UPDATE 1-Union mulling action on job cuts at Freeport Chile copper mine (Reuters U.S. – August 31, 2015)

http://www.reuters.com/

Aug 31 (Reuters) – A Chilean union that represents copper mine workers rejected a move by Freeport-McMoRan Inc to drastically cut staff at its El Abra mine and said on Monday it was considering action.

Last week, Arizona-based Freeport, which owns a 51 percent stake in the mine in northern Chile, became one of the first big global miners to announce it was slashing production because of slumping copper prices.

That would include reducing mining rates at El Abra by about 50 percent to cut and defer costs, and extend the mine’s life, the company said.

Over the weekend Freeport began to send out letters announcing the dismissals and refusing to negotiate, said Juana Mejias, who heads the mine’s local union, adding that around 700 workers were being fired.

“The situation is complex and a true massacre that they have carried out by dismissing 50 percent of the workforce,” she said in a statement on Monday.

Read more

Tesla Secures Lithium Hydroxide Supply for Its Battery Factory – by Mike Ramsey (Wall street Journal – August 28, 2015)

http://www.wsj.com/

Electric-vehical maker in long-term contract with Bacanora Minerals and Rare Earth Minerals

Tesla Motors Inc. has secured a North American supply of lithium hydroxide through a long-term contract with mining company Bacanora Minerals Ltd. and Rare Earth Minerals PLC, giving the electric car maker a key base material used to produce lithium-ion batteries used its electric vehicles.

Tesla is building a $5 billion battery factory in Nevada that aims to reduce battery costs by 30% or more, partly by bringing in in-house materials suppliers.

The agreement with the two companies gives Tesla access to below-market-rate lithium in exchange for minimum purchase amounts over a five-year period, according to a statement.

The first phase of the battery factory, under construction near Reno, is expected to be completed next year. When the battery factory is fully built out, it will be capable of making 35 gigawatt-hours of battery cells, which is more than all of the current lithium-ion battery plants in the world today combined.

Read more

WA chills as BHP Billiton, Rio Tinto and Fortescue cut $20b spending – by Julie-anne Sprague (Australian Financial Review – August 30, 2015)

http://www.afr.com/

A dramatic $20 billion cut in operational spending by the nation’s three biggest iron ore miners is chilling a West Australian economy already under stress from falling investment in resources-related construction.

Analysis by The Australian Financial Review reveals that since 2012, BHP Billiton, Rio Tinto and Fortescue Metals Group have cut the amount they spend on extracting resources by $US14.3 billion ($19.9 billion).

While this figure includes BHP and Rio’s global operations, the majority of the cuts have been generated from their West Australian iron ore operations.

This excludes massive cuts to capital expenditure. With laser like precision the miners are tightening the cost screws beyond cutting staff and salaries.

They’re cutting meals served on flights to remote mine sites, pulling biscuits from the tea rooms and reducing the number of uniforms issued to staff.

Read more

Aimed at Curbing Job Losses at Mines – by Andre Janse Van Vuuren (Bloomberg News – August 31, 2015)

http://www.bloomberg.com/

South Africa’s government, mining companies and labor unions adopted a 10-point plan Monday in an attempt to curb job losses in an industry where more than 11,700 people are at risk of losing their employment.

The plan includes proposals to improve productivity, the re-skilling of workers and the transfer of employees between companies, Minister of Mineral Resources Ngoako Ramatlhodi told reporters in Pretoria. The government and mine operators will also seek buyers for distressed assets that could be run profitably under different management, Ramatlhodi said.

The proposals were adopted after mining operators including Lonmin Plc and Anglo American Plc announced plans to reduce their workforce as metal prices fell to their lowest levels since the fallout from the global financial crisis in 2009.

While the government has received notices of plans to cut as many as 11,798 jobs, unions say the figure could be as high as 19,000.

Read more

Colorado mining disaster shows Maine was right to reject mining rules — again – by Nick Bennett (Bangor Daily News – August 30, 2015)

https://bangordailynews.com/

Nick Bennett is staff scientist and watersheds project director at the Natural Resource Council of Maine.

2015 has been a year of seconds with respect to mining. For the second time, the Department of Environmental Protection submitted the same weak mining rules it submitted to the Legislature in 2014. For the second time, the Legislature wisely rejected them.

Also for the second straight year, a mining disaster occurred soon after the end of the legislative session and proved that the Legislature was right to reject DEP’s rules. On Aug. 4, 2014, the tailings dam at the Mount Polley mine in British Columbia failed, releasing billions of gallons of mining waste into pristine lakes and streams.

The effects of the pollution from this modern mine, which its owner built in 1997, will linger for decades in some of the most important salmon habitat in Western Canada.

After the Mount Polley disaster, many Mainers breathed a sigh of relief that the Legislature had blocked weak rules that would have allowed Canada-based J.D. Irving to mine at Bald Mountain.

Read more

Australian gold output on the rise – by Lawrie Williams (Mineweb.com – August 31, 2015)

http://www.mineweb.com/

Surbiton Associates in its latest survey of the Australian gold sector notes rising production during the June quarter.

