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Gabriel may seek billions in arbitration over stalled Romanian mine – by Eric Reguly (Globe and Mail – April 30, 2014)

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.

The Toronto mining company whose 15-year effort to open Europe’s biggest gold project has gone nowhere is preparing an international arbitration case against the Romanian government that would seek billions of dollars in damages.

Gabriel Resources is making plans for the case, which probably would be heard in Vienna in the second half of the year, as it starts to wind down its activities in Romania’s Transylvania region to conserve cash. About 400 employees, or 80 per cent, of Gabriel’s Romanian subsidiary, Rosia Montana Gold Corp. (RMGC), have been suspended at three-quarters pay. The company has said it may fire them in May “if there is no progress in the advancement of the project.”

Gabriel, which is listed on the Toronto stock exchange but run from London, is not expecting a breakthrough any time soon. The Romanian parliament’s chamber of deputies is scheduled to vote on a bill that would give special legal status to the $1.5-billion (U.S.) project, allowing it to go ahead, on May 7.

But the company does not expect the vote to go in its favour, partly because public opposition to the mine and its cyanide-based extraction technology remains strong.

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UPDATE 1-Eramet sees another loss in H1 despite nickel recovery – by Andrew Callus and Gus Trompiz (Reuters India – April 29, 2014)

http://in.reuters.com/

PARIS, April 29 (Reuters) – French mining and metals group Eramet said on Tuesday it expected to make another operating loss in the first half of 2014 despite a recovery in nickel prices driven by an Indonesian ban on unprocessed mineral exports.

The group, whose nickel operations are based in the French Pacific territory of New Caledonia, has been pinning its hopes on Indonesia’s export embargo to curb global oversupply and bolster prices that sank to a four-year low in 2013.

Nickel prices had recovered significantly since March but still remained down 15 percent on year at “an abnormally low average level” of $6.64 a pound, it said.

“Eramet group turnover should pick up in Q2 2014, compared with Q1 2014,” it said in a first-quarter sales statement.  “Nonetheless, in view of the relative movement in nickel and manganese prices, current operating income for first-half 2014 should be approximately the same as in second-half 2013,” it said.

Eramet posted a current operating loss of 45 million euros for 2013, including losses in each half. Its nickel branch suffered a full-year loss of 222 million euros and the poor market conditions led Eramet to postpone its flagship nickel mining project in Indonesia.

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Red dirt in Red Square: Mining World Russia – by Cole Latimer (Australian Mining – April 28, 2014)

http://www.miningaustralia.com.au/home

As the Mining World Russia exhibition wraps up, Australian companies are looking to head home and count their successes at the show, and in the country. Speaking to a number of Australian companies which participated in the Austmine and Austrade developed trade mission and the exhibition as well, they said it was a positive experience and has helped them get a foot in the door of one of the largest mining markets in the world.

The trade mission was carried out as a political storm grew in the background, however this didn’t work to deter miners, who were focusing on the longer term goals of taking Australian experience and technology into new and willing markets.

But why Russia? According to Palaris’ Joe Carr “Russian miners are currently seeing a requirement for technical expertise that they just don’t have here,” which includes high end products and experience that many Australian mining and METS companies have.

Bradken added that “there is a real desire for better technology and equipment in the country,” with Gekko’s Nigel Grigg explaining that previously Russia operated with smaller equipment, but lots of it, so now they are looking to larger, single pieces of machinery or technology”.

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Pyhäsalmi Mine Oy: Bringing ore to the surface – by Will Daynes (BE Mining – April 23, 2014)

http://www.bus-ex.com/mining

Located in the town of Pyhäjärvi in the south of Oulu province, in central Finland, the Pyhäsalmi mine is an underground copper and zinc mine, owned by Canadian mining corporation First Quantum Minerals.

With a depth measuring 1,444 metres, or 4,738 feet, it is the deepest metal mine in Europe and among the continents oldest. It origins date back to 1958, when a local farmer came across gossan ore during a well construction. A sample of this ore was soon delivered to Outokumpu Corporation, which, following analysis of the sample ordered a more thorough geological survey to be conducted on the area. Said survey revealed a rich volcanogenic massive sulphide (VMS) deposit rich in copper and zinc, and come 1959 the decision was taken to open up a new mine at the site of the ore discovery.

