London in 1999, no longer has gold mines in South Africa but the lawyers said its Johannesburg-based unit still had assets of around $15 billion (9 billion pounds).

“Today’s ruling was a pyrrhic victory for Anglo American, which as the largest gold mining company over the past 50 years still has to face compelling claims by thousands of miners affected by dust-related lung diseases,” said Richard Meeran of Leigh Day, which is representing the miners. Continue Reading →

Congo Raises Tax on Copper, Cobalt Concentrates by Two-Thirds – by By Michael J. KavanaghJuly (Boomberg News – July 25, 2013)

http://www.businessweek.com/

The Democratic Republic of Congo’s Katanga province raised its tax on copper and cobalt concentrates to $100 per metric ton from $60 as the country prepares to ban their export at the end of this year.

“We needed a way to discourage companies from continuing to export concentrates, so we raised the tax,” Valery Mukasa, chief of staff for Mines Minster Martin Kabwelulu, said yesterday in an interview in Kinshasa, the capital.

The Central African nation is trying force mining companies to increase the value of their exports by fully processing minerals within the country’s borders, Mukasa said.

Congo was the world’s eighth-largest producer of copper and the biggest producer of cobalt last year, according to the U.S. Geological Survey. At least 13 companies exported concentrates of copper, cobalt, or a copper-cobalt concentrate last year, according to Katangan provincial Mines Ministry statistics. Continue Reading →

UPDATE 2-Teck profit falls on lower prices, delays new mines – by Julie Gordon and Allison Martell (Reuters India – July 25, 2013)

http://in.reuters.com/

(Reuters) – Teck Resources Ltd on Thursday reported a sharp drop in second-quarter earnings on lower copper and coal prices, and cut its capital spending plan through 2014, delaying new mining projects.

The company, Canada’s largest diversified miner, is slowing the restarting of its Quintette coal mine in British Columbia until the steelmaking coal market recovers, and it delayed development of its Quebrada Blanca Phase 2 copper expansion in Chile.

“I think it is the right move,” said Garrett Nelson, mining analyst at BB&T Capital Markets, on the Quebrada Blanca delay. “That was going to be a significant drain on free cash flow over the next few years.”

Shares rose 4 percent to C$24.64 on the Toronto Stock Exchange.

A feasibility study last year pegged the project’s capital cost at $5.6 billion, with Teck’s share at $4.8 billion. It had planned to complete a study on its social and environmental impact by the end of the second quarter, but now does not expect to finish before the fourth quarter of 2014. Continue Reading →

POSCO’s global expansion plan hits India roadblock – by Hyunjoo Jin (Reuters India – July 25, 2013)

http://in.reuters.com/

SEOUL – (Reuters) – Some investors in South Korean steelmaker POSCO are starting to sour on a long-delayed $12 billion project for a steel mill in Odisha that was once hailed as a profit driver.

The investment is part of a global expansion spree led by POSCO Group Chairman and Chief Executive Chung Joon-yang, a nearly decade-long strategy that was intended to capitalise on rapid emerging economy growth and help reduce the company’s reliance on its domestic market.

But a series of acquisitions left POSCO with a debt burden that has more than doubled over the past three years, while slowing growth in major markets such as China has hurt steel prices and margins. Last week, the steelmaker said it will bow out of a $5.3 billion steel mill development in Karnataka.

“The steel market is not in good shape, and we share investors’ concerns about the overall market conditions,” a POSCO executive told Reuters, speaking on condition of anonymity because he was not authorised to talk to the media. “The Odisha investment would be a burden to us.” Continue Reading →

Toronto Bankers Feel Pain From Mining Slowdown: Corporate Canada -by Liezel Hill and Doug Alexander (Bloomberg News – July 25, 2013)

http://www.businessweek.com/

The downturn in the mining industry is beginning to ripple through brokerage firms and investment banks in Canada.

One small brokerage firm, Fraser Mackenzie Ltd., closed earlier this year. Casimir Capital Ltd., a closely held investment bank, has cut jobs on its mining team and is shifting its focus to energy companies.

Bill Vlaad, a financial services recruiter, says requests to find bankers to work with mining and natural resources companies are drying up. Those searches now represent less than 10 percent of his business, down from half of his work three years ago. Mark Morabito, chairman of Canadian mining company Alderon Iron Ore Corp. (ADV), says he’s getting a steady stream of e-mails from bankers who are getting fired.

“I’m now dealing with the top guys, the global heads of mining, because the guys in between are all gone,” Morabito said in an interview. “Toronto is just a dead zone.”

Though the job cuts have been relatively small so far, many in the finance industry expect a bigger wave of reductions as well as consolidation, especially among boutique financial firms. Continue Reading →

As demand for resources moderates, the Canada-China ‘honeymoon is over’ – by Brenda Bouw (Globe and Mail – July 25, 2013)

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.

China’s leaders are positioning the country for a new era of lower, single-digit growth led more by consumer spending. That reshuffles the lineup of suppliers to the world’s second-largest economy and appears set to push Canadian commodities producers to the margins.

“The commodities super cycle – I don’t know if it’s over, but it’s not looking as good as it used to and it’s going to hurt a major part of our economy,” said Yuen Pau Woo, president and CEO of the Vancouver-based Asia Pacific Foundation of Canada. “We did less badly out of the global recession of 2008-09 on the back of Chinese demand for commodities. That honeymoon is over.”

As demand for resources moderates, Mr. Woo warns that Canada needs to strike a trade agreement with China and better promote its banks, automotive sector and other products that don’t depend on construction.

China’s leaders have been warning its companies for much of the past decade about their over-reliance on infrastructure investment and the need to prepare for a shift to consumer-led growth. Continue Reading →

Analysis: As Canada’s junior miners flounder, long-term damage looms – by Allison Martell and Euan Rocha (Reuters Canada – July 25, 2013)

 http://ca.reuters.com/

TORONTO (Reuters) – Hundreds of small mineral exploration companies may have their stock delisted by Canada’s TSX Venture Exchange in the coming months, choking off a development pipeline that has long supplied major miners with new projects.

As commodity prices boomed in the last decade, a flood of new issuers swelled the ranks of the Venture, TMX Group Inc’s exchange for small-capitalization companies, burnishing Canada’s reputation as the center of global mining finance.

But the money has dried up over the past two years, thanks to a slump in metal prices and a spike in costs. Hardest hit are the Venture-listed, exploration-stage companies that depend on equity financing to develop their properties to the point where they can build a mine or sell the asset to a major.

“There’s a crisis that’s looming,” said Joe Groia, a securities lawyer and former head of enforcement at Canada’s top securities regulator, the Ontario Securities Commission. “If we continue to not address it, what we’re going to end up with is literally hundreds of companies where boards are either going to walk away or hundreds of companies that are going to run out of money.”

Continue Reading →