Romania eyes 78 pct of revenues from delayed gold mine project – by Luiza Ilie (Reuters U.S. – July 11, 2013)

BUCHAREST, July 11 (Reuters) – Romania aims to bank as much as 78 percent of revenues from Europe’s biggest open cast mine being developed by Canada’s Gabriel Resources and will finish renegotiating terms of the long-delayed project by September.

Gabriel controls the project which aims to use cyanide to mine for a total 314 tonnes of gold and 1,600 tonnes of silver among a cluster of villages in the Carpathian mountains, known as Rosia Montana. It owns 80 percent in local unit Rosia Montana Gold Corporation (RMGC) with the Romanian government holding the rest.

The mine has been stuck in limbo for years, waiting for a key environmental permit, but Prime Minister Victor Ponta promised his cabinet will ask parliament to vote on whether to give the 14-year-old plan the green light in the fall.

On Thursday, the government said it aims to secure larger benefits for Romania from its natural resources, including “a bigger stake and higher royalty taxes on gold resources,” according to the national infrastructure ministry. “The government is renegotiating the Rosia Montana project in its entirety to ensure Romania gets maximum and fair benefits,” the ministry said. “We will get … 78 percent of what revenues the project generates.”

Read more

2013 KGHM International Corporate Social Responsibility Report Introduction – by Derek C. White, President and Chief Executive Officer

To view the 2013 KGHM International Corporate Social Responsibility Report, click here

KGHM International has grown to be a globally diverse mining company, with operations and projects in Canada, Chile, Greenland and the United States and is a growth vehicle for our parent company, KGHM Polska Miedź, S.A. Each of our operations is located within their own distinct communities, whether they are situated near a small town in the middle of the Atacama Desert in Northern Chile, or within a renowned world-class mining camp in Canada. We appreciate and recognize that each site is unique and do our best to be a good neighbour wherever we operate.

We believe in four very important values: Zero Harm, Results Driven, Success Through Teamwork, and Courageous. These
values not only guide how we behave at our operations, they provide the foundation for how we interact and communicate
with our surrounding communities. These values help to ensure that we are operating in a safe, socially accountable and
environmentally responsible manner.

Zero Harm is at the heart of our core values. We are committed to the health and safety of our employees and the communities in which we operate. Our Zero Harm commitment applies not only to our employees, but also to the environments in which we live, work and play. Through careful planning and practices we minimize the impact of our activities, from development to operation, to closure and rehabilitation.

Read more

Mining revival offers hope in crisis-hit Europe – by Susan Thomas (Reuters U.K. – July 4, 2013)

LONDON, July 4 (Reuters) – A gradual shift in European attitudes and policy toward mining in the past four years, spurred by the need to create jobs and to ensure supply of critical materials, has led to investment and a nascent revival of the industry.

New or resurrected mining and smelting projects in some areas of Europe are providing some prospects for growth in the region as countries struggle with recession and crippling unemployment.

A handful of countries, including hard-hit Spain and Portugal, are attracting investment with good grades of ore, a large labour pool, revamped mining regulations and low political risk.

“Spain has gone from being shy of mining to being welcoming of mining. The political landscape has turned 180 degrees,” said EMED Mining Chief Executive Harry Anagnostaras-Adams, whose London-listed company plans to reopen a former Rio Tinto copper mine near Seville.

“There has been a marked transformation between when we arrived six years ago, when mining was not conventionally regarded as a favourite industry, to today when it overshadows most other initiatives in the area.”

Read more

Norilsk to Focus on Arctic Circle Mines as CEO Builds Team (2) – by Yuliya Fedorinova (Bloomberg News – June 28, 2013)

OAO GMK Norilsk Nickel (GMKN), the largest nickel and palladium producer, plans to focus on developing its operations in northern Russia over international assets after installing a new chief executive officer and management team.

“We will be looking at opportunities to optimize our portfolio of assets, including our international operations, with a key strategic focus on the sustainable increase of the firm’s return on capital,” Norilsk Deputy CEO Pavel Fedorov, head of strategy and business development, said in an interview in Moscow. “Enhancing the efficiency and capitalization of our key Polar Division would be at the heart of the new strategy.”

The division has seven mines north of the Arctic Circle, producing nickel, copper, platinum, palladium, cobalt and gold above the 69th parallel. Plants processing ore from these mines achieve an extraction rate of 83 percent of nickel from each ton of ore after the first phase of enrichment, compared with 70 percent and below for Norilsk’s assets in Africa and Australia, according to its annual report.

Billionaire Vladimir Potanin replaced Vladimir Strzhalkovsky as CEO at the end of 2012 as part of a truce to end a conflict between Norilsk shareholders Interros and United Co. Rusal over how the company was run. In April, Potanin hired Fedorov, a former mergers-and-acquisitions banker, for the 12-member management board among nine newly appointed executives.

Read more

Cossacks Ramp Up Pressure on [nickel] Mining Firm After Riot – (RIA Novosti – June 25, 2013)

MOSCOW, June 25 (RIA Novosti) – A representative of a Cossack organization said that a mining company whose allegedly environmentally disastrous operations incited hundreds of locals to riot in central Russia has a month to stop the project or face the consequences, the Komsomolskaya Pravda newspaper reported Tuesday.

“We reserve the right to campaign against nickel exploration by any legal means,” Valery Davydov was cited as saying.
“And let them keep in mind that if they so much as insert a shovel into the ground, the entire region will explode,” he said, adding that the decision was endorsed by eight Cossack organizations.

The Cossacks, an ethno-social group in Eastern Europe known for their social conservatism and pre-revolutionary military exploits, were repressed under the Soviets for their loyalty to the tsar. Today the group is showing a revival, regaining prominence in Russian public life and sometimes performing vigilante police duties.

The 13-month-long standoff over a prospective nickel mine in the Voronezh Region exploded last weekend, when a crowd of several hundred stormed the premises of a geological exploration party and torched cars, construction trailers and drilling rigs.

Read more

Serbia may be on cusp of mining revival after years of decline – by Aleksandar Vasovic and Stephen Eisenhammer (Reuters U.S. – June 13, 2013)

Reuters) – Serbia’s mining sector, stagnant since the wars that tore Yugoslavia apart in the early 1990s, looks set for a revival as volatile commodity prices increase the allure of countries in Europe with established infrastructure and skilled labor.

Once home to a core copper and gold mining facility for the former Yugoslavia, the town of Bor in the north-eastern corner of Serbia has a history of mining dating back to Roman times.

Canadian major Freeport and its smaller partner Reservoir Minerals are exploring the area’s underground reserves. Early results have impressed investors and analysts. “The grades they’re drilling are exceptional… These come around once a decade,” said Brent Cook, a geologist and private investor who writes an investment newsletter.

International mining firms are under pressure from increasingly cautious investors to move away from projects in non-traditional mining countries where a lack of good roads, railways, water and power, as well as skilled workers, can hike costs.

Eastern Europe, along with Spain and Greece, has emerged at the forefront of this shift, with governments that are eager to help boost jobs and growth.

Read more

Russian city awaits potash boom but outlook fragile – by Agence France-Presse/Global (June 11, 2013)

At first sight, Berezniki looks a typically bland provincial Russian outpost with its decrepit housing blocks and factory chimneys.

But the city in the Perm region of the Urals sits on a vast and hugely valuable secret — one of the world’s biggest deposits of potash, a mineral that is now coveted across the world as a fertiliser for food crops.

Berezniki, 1,200 kilometres (750 miles) east of Moscow, sits on the Verkhnekamsk deposit, which was discovered in 1925 and which was developed after World War II.

Its proven reserves represent some 34.5 percent of the world’s total and the deposit is the second biggest in the world after those in Saskatchewan in Canada, according to the US Geological Survey.

A veritable army of miners march up and down the kilometres of passages that have already been carved out 450 metres (1,500 feet) underground. Their machines work day and night to mine the pink coloured rock where the mineral is contained.

This is then taken to the surface by conveyors to extract the precious mineral. Once turned into powder or crystalised as granules, potash is used as a fertiliser to help crops grow and increase their immunity to disease.

Read more

Russia Stocks Sink 2nd Day on Bets Commodity Supercycle Fading – by Ksenia Galouchko (Bloomberg News – June 11, 2013)

Russian shares dropped for a second day on concern commodities may extend their decline, curbing growth in the world’s biggest energy exporter.

The Micex Index (INDEXCF) fell 1.4 percent to 1,317.20 by 11:31 a.m. in Moscow, the sharpest slide in almost a week. Basic materials companies led the retreat, losing 1.5 percent on average. The volume of shares traded on the gauge was 50 percent below the 30-day average, while 10-day price swings subsided to 16.497.

The Standard & Poor’s GSCI (SPGSCI) gauge of 24 raw materials retreated 0.5 percent as the Bank of Japan disappointed investors by failing to expand monetary stimulus and concern grew that the U.S. Federal Reserve will scale back debt purchases. Russian central bank Chairman Sergey Ignatiev, who presided yesterday over his last policy meeting after leading the regulator for more than a decade, kept key rates on hold for a ninth month.

“The market is falling on fears that we’re entering the end of the commodity cycle, that the rise of commodities is over,” Sergey Kucherenko, who manages about $50 million in Russian equities at OAO Nomos Bank in Moscow, said by phone. “Russia is very closely correlated to oil.” The dollar-denominated RTS Index (RTSI$), which last week entered a bear market, declined 1.4 percent to 1,282.53. On the Micex, 3 stocks increased while 44 dropped, three were little changed.

Read more

[Saskatchewan potash] Bethune Mine: Promises Lasting Legacy – by Ella McIntyre (Saskatoon StarPhoenix – June 11, 2013)

A promise of economic growth and employment, with an eye to ensuring long-lasting environmental and community well-being, is behind K + S Potash Canada’s $3.25 billion dollar solution mining Legacy Project planned for the Rural Municipality (RM) of Dufferin, near the village of Bethune. Bethune is approximately 50 kilometres from Regina.

“Not only is the Legacy Project Saskatchewan’s first potash mine in nearly 40 years, it is one of the world’s most economically attractive greenfield projects,” said Christine Stass, spokesperson for K+S Potash Canada and its parent K+S Group, a leading supplier of fertilizers and the world’s leading salt producer.

As Stass explains, with a potash price of between USD 400 and 450/tonne, the project achieves a Return on Capital Employed of 12 per cent and an attractive premium on K+S Group’s costs of capital. It also promotes important jobs and economic opportunities for Saskatchewan. By spring 2013, 200 to 300 people will be working on site which, at its peak, will provide over 1,100 jobs and roughly 6 million employment hours. The following two years will see rail construction, structures built and equipment installed and, by late 2015, plant commissioning and the site near completion. Once in full production, the mine will employ 320 permanent workers, with more jobs created through ongoing contract employment.

Potash production for the mine is anticipated for 2015. The operation will ramp up to full capacity of 2.86 million tonnes by 2023. With further expansion, production could increase up to 4 million tonnes per year.

Read more

Arctic governments stand by as deadly pollution spews from Russia’s Nikel mine – by Alex Boyd (Nunatsiaq on -June 11, 2013)

“More profitable to keep polluting the region than modernize the production”

The nickel mine in the aptly named town of Nikel in northwestern Russia is usually notable for three things: it’s big, it’s a massive source of pollution, and, for more than 20 years, it’s defied all attempts to change.

Controversy is as constant in Nikel as the clouds of sulphur dioxide; the mine here is equal parts economic powerhouse and environmental scourge. Yet, criticism has kicked up a notch in recent weeks after European leaders met to discuss issues in the region — and failed to mention Nikel.

Last week’s Barents Summit in Kirkenes, Norway brought together leaders from all over northern Europe, but despite old promises to deal with the mine’s pollution and new commitments to environmental sustainability, the mine located just 50 kilometres away went unmentioned.

Amid the international hoopla over the Arctic, it’s easy to forget that the region is a relatively small place, with a small population. The presence of organizations such as the Arctic Council and the Barents Council means countries are increasingly trying to tackle Arctic issues as a group, but disagreements still arise.

Read more

Germany seeks to develop relationships in mining – by Lindsay Kelly (Northern Ontario Business – June 10, 2013)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

There’s such little awareness amongst German companies of the underground mining capabilities in Canada that one German company recently declared, “There’s no underground mining in Canada.”

It’s a misperception that needs to change in order for relationships to develop between Canadian and German companies in the mining supply and services sector, said Aarti Mona Soerensen, manager of the mining and mineral resources department at the Canadian German Chamber of Industry and Commerce.

Based in Toronto, the chamber is an official representative of German trade with more than 500 members. It focuses on establishing partnerships in the construction, food, medical technology and mining sectors. During a recent exploratory discussion with industry representatives in Sudbury, Soerensen said Canada has been underestimated as a partner for German companies, and she’s hoping to change that.

“The intent is to get into a discussion and hopefully, then, over the longer term, co-operation to work out partnership opportunities,” Soerensen said. “My idea is not to flood Sudbury with new companies and take over the market, because that’s not really what German companies do. We very much rely on collaboration with local companies.”

Read more

[Eramet] Weda Bay Nickel May Miss Tax Holiday – by Tito Summa Siahaan (Jakarta Times – June 6, 2013)

France-based mining firm Eramet has been urged to spin off the processing facility of its planned Indonesian nickel mine if it wishes to take advantage of a foreign investment tax holiday.

The company plans to invest up to $5 billion to build nickel processing facilities associated with its proposed mine at Weda Bay in North Maluku.

Because the company formed to pursue the Weda Bay mine plan pre-dates the government’s tax holiday initiative, the company may otherwise be ineligible for the incentive that it sought. A contract of work for the proposed mine was signed with the national government in 1998.

Thamrin Sihite, the director general for coal and mineral resources at the Energy and Mineral Resources Ministry, said that the regulation providing a tax holiday, issued by the Finance Ministry, may not cover investment plans such as the one by Eramet.

“The thing is, the tax holiday is only for companies [incorporated] after the regulation was issued [in 2010],” Thamrin Sihite said after a meeting with a French trade delegation lead by Trade Minister Nicole Bricq in Jakarta on Wednesday.

Read more

Greek opponents of Eldorado mine take message to company’s Canadian HQ: ‘Leave us alone’ – by David P. Ball ( – June 4, 2013)

Greek villagers brought their region’s fierce battle against Vancouver-based Eldorado Gold to the firm’s headquarters Friday, marking the end of the activists’ cross-Canada tour opposing open-pit gold mining in their homeland.

Over the past year, a growing conflict in Greece’s Halkidiki region — birthplace of the philosopher Aristotle — has seen thousands of residents blockade roads, raid mine sites, and skirmish with police they say are corrupt and beholden to the company. Another demonstration brought 20,000 protesters to the streets of Thessaloniki.

“Our will will not be curbed,” said Maria Kadoglou, a resident of Ierissos village, Greece. “We will keep on fighting until Eldorado Gold goes away.”

“Eldorado has been trying for a very long time to conceal from the Canadian public and its own investors that fact that there is huge resistance to its operations in Greece. When demonstrations got so big that they could no longer deny it any more … they have been saying the people protesting are anarchists, radical leftists, that we are flying in protesters from other parts of Greece; this is totally false. This is a genuine local resistance movement.”

Read more

Massive gas find renews shale debate in U.K. – by Paul Waldie (Globe and Mail – June 4, 2013)

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.

LONDON — Britain’s long-simmering debate about the future of shale gas has been shaken up by a new report indicating that one large deposit could contain enough natural gas to make the country self-sufficient for decades. The announcement came Monday from IGas Energy PLC, one of a handful of companies exploring Britain for shale gas.

London-based IGas said its drilling in northwestern England indicates a deposit containing at least 15 trillion cubic feet of in-place gas, and as much as 172 tcf. This was far higher than IGas’s original estimate of nine trillion cubic feet.

IGas, which is 20 per cent owned by Calgary-based Nexen Inc., has been drilling in the Bowland basin, a large rock formation that stretches across much of England. Another company, Cuadrilla Resources Inc., has been exploring the same basin in a different area and has already announced that it has located 200 tcf of in-place gas.

IGas chief executive officer Andrew Austin said the entire basin could contain 500 tcf. “Even if the industry can only extract a fraction of that, combined with North Sea reserves, it could make the U.K. self-sufficient in gas for decades to come,” Mr. Austin told the BBC on Monday.

Read more

INTERVIEW-Norway oil fund may sell out of mines that mistreat workers – by Gwladys Fouche (Reuters India – May 29, 2013)

OSLO, May 29 (Reuters) – Norway’s $740-billion sovereign wealth fund, the world’s largest, is examining labour conditions in the mining industry and may sell out of firms that violate workers’ rights, the head of the fund’s ethics council said.

The fund could also divest from companies involved in cattle ranching, if working conditions on farms are exploitative, and from firms implicated in illegal or unregulated fishing.

“Working conditions, slave-like working conditions, … is a very important priority,” said Ola Mestad. “We have been trying to identify different sectors: (one of them) could be mining.”

The fund invests Norway’s revenues from oil and gas production for future generations. It is one of the world’s largest investors with holdings in some 7,500 companies.

It has excluded firms for what it deems to be unethical behaviour based on the advice of its ethics council, an independent body reporting to the finance ministry, which has ultimate responsibility for the fund. The ministry tends to follow the council’s recommendations. The fund also bans investments in some industries – nuclear arms, anti-personnel landmines, cluster bombs and tobacco.

Read more