International Media Resource Articles – Page 639

UPDATE 1-Brazil court orders Vale to halt Amazon nickel-mine operation (Reuters U.S. – August 14, 2015)

August 14, 2015

http://www.reuters.com/

Aug 14 (Reuters) – A Brazilian federal court on Friday ordered Vale SA to halt activity at its Onça Puma nickel mine in Brazil’s Amazon state of Pará until it can demonstrate what actions it has taken to compensate indigenous communities in the region.

Vale’s operations in Pará face regular legal and protest action by native Brazilian groups seeking better schools, health care and other public services.

Onça Puma, in Ourilândia do Norte, is part of a complex of mines operated by Vale in the state’s Carajas region. The mine produced 5,900 tonnes of finished nickel in the second quarter, or about 8.8 percent of Vale’s finished-nickel output.

The most common protest by indigenous groups has involved blocking Vale’s rail line between Carajas and the Atlantic Ocean.

The court also ordered Vale, the world’s second-largest nickel producer, to deposit 1 million reais ($287,000) for each indigenous village in the area until it establishes a compensation program for the communities.

RPT-COLUMN-Yuan devaluation more likely to boost than hurt China commodity imports – by Clyde Russell (Reuters U.K. – August 14, 2015)

August 14, 2015

http://uk.reuters.com/

LAUNCESTON, Australia, Aug 13 (Reuters) – The sudden depreciation of the yuan will have flow-on effects in commodity markets, but reducing China’s demand for imports is unlikely to be one of them.

The yuan has lost around 3.5 percent of its value against the U.S. dollar in domestic trade since the People’s Bank of China this week took steps to devalue its currency, in a move widely interpreted as aimed at boosting the competitiveness of the struggling export sector.

The depreciation was more steep in international markets, where the yuan lost about 4.8 percent of its value as investors feared China was starting a sustained depreciation, which may lead to a global currency war.

Commodity prices, and the currencies of major natural resource exports such as Australia, also took a hit along with the yuan on the view that a weaker Chinese currency will dampen demand for imports.

Brent crude lost as much as 3.6 percent on Aug. 11, the day of the Chinese devaluation, although by the close on Wednesday at $49.66 a barrel, the decline had tempered to just 1.5 percent.

South Africa faces mining strike double whammy – by Sungula Nkabinde (Mineweb.com – August 14, 2015)

August 14, 2015

http://www.mineweb.com

Disputes have been declared in both coal and the gold sector negotiations. Strikes will happen if no resolution is found.

South Africa should brace itself for strikes in the gold and coal mining sectors. The latter is arguably more important to the country given our current electricity situation, but it would be disastrous to have two sector-wide strikes running concurrently within the mining industry.

The gold wage negotiations have come to naught after the Associated Union of Mineworkers and Construction (AMCU) and the National Union of Mineworkers (NUM) rejected the gold producers’ final offer and, as a result, the producers have taken the offer off the table and deferred back to what they refer to as their initial ‘firm’ offer. On Thursday, after the final opportunity for voluntary mediation, the NUM has declared a dispute.

“The final offer that was on the table was an extremely generous offer and represented increases ranging from 9% to 18%, which is more than you would find anywhere else,” said Memory Johnstone, who spoke on behalf of the gold producers.

What is on the table now is an increase ranging from 7% to 13%, but a key difference between the two was that the former was a cash payout that was not linked to benefits (i.e. overtime, pension fund contributions), while the latter would be.

Nuclear Revival Sparks Cameco Rally as Uranium Demand Is Growing – by Christopher Donville (Bloomberg News – August 13, 2015)

August 14, 2015

http://www.bloomberg.com/

Cameco Corp., the world’s second-largest producer of uranium, is emerging as a rare bright spot among Canada’s largest mining companies on signs nuclear power is shaking off its post-Fukushima slump.

Shares of Cameco have climbed 12 percent in Toronto in the past month. By comparison, Teck Resources Ltd., the world’s second-largest exporter of seaborne metallurgical coal, fell 16 percent and Barrick Gold Corp., No. 1 for bullion production, slid 18 percent.

A U.S. plan to cut carbon emissions from power plants may support new reactors and the restart of a Kyushu Electric Power Co. plant this week is highlighting a drive to get more atomic stations online in Japan. The improved prospect for uranium, the raw material in reactor fuel, is in contrast to slowing demand and ample supply for metals such as aluminum and zinc, which sent the Bloomberg World Mining Index to a six-year low in July.