LONDON – The world’s second largest gold mining nation, Australia, saw gold output rise in the June quarter according to a survey by Melbourne-based consultancy, Surbiton Associates.
Gold production for the period totalled some 72 tonnes (2.31 million ounces), an increase of almost three tonnes or four per cent over the March 2015 quarter. With most Australian miners having June year-ends, Surbiton puts the fiscal year total (to end-June) at 285 tonnes.

In Mineweb’s analysis of global gold output in calendar 2014, derived from figures from London-based consultancy Metals Focus, China was the world’s leading producer that year with annual output of 462 tonnes with Australia second, just ahead of Russia, with a little over 272 tonnes.

So the latest Surbiton figures suggest Australian gold output could well be heading strongly higher in calendar 2015. (See: Gold’s top 20 – mines, miners and countries). China is also believed to be producing more gold this year than last.

Read more

Suppliers Feel Pain as Coal Miners Struggle – by John W. Miller (Wall Street Journal – August 30, 2015)

http://www.wsj.com/

Thousands of firms scramble for new customers; ‘it’s been catastrophic’

BROOKVILLE, Pa.—Workers in a rural warehouse here are restoring four machines: a locomotive for coal miner Consol Energy Inc., and three 1947 San Francisco streetcars.

By this time next year, the coal-mining equipment could be gone, and the workers at Brookville Equipment Corp. left repairing just streetcars.

So it goes in coal country, which has been bruised by competition from natural gas, regulation of coal’s heavy carbon footprint, and economic forces like the strong dollar. As big coal miners struggle, their equipment suppliers—thousands of firms sprinkled throughout Pennsylvania, West Virginia, Ohio and Kentucky—are scrambling to find new customers anywhere they can, from gun shops to the San Francisco Municipal Transportation Agency.

For most, nothing will replace the massive scale of the coal-mining sector, and as the generational coal crisis ripples throughout the hamlets and hollows of Appalachia, economists are debating the region’s most viable path for growth.

Read more

Top miners wrestle with $202b of debt as profits shrink – by Jesse Riseborough and Thomas Biesheuvel (Australian Financial Review – August 28, 2015)

http://www.afr.com/business/

As tumbling commodity prices erode earnings for the world’s biggest miners, investors are focusing on how the industry will cope with its near record levels of debt. It’s looking increasingly ugly.

While overall borrowings from the 10-largest mining companies fell slightly last year, it’s still close to an all-time high of $US145 billion ($202 billion). At the same time, profits are expected to drop to a six-year low, according to Bloomberg estimates, hampering their ability the pay down the debt pile.

Against a backdrop of a deteriorating outlook for economic growth in China, the industry’s biggest customer, investors have retreated from the world’s largest producers.

“The debt pigeons are coming home to roost at many heavily indebted mining companies,” analysts at Investec wrote in a note Wednesday. “The heady days of the super-cycle were fuelled by cheap debt, which was eagerly taken on by mining companies in order to buy (overpriced) assets or to build new mines.”

Read more

Boards and investors have let the mining sector dig itself into a hole – by Ian McVeigh (The Telegraph – August 27, 2015)

http://www.telegraph.co.uk/

Ian McVeigh is head of governance at Jupiter Asset Management

Senior management continued to behave as if the boom times would last forever by engaging in expensive takeover deals that seemed to make no financial sense

“Where has all the money gone, long time passing…” What a sorry state of affairs for long-term investors in the mining sector, the ones who put their money into household names like Rio Tinto or Anglo American during the great commodity boom from 2003 to 2015. Over this period, the FTSE All Share Mining Index actually managed to underperform the broader market by a massive 39pc in spite of a powerful tailwind for much of the period.

Two factors have been behind this dismal outcome for investors: first, the hubris that marked many of the mergers made at the peak of the boom; second, the excessive nature of much of the capital investment that went to increase output as financial discipline went out of the window.

It also raises questions about the quality of the corporate governance operating at these mining firms.

Read more

Appalachian coal country wants Republican nod for federal aid – by Valerie Volcovici (Reuters U.S. – August 28, 2015)

http://www.reuters.com/

WASHINGTON – A small but growing number of Appalachian coal communities are urging Republicans in Congress to support a proposed $1 billion federal aid program from the Obama administration to save local economies ravaged by the decline of the coal industry.

Nearly a dozen Appalachian coal mining communities have passed resolutions over the past few weeks supporting President Barack Obama’s Power + program, which was outlined in his 2016 budget. It will be considered in the fall when Congress returns from recess.

From towns such as Norton, Virginia, to Letcher County, Kentucky, local officials have called on their Washington representatives to back the proposal that would provide public funds for new economic activities around reclaimed coal mines in the Appalachian Mountains.

“This isn’t a partisan issue here,” said Eric Dixon, policy coordinator for the Appalachian Citizens’ Law Center in Whitesburg, Kentucky, which has helped push the resolutions across the region. “We have Republicans and Democrats in the mountains who support this plan.”

