International Media Resource Articles – Page 653

China’s steel dragon has lost its appetite for American coal – by John Dizard (Financial Times – July 3, 2015)

July 6, 2015

http://www.ft.com/home/us

It may be too late to save the coal industry from looming financial disaster, says John Dizard

As the headlines earlier this week told you, the US coal industry scored a win at the Supreme Court. With a 5-4 majority it ruled that the Environmental Protection Agency had to consider compliance costs when it issues emissions rules for power plants. The court sent the Mercury and Air Toxics Standards (Mats) back to the agency to justify its net economic benefits.

Whatever short-term cheer this brought to the coal-mining companies, it has come too late to save most of the industry from looming financial disaster. Coal company shares and bonds bounced up for a day and then fell back into depression.

Most US coal capacity, more than 500m tons of annual production, is owned by companies in financial distress. The unsecured bonds of Arch Coal, behind which are more than 130m tons of capacity, are selling for 14 to 17 cents on the dollar. Peabody Coal (about 200m tons of capacity) has a bond maturing in 2018 that is priced at 48 cents on the dollar.

Even after the oil and gas price plunge, many oil and gas exploration and production companies with big reserves and negative cash flows have been able to raise new equity and refinance debt. The coal trade, on the other hand, is attracting little investor interest.

[South Africa] Govt, private sector working constructively to tackle acid mine drainage in Wits basin – by Ilan Solomons (MiningWeekly.com – July 3, 2015)

July 3, 2015

http://www.miningweekly.com/page/americas-home

JOHANNESBURG (miningweekly.com) – Although acid mine drainage (AMD) in the Witwatersrand basin is the result of a legacy of environmental mismanagement of water resources by mines and lax enforcement of regulations by government, these role-players are working to constructively address this problem, says Department of Water and Sanitation (DWS) senior manager Marius Keet.

Keet was a speaker during the first day of black-owned training and conferencing company Intelligence Transfer Centre’s two-day EnviroMining conference, held in Johannesburg, in March.

The Witwatersrand basin, a largely underground geological formation that surfaces in the Witwatersrand region of Johannesburg, comprises the Western, Central and Eastern basins.

A current key focus for government is to prevent further decanting of AMD from the basins by pumping underground water to protect the environmental critical level (ECL). The ECL is the level above which the water in the mine voids at critical locations, which is where environmental features that need to be protected are at the lowest elevations.

The Marikana massacre report has brought no justice and no relief – by Jack Shenker (The Guardian – July 3, 2015)

July 3, 2015

http://www.theguardian.com/international

Almost three years have passed since 34 men were shot dead on a hillside in South Africa, after asking for a living wage.

All of them had spent their working lives far below the Earth’s surface, blasting rocks in order to extract some of the metals that sit inside whatever computer or mobile phone you’re looking at right now. It’s hot, dangerous and dirty work, which leaves the body cramped and sore. Each of the miners had a name, a family and a story to tell, a past and a future.

Their relatives have waited more than 1,000 days to find out who was responsible for cutting those stories short and why. Last week, the findings of a judicial inquiry into the killings were finally made public. Most of the families missed the start of a speech by the South African president, Jacob Zuma, because the government hadn’t bothered to give them proper notice that a statement was imminent. The rest came through only in fragments, via a single erratic laptop feed in a language that many could not understand.

The inquiry’s report, as one commentator aptly observed, proved to be an exercise in throat-clearing. By the time Zuma’s summation was over, only one thing was clear: the wait for truth and accountability continues.

BP reaches $18.7 billion settlement over deadly 2010 spill – by Tery Wade and Kristen Hays (Reuters U.S. – July 2, 2015)

July 3, 2015

http://www.reuters.com/

HOUSTON – BP Plc will pay up to $18.7 billion in penalties to the U.S. government and five states to resolve nearly all claims from its deadly Gulf of Mexico oil spill five years ago in the largest corporate settlement in U.S. history.

The agreement adds to the $43.8 billion that BP had previously set aside for criminal and civil penalties and cleanup costs. The company said its total pre-tax charge for the spill now stands at $53.8 billion. (link.reuters.com/duz94w)

BP shares jumped more than 5 percent in New York trading as investors said the British company, often mentioned as a potential acquisition target, could now turn the page on one of the darkest chapters in its century-long history.