The Pyhäsalmi mine opened on 1 March 1962. For the first five years it existed as an open cast pit, before underground mining operations commenced in 1967. Outokumpu was responsible for designing an underground development plan for the mine and in 2001 completed the construction of a 1,450 metre deep automated hoisting shaft. A year later the mine was acquired by Inmet Mining, who continued forward with the underground development plan. Fast forward to 2013 and the company found itself being acquired by First Quantum Minerals as part of its purchase of the Inmet Mining group.

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Globe in Ukraine: In a former mining town, nostalgia for Soviet era – by Mark MacKinnon (Globe and Mail – April 22, 2014)

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.

HORLIVKA, UKRAINE — You can smell Horlivka before you see it: the acrid output from the aging chemical plants and machinery factories that still limp along, though only at a fraction of the pace they once did.

Then you hit the jarring, metre-long potholes and get a glimpse of the city’s grim skyline of crumbling apartment blocks. The Soviet Union fell 23 years ago. Horlivka has kept falling ever since.

The next thing you sense in Horlivka is anger. Armed men have taken over the city’s main police station, and have built a wall of tires around it. Checkpoints flying the black-blue-and-red banner of the self-proclaimed Donetsk People’s Republic, often alongside the flag of the Russian Federation, block the roads into the city.

But residents of Horlivka and other parts of eastern Ukraine don’t really want to live in an independent Donetsk. In many ways, they don’t even want to live in today’s Russia, although there’s a lot of admiration for President Vladimir Putin here.

What they want is to go back in time, to when the Soviet Union still existed and Horlivka residents had jobs producing things that people in other places wanted to buy.

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[Norilsk Russia and Nickel Mining] Life behind closed doors in the Arctic is…..fun! – by Kate Baklitskaya (Siberian Times – April 22 2014)

http://siberiantimes.com/home/

Norilsk is home to the world biggest mining and metallurgy complex, and is shut off from the world in more ways than one.

From deep in Soviet times, it was ‘closed’ to outsiders, and currently remains exceptionally hard to visit for foreigners. It appears on lists of the top ten most polluted cities in the world, and yet has no road or rail connections to the ‘mainland’, as the rest of Russia is known here, and the sea port Dudinka, which is 100 km from Norilsk is closed for nine months a year. Yet, intriguingly, the 177,000 people living in Norilsk – which accounts for two per cent of Russia’s entire GDP – seem more contented than many others in Russia.

On a Saturday night, local photographer Nadezhda Rimskaya, 32, goes to OverTime bar to see the local rockabilly band. Nadezhda graduated from a college in St Petersburg but decided to return home and has been working here for the last four years. The concert finishes after midnight and the group of young people decide to go for a late dinner.

Luckily there are places where the kitchen remains open after midnight – for example Maxim pub. Indeed, Moscow-level restaurants and night clubs, bars and coffee shops, are increasing in Norilsk powered by the high demand, surprising as this may seem.

‘Norilsk misses just two things – oxygen and the internet’, says Nadezhda on her night out, referring to the general lack of oxygen in the air in the north and the absence of the high speed internet in the city. Everything else is fine here and in many ways much better than in many Russian cities. I’m honestly surprised when I hear people say that Norilsk is ‘horrible’. That’s just a misinformed stereotype.’

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3 Reasons Why Palladium Prices Should Continue To Surge – by Royston Wild (Forbes Magazine – April 15, 2014)

http://www.forbes.com/

A confluence of factors have propelled palladium to multi-year peaks in the past few days. Recent highs above $800 per ounce representing the highest level since March 2011, and for some a march towards 2001′s all-time high of $1,090 is considered a very real possibility.

I am amongst those who reckon that palladium is poised to enjoy further solid price appreciation, and here I outline the three major factors which should continue to drive the metal skywards.

Russian shipments on the wane

The escalating political crisis in Ukraine has been a significant driver of palladium’s ascent in recent weeks, with Russia’s alleged involvement in the conflict prompting the US and the European Union to discuss imposing heavy economic sanctions on the country.

Norilsk Nickel is the world’s largest producer of the precious metal, and last year the company produced 2.58 million ounces of the material, or about 40% of total global supply. So the possibility of trade restrictions being placed on Russia could be catastrophic for metal supplies.

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Holcim-Lafarge cement mega-merger to be felt in Canada – by Nicolas Van Praet (National Post – April 8, 2014)

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

MONTREAL – Holcim Ltd. and Lafarge SA confirmed they will merge to form the world’s biggest cement maker in a deal with significant market concentration implications in Canada and other countries.

The two companies are already among the world’s largest suppliers of cement, crushed stone and sand and gravel. In combining into a new producer with annual revenue of US$40-billion, management of the two companies believe they will be required to sell assets representing about 18% of that revenue to satisfy competition regulators.

