International Media Resource Articles – Page 655

Gina Rinehart’s Roy Hill Tells Workers To Take Pay Cut To Keep Jobs – by Anne Lu (International Business Times – June 26, 2015)

June 26, 2015

http://www.ibtimes.com.au/

Australia’s richest person has told her employees to take a pay cut or lose their jobs. Gina Rinehart’s Roy Hill project will cut pay rates for its employees to avoid job losses.

The $10 billion company will be deducting 5 to 10 percent from the salaries of about 60 percent of its workforce in a bid to save its employees. It will also offer lower salaries to new workers. The move is expected to affect about 540 workers, with the upper management group taking the biggest cut, though it will spare existing employees in the lower remuneration bands.

According to Barry Fitzgerald, the company’s chief executive, the decision was made after reviewing the cost base. The pay cuts, which he said was approved by the workers through a survey, was to maintain the “family-friendly roster,” which is 14 days on with 10 days off, and 14 days on with 11 days off. He said the roster was what attracted a number of people to join the company recently.

“We felt it was more important for our people to retain their job rather than pursue workforce reduction as a cost-saving strategy in response to market conditions,” Fitzgerald, who will be getting a 10 percent cut from his pay, said. He further explained that cutting salaries was a practical decision they agreed on to keep the company competitive over the long term.

S. Africa’s Zuma to release Marikana mine massacre report – by AFP (Yahoo News – June 25, 2015)

June 26, 2015

https://uk.news.yahoo.com/

President Jacob Zuma was on Thursday due to release the official report into the police killing of 34 South African striking workers at Marikana mine in 2012, his office said.

The report into the shooting was handed to the president on March 31, after more than two years of hearings plagued by delays.

Rights groups and lawyers representing the killed and injured miners have been clamouring since then for Zuma to make the document public.

The president’s office said the report would finally be published after he addresses the nation on public television on Thursday night. The August 16 shooting was the worst violence South Africa has witnessed since the advent of democracy in 1994.

Days after the killings, Zuma set up the Farlam Commission of Inquiry to investigate the events at Marikana, around 100 kilometres (60 miles) northwest of Johannesburg.

The commission was granted powers to suggest names of individuals to be criminally charged. But proceedings were plagued with delays from the start and the deadline was repeatedly extended.

Two-Month Low Nickel Prices Continue to Slide Further Amid Nickel Glut – by Anne Lu (International Business Times – June 25 2015)

June 26, 2015

http://www.ibtimes.com.au/

A jump in nickel stockpiles has brought the metal to a two-month low as production continues to outstrip consumption, especially in China, the world’s biggest consumer of nickel. According to London Metal Exchange (LME) data, inventories rose 0.6 percent to 461,436 metric tonnes on Monday, its biggest gain in two weeks. Nickel for delivery in three months settled at US$12,410 [$16,000] a tonne — the lowest price since April 20.

“More metal continuing to show up in LME warehouses points to the fact that maybe the underlying demand isn’t as strong, and that has bearish implications,” Mike Dragosits, a senior commodity strategist at TD Securities, said in an interview with Bloomberg.

Analysts think that nickel prices still have further to fall, with many investors looking to get out of their positions at the earliest sign of a nickel rally. Many investors who were lured into nickel during the metal’s rally in early 2014 didn’t get out fast enough when the slide began, so they are lightening their positions every time the metal rallies, keeping a ceiling on the price.

Prices surged to 50 percent from January to mid-May 2014 as Indonesia, then the world’s top nickel exporter, banned exports of the metal, leading many analysts and investors believing that global nickel stockpiles are soon to be depleted.

Canada’s Potash approaches German rival – by James Wilson (Financial Times – June 25, 2015)

June 25, 2015

http://www.ft.com/intl/companies/mining

London – The world’s largest potash producer has approached a rival about a possible takeover worth at least $7bn, a step that would be one of the largest transactions in the mining industry during the commodity price downturn of recent years.

PotashCorp of Saskatchewan, the Canadian miner of the fertiliser ingredient, said it had made a friendly “private proposal” to K+S, a German producer of the same commodity.

