Copper – Page 97 – Republic of Mining

Anglo American sells two Chilean mines to Audley for $300 million (Reuters U.K. – August 24, 2015)

August 24, 2015

http://uk.reuters.com/

Anglo American (AAL.L) is to sell two Chilean copper mines to investment firm Audley Capital for $300 million (£191.5 million), the company said on Monday, as it delivers its balance sheet to help combat a global slump in commodity prices.

Orion Mine Finance Group is principal co-investor with Audley for the open-pit Mantos Blancos and Mantoverde mines. The deal includes conditional future payments which could boost the eventual price tag by $200 million (£128 million), Anglo American said.

Following a review last year Anglo American said it would divest assets that did not meet its return criteria. The investment by Audley Capital was led by John Mackenzie, a former chief executive of Anglo’s copper business.

The potential follow-up payments are contingent on the copper price and also on whether the new investors decide to extend the sulphide life of the Mantoverde mine.

Banking sources had initially touted the mines as having a price tag of up to $1 billion.

In Minnesota, fight between mining and environment gets personal – by by Stephanie Pearson (Al Jazeera America – August 23, 2015)

August 24, 2015

http://america.aljazeera.com/

Projects that would bring much-needed jobs could also ruin irreplaceable freshwater resources

ELY, Minn. — It’s the kind of July day that Minnesotans fantasize about in the dead of winter. Puffball clouds float in a blue sky and daisies sprout under stately pines lining Spruce Road, the main artery of an old logging network deep in the Superior National Forest about 15 miles southeast of Ely.

Paul Schurke is bumping down a dirt road in a Dodge Ram pickup truck. He owns Wintergreen Dogsled Lodge with his wife, Susan, and is famous in these parts as the explorer who co-led the first dogsled expedition to the North Pole without re-supply in 1986.

The dirt track ends before it reaches the Boundary Waters Canoe Area Wilderness, the roadless, motorless, cellphone-towerless 1.1-million-acre ecosystem where nearly 250,000 visitors from around the globe annually pilgrimage to paddle a connected chain of more than 1,000 pristine lakes.

Every night they break camp on a forested shoreline to hear the cool northern breeze whisper through the pines and loons project their mournful calls over vast stretches of open water. Occasionally an emerald display of Northern Lights flickers in a sky entirely free of light pollution.

The real reason the copper price is being crushed – by Frik Els (Mining.com – August 19, 2015)

August 20, 2015

http://www.mining.com/

The turmoil on Chinese share and currency markets, and worries about the true extent of the country’s economic slowdown continue to rattle investors.
Given its widespread use in manufacturing and construction coupled with the fact that China consumes 45% of the world’s supply, copper has been bearing the brunt of this bearishness.

On Wednesday in New York trade December copper contracts were trending weaker again after breaching the key $5,000 level yesterday for the first time since the global financial crisis.

Bloomberg Intelligence analyst Kenneth Hoffman spoke to MINING.com after returning from a tour of China to find out the true state of copper demand in the country.

Hoffman has been visiting China for the past twenty years and in 2015 saw a sea-change in sentiment inside the world’s second largest economy:

Friedland: Mining companies ‘priced for Armageddon’ – by Lesley Stokes (Northern Miner – August 18, 2015)

August 19, 2015

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

VANCOUVER — The vanguard executive chairman of Ivanhoe Mines (TSX: IVN; US-OTC: IVPAF), Robert Friedland, took to the stage at the Sprott Natural Resource Symposium in Vancouver in late July, and delivered a relaxed speech discussing why he believes copper is set to rebound in two to three years.

“The further you push the price down, the higher it’ll bounce,” he said, predicting that higher environmental standards in China may strengthen the demand for copper, in tow with other “green” metals such as zinc, platinum and palladium.

He said that China will “try very hard” to double its growth to 6% or 7% through sustainable development, but he’s dubious whether the current world supply will match the metal needed to clean China’s air and fertilize its soils.

He describes many of the great copper mines as “little old ladies, kept on life support and waiting to die,” whereas others are so low grade “they’re practically mining air” and kept alive by favourable currency exchange rates.

When copper bites – by Kip Keen (Mineweb.com – August 19, 2015)

August 19, 2015

http://www.mineweb.com/

When does push become shove as prices of the commodity continue to fall.

