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Greece revokes Eldorado Gold Corp’s authorization for Skouries mining project – by Peter Koven (National Post – March 3, 2015)

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

Greece’s leftist government has taken steps to block Eldorado Gold Corp.’s key mine in the region, prompting a furious response from the Canadian miner and its employees while leaving the project’s future in question.

Investors have been watching Eldorado with concern ever since the far-left Syriza government was elected in late January. Just a few days after the election, Greece’s new energy minister Panagiotis Lafazanis said the government is ”absolutely against” to the Skouries mine, which is currently under construction. “We will examine our next moves on it,” he warned at the time.

So it was no surprise on Monday when Eldorado announced the government revoked a permit required for the Skouries processing plant. What was surprising was Eldorado’s angry public response, which was uncharacteristic of the company.

“The recent decision of the Ministry of Energy — if not reversed in a timely manner — may force Eldorado to reconsider its investment plans for Greece,” chief executive Paul Wright said in a statement. Eldorado also said the move has “no legal basis.”

The government’s decision prompted an even angrier response from union workers at the project.

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Global ferrochrome market to be in 11,000-mt deficit in 2015: Yildirim – by Mayumi Watanabe (Platts.com – February 25, 2015)

http://www.platts.com/

Tokyo (Platts) – The global ferrochrome market will be in a deficit of 11,000 mt, as demand from the stainless steel sector outgrows production, Turkey’s Yildirim Group said Wednesday.

Yildirim’s subsidiary, ETI Krom, is the world?s largest high-grade lumpy chromium ore producer and combined with Vargon Alloys in Sweden, is the world’s second-largest high-carbon ferrochrome producer, according to the group’s website.

Global charge chrome and high carbon ferrochrome production in 2015 is expected to rise by 4% from 2014 to 11.69 million mt in total, slowing from the previous year’s 8.8% growth, Yildirim said in a research report. Production in 2014 was 11.23 million mt, it added.

China’s production fell by 330,000 mt in the second half of 2014 from the fist half, triggered by slowing demand from the steel sector. China’s production as a result was 4.4 million mt in 2014, up 10% from 2013.

In 2015, China is expected to produce 4.5 million mt, up a marginal 2%, Yildirim said. Production outside of China is seen at 7.2 million mt in 2015, up 5.2% from 2014.

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Potash Price War Looms With Belarus Seeking Share: Commodities – by Yuliya Fedorinova (Bloomberg News – February 19, 2015)

http://www.bloomberg.com/

(Bloomberg) — The potash industry, which provides the potassium used to grow bigger fruits and vegetables worldwide, is facing a global price war as Belarus seeks to strengthen its share of the $20 billion market. The Eastern European country, which supplied 20 percent of global exports last year, is running mines at almost full capacity to gain a foothold in the U.S. and in China, at a time when the Asian nation is in talks with other providers of the plant nutrient, analysts and competitors say.

The moves come a year-and-a-half after the once-staid market was thrown into chaos when Russia’s PAO Uralkali unexpectedly terminated its relationship with Belarus’s state-owned producer Belaruskali. That venture used to control 40 percent of exports, helping to maintain stable prices.

“The real price war has already started,” said Oleg Petropavlovskiy, an analyst at BCS Financial Group in Moscow. “Belarus is offering lower prices in some regions, while running close to full capacity. It’s the key threat now for the global potash market and will not abate any time soon.”

Potash, used by farmers as an important fertilizer for their plants, is mined deep underground, in areas where water from ancient seas dried up and disappeared, leaving behind potassium salts. Total demand for the nutrient reached a record high of about 62 million tons last year as farmers in Brazil, China and North America increased consumption.

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Letter from: the blast furnaces of Kryvyi Rih, Ukraine’s decaying industrial heartland – by Alan Turgutoglu (Calvert Journal – February 19, 2015)

http://calvertjournal.com/

The Calvert Journal is a daily briefing on the culture and creativity of modern Russia.

Ugly cities are plentiful in Ukraine, but Kryvyi Rih, a city in central Ukraine’s Dnipropetrovsk region, is uglier than most. Its skyline of towering pit heads and blast furnaces extends for 130 km across the horizon, following the line of the region’s iron ore deposits. The city has the odd distinction of being the longest city in Europe.

The statue of Lenin still looks proudly upon his labourers, even though many of the iron ore mines are now long closed. In a country where nobody minds the rashes from bathing in the polluted seas and rivers in summertime, this city is dirty enough to make people want to leave. What brought me here were the stories of former inhabitants who left and who told me that the pollution is so bad that houses, cars and even cats and dogs are constantly coated in red dust, a by­-product of the ore extraction process. Upon arrival I was welcomed by a cloud of smog unlike anything I’ve seen in Ukraine, rivalling that of some Chinese cities.