K+S was currently assessing its options after being told by PotashCorp of a possible takeover offer, the German company said in a statement. A PotashCorp statement said: “There is no certainty that any offer will ultimately be made or as to the terms on which such an offer might be made.”

Shares in K+S rose more than 30 per cent to €37.38. Shares in PotashCorp rose 4.3 per cent in Toronto to C$39.33. News of the approach was first reported by Handelsblatt.

Potash is a key ingredient in fertilisers and the market has been in a state of flux since 2013, when a Russian and a Byelorussian producer broke a longstanding partnership agreement that was aimed at supporting prices rather than a specific level of output.

Latin America: The loss of El Dorado (The Economist – June 27, 2015)

June 25, 2015

http://www.economist.com/

After the commodity boom, the region needs a new formula for growth

IT WAS wonderful while it lasted. For much of this century Latin America saw robust economic growth, a big fall in poverty and a swelling of the middle classes. Now the good times are over. Emerging markets everywhere are subsiding like a cooling soufflé.

But Latin America has gone stone cold. The IMF expects growth of just 0.9% in 2015, which would be the fifth successive year of deceleration. Many economists are talking of a new normal of growth of only 2% or so a year—less than half the region’s pace during the boom.

What has gone wrong? The short answer is that the great commodity supercycle triggered by the industrialisation of China is over. Rising exports of minerals, soya beans and fuels lifted many South American economies. Without that fillip the region has converged downwards to the 2.4% long-term growth rate of Mexico, which is not a big commodity exporter.

Worse, the commodity bonanza prompted distortions that may limit new sources of growth. Many Latin currencies became overvalued, wounding the competitiveness of non-commodity firms. Consumption soared; investment sagged. While Asia built factories, Latin America erected shopping centres.

Molycorp Files for Bankruptcy Protection – by John W. Miller and Anjie Zheng (Wall Street Journal – June 25, 2015)

June 25, 2015

http://www.wsj.com/

Rare-earths miner reaches agreement with major creditors to restructure its $1.7 billion debt load

Molycorp Inc. filed for bankruptcy protection on Thursday, becoming the biggest corporate failure in a bleak year for a mining industry hit by slumping commodity prices and waning demand from its biggest customer, China.

The Greenwood Village, Colo., company, the sole U.S. miner and producer of rare earth elements, said it had secured an agreement with creditors to restructure its $1.7 billion in debt, and obtained $225 million in new financing to continue operations. It expects to have a court-approved restructuring plan by the end of the year.

The filing marks a sharp reversal of fortunes for a company that rode a boom in rare earths, amid a broader surge in commodities prices. Fueled by restrictions on exports of rare earths by China, the world’s dominant supplier, Molycorp’s market value rocketed to over $6 billion five years ago.

But China then relaxed its rules, and battery and magnet makers found alternatives to rare earths, sending Molycorp into a long slide. It hasn’t turned a profit since 2011.

COLUMN-Adani walking away, or upping ante on Australian coal project? – by Clyde Russell (Reuters U.s. – June 25, 2015)

June 25, 2015

http://www.reuters.com/

LAUNCESTON, Australia, June 25 (Reuters) – Is India’s Adani Mining preparing to walk away from its A$10 billion ($7.7 billion) coal project in Australia’s Queensland state, or upping the ante in trying to speed up approvals for the huge project?

Adani surprised industry observers by confirming on Wednesday it had halted engineering work on its Carmichael coal project in the frontier Galilee basin in central Queensland.

The planned 40-million tonne per annum mine is supposed to start producing in 2017, with Adani intending to ship to India to meet the growing demand for power generation.

The explanation from Adani on why it stopped independent contractors from working on the mine, rail and port infrastructure was that it was rejigging the budget on the project as it faces delays in obtaining all the necessary government approvals.

Delays in getting approvals from the Queensland government meant that the previous project timelines were no longer achievable, Adani said in a statement.

Uncertain future for global diamond trade as profits vanish – by Tova Cohen and Ari Rabinovitch (Reuters U.S. – June 24, 2015)

June 25, 2015

http://www.reuters.com/

TEL AVIV – The family businesses that make up the global diamond trade have seen their profits wiped out over the past five years, hit by shaky financing, increased costs and uncertain demand from customers who prefer hi-tech gadgets to bling.

