International Media Resource Articles – Page 630

The losing battle against conflict minerals (Al Jazeera.com – September 14, 2015)

September 14, 2015

http://america.aljazeera.com/

Minerals from countries where sales fund corruption and violence continue to enter the US, as oversight proves tricky

Efforts by the United States to reduce the devastating violence in the eastern Democratic Republic of Congo by regulating the trade in conflict minerals — a group of four minerals, mined in Congo and neighboring countries, where they help to finance conflict there — are proving difficult to enforce as illegal armed groups and corrupt members of the national military continue to create instability in the region, according to a report released this summer by the Government Accountability Office.

“We do see these armed groups are still present and they are most likely still benefiting from the mineral trade,” Evie Francq, a DRC researcher with Amnesty International, told Al Jazeera America by phone from Nairobi.

“What we see is there are still very big displacements of the population, people that are fleeing abuses by rebel groups,” said Francq, adding that civilians have also become caught up in army operations against those groups, like the Democratic Force for the Liberation of Rwanda (FDLR).

“Often civilians are targeted either by the armed group or by the [Congolese] army because they’re suspected of giving information about the group to the army, or about different groups that are fighting against each other,” she said.

Iran says finds unexpectedly high uranium reserve (Reuters U.S. – September 12, 2015)

September 14, 2015

http://www.reuters.com/

DUBAI – Iran has discovered an unexpectedly high reserve of uranium and will soon begin extracting the radioactive element at a new mine, the head of Iran’s Atomic Energy Organization said on Saturday.

The comments cast doubt on previous assessments from some Western analysts who said the country had a low supply and sooner or later would need to import uranium, the raw material needed for its nuclear program.

Any indication Iran could become more self-sufficient will be closely watched by world powers, which reached a landmark deal with Tehran in July over its program. They had feared the nuclear activities were aimed at acquiring the capability to produce atomic weapons – something denied by Tehran.

“I cannot announce (the level of) Iran’s uranium mine reserves. The important thing is that before aerial prospecting for uranium ores we were not too optimistic, but the new discoveries have made us confident about our reserves,” Iranian nuclear chief Ali Akbar Salehi was quoted as saying by state news agency IRNA.

Salehi said uranium exploration had covered almost two-thirds of Iran and would be complete in the next four years.

The Great Indian Gold Rush: Mines ministry pushes to re-open Karnataka’s Kolar Fields and extract gold worth Rs 25,000 crore – by Darpan Singh (Daily Mail Online India – September 13, 2015)

September 14, 2015

http://www.dailymail.co.uk/indiahome/

All that glitters may soon be gold, and worth Rs 25,000 crore! That’s what the ministry of mines has set out to extract by reworking the grey-white waste hillocks at the abandoned Kolar Gold Fields in Karnataka.

Part of this treasure will also come from the mines themselves, still believed to have gold-bearing veins.

The ministry is pushing to revive India’s only world-class gold mining operation, shut in 2001 because of mounting losses and depleting reserves.

But the government is buoyed by the latest assessment it has conducted on the extractable gold.
India is the largest importer and consumer of gold in the world with the imports of the metal standing at around 800 tonnes last fiscal.

But domestic production has dropped to a mere 1.43 tonne. Reviving India’s dormant gold mining industry is key to cutting the rising gold import bill and boosting the economy.

Colorado Mine Spill Highlights Superfund Challenges – by Dan Frosch and Alexandra Berzon (Wall Street Journal – September 11, 2015)

September 14, 2015

http://www.wsj.com/

Gold King incident shows difficulty in cleaning contaminated sites

The Colorado mine spill that sent three million gallons of toxic sludge into a river last month highlighted the struggles of the federal Superfund program to clean up contaminated mining sites across the American West.

The program, administered by the Environmental Protection Agency, was set up in the 1980s to remediate the nation’s most polluted places, from old factories to landfills. But it has been especially strained by legacy mining sites, which are often impossible to permanently clean up and instead require water-treatment plants or other expensive measures to contain widespread pollution, experts say.