HALIFAX – The spot price of copper continues to fall, dropping below $2.30/lb Tuesday and approaching levels that clearly puts pressure on smaller, higher cost and debt-laden producers. But the ongoing rout also raises red flags for larger producers who will feel the pinch on profits, if not mining operations, if the price falls much further.

To be sure, as the copper price stands, the majors and intermediates do not face an existential threat to their balance sheets, or to most operations, as many still produce with basic cash costs a fair bit lower than $2/lb. Glencore, an important copper producer, reported 2014 cash costs at $1.46/lb.

Freeport McMoRan Copper & Gold, one of the more leveraged major copper producers, last reported cash costs of $1.85/lb, for example. And like other miners with operations outside the U.S., they benefit from the strengthening of the dollar, weakening ex-U.S. currencies and, as the case may be, cheaper energy prices.

But there is no escaping the fact dramatically falling prices tarnish copper as a profit center.

World’s Biggest Dam Needs Rain to Send Power to Zambia Mines – by Matthew Hill (Bloomberg News – August 14, 2015)

August 14, 2015

http://www.bloomberg.com/

Energy-use curbs by Zambia will keep its largest electricity plant at the world’s biggest dam, Lake Kariba, going until November, when seasonal rains may begin replenishing water levels at the hydropower station.

“If we don’t do anything right now, by October we’ll have nothing,” Jackson Sikamo, president at the Chamber of Mines, which represents mining companies in Africa’s second-biggest copper producer, said by phone Thursday. “If we do something right now, we’ll be able to run up to November and then the rains will come and we’ll be able to continue to operate at reduced levels.”

The Kariba North Bank generation facility has capacity to provide as much as 1,080 megawatts, nearly half of Zambia’s normal power production. Water levels at the reservoir had dropped to 40 percent by July 19, according to the Zambezi River Authority, half of where they were 12 months earlier. Neighboring Zimbabwe also relies on the dam for electricity.

Zambia in June started cutting power to customers other than mines by as much as 10 hours a day because of reduced generation at Kariba and the Kafue Gorge plants.

Chile Mines Turn to Renewable Energy – by Ryan Dube (Wall Street Journal – August 11, 2015)

August 12, 2015

http://www.wsj.com/

Power-hungry operations save nearly $20 per megawatt hour using the sun and wind

CALAMA, Chile—The three industrial boilers at the state-owned Codelco mine high in the mountains here once consumed 67,000 barrels of diesel a year to turn out shiny copper sheets for export. Now, the job is powered by nearly 3,000 solar panels that take advantage of the Atacama Desert’s cloudless blue sky.

As the cost of solar and wind power declines, renewable energy has become increasingly attractive to power-hungry mining companies. Nowhere, though, is it more prevalent than in resource-rich Chile, where companies have been pioneering alternatives to conventional power after years of shouldering some of the world’s highest energy costs.

Here at the Codelco mine, named after the late Chilean poet Gabriela Mistral, a thermosolar plant run by Chile’s Energia Llaima SpA and Denmark’s Arcon-Sunmark has replaced about 80% of the diesel that Codelco previously trucked up 8,700 feet to the mine. Copper produced by Corporación Nacional del Cobre de Chile, or Codelco, the world’s biggest producer of the metal, goes to China and other global markets.

“This blue sky makes me happy,” said plant manager Rodrigo Aravena, as he inspected rows of panels, shining in the sun and installed over an area the size of eight football fields. “It means we are generating more, and it is much better for business.”

As storms batter Chile’s coast, some copper mines suspend work – by Rosalba O’Brien (Reuters U.S. – August 9, 2015)

August 10, 2015

http://www.reuters.com/

SANTIAGO – Heavy rain and winds hit the southern cone of South America over the weekend, battering the Chilean coastline and leading to the precautionary suspension of work at some mines in the top copper exporter.

Over 1,000 people from Antofagasta in the far north to Los Rios in the south of Chile were affected, with some being housed in shelters after being evacuated or losing their homes to floods, and over 120,000 were left without electricity, the emergency service Onemi said on Sunday.

