International Media Resource Articles – Page 656

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

June 24, 2015

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.

On the Iron Range, a push for a new kind of iron – by Dan Kraker (Minnesota Public Radio News – June 24, 2015)

June 24, 2015

http://www.mprnews.org/

Duluth – For more than a century, iron ore mined from Minnesota’s Iron Range and formed into taconite pellets has fed enormous blast furnaces at steel mills around the Great Lakes in old rust belt cities like Chicago, Detroit, Cleveland and Hamilton, Ontario.

After the iron ore is combined with coal and limestone in 12-story-high stacks, the mixture is heated to more than 2,600 degrees to create the molten iron needed for steel. That steel has helped manufacture everything from toy wagons to pickup trucks.

But in the few months since steel companies on the Iron Range laid off about 1,000 mineworkers — one out of every five workers in a region where mining makes up about a third of the economy — two trends in the steel industry have Iron Range watchers feeling uneasy.

Even as officials contend with the current downturn, many worry about a longer-term question with even larger economic consequences. At issue is whether Minnesota is producing the right kind of iron ore product for a changing steel industry.

First, the blast furnaces that Minnesota taconite pellets feed are disappearing, said Brian Hiti, a senior policy adviser on mining for the Iron Range Resources and Rehabilitation Board.

Vale Looks to Sell Up to 30% of Metals Unit in Possible IPO – by Juan Pablo Spinetto (Bloomberg News – June 24, 2015)

June 24, 2015

http://www.bloomberg.com/

Vale SA, the world’s largest nickel producer, is considering selling about 25 percent to 30 percent of its base metals business in an initial public offering.

Work on the transaction continues, although the Rio de Janeiro-based miner will only proceed if nickel and copper prices reach “appropriate” levels, Investor Relations Director Rogerio Nogueira said in Sao Paulo Wednesday.

“We have the vision of doing this IPO to create value,” he said. “It was never thought as a way of getting cash.”

Vale, whose iron-ore business has been buffeted by a 50 percent price collapse since late 2013, may hold the base metals offering in two tranches as it seeks to unlock value at a time of rising profit and output after years of operational setbacks. Vale hired Canadian law firm Stikeman Elliott LLP for the possible IPO, people with knowledge of the matter said earlier this month.

While Nogueira declined to give a valuation for the base metals business during his presentation, Chief Financial Officer Luciano Siani said in a Bloomberg Television interview in December that it may be worth $30 billion to $35 billion.

[India] CM Help Sought to Tide over Chrome Ore Crisis (New Indian Express – June 24, 2015)

June 24, 2015

http://www.newindianexpress.com/

BHUBANESWAR: Pushed to the verge of closure on account of severe chrome ore crisis due to non-extension of mining leases, the ferrochrome industry in Odisha is crying for urgent attention.

With mining output from three major producers – Tata Steel, Misrilal Mines and BC Mohanty and Sons – dropping to a trickle, the industry has rushed an SoS to Chief Minister Naveen Patnaik seeking his intervention to resolve the issue.

The apex industry body, Indian Chamber of Commerce (ICC), has stated that non-extension of chrome ore mining leases in accordance with the new Mines and Minerals (Development and Regulation) Act, 2015 (MMDR) has not only threatened the plants but is also causing huge revenue loss for the Government.

The newly amended MMDR Act has allowed extension of lease period of captive mines till 2030 and non-captive mines till 2020. Under the rules, chrome ore mining leases of the three miners are deemed to have been extended up to 2020 as a majority of the mineral is used for non-captive purpose.

Dust from abandoned Cliffs’ mine casts pall over eastern Canadian town – by Mike De Souza (Reuters U.S. – June 19, 2015)

June 23, 2015

http://www.reuters.com/

OTTAWA – Heavy dust clouds blowing from Cliffs