The EPA often faces opposition from communities that distrust the agency and remain fearful of the economic stigma of being labeled a Superfund site. The agency also frequently is confronted with deep-pocketed mining companies who try to fend off efforts to hold them at least partially responsible for cleanup costs.

And for the past decade, the EPA has had to work with diminished finances after levies on oil and chemical companies originally intended to help fund Superfund cleanups expired and weren’t renewed by Congress.

Glencore stock dives again on rating outlook, Zambia – by Chris Mfula (Reuters U.S. – September 10, 2015)

September 14, 2015

http://www.reuters.com/

LUSAKA/LONDON (Reuters) – Shares Glencore fell almost eight percent on Thursday after Zambia said it wanted to save jobs at mines the commodities giant plans to suspend and ratings agency Moody’s changed its outlook on the company to negative.

Glencore acknowledged on Monday the severity of the commodity market slump as it suspended dividends and said it would sell assets and new shares to cut debt by a third to around $20 billion – built up through years of rapid expansion – to protect its rating.

The strategy, which also includes plans to shut down some copper mines to support flagging prices, had triggered a rally in Glencore’s stock and propelled copper – hit by worries over the Chinese economy – to a seven-week high.

But on Thursday the stock – which this month fell to the lowest level since being floated in 2011 – resumed its fall after Zambia said it would hold talks with Mopani Copper Mines (MCM) over parent Glencore’s plan to suspend operations after a drop in the metal’s price.

“We are about to start discussions with Mopani.

Once booming, Nevada gold output falls to 1988 level – by Sean Whaley (Las Vegas Review Journal – September 12, 2015)

September 14, 2015

http://www.reviewjournal.com/

CARSON CITY — Gold production in Nevada fell to less than 5 million ounces in 2014, the first time since 1988 that output of the precious metal has dipped so low.

A new state Division of Minerals report shows 4.94 million ounces of the precious metal was taken from 30 Nevada mines in 2014. There was about 5.5 million ounces of gold produced in Nevada in 2013.

The peak year in recent memory was 1998, with just under 9 million ounces.

Richard Perry, administrator of the Division of Minerals, said it appears production has leveled off in the 5 million ounce range over the past five years. While production has fallen, Nevada mines still throw of gold valued at $5.5 billion, at $1,100 per ounce, he said.

“We need better gold prices to see more projects and new mining,” Perry said. The lower gold production is due largely to the price of gold, which hit a high of nearly $1,800 per ounce in 2012 but has dropped to about $1,100 as of Friday.

Western Australian resources worth nearly $100 billion – by Cole Latimer (Australian Mining – September 11, 2015)

September 11, 2015

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

New figures from the WA Department of Mines and Petroleum have highlighted the value of the state’s resources industry.

In statistics released today, the WA DMP said the industry was valued at $99.5 billion in 2014-15. Iron ore was the highest rated commodity, worth $54 billion in sales to Western Australia. This was despite falling Chinese demand for the metal.

“Western Australia produced 719 million tonnes of iron ore in 2014-15, a 15 per cent increase compared to the previous year, however the low iron ore price resulted in a decrease in the total value of sales,” WA DMP general manager for policy and co-ordination Richard Borozdin said.

Gold brought $9 billion worth of sales into the state, an increase of 1.5 per cent year on year.

Alumina was the third most value commodity to WA, reaching more than $5 billion in value, a 20 per cent jump compared to the previous corresponding period, which was buoyed by the weak Australian dollar.

Moody’s Downgrades Glencore’s Credit Outlook to Negative – by Alex MacDonald and Scott Patterson (Wall Street Journal – September 11, 2015)

September 11, 2015

http://www.wsj.com/

Move follows similar one by S&P as mining giant looks to trim debt amid soft commodity prices

LONDON— Glencore PLC suffered a fresh blow Thursday, when Moody’s Investors Service downgraded the outlook for the commodity giant’s credit rating due to concerns over continued weakness in commodity prices, just days after the company unveiled plans to slash its heavy debt load.

Moody’s said it wasn’t changing the miner and trader’s investment-grade credit rating, but revising its outlook on that rating to negative from stable.