Manufacturers who cut and polish diamonds have found themselves caught between giant mining companies charging high prices for rough stones, and big retail chains that demand gems at low margins to keep sales moving.

While the $80 billion overall spent on diamond jewelry last year was a record, the manufacturers are expected to share a profit of just $100 million in 2015. That is half last year’s total and down from $900 million in 2010, according to Chaim Even-Zohar of Tacy Ltd and Pranay Narvekar of Pharos Beam in Mumbai, two of the industry’s top consultants.

Even-Zohar estimated that 300,000 Chinese and Indian workers had been laid off out of nearly 1 million employed in gemcutting in those two countries, where most manufacturing takes place.

“The rule of supply and demand doesn’t necessarily apply to the diamond sector,” said Yoram Dvash, a high-end polisher in Israel who outsources his rough stones to smaller Israeli polishers.

Zambia Mine Revenue May Help Narrow Budget Gap, Moody’s Says – by David Malingha Doya (Bloomberg News – June 25, 2015)

June 25, 2015

http://www.bloomberg.com/

Zambia may keep its budget deficit below 6 percent this year because of increased revenue resulting from changes to the country’s mine-tax system, according to Moody’s Investors Service.

The International Monetary Fund last week forecast the fiscal gap in Africa’s second-biggest copper producer will climb to 7.7 percent of gross domestic product this year. That’s higher than the government’s projection of at least 6 percent, which it raised from 4.6 percent after an increase of mining royalties and scrapping of a profit tax in January disrupted revenue flows from the industry. The changes to those levies will be reversed from the start of next month.

“We don’t expect the deficit for the second half to be anywhere near as large, in fact it could be a surplus for that six-month period, ultimately resulting in a fiscal deficit somewhere in the vicinity of 5 to 6 percent of GDP,” Matt Robinson, credit manager at Moody’s, said in an interview Tuesday in the Kenyan capital, Nairobi.

The southern African nation plans on setting the royalty for underground miners at 6 percent, scrapping an earlier plan to charge the same 9 percent rate set for open-cast mines. A 30 percent profit tax will also be reintroduced for both types of operations.

RPT-COLUMN-Knives out for nickel despite bullish supply signals – by Andy Home (Reuters India – June 24, 2015)

June 25, 2015

http://in.reuters.com/

(Reuters) – The knives are out for nickel.

Analysts at some of the biggest commodity banks have been slashing their price forecasts for the stainless steel input over the last few days amid a welter of negative comment.

“We now see little prospect of a sustainable nickel price or stainless stocking upturn ahead of the July/August holiday period,” Citi said.

“Fundamentals of this small, high-value metal market are subdued for now: global inventories are high/rising (+25 percent of global supply); regional premia are soft; stainless steel prices are in decline,” Morgan Stanley chimed in.

JPMorgan is “more comfortable with $10,000 nickel” than it is with prices at $17,000 a tonne. Ouch!

In part, this collective price downgrade is a simple reflection of nickel’s underperformance so far this year. At a current $12,900 per tonne, three-month metal on the London Metal Exchange (LME) is down 13 percent since the start of January.

Gold Versus Water In The Western Drought [Nevada] – by Chris Sieroty (Nevada Public Radio – June 23, 2015)

June 24, 2015

https://knpr.org/

With Nevada going through a prolonged drought, water use is a hot topic in urban areas.

The issue of drought is also being heavily debated in rural parts of Nevada because of the impact of current and future pit lakes left by mining operations.

The Progressive Leadership Alliance of Nevada recently released a hydrology study of the impacts of mining on the Humboldt River.

The study finds the largest gold mining companies use an enormous amount of water and are pumping record amounts. Will Nevada soon have to decide if water is more precious than gold?

Nevada Mining Association president Dana Bennett, Ph.D., had the following to say in response to an interview request from KNPR’s State of Nevada:

“Nevada’s mining industry has been sensitive to Nevada’s limited water resources since long before this drought began. Water is a precious resource and the drought is something all Nevada industries should take seriously.