Mud landslides wiped out roads in and around the city of Tocopilla in the Antofagasta region, leading to three deaths, while another three were killed in accidents along the coast, local media reported.

Over 15 millimeters (0.6 inch) of rain had fallen in six hours in normally bone-dry Antofagasta, the interior ministry said.

After months of drought, the rains that began early last week in central Chile and have since spread north have brought some relief to farmers and ski resort owners, but spelled more potential bad news for Chile’s key copper mining industry, mostly based in the north of the country and already hit by floods once this year.

Zambia Copper Miners to Cut Power Use 15% to Ease Shortage – by Matthew Hill (Bloomberg News – August 4, 2015)

August 5, 2015

http://www.bloomberg.com/

Zambian mining companies agreed to reduce their electricity consumption by as much as 15 percent to help ease a power shortage in Africa’s second-biggest copper producer.

The local units of Glencore Plc, Vedanta Resources Plc and other operators reached the agreement with Mines Minister Christopher Yaluma and electricity supplier Copperbelt Energy Corp. at a meeting on Tuesday, according to the Chamber of Mines.

Power cuts already enforced at projects run by First Quantum Minerals Ltd. and Barrick Gold Corp. will be reversed on Wednesday, said Jackson Sikamo, the president of the chamber.

“The discussion was very open and the minister acknowledged the effort the mining companies have made,” he said by phone on Tuesday from Kitwe, about 280 kilometers (174 miles) north of Lusaka, the capital. The reductions of 10 percent to 15 percent will “definitely affect production,” though it’s too early to tell by how much, Sikamo said.

Some Robert Friedland riffs: The “miner’s miner” talks commodities, jurisdictions, markets and majors – by Greg Klein (Resource Clips – July 29, 2015)

July 30, 2015

http://resourceclips.com/

Getting back to commodities, he argues that Saudis killed the Alberta oilsands
and devastated U.S. shale “but no one can do that to copper.” Friedland
dismisses some copper miners as “little old ladies waiting to die,” saying
some grades fall so low that companies are “practically mining air.”
(Robert Freidland)

A “miner’s miner” was how Rick Rule introduced Robert Friedland. The founder and executive chairperson of Ivanhoe Mines TSX:IVN also serves as executive chair of the Sprott-Stansberry Natural Resource Symposium in Vancouver, where he delivered the opening day’s keynote speech on July 28. That was the original plan, anyway. Instead, a relaxed-looking Friedland eschewed a script to sit back and, in response to questions posed by Rule, discuss commodities, jurisdictional risk, markets and the problem with the majors.

Friedland’s favourite metals? They’re currently copper, platinum, palladium and zinc—stuff for which he sees bright futures and, not surprisingly, the stuff he’s currently pursuing. He also likes diamonds but considers himself “an agnostic on gold.”

“Copper is the metal if you believe in human advancement,” Friedland says. “Gold is the opposite.” Meanwhile this market has either hit bottom “or it’s the end of the world.” He says he’s never seen such a severe devaluation, with stocks “priced for Armageddon.”

“The 33” Movie Trailer for the 2010 Chilean Mining Accident

July 30, 2015

In movie theatres in November.

Wiki Summary of the Chilean Mining Accident

The 2010 Copiapó mining accident, also known then as the “Chilean mining accident”, began in the afternoon of Thursday, 5 August 2010 as a significant cave-in at the troubled 121-year-old San José copper–gold mine. The mine is located in the Atacama Desert about 45 kilometers (28 mi) north of the regional capital of Copiapó, in northern Chile.[1] The buried men, who became known as “Los 33” (“The 33”), were trapped 700 meters (2,300 ft) underground and about 5 kilometers (3 mi) from the mine’s entrance via spiraling underground service ramps.

The mixed crew of experienced miners and technical support personnel, with less experience working underground, survived for a record 69 days deep underground before their rescue.[2][3] Previous geological instability at the old mine and a long record of safety violations for the mine’s owners had resulted in a series of fines and accidents, including eight deaths, during the dozen years leading up to this accident.[4][5][6] As a result of the mine’s notorious history, it was originally thought that the workers had probably not survived the collapse or would starve to death before they were found, if ever.