“What we’re seeing is the U.S. and Japan really renewing their commitment to nuclear power,” Rob Chang, a Toronto-based analyst at Cantor Fitzgerald LP, said Aug. 11 in a phone interview. “You’ve also got India and China pushing ahead with their nuclear expansion.”

Glencore: world of big mining agog at huge fall – by Nils Pratley (The Guardian – August 12, 2015)

August 14, 2015

http://www.theguardian.com/

Financial challenges ahead for Ivan Glasenberg as share price at mining and commodity-trading company falls by two-thirds since it came to market

How do you make a £2bn fortune from commodities? Answer: start with a £6bn fortune.

Ivan Glasenberg, chief executive of Glencore, won’t be laughing. Those numbers are the value of his shareholding in the mining and commodity-trading company at flotation in 2011 and now. Yes, Glencore’s share price really has fallen by two-thirds, from 530p to 180p, since it came to market with a fanfare. Among London’s big miners, only Anglo-American has done worse.

This week alone the fall has been 10% as the China-inspired rout has run through commodity markets and mining stocks. Glencore is being whacked harder than the likes of BHP Billiton and Rio Tinto for a simple reason – relative to earnings, it has a lot more debt.

Analysts predict borrowings will stand at about $48bn when the company reports half-year numbers next week, which is a hell of a sum even for a business making top-line (before interest and tax) earnings of $10bn-$12bn.

[Australia] Samsung races to deliver Roy Hill – by Tess Ingram (Sydney Morning Herald – August 13, 2015)

August 13, 2015

http://www.smh.com.au/

Contractors building Gina Rinehart’s $10 billion Roy Hill project have been forced to send hundreds of workers to the Pilbara to try to avoid hefty penalty fees for delays finishing the project.

Head contractor Samsung C&T and its subcontractors have been racing to ensure they meet Roy Hill’s aggressive deadline to ship its first ore, which was slated for next month but now not expected until October.

If the first shipment does not sail by the end of October, Samsung faces penalty fees of almost $2 million for each day the project is late.

Sources said between 1000 and 1500 workers, unable to be accommodated at Roy Hill’s onsite accommodation, were being housed in various sites around the Pilbara town of Newman, about a three-hour round trip from Roy Hill.

A Roy Hill spokeswoman confirmed about 1100 workers were being housed in Newman “and have been for more than three months as part of Samsung’s efforts to meet schedule”.

South Africa Job-Cuts Backlash Pits Mining CEOs Against Zuma – by Andre Janse Van Vuuren and Michael Cohen (Bloomberg News – August 12, 2015)

August 13, 2015

http://www.bloomberg.com/

Relations between South Africa’s government and the mining industry are unraveling as a commodity-price rout derails plans by President Jacob Zuma’s administration to create millions of jobs and pare a 25 percent jobless rate.

Mining companies in South Africa, the world’s largest platinum and manganese producer, plan to fire as many as 10,000 workers at a time when the economy is struggling to rebound from the slowest expansion since a 2009 recession.

A public slanging match has ensued between senior politicians opposed to the layoffs and executives who say their stance, together with prolonged uncertainty over mining laws and an unreliable power supply, threatens their companies’ survival. Gwede Mantashe, secretary general of the ruling African National Congress, last month branded companies as “lazy” for firing staff rather than considering alternatives.

“I don’t think the government understands the gravity of the challenges in the industry,” Mzukisi Qobo, a politics lecturer at the University of Pretoria, said by phone on Wednesday.

Glencore and BHP Fall to Lowest in Years as Miners Shunned – by Jesse Riseborough and Thomas Biesheuvel (Bloomberg News – August 12, 2015)

August 12, 2015

http://www.bloomberg.com/

Glencore Plc and BHP Billiton Ltd. shares fell to the lowest in at least four years as investors continued to shun mining companies on concern Chinese demand for commodities is waning.

The FTSE 350 Mining Index of 14 producers fell for a second day to the lowest since March 2009. BHP, the world’s biggest miner, dropped to a six-year low while Glencore slid as much as 7 percent to the lowest since it started trading in 2011.