Adani halts engineering work on Aus coal mine project: report (The Hindu – June 24, 2015)

June 24, 2015

http://www.thehindu.com/

Adani Group has halted engineering work related to Australia’s largest proposed mine, raising speculation that it could abandon the contentious $16.5 billion project altogether

India’s mining giant Adani Group has halted engineering work related to Australia’s largest proposed mine, raising speculation that it could abandon the contentious $16.5 billion project altogether.

Adani last week advised four major engineering contractors to stop work on projects around the Carmichael mine in Queensland including a joint venture rail line and the expansion of Abbot Point port, Guardian Australia reported citing industry sources.

The report quoted sources as saying that the move to suspend preparatory work by WorleyParsons and Aecon, Aurecon and SMEC at this stage of a project was unheard of and made no sense as a savings measure even amid delays.

“It’s Adani’s practice not to comment on specific commercial arrangements,” a spokeswoman for Adani was quoted as saying by the daily.

Gold output from Peru illegal miners surges after crackdown eases – by Mitra Taj (Reuters U.S. – June 23, 2015)

June 24, 2015

http://www.reuters.com/

LIMA – Gold output from unregulated mining in a rainforest region of Peru is rising sharply, official data shows, a trend the country’s top official fighting wildcat miners said was due to a shortage of police to enforce a government-led clampdown.

Peruvian President Ollanta Humala launched the crackdown in late 2013 to tackle a decade-long boom in illegal mining that has destroyed swathes of Peru’s Amazon forest and laced its rivers with mercury.

Police last year conducted more than a dozen big stings in Madre de Dios to shutdown illegal mines, blowing up machinery at makeshift riverside camps, seizing equipment and shuttering brothels. This year there have been no operations there, official figures show.

Antonio Fernandez, the new anti-illegal mining czar, said he lacked manpower because police were sent to contain protests against Southern Copper Corp’s $1.4 billion Tia Maria project.

“Our priority in the second half of the year is Madre de Dios,” Fernandez said. Fernandez said he needs at least 1,000 officers to launch a sting in the Amazonian Madree de Dios region, where wildcat mines typically account for about 10 percent of Peru’s total gold production.

Phosphate Producers Set to Become New ‘Blue Chips,’ VTB Says – by Yuliya Fedorinova (Bloomberg News – June 24, 2015)

June 24, 2015

http://www.bloomberg.com/

Phosphate fertilizer makers are set to gain as a supply surplus in the $35 billion market narrows, reducing the premium investors pay for potash producers, according to VTB Capital.

“The phosphate fertilizer producers are set to become the blue chips of the agrochemicals market, the role which potash miners once held,” said Elena Sakhnova, an analyst at VTB Capital in Moscow.

While the two groups of fertilizers don’t directly compete as farmers require both, Sakhnova said the pendulum is swinging in favor of phosphates, with demand set to increase 3 percent this year. The $20 billion potash market hasn’t recovered from the 2013 demise of the trading venture between PAO Uralkali, the biggest producer, and its Belarusian partner, which depressed crop nutrient prices and shares.

The gap in the enterprise value to earnings before interest, taxes, depreciation and amortization ratio between potash producers and phosphate-focused fertilizer makers, which indicates the size of the premium investors are ready to pay for the shares, has narrowed to the lowest since at least 2013, according to data compiled by Bloomberg.

UPDATE 2-S.Africa ferrochrome industry sees big job losses if power prices hiked – by Peroshni Govender (Reuters Africa – June 23, 2015)

June 24, 2015

http://af.reuters.com/

JOHANNESBURG, June 23 (Reuters) – South Africa’s ferrochrome industry will be thrown into crisis if cash-strapped power utility Eskom is allowed to hike prices, with mines forced to close and as many as 200,000 jobs at risk, an industry group said on Tuesday.

Eskom, struggling to maintain power supplies and laden with debt, has asked the National Energy Regulator of South Africa to approve a 9.58 percent price increase.

While down from an original request of 12.7 percent, ferrochrome producers say that, on top of increases earlier this year, it would deal a hammer blow to the industry.

“The increase in electricity prices will further increase production costs and lead to the closure of most smelters in South Africa,” Jacobus Zaayman, a representative from the Ferro-Alloy Producers Association of South Africa, told a public hearing held by the regulator to consider tariff hikes.

Zaayman said as many as 200,000 jobs could go. It was not clear how many workers the industry employs.