Under the agreement with the U.S. Department of Justice and the states, BP will pay at least $12.8 billion for Clean Water Act fines and natural resource damages, plus $4.9 billion to states. The payouts will be staggered over as many as 18 years. The preliminary settlement, subject to all sorts of variables, avoids a substantial amount of further litigation.

Iron Ore’s Recovery Turns to Rust – by Abheek Bhattacharya (Wall Street Journal – July 3, 2015)

July 3, 2015

http://www.wsj.com/

Mining firms looking to cash in on higher iron-ore prices are the same ones causing the steelmaking commodity’s downfall

The iron-ore market is discovering why the archenemy of high commodity prices is, well, high commodity prices.

The benchmark price of iron ore has fallen 15% in the past three weeks after hitting its highest level since January, which in turn has sent shares of Australia’s pure iron-ore producer Fortescue Metals tumbling 27%. Signals of high shipments from Australia and poor steel appetite from China suddenly reminded traders of the gulf that exists between supply and demand in this steelmaking ingredient.

Between April and mid-June, traders had pushed up prices nearly 40% because they thought that gulf was closing. One reason: many iron-ore mines were shutting down. Midsize Australian producer Atlas Iron closed its operations while China closed high-cost mines.

But as prices ticked up, Atlas slowly restarted mines, the latest one this week. That amounts to an extra 10 million tons or 1% of supply. China has brought back over 20 million tons, notes Citigroup’s Ivan Szpakowski. There is also the prospect of new supply from Australian mines later this year.

REFILE-Iron ore price fall a sign China’s economic might waning – by James Regan and Ruby Lian (Reuters U.S. – July 3, 2015)

July 3, 2015

http://www.reuters.com/

SYDNEY/SHANGHAI, July 3 (Reuters) – Iron ore prices dropped to the lowest in more than two months on Friday, sending shivers through the mining industry and heightening worries that Chinese economic activity is slowing just as ore piles up at its ports.

China uses more than a billion tonnes of iron ore a year to make steel – 14 times the consumption of the United States – but Beijing’s efforts to shift the economy to consumer-led growth means steel consumption is peaking faster than expected.

“It’s clear China can no longer consume all the iron ore that’s out there, so something’s got to give,” said James Wilson, a sector analyst for Morgans Financial in Perth.

Shares in Australia’s biggest mining houses, including Rio Tinto , BHP Billiton and Fortescue Metals Group led the Australian bourse lower after the price of the raw material fell by 5 percent.

Mongolia premier pledges to end Tavan Tolgoi coal mine impasse – by James Kynge and James Wilson (Financial Times – July 2, 2015)

July 3, 2015

http://www.ft.com/intl/markets/emerging-markets

London – Mongolia will “in the very near future” end an impasse over investment in a $5bn coal mine and push forward “Steppe Road” infrastructure plans with Russia and China, the prime minister has said as he seeks to shore up investor support for his country’s flagging economy.

Saikhanbileg Chimed also indicated that Mongolia planned to launch another sovereign bond as the country seeks to get “back to business” following two years of slowing growth in gross domestic product, plummeting foreign direct investment and rating agency downgrades of its junk-rated “Chinggis” bonds.

Official approval for investors to start work on the Tavan Tolgoi (TT) coking coal mine in the Gobi desert should follow soon after a review of the investor agreement in parliament this month, Mr Saikhanbileg told the Financial Times in an interview. Investors in the project include China’s Shenhua Energy and Japan’s Sumitomo Corp.
“TT will be unlocked in the very near future,” he said.

Supply of quality copper concentrate shrinks, sows seeds of price support – by Melanie Burton and Yuka Obayashi (Reuters U.S. – July 3, 2015)

July 3, 2015

http://www.reuters.com/

MELBOURNE/TOKYO, July 3 (Reuters) – Supply of high quality copper concentrate shrank more than expected in the first half of this year due to output delays in top miner Chile, squeezing the pipeline for metal producers and likely supporting prices later in 2015, traders said.

Production from two of four mines in Chile that churn out clean, standard concentrate was stalled in the first half as the country was hit by floods, while the world’s top mine, Escondida, has not tendered surplus concentrate for months, the traders and mining sources said.