In Canada, Lafarge and Holcim together employ about 9,000 people and hold about half of the cement market, according to a 2008 estimate published by the Cement Association of Canada. The industry is centered in Ontario and Quebec.

Rivals such as Bolton, Ont.-based James Dick Construction Ltd. said they were surprised by the announcement, but added it could create an opportunity to grow their own businesses by buying what Lafarge and Holcim are forced to discard. Dick specializes in so-called aggregates, which are granular construction materials such as gravel and sand.

“I don’t think it’s bad news. It’ll open it up a bit for us,” company president Jim Dick said Monday. “We would expand if it makes sense.”

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German coal industry underpins renewable push – by Richard Anderson (BBC News – April 9, 2014)

http://www.bbc.com/news/

Germany is an enlightened leader in the global battle to reduce CO2 emissions, a pioneer in renewable energy and community power projects and a champion of energy efficiency. Or so the common narrative goes.

But try telling that to Monika Schulz-Hopfner. She and her husband, along with 250 other residents of Atterwasch, a quiet village near the Polish border, face eviction from their home of 30 years to make way for the Janschwalde-Nord coal mine.

And not just any old coal, but lignite, the dirtiest form of this ancient fossil fuel that is mined in vast opencast pits. If the plans go ahead, the village, parts of which date back more than 700 years, will be demolished.

“Since the plans for the mine were unveiled in 2007, we have lived with this constant threat, which has taken over the lives of every individual and the community as a whole,” says Mrs Schulz-Hopfner. “Every single decision we make is affected by it.” And the residents of Atterwasch are not alone.

In the eastern German region of Lausitz, nine villages are under threat, where up to 3,000 people could lose their homes to make way for five new lignite mines that are fuelling the country’s renewed thirst for coal. Two further mines are under consideration.

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UPDATE 2-Russia’s Norilsk sees nickel price recovery in 2014 – by Polina Devitt (Reuters U.S. – April 7, 2014)

http://www.reuters.com/

MOSCOW, April 7 (Reuters) – Norilsk Nickel, the world’s biggest producer of nickel and palladium, sees nickel prices recovering this year, it said on Monday after reporting a 64 percent drop in net profits due to write-offs.

The Russian firm, part owned by Chief Executive Vladimir Potanin and aluminium giant Rusal, had to trim spending last year and focus on its lucrative Soviet-era operations in Russia’s far north to cope with weak prices for its key metals.

“Last year was a challenging and volatile year in commodity markets with prices for the majority of metals in the Norilsk Nickel portfolio declining that had a clear impact on our top-line performance,” Potanin said in a statement.

The management is cautiously positive on 2014 with improving commodity prices in the beginning of the year but is also concerned over a deteriorating emerging market risk appetite in the global investment community, he added. Norilsk has not been hit by the political tension over Ukraine so far, but all Russian companies would suffer should the situation escalate, its deputy chief executive, Andrei Bougrov, said last week.

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PRESS RELEASE: Eramet Group: NEW CALEDONIA: AGREEMENT BETWEEN GROUPS ERAMET AND VALE AND SOUTH PROVINCE FOR THE STUDY OF MINING AND BENEFICIATION OF THE NICKEL DEPOSITS AT PRONY AND PERNOD

 Paris, April 7, 2014

NEW CALEDONIA: AGREEMENT BETWEEN GROUPS ERAMET AND VALE AND SOUTH PROVINCE FOR THE STUDY OF MINING AND BENEFICIATION OF THE NICKEL DEPOSITS AT PRONY AND PERNOD.

ERAMET, Vale Canada and New Caledonia’s South Province signed a framework agreement on April 5, 2014 in Nouméa providing for the exploration, study and beneficiation of the nickel deposits at Prony and Pernod in the south of New Caledonia.

This agreement is governed by the Mining Code, passed by the New Caledonian congress in 2009. Under this code, the deposits were classified as “Provincial Technical Reserves”* by South Province on February 12, 2012.

It follows on from the signature by the three entities of a declaration of intent on November 5, 2012 setting out the guidelines of a partnership for the development in New Caledonia of the mineral deposits at Prony and Pernod.

This agreement provides for the creation of a joint venture for the project, owned 34% by South Province, and 33% each by ERAMET and Vale Canada. The joint venture will first undertake the geological exploration works and technical studies required for improving knowledge on the deposits and the operation of the mine.

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Greater tension could do systemic harm to Russian firms-Norilsk – by Silvia Antonioli (Reuters U.S. – April 4, 2014)

http://www.reuters.com/

LAUSANNE, Switzerland – (Reuters) – Any worsening of tension between Moscow and the West that leads to stiffer sanctions would do systemic damage to Russian companies by deterring investors and making borrowing more difficult, a Norilsk Nickel executive said.

Russia’s annexation of Ukraine’s Crimean peninsula has marked the biggest East-West crisis since the Cold War and prompted the United States and Europe to impose sanctions.

Norilsk Nickel, the world’s largest nickel and palladium miner, has not been hit by the political tension so far, but all Russian companies would suffer should the situation escalate, its deputy chief executive officer for government and investor relations said in an interview.

“The impact would be felt if the situation further aggravated and there would be some systemic implications for companies, like for example a decrease in the ratings…lack of interest from investors, an exodus of some of the investors from the shareholder base, tightening of the terms of financing,” Andrei Bougrov said.

“All this we do not see at the moment. But this is more of a systemic issue that may or may not evolve. One has to trust the politicians that they will be able to find a solution.”

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Throwing stones in a glass Dacha: The West’s metal vulnerabilities – by Christopher Ecclestone (Mineweb.com – April 4, 2014)

http://www.mineweb.com/

Christopher Ecclestone of Hallgarten & Company addresses supply issues the West faces with Russia as adversary.

LONDON – Some have accused the EU and U.S. of soft-pedaling on the Crimea/Ukraine issue. But might these economic powers think twice before stirring up too much of a ruckus? The EU is particularly vulnerable to Russia cutting off natural gas exports and the U.S. has to play nice with Russia to keep getting cheap uranium supplies.

According to the US Energy Administration, in 2011 the United States mined nine percent of the uranium consumed by its nuclear power plants. The remainder was imported, principally from Russia (50%), Canada, and Australia. As uranium bulls will ceaselessly inform you the supply situation is tight and if it wasn’t for those pesky Russians the price would be a lot higher.

We usually do not make common cause with the tin-foil-hatted but would beg to agree with the uranium bulls. It is a truism that the unwinding of the Soviet stockpiles have beggared the global uranium mining industry and that the great day will be when an end to this attrition is seen.

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Strategic metal mining set to gain traction in Britain – by Harpreet Bhal (Reuters U.S. – April 2, 2014)

http://www.reuters.com/

LONDON, April 2 (Reuters) – Mining firms are looking favourably at Britain as a project destination with deposits of strategic metals leading a small mining revival following the launch of the country’s first new metal mine in 45 years.

The UK has deposits of metals such as tin – used in mobile phones, and tungsten – used to make drilling tools – as well as antimony and tellurium – used in the semiconductor industry – seen as having bullish long-term price outlooks as the appetite for electronic gadgets expands in the developing world.

The southwest counties of Cornwall and Devon experienced extensive mining in the 19th century when metals including copper, lead and tin were keenly sought, but fierce competition from lower cost operations in Latin America, Asia and Africa resulted in projects being shut and many sites abandoned.

While analysts said it is unlikely for Britain to experience another mining boom, the country is being eyed by some as a favourable destination due to competitive labour costs and tax rates, as well as deposits of strategic metals – a vital component in technology and industry.

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Why are platinum and palladium not meeting analyst expectations? – by Lawrence Williams (Mineweb.com – April 1, 2014)

http://www.mineweb.com/

The impact of the 10 week old strike which has halted production at a number of South Africa’s platinum mines so far seems to have had little impact on pgm prices. Why?

LONDON (MINEWEB) – While every now and again some analyst or other comments that perhaps palladium is outperforming gold, or platinum is, on the year to date both the pgms have moved up pretty well pari passu with gold overall. All three metals are around 7-8% up since the beginning of the year. Indeed gold moved up substantially further during the height of the Ukraine crisis and while the pgms followed they did not quite do so to the same extent. As gold has fallen back though, the pgms have caught up again.

Many analysts have been preaching the investment merits of the pgms in the light of the long running platinum strike in South Africa which has seen a number of mines effectively shut down so far for some ten weeks – with no end in sight to the strikes yet.

The more aggressive AMCU which has become the dominant player among the platinum mine unions, has been demanding an effective doubling of the workers’ wages which the mining companies have concertedly said they cannot afford – and with many of the deep narrow reef platinum producers finding it tough to make any kind of profit even at current platinum prices they do have a point.

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