Commodity prices are near a 13-year low and this year’s 18 percent plunge in the Bloomberg World Mining Index wiped almost $200 billion off the value of the biggest producers. China, the biggest raw-materials user, this week devalued its currency in a move that supports exports and makes imports more expensive. That further spooked investors already concerned that consumption is falling as the country’s economy expands at the slowest pace in a quarter of a century.

“This is coming at a time when the market is capitulating anyway,” Marc Elliott, an analyst at Investec Plc in London, said by phone, referring to the weakening yuan.

METALS-Copper, aluminium tumble to six-year lows after China devalues yuan – by Eric Onstad (Reuters U.S. – August 11, 2015)

August 12, 2015

http://www.reuters.com/

LONDON, Aug 11 (Reuters) – Copper and aluminium hit six-year lows on Tuesday after China devalued its currency, fuelling worries about a glut of aluminium and boosting the cost of commodities for the world’s top metals consumer.

Zinc spiralled to the weakest in nearly three years as the currency move unleashed a wave of speculative selling across the metals complex on the London Metal Exchange, which has shed about 16 percent so far this year.

It reversed a rally in the previous session as bears got the upper hand again. “It really suggests that these markets are incredibly weak,” said Justin Lennon at Mitsui Bussan Commodities USA in New York.

Three month LME copper closed down 3.5 percent at $5,125 a tonne after sliding to $5,109, the weakest since July 2009.

It more than wiped out the 2.6 percent gains from the previous session. “The devaluation will make commodities more expensive for China to import, so I would imagine that is the main reason for the negative reaction,” said Caroline Bain, senior commodities economist at Capital Economics in London.

Chile Mines Turn to Renewable Energy – by Ryan Dube (Wall Street Journal – August 11, 2015)

August 12, 2015

http://www.wsj.com/

Power-hungry operations save nearly $20 per megawatt hour using the sun and wind

CALAMA, Chile—The three industrial boilers at the state-owned Codelco mine high in the mountains here once consumed 67,000 barrels of diesel a year to turn out shiny copper sheets for export. Now, the job is powered by nearly 3,000 solar panels that take advantage of the Atacama Desert’s cloudless blue sky.

As the cost of solar and wind power declines, renewable energy has become increasingly attractive to power-hungry mining companies. Nowhere, though, is it more prevalent than in resource-rich Chile, where companies have been pioneering alternatives to conventional power after years of shouldering some of the world’s highest energy costs.

Here at the Codelco mine, named after the late Chilean poet Gabriela Mistral, a thermosolar plant run by Chile’s Energia Llaima SpA and Denmark’s Arcon-Sunmark has replaced about 80% of the diesel that Codelco previously trucked up 8,700 feet to the mine. Copper produced by Corporación Nacional del Cobre de Chile, or Codelco, the world’s biggest producer of the metal, goes to China and other global markets.

“This blue sky makes me happy,” said plant manager Rodrigo Aravena, as he inspected rows of panels, shining in the sun and installed over an area the size of eight football fields. “It means we are generating more, and it is much better for business.”

Colorado, New Mexico Free Up State Funds for Gold-Mine Spill – by Dan Frosch (Wall Street Journal – August 10, 2015)

August 12, 2015

http://www.wsj.com/

Governors declare emergencies; EPA criticized for accident that sent contaminants into river system

The governors of Colorado and New Mexico declared emergencies Monday, freeing up state funds to help clean up a mine spill that sent an estimated three million gallons of toxic, mustard-hued sludge surging through the regional river system.

The announcements allocate $500,000 in state money for Colorado and an additional $750,000 for New Mexico, on top of $500,000 disbursed Friday. The spill occurred Wednesday after an Environmental Protection Agency cleanup crew accidentally triggered a breach in an abandoned gold mine, releasing a plume of contaminated water.

“I had the chance to see the spill with my own eyes. It is absolutely devastating, and I am heartbroken by this environmental catastrophe,” said New Mexico Gov. Susana Martinez, a Republican, adding she was concerned about the EPA’s “lack of communication.”

The EPA has apologized for the accident, with one official calling it a tragedy. The agency also said it regretted a slow response that has drawn sharp criticism from officials and residents in Colorado and New Mexico.

The Trick That’s Going to Keep America’s Coal Alive – by Mario Parker (Bloomberg News – August 11, 2015)

August 11, 2015

http://www.bloomberg.com/

A 30-year-old mining technique is becoming all that’s keeping a group of U.S. coal producers from joining their competitors in bankruptcy.