Read more

How Brazil’s China-Driven Commodities Boom Went Bust – by John Lyons and Paul Kiernan (Wall Street Journal – August 27, 2015)

http://www.wsj.com/

Developing nation’s big bet on China turns sour as China’s appetite for exports dims; ‘looking at a lost decade’

SÃO PAULO—Not long ago, Brazil stood as the leading example of how a developing nation could rise toward global prominence on the force of a China-driven commodity boom.

As its economy surged, Brazil stormed the world stage—hosting a World Cup, demanding more say at the United Nations and blocking a U.S. free-trade plan for the Americas.

Now Brazil is looking like a symbol of something else: resource-rich nations’ habit of ending their booms with spectacular busts.

Brazil’s stock market is down 22% in the past year. Its currency has lost a third of its value against the dollar. And on Friday, Brazil is expected to report that in the second quarter, its economy shrank at a pace of about 1.7%. Economists are voicing fears of prolonged stagnation.

Read more

Goldcorp, Teck Combine El Morro and Relincho Projects in Chile – by Carolyn King (Wall Street Journal – August 27, 2015)

http://www.wsj.com/

Goldcorp will acquire New Gold’s 30% interest in the El Morro copper-gold project in Chile

Goldcorp Inc. on Thursday said it would acquire New Gold Inc.’s 30% interest in the El Morro copper-gold project in Chile and then combine El Morro with Teck Resources Ltd.’s nearby Relincho asset into a single $3.5 billion project.

Goldcorp and Teck, both Canada-based mining companies, said the combination would reduce the project’s development costs and its environmental footprint and thereby improve returns for shareholders. The $3.5 billion estimated cost of bringing the project into production would be less than half the cost of developing the projects separately, they said.

The move comes as mining companies around the world cope with tumbling metal prices and fears of a slowdown in China, the world’s biggest consumer of commodities. The commodity-price swoon has put pressure on many to slash costs and focus on the most promising projects.

Read more

[South Africa] Mining: Thousands of jobs, 10 solutions – by Greg Nicolson (Daily Maverick/South Africa – August 27, 2015)

http://www.dailymaverick.co.za/

As the country’s economy continues to shrink, a report on Wednesday said mining stakeholders have come up with 10 initiatives to save jobs and ensure the industry remains viable. The agreement is likely to be signed on Monday and could include some novel solutions.

A stakeholder agreement could potentially avert some job cuts in the mining sector as the government, unions and mining companies are expected to commit to interventions next week to help the sector, Reuters reported on Wednesday.

The potential agreement comes after Mineral Resources Minister Ngoako Ramatlhodi began discussions with industry leaders earlier this month under the auspices of the Mining Industry Growth Development and Employment Task Team to confront plans across the industry to cut jobs and ensure the industry remains sustainable.

“Parties have agreed on the broad framework on interventions to be pursued, and stakeholders have been given an opportunity, over the next few days, to obtain an official mandate from their respective constituencies,” a statement from Ramatlhodi’s spokesperson Mahlodi Muofhe said on Tuesday. The agreement is expected to be signed on Monday.

Read more

British Columbia officials try to smooth over mine dispute during Juneau trip – by Pat Forgey (Alaska Dispatch News – August 26, 2015)

https://www.adn.com/

JUNEAU — Top British Columbia mining regulators this week have been trying to improve relations with Alaska that have been strained by several controversial mines and are even talking about cleanup of a British Columbia mine that’s been polluting Taku Inlet for decades.

Provincial Minister of Energy and Mines William Bennett said Wednesday in Juneau that could mean an agreement to give Alaska more of a say in what happens over the border, and that Alaska should have a larger role.

The state’s bigger role might include permitting new mines and monitoring operating mines. “I think it’s fair to say that Alaska doesn’t have a lot of access to that information,” Bennett said.

But while the minister was offering to sign a memorandum of agreement or understanding with Alaska, Alaskans in Juneau were demanding more.

John Morris, a member of the Juneau-based Douglas Indian Association’s tribal council, described a memorandum of understanding as “nothing more than a formal handshake” and said it would be better to use the Boundary Waters Treaty to see that Alaska’s interests were protected.

Read more

Sun-Drenched Miners Look to the Skies to Cut Fuel Costs in Half – by David Stringer and Paul Allen (Bloomberg News – August 26, 2015)

http://www.bloomberg.com/

The DeGrussa copper and gold mine in Australia’s sun-scorched outback is getting a solar farm, the latest example of the industry embracing clean energy.

The plant will replace about 5 million liters (1.3 million gallons) of diesel a year, a fifth of the mine’s energy needs. Energy generated by the system may eventually cost about half that of diesel-generated power, according to Sandfire Resources NL, the deposit’s owner.

Miners including Rio Tinto Group are installing new solar plants from Chile to South Africa, betting they’ll deliver long-term savings even as tumbling oil prices cut power costs. The global solar-power market for mining companies may grow to about $2 billion a year by 2022 from about $42 million in 2013, according to Navigant Consulting Inc.

“Solar-power providers are specifically targeting mines right now and it’s about replacing diesel,” Dexter Gauntlett, a senior research analyst at Navigant said by phone from Portland, Oregon. With lower costs, “it becomes a no-brainer,” he said.

Read more