Standard & Poor’s Ratings Services, which downgraded its outlook on Glencore last week amid concerns about its debt and soft commodity prices, said late Wednesday that its outlook remains negative despite the mining giant’s recent moves to trim its debt.

Robots Will Help Iron-Ore Miners Survive Price Rout – by Luzi-Ann Javier (Bloomberg News – September 10, 2015)

September 11, 2015

http://www.bloomberg.com/

When the rout in prices ends for the world’s iron-ore producers, those left standing probably will have more robots on their side.

Automated drills and driver-less trucks are among the new tools employed by the four biggest companies, including BHP Billiton Ltd., in a bid to preserve profit margins during a bear market that began more than two years ago. Using more technology helped reduce costs at Rio Tinto Plc by 8 percent since 2013, even as it boosted output by 5 percent, according to Paul Young, an analyst at Deutsche Bank AG in Sydney.

Improvements by top producers is defying a productivity collapse for the rest of the mining industry, which consultant McKinsey & Co. says declined as much as 28 percent in the past decade, forcing smaller operators to shut.

With demand for iron-ore slowing in China, the world’s biggest user, prices are probably headed lower as major suppliers expand output by tapping low-cost reserves, mostly in Australia, according to Citigroup Inc. The top four companies will see their share of the global market jump to 79 percent in 2018 from 64 percent in 2010, the bank said.

A piece of mining history revived – the original Rio Tinto mine back in production – by Lawrie Williams (lawrieongold.com – September 10, 2015)

September 10, 2015

http://lawrieongold.com/

While the following article is not specifically on precious metals, but on the revival of one of the world’s oldest known mines, it has in its time produced silver and gold – indeed the Romans mined it primarily for its silver content – and the orebody still contains both precious metals.

While silver is still a byproduct, albeit a small one, the gold content is probably too low to be profitably extracted. Nevertheless as a piece of mining history – and a potentially decently profitable copper mining operation – even at current copper prices, readers may find it an interesting article.

In what has to be a mining engineer’s dream, the old Rio Tinto copper mine in Spain – which in its heyday was the foundation stone for the mega mining company which still bears its name – is being brought back to life. Indeed it is well on the way to becoming a major producer again – and the economics in comparison with low grade copper porphyries which provide the bulk of global copper production, are impressive.

The Rio Tinto mine in southwestern Spain has one of the world’s longest known mining histories with copper having been mined there even before Roman times, but it was in the late 19th Century, and the development of the operation into what at the time was one of the world’s largest copper mines as its first operation by the UK’s Rio Tinto company which made it into a mining classic – and as the world know Rio Tinto subsequently went on to become one of the world’s biggest diversified mining companies.

Gold’s Mr. Fixit Starts Second Act With Anglo Platinum Discards – by Andre Janse Van Vuuren and Kevin Crowley (Bloomberg News – September 10, 2015)

September 10, 2015

http://www.bloomberg.com/

Crippling labor strikes, geriatric mines and precious metals prices scraping along at their lowest levels in half a decade don’t faze Neal Froneman, head of the world’s best-performing gold producer over the past two years.

Froneman, known in the industry as Mr. Fixit, defied investors’ skepticism to build up Sibanye Gold Ltd. from a spinoff of three old, strike-prone South African mines owned by Gold Fields Ltd. Now he wants to do it again in platinum and maybe even coal.

“We think that we’re very well positioned to move into other difficult social environments within South Africa and make a meaningful difference,” Froneman, Sibanye’s chief executive officer, said in a Bloomberg Television interview.

“We have some experience and we understand these risks very well. “While other investors flee the nation, Froneman, 55, reckons he can overcome its fractious labor relations, high costs and low productivity to buy assets cheaply, turn them around and make money.

Atlas MD David Flanagan optimistic about outlook for iron ore – by Jasmine Ng (Australian Financial Review – September 10, 2015)

September 10, 2015

http://www.afr.com/

Iron ore’s prospects for the rest of the year aren’t that poor as supplies from less efficient mines dwindle, according to Atlas Iron.

Chinese buyers are also replenishing inventories, boosting demand, said David Flanagan, managing director of the Perth-based company. Global supplies from high-cost mines will continue to shrink, he said in an interview on Wednesday. Atlas operates mines in Australia’s ore-rich Pilbara region.

The commodity’s been on a roller-coaster in 2015, sinking to a six-year low in April on rising low-cost output and weaker growth in China, the biggest buyer, before rebounding into a bull market the same month.

Ore then fell to a new low at the start of July as some banks forecast that prices would tumble below $US40, before rallying into another bull market and reaching a two-month high on Wednesday.

“There’s more opportunity for an uptick in iron ore prices than there is for a downward tick,” Flanagan said by phone. “There’s opportunity for more mines to close and there’s also opportunity for a buying rally leading into December.”

Welcome to Rustenburg, Mr Froneman – by Warren Dick (Moneyweb – September 10, 2015)

September 10, 2015

http://www.moneyweb.co.za/

Sibanye to join the ranks of the platinum producers

The CEO of Sibanye Gold* (to be amended shortly) in negotiations with Anglo American Platinum (Amplats) has bobbed and weaved, ducked and counterpunched, but finally, Neil Froneman appears to have landed a potential title-winning blow for shareholders. In the process Sibanye might well move up a category, from middle to heavyweight.

This is because the R1.5 billion plus deal (more about this later) looks to provide a sizable entry point for Sibanye to enter the platinum group metals (PGM) market through the acquisition of the Rustenburg Operations from Amplats.

Speaking at the announcement of the deal yesterday, Froneman said, “we were very disciplined and structured. We had to make sure our first entry into platinum was significant, but we haven’t rushed into it.” Froneman demonstrated that discipline when he walked away from a deal with Amplats in October last year with those immortal words, “Well if they [the assets up for sale] are so good, they should keep them.”

In response to a question from an analyst on how the two parties came to agree on the price the second time around, Froneman revealed why he has a reputation as a skilled dealmaker.

UPDATE 2-Zambia to address jobs threat at Glencore’s Mopani Copper – by Chris Mfula (Reuters U.K. – September 10, 2015)

September 10, 2015

http://uk.reuters.com/

LUSAKA, Sept 10 (Reuters) – Zambia is to hold talks with Mopani Copper Mines (MCM) over parent company Glencore’s plan to suspend operations after a drop in the metal’s price, the mining minister said on Thursday.

An electricity shortage and weaker copper prices have put pressure on Zambia’s mining industry, threatening output, jobs and economic growth in Africa’s second-biggest producer of the metal.

The power problems and slide in copper prices have driven the kwacha currency to record lows amid a sell-off in commodity-linked currencies as key consumer China’s economy has slowed, renewing pressure on Zambia to diversify its economy.

Glencore, Vedanta Resources and China’s NFC Africa and CNMC Luanshya Copper Mine have all said they will shut down some operations because of the harsh business environment.

Zambia minining minister Christopher Yaluma said that the government would not respond to Glencore directly but would instead negotiate with Mopani because it is more familiar with the local economy.

What the influencers are saying about commodities – by Frank Holmes (U.S. Investors) (Mineweb.com – September 9, 2015)

September 10, 2015

http://www.mineweb.com/

All the big names are making investments – Soros, Druckenmiller, Icahn and Faber.

A few legendary influencers in investing are making huge bets right now on commodities, an area that’s faced—and continues to face—some pretty strong headwinds. What are we to make of this?

I already shared with you that famed hedge fund manager Stanley Druckenmiller made a $323-million bet on gold, now the largest position in his family office fund. It’s also come to light that George Soros recently moved $2 million into coal producers Peabody Energy and Arch Coal. Meanwhile, activist investor Carl Icahn took an 8.5-percent position in copper miner Freeport-McMoRan, which we own.

My friend Marc Faber, the widely-respected Swiss investor and editor of the influential “Gloom, Boom & Doom Report,” is now plugging for the mining sector and precious metals. Speaking to Bloomberg TV last week, Faber claimed that investors are running low on safe assets and suggested they revisit mining companies:

If I had to turn anywhere where… the opportunity for large capital gains exists, and the downside is, in my opinion, limited, it would be the mining sectors, specifically precious metals and mining companies… like Freeport, Newmont, Barrick.