Coal, already locked in a battle with cheap natural gas, now faces federal environmental rules that threaten to reduce its share of power generation to the lowest in 66 years. Companies from Illinois to Northern Appalachia are responding by leaning more heavily than ever on longwall-mining, a technology that’ll be used to produce a quarter of America’s coal this year, up from 19 percent in 2013.

Investors are backing the miners who rely on the efficient approach. Think of a giant deli slicer with multiple revolving blades that cuts coal from a seam into slices. Eighty percent of analysts covering Foresight Energy LP and CNX Coal Resources LP, both known for longwall operations, recommend buying their shares, compared with less than a third for producers who use it less, data compiled by Bloomberg show.

“People ask me all the time, ‘What’s the new mining technology that saves coal?’” Jim Stevenson, director of North American coal for consultant IHS Inc. in Houston, said by phone July 31. “It’s the longwall. It’s the proliferation of this 30-year-old technology that’s keeping coal coming out of these basins.”

What China’s surprise currency devaluation means for its economy and the world – by Ana Swanson (Washington Post – August 11, 2015)

August 11, 2015

http://www.washingtonpost.com/

China surprised the world on Tuesday by devaluing its currency, in a move likely to boost Chinese exports and support the country’s flagging economic growth. The change to the currency’s value was the most dramatic one-day change in two decades.

The move is likely to stir intense concern, as political leaders, especially in the United States, have long complained that China leaves its currency at a lower value to boost its domestic industries.

Over the past decade, China has let the value of the currency, known as the yuan or renminbi, rise, but the announcement by China’s central bank Tuesday is sure to reignite debate over whether the country is giving an unfair advantage to its businesses.

Stephen Roach, a fellow at Yale University who formerly served as a non-executive chairman for Morgan Stanley in Asia, told Bloomberg that the move raised the “possibility of a new and increasingly destabilizing skirmish in the ever-widening global currency war.”

COLUMN-China commodity imports will have to do more than just “hold up” – by Clyde Russell (Reuters U.S. – August 11, 2015)

August 11, 2015

http://www.reuters.com/

LAUNCESTON, Australia, Aug 11 (Reuters) – China’s imports of major commodities are holding up well, according to market consensus, but that in itself is quite concerning for the overall state of the world’s second-biggest economy.

Commodities are often viewed as the canary in the coal mine, with falling demand a sign of economic troubles ahead. Likewise, consumption of natural resources should pick up ahead of a more general recovery.

The fact commodity imports haven’t weakened does allow some of the more alarmist views of China’s economy to be discounted.

But equally, the absence of a resurgence in imports means any significant, infrastructure-led recovery is not yet on the horizon, even if it is coming, as is the widely-held conviction.

“July commodity imports held up,” was how Barclays headlined a report on China’s trade data, while London-based consultancy Capital Economics said, “Commodity imports hold up well.”

Critical Metals: The West is sleepwalking to its economic decline – by Robin Bromby (Investor Intel.com – August 4, 2015)

August 11, 2015

http://investorintel.com/

Anne-Marie Brady, professor at the School of Social and Political Sciences at the University of Canterbury in the New Zealand city of Christchurch, specializes in China, and has since 2008 been researching Chinese interests in the polar regions. Some time ago she saw on a Chinese website a map of Antarctica’s mineral resources. After she revealed her find, the map was swiftly removed.

She will in October be delivering a lecture on the subject of “China as Polar Great Power”, which is also the title of her forthcoming book. She says Chinese literature is “very, very clear about China’s interests in Antarctic minerals”. And everyone else’s.

Reading Jack Lifton’s incisive summation of the global rare earth situation posted on InvestorIntel yesterday, and the West’s continuing weakness in that sector, it occurred to me that this is part of a much wider problem. As Jack wrote, the strategy being followed by Chinalco involves a concerted, well-planned consolidation of Chinese interests.

And he added: “While American, European, Brazilian, South African, and Australian rare earth producers and juniors squabble with each other and promote their share prices as their only hope of raising new capital in a market dominated by China’s use … of the majority of the world’s rare earths as well as the majority of all metals, Chinalco is methodically planning to diversify its sources of raw materials and to seek out technology sales or purchases to improve its efficiencies.”