Smelters blend clean concentrates with supply from mines that suffer from impurities such as arsenic, which have become more common as miners dig deeper into the earth’s crust.

“The concentrate element is tightening up which will eventually flow through to a tighter refined market,” said analyst Colin Hamilton at Macquarie in London

Benchmark LME copper has shed 8 percent this year as China demand slows, plumbing six-year lows in January. It traded at $5,800 a tonne on Friday.

The exploration Elephant in the room – by Kip Keen (Mineweb.com – July 3, 2015)

July 3, 2015

http://www.mineweb.com/

Analysis: We consider a recent report on the issue of exploration by the Boston Consulting Group.

The Boston Consulting Group – one of the so-called Big Three consulting firms – takes on mineral exploration in a recent report. It calls it “Tackling the Crisis in Mineral Exploration” and, as you might guess, it deals with the elephant in the room, which is the lack of elephants in the room. That is: big, important discoveries.

In recent years, despite a massive increase in exploration spending, discoveries have dried up – ground well covered by researchers and analysts. Indeed, the Boston Consulting Group relies heavily on one of the better sources tracking the sector – Mines Consulting run by Richard Schodde – to set the scene.

Schodde shows that over the past decade the rate of deposit discovery has barely budged (even estimating for un-reported discoveries) despite a tenfold increase in exploration spending. What the Boston Consulting Group adds to the issue is a journalistic style endeavour in interviewing six of the industries better-known explorers.

These include Graham Brown, Douglas Kirwin, Jim Lalor, Sig Muessig, Andy Wallace and Dan Wood. This makes for an interesting, and at times, insightful read on industry issues, no doubt there.

Iron ore drop, Vale start could make Fortescue Metals a marginal producer – by Amanda Saunders (Australian Financial Review – July 3, 2015)

July 3, 2015

http://www.afr.com/

Even as Fortescue Metals Group races to hammer down production costs, the leaner miner faces the prospect of becoming the marginal producer of the large iron ore players, once Brazil’s Vale brings its new mega expansion project online, analysts say.

Iron ore crashed spectacularly overnight on Thursday – falling 6 per cent to $US55.63 a tonne – its biggest one-day decline in a year. It snatched back much of the modest recovery made since hitting a record low of $US47 a tonne in early April.

UBS mining analyst Glyn Lawcock told AFR Weekend that “the concern the market has is that the all-in cash delivered price that FMG needs to be cash-neutral is ultimately going to be the dictator of where the long-term price settles”.

Fortescue could become the highest-cost of the large producers – Vale, Rio Tinto and BHP Billiton, and newcomers Roy Hill and Anglo American, he said.

“As more low-cost supply comes on, and high-cost supply is pushed out, ultimately the risk is that Fortescue becomes the most significant size marginal player.

Pricey mining delays [in United States] – by Shane Lasley (North of 60 Mining News – July 5, 2015)

July 3, 2015

http://www.petroleumnews.com/miningnewsnorth/index.shtml

SNL investigates costs of notoriously long mine-permitting process in U.S.

Permitting delays are becoming the bane of companies endeavoring to develop mines in the United States, a country that is otherwise considered a stable and richly endowed mining jurisdiction. SNL Metals & Mining has published a report that shows a notoriously lengthy process is resulting in U. S. mines losing up to half their value before receiving final approvals for development.

“The longer the wait, the more the value of the investment is reduced, even to the extent that the project ultimately becomes an unviable investment,” the mining research firm penned in its report: “Permitting, economic value and mining in the United States.”

The National Mining Association, which commissioned the investigation, hopes the findings will supply U. S. lawmakers with the impetus to approve critical minerals legislation aimed at facilitating a timely permitting process.

“For years, we have witnessed U. S. mines’ struggle to move forward due to an inefficient permitting system plagued by duplication, uncertainty and delays.” National Mining Association President and CEO Hal Quinn said.

Tanzania: Alert to End Uranium Mining, Nuclear Weapons – by Deus Ngowi (All Africa.com – July 2, 2015)

July 2, 2015

http://allafrica.com/

Moshi — PEACE and environmental activists from around the world are gathering here in a quest to persuade African governments to slap a ban on uranium mining and nuclear weapons as they are twin threats.