Copper’s Tumble Not Over With Most Miners Still Making Money – by Agnieszka De Sousa and Debarati Roy (Bloomberg News – July 28, 2015)

July 29, 2015

http://www.bloomberg.com/

World copper mine production at record

The pain rippling through the copper market isn’t yet threatening profits for most miners, and that could mean more tears for bullish investors.

Even with prices near a six-year low, about 90 percent of copper mines are profitable, meaning most producers have little incentive to reduce output, according to Standard Chartered Plc. Prices need to fall another 24 percent before major companies begin cutting back, Bloomberg Intelligence estimates.

“You want miners to throw in the towel, start shutting down some mines,” Kenneth Hoffman, an analyst at Bloomberg Intelligence, said by telephone. “They keep forging ahead with all their plans. They’re still bringing new stuff on.”

As producers dig up more metal, demand for the raw material is weakening with China’s economy expanding at the slowest pace since 1990. Societe Generale SA estimates that copper’s oversupply will almost double this year. Goldman Sachs Group Inc. expects prices to reach $4,800 a metric ton in the next six months, a 9.4 percent drop from Tuesday’s settlement.

Former Kinross Gold CEO working on potential bid for Anglo assets – by Rachelle Younglai (Globe and Mail – July 14, 2015)

July 14, 2015

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.

Kinross Gold Corp.’s former chief executive Tye Burt is interested in Anglo American PLC’s three copper mines in Chile, according to people familiar with the matter.

Mr. Burt is working with another former Kinross executive, Hugh Agro, to create another mining company after being ousted as Kinross’s CEO for a deal gone awry.

Mr. Burt and Mr. Agro, the former M&A executive at Kinross, are now seeking financing for a potential bid on the Anglo assets, the sources said.

Mr. Burt is one of many people who were given the opportunity to examine Anglo’s Mantoverde, Mantos Blancos and El Soldado mines.

Others include former Xstrata PLC CEO Mick Davis, who now runs a private mining entity called X2 Resources LLP, sources said.

INSIGHT-China’s ‘infrastructure for minerals’ deal gets reality-check in Congo – by Aaron Ross (Reuters U.S. – July 8, 2015)

July 8, 2015

http://www.reuters.com/

KOLWEZI, Democratic Republic of Congo, July 8 (Reuters) – W hen it was signed in 2007, China’s $6 billion ‘minerals for infrastructure’ deal in Congo stirred fears among Western countries that Beijing’s hunger for resources would erode their influence and saddle the vast central African country with unmanageable debt.

Eight years on, as Sicomines prepares to produce its first copper after long delays, the main lesson from the giant project is that investing in one of Africa’s most chaotic countries is a messy and frustrating business, no matter who you are.

While most mining projects in Congo go years before paying significant taxes under the mining code, Sicomines was meant to have an immediate economic impact. The government says the deal has already produced at least $800 million in infrastructure investment.

Chinese firms Sinohydro Corp and China Railway Group Limited are building roads and hospitals in exchange for a 68 percent stake in the Sicomines copper and cobalt mine, one of the largest in Africa with about 6.8 million tonnes in proven reserves.

China’s state-run Exim Bank and smaller Chinese banks are stumping up $3 billion for infrastructure plus a further $3 billion to develop Sicomines, with all the loans to be repaid with mining profits.

Native Americans protest proposed Arizona copper mine – by David Schwartz (Reuters U.S. – July 6, 2015)

July 7, 2015

http://www.reuters.com/

PHOENIX – Members of a Native American tribe in Arizona took to the roadways on Monday to protest against a proposal for a massive copper mine at a small town east of Phoenix, vowing to protect sacred lands.

A small group from the San Carlos Apache tribe began a scheduled cross-country caravan to Washington, D.C., to try to persuade the U.S. Congress to save an area known as the Oak Flat campground near Superior, Arizona.

The several dozen protesters hope to garner wide public support and get lawmakers to repeal a land exchange signed last year that paves the way for a $6 billion project by Resolution Copper Mining, a company jointly owned by Britain’s Rio Tinto and Australia’s BHP Billiton Ltd.

“This is sacred land to us and what they are doing is a betrayal,” tribal elder Sandra Rambler said in a telephone interview from the caravan. “It’s like someone ripping the guts out of you right when you’re standing there. We will not sit still and allow this to happen.”