It’s worse in the evening, when the sky is covered with brownish­red clouds of smoke. The chemical smell is nauseating. “It’s probably because these plants function at lower capacity in the morning and afternoon, then go up to full capacity in the evening.

People are less likely to complain then,” Andrei, 28, tells me. He’s a foreman in a metallurgical plant at a full-­cycle combine, a complex which carries out the complete iron production process from the moment the ore is extracted from underground all the way to casting the metal bars which are then shipped across the country.

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Norilsk, Russia — The inescapability of the company town on the tundra – by Mia Bennett (Cryopolitics.com – February 2015)

http://cryopolitics.com/

There are many ways of framing Arctic climate change.

On the one hand, countries in the south often see themselves as potential victims of the melting Greenland ice sheet and rising sea levels. On the other hand, in the north, Arctic residents often view themselves as the victims of massive levels of industrialization and urbanization in the south. Most of the world’s greenhouse gases emissions, after all, can be traced to the United States, China, Europe, and Russia.

These emissions are driving environmental changes like warming temperatures and ocean acidification, which are exacerbated in the north by the polar amplification effect. Arctic residents then wonder whether it is fair for them to have to pay, often with their traditions and livelihoods, for people in the south to enjoy all the creature comforts of modernity.

But it’s not so simple as that. The Arctic, too, has sooty, polluting cities, some of which have a higher carbon footprint than cities in the middle and southern latitudes. Several of these can be found in the Russian Arctic, which is more industrialized than any other Arctic country’s northern area.

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UPDATE 2-Glencore to spin-off Lonmin stake, cut spending to counter price rout – by Silvia Antonioli (Reuters U.S. – February 12, 2015)

http://www.reuters.com/

CAPE TOWN, Feb 11 (Reuters) – Miner and commodities trader Glencore will spin-off its stake in troubled platinum producer Lonmin and cut capital spending to help it cope with a plunge in commodity prices, it said on Wednesday.

Like peers, Glencore has been hit by a rout in prices of commodities such as copper, coal and oil in recent months. Its shares have fallen by about 9 percent this year.

“What this feels like to me is that Ivan (Glasenberg, Glencore’s CEO) is trying to get ahead of the story again, to make himself look proactive and everyone else reactive,” said Bernstein analyst Paul Gait, who rates Glencore “outperform”.

“Both of those measures fit the same strategic goal from a Glencore perspective: to show leadership, like they did with the buyback.” Last year Glencore was the first mining firm to deliver on promises to return cash to shareholders.

Responding to what it called a “volatile market backdrop,” Swiss-based Glencore said it would cut “sustaining and expansionary” capital spending for this year to $6.5-$6.8 billion, with reductions across its businesses. In December, it had forecast spending of $7.9 billion this year.

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‘Full speed ahead’ for Victoria Mine, says KGHM manager – by Jonathan Migneault (Sudbury Northern Life -February 11, 2015)

http://www.northernlife.ca/

Project still waiting for full funding from KGHM

It’s still “full speed ahead” for KGHM’s Victoria Mine project in Sudbury, said a senior manager with the company in Sudbury.

Trevor Eagles, KGHM’s manager of engineering in Sudbury, said the project is finalizing a feasibility study, and is on schedule to complete a mining shaft by 2019.

In 2014 KGHM completed timbering at the site, located about two kilometres south of the historic Victoria Mine, which was first developed in the 1890s and then closed in the 1920s.

The former Inco reopened the mine in the 1970s, and made a deal with KGHM’s predecessor, FNX, in 2002, to take control. A long and thin ore body – about 50 kilometres long – was discovered in 2010, which the company now wants to bring into production.

KGHM estimates the new mine site contains 14.2 million tonnes of resources. The inferred resources include 700 million pounds of copper, 700 million pounds of Nickel and 3.5 million ounces of platinum group elements. “Everybody working on the project is fully confident we have a world-class ore deposit and a very strong business case,” said Eagles.

KGHM’s original plan was to sink two mine shafts at the site – an initial exploration shaft, and a second larger shaft for production – but in the last six to eight months, the company decided instead to go with one larger mine shaft.

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Uralkali Sees Potash Deal With India Possible Ahead of China – by Yuliya Fedorinova (Bloomberg News – February 11, 2015)

 http://www.bloomberg.com/

(Bloomberg) — PAO Uralkali, the largest potash supplier by volume last year, sees a possible supply deal with India taking place ahead of China for the first time since 2008, signaling a price increase.

China, with larger stockpiles, won’t rush to lock in a new deal, said Oleg Petrov, chief of sales.

“China may have around 4.5 million tons of stockpiles now,” he said in Moscow. “We saw higher levels in the past but still this is far from the 2.5 million-ton level which is seen as more comfortable for the new contract. On top of this we saw Belarus shipping four cargoes in January to China. Some of those volumes went to the market, some stay in the port, but still this is delaying the opportunity for the new deal.”

Normally China, the biggest consumer of the soil nutrient, strikes a deal first, and that contract provides the benchmark price for the year, with India paying a premium. Only once, in 2008, a contract with India came first, and China paid the premium.

China’s potash demand was 14 million metric tons last year, when the market hit a record 62 million tons, Uralkali’s press service said today, updating last-month estimates. The country last signed contracts at $305 per ton in January 2014 covering the first half of the year, later prolonging them to year-end.

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Mining in Albania [chromite mining] by Christopher Ecclestone (Investorintel.com – February 10, 2015)

http://investorintel.com/

Albania – Not Quite the Land that Time Forgot: In the not too distant past, with one of my other hats on, I was very involved with the mining scene in Albania. At the time I headed a company that desperately needed to diversify away from the mammoth country risk involved in doing business in Turkey (therein lies another story) and my glance turned to Albania for a couple of reasons.

Firstly it was a country with a very strong mining history (in fact its fate post-WW2 was directly linked to mining). Secondly, its major resource was chromite, for which I have a particularly soft spot (as evidenced by my recent writings on Tasman’s diversification into this metal). Thirdly it is geologically governed by the Eastern Ophiolite Belt which is a spur of the great Tethyan Copper Belt that stretches from the Carpathians in Slovakia, all the way through the Balkans, across, Turkey, Iran and ending in Afghanistan or Pakistan depending on your point of view.

I am more conflicted as to whether it is a positive or negative for the country that it is not currently a member of the EU.

Albania, with a population of approximately 3.5 million people, has had an open market economy since 1991 though the country’s potential (mineral and otherwise) remains largely untapped. The population of Albania is relatively young, (average age of 32) and the majority of people speak English, Greek and/or Italian. There is an ongoing effort in the country to improve infrastructure, sanitation facilities and wealth creation amongst its population as part of an overall bid to eventually join the European Union.

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A Silver Lining Coated in Coal Dust in Eastern Ukraine – by Andrew E. Kramerjan (New York Times – January 31, 2015)

http://www.nytimes.com/

SNIZHNE, Ukraine — Outside Vladimir Moroz’s snug little brick home, winter and hardship grip war-stricken eastern Ukraine. Money is scarce, the store shelves are bare and an icy wind whips over the snowy steppe.

Inside, a retired miner smiles broadly. He peels off his gloves and flexes his cold-stiffened hands over a stove and his prized, glowing, once-illicit source of warmth: backyard coal dug from dangerous, unregulated mines.

In a region plagued by upheaval and misfortune, coal miners who take pride in their grit and self-reliance have found at least one silver lining in changes sweeping over their land. The rebel government has decided to allow private mining, a long-stigmatized, legally proscribed but nevertheless widespread practice in Ukraine’s east.

“I have my own potatoes, my own carrots, my own cabbage and my own mine,” Mr. Moroz said, referring to the dank pit under a shed out back. “This is how we live.”

Deep in the backcountry of Donbass, as the rebellious region of eastern Ukraine is known, rich seams of coal undulate just under the hills. In places, kicking back the topsoil with a boot reveals glistening layers of coal, as mysterious and alluring to these miners as onyx.

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Crashing Ruble Means Russia Has Cheapest Costs for Gold – by Andrey LemeshkoYuliya Fedorinova (Bloomberg News – February 3, 2015)

http://www.bloomberg.com/

(Bloomberg) — The ruble is crashing. Oil is at a five-year low, and economic sanctions have slammed the brakes on the economy. It’s a good time to mine gold in Russia.

With gold typically priced in dollars, and labor and other expenses paid in rubles, Russian mining companies led by Polyus Gold International Ltd. are gaining from the weak currency. It doesn’t hurt that the price of gold has climbed about 7 percent this year as slowing world economies spur demand for the metal.

Russia is the biggest producer after China and its mining companies now have the lowest costs in the world, according to BCS Financial Group, a Moscow-based investment company. What’s more, the country’s central bank is buying up gold from domestic companies as efforts to curb the economic crisis decrease its foreign currency reserves.

“This year may become historically best for the Russian gold producers in terms of margins,” said Kirill Chuyko, head of equity research at BCS Financial Group, in a telephone interview. “Despite the double-digit inflation, their costs may decline as much as 25 percent this year.”

Still, the gains may be less pronounced in the future, according to Natalia Orlova, chief economist at Alfa Bank in Moscow. The central bank’s gold reserves may now be adequate, she said, and its purchases may not climb at the same pace as in 2014.

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Russia’s biggest miner faces Arctic prices challenge – by Polina Devitt (Reuters India – January 30, 2015)

http://in.reuters.com/

NORILSK, Russia – Reuters) – Russia’s financial crisis is posing a stark challenge to the country’s largest mining company. How can Norilsk Nickel protect the living standards of thousands of workers cut off inside the inhospitable Arctic while also satisfying its shareholders?

The slump in the ruble and a resulting rise in inflation could have an outsize effect in Norilsk, a town 300 km inside the Arctic Circle where more than a quarter of the 220,000 population work for the company, and it’s hard to shop around.

Winter temperatures in Norilsk plunge to levels that visitors can find distinctly uncomfortable, but for the isolated workers who live there any hint of a rise in the cost of living is equally unwelcome.

With the rouble down 50 percent against the dollar since early last year and Russian food inflation above 15 percent, it falls partly to the company to bear the cost of holding down prices in the grimy industrial city where it is based.

Norilsk Nickel, the world’s largest producer of nickel and palladium, owns a loss-making chain of seven shops called “Sunflower”, which have sold staples such as milk and bread more cheaply than other stores in the city since 2011.

The company also helps other retailers bring food supplies to the city and subsidizes their transport costs. It increased its workers’ salaries on Jan. 1 and plans another review on April 1, said Vladimir Potanin, chief executive and co-owner.

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$50 Oil Kills Bonanza Dream Making Greenlanders Millionaires – by Peter Levring (Bloomberg News – January 12, 2015)

http://www.bloomberg.com/

Greenland, an island that may be sitting on trillions of dollars of oil, has had to acknowledge that its dream of tapping into that wealth looks increasingly far-fetched.

Back when oil was headed for $150 a barrel, Greenlanders girded for a production boom after inviting in some of the world’s biggest explorers, including Chevron Corp. and Exxon Mobil Corp. (XOM) Now, with Brent crude dipping below $50 last week, Deputy Prime Minister Andreas Uldum says Greenland’s hope of growing rich quickly on fossil fuels was “naïve.”

“I myself believed back when I was first elected” to parliament in 2009 “that billions from oil and minerals would start flowing to us the next year or the year after that,” he said in an interview in Copenhagen. “However, that’s just not the reality. I don’t know any politician in Greenland today who won’t admit to having fueled the hysteria.”

Oil Prices

The nation of about 56,000 had imagined its oil and mineral production would turn every citizen into a millionaire. Instead, Greenland continues to rely on an annual 3.68 billion-krone ($586 million) subsidy from Denmark to stay afloat, a sum that’s equivalent to almost half its gross domestic product. Talk of severing ties from its former colonial master has also faded as Greenlanders see little prospect of achieving economic independence anytime soon.

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Uralkali Gains Most in 5 Years on Output Goal, Share-Deal Delay – by Yuliya Fedorinova (Bloomberg News – December 18, 2014)

http://www.businessweek.com/

OAO Uralkali jumped the most more than five years in Moscow as the largest potash company raised its output goal even after one mine was halted by flooding and it delayed a share deal that would have left it less room to pay dividends.

“With increased capacity utilization at other mines, we intend to produce 12 million tons of potash this year to meet strong demand from our customers,” Chief Executive Officer Dmitry Osipov said in a statement. In August, Uralkali estimated annual output of the fertilizer of 11.5 million metric tons.

The potash producer advanced 14 percent, the biggest gain since May 2009, to 141.50 rubles by the close in Moscow trading, paring its loss for the year to 18 percent.

Uralkali is monitoring the Solikamsk-2 mine in Russia’s Perm region after water poured into the site last month. A sinkhole that has widened to 54 meters (177 feet) by 83 meters opened near the mine, swallowing up summer homes. Uralkali sees a high risk the mine will be completely flooded, forcing it to abandon a site contributing almost 18 percent of its capacity.

“We expect the accident to have an insignificant impact on our 2014 full-year output target,” Osipov said today.

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Poland’s KGHM has talks with Canadian rival over permit dispute – by Adrian Krajewski and Anna Koper (Reuters India – December 17, 2014)

http://in.reuters.com/

WARSAW – Dec 17 (Reuters) – Europe’s second largest copper producer KGHM has held talks with Canadian-owned rival Miedzi Copper about two disputed Polish concessions which are the subject of a legal battle, KGHM said on Wednesday.

Miedzi Copper filed a case in a Polish court against the government after two copper permits it had been awarded were withdrawn by the government following a challenge from KGHM, which itself wanted to develop the concessions.

“KGHM management met with Miedzi Copper management,” KGHM spokesman Dariusz Wyborski said. “We’re aiming at a solution that’s best for us, Miedzi Copper and the region.”

He said further geological studies on the concessions would be carried out “to accurately reflect on the possibilities sketched out at the meeting.” He did not elaborate. Miedzi Copper declined to comment.

KGHM, part state owned and the only miner producing copper in Poland, has previously said it challenged the award of the permits to Miedzi copper because it had spent time and money researching the permits, adjacent to areas it is already mining.

The government said the permits were withdrawn because of shortcomings in the way the bidding process was administered.

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