Under the K-Project for Peace, the activists, having gone through scientific studies, have formed an opinion that it is in everybody’s best interest that uranium should remain in the ground, as its extraction is in every way hazardous.

K-Project for Peace started as an appeal by Ms Racheal Chagonja, an environmental and peace activist from Tanzania, when she saw the devastating effects of uranium mining (U-Mining) to the environment, health, and rights of indigenous people in Niger and Mali.

She did not want to see this happen to her country Tanzania, a potential future U-Mining country, and sensed the urgency to halt U-Mining in active sites and stop potential future UMining sites in other African countries Ms Chagonja reached out to like-minded civil society organisations in Africa to join her and the project has since grown from an appeal to an international campaign led by young African activists.

Miners, mugs, Mr Asia – and bat droppings – by Trevor Sykes (Australian Financial Review – July 2, 2015)

July 2, 2015

http://www.afr.com/

Pierpont’s favourite drinking companions are geologists. Their first qualification is that they’re always thirsty, having spent their formative years chipping at rocks in the arid outback of Australia, where the nearest pub is usually 100 miles or more away.

Their second qualification is that they’re literally a down-to-earth bunch. They are quite skilled scientists, but the science of geology inevitably entails plodding around a lot of harsh landscape, so they rarely become academically out of touch with the real world.

Finally – and best of all – any geologist who’s been in the profession for a few decades has an excellent knowledge of which ore deposits are likely to be profitable and which aren’t: a characteristic which has saved your correspondent from many an investment disaster.

So Pierpont was overjoyed when he heard that John Gaskell had written his memoirs, because John is a boy who has been around. He started life in Wigan but now lives in Australia after a career that has taken him through Malawi, Malaysia, Tennessee and a few other places. As there are rocks all around our planet, most geologists have worked in the backblocks of more than one country, which gives them a good perspective on the world.

Vale Tumbles With Iron Ore Below $60 as Brazilian Stocks Advance – by Denyse Godoy (Bloomberg News – June 30, 2015)

July 2, 2015

http://www.bloomberg.com/

Vale SA, the world’s largest iron-ore miner, sank to a two-month low on concern that global supplies of the steelmaking ingredient are too high. The Ibovespa posted the best first half of any year since 2009.

Shares of Vale extended their 2015 plunge to 19 percent as Australia cut its price estimates for the commodity, saying the nation’s exports will surge. The raw material dropped below $60 a ton, paring this quarter’s gain to 16 percent.

The slump in iron ore sent a gauge of commodity shares in the MSCI Brazil to the only decline among 10 groups Tuesday. While the industry’s stock swings have abated this month, they reached the highest level since 2011 at the end of May amid a roller-coaster ride in the raw material.

“It’s hard to forecast now where the commodity is going,” Pedro Paulo Silveira, the chief economist at brokerage TOV Corretora, said in a phone interview from Sao Paulo. “Vale has fallen a lot because of prospects for iron ore.”

The stock led losses in the Ibovespa, which added 0.1 percent to 53,080.88 at the close of trading in Sao Paulo. Commodity companies account for about a quarter of the stock gauge.

Rio Tinto chief Sam Walsh tells rivals to stop sledging – by by James Chessell (Australian Financial Review – July 2, 2015)

July 2, 2015

http://www.afr.com/

Rio Tinto chief executive Sam Walsh may not have mentioned Fortescue Metals Group or Glencore by name.

But the rival mining companies were clearly on his mind as he delivered the speech at the Melbourne Mining Club’s annual gathering in London on Wednesday.

Addressing a 560-strong crowd packed into a marquee next to Lord’s Cricket Ground, Mr Walsh said 2015 had been characterised by “a lot of commentary, free expert advice, and even some sledging”.

Mr Walsh, who has held the top job at Rio since January 2013, said it was in Australia’s national interest to stick to the principles of open markets at a “challenging” time for many commodities, including iron ore, coal and aluminium.

“Some have called it a crisis of confidence and talked themselves and others into a gloom,” he said.

“It’s been suggested to me there’s a direct correlation between your position on the cost curve and the volume of your opinion. The higher on the curve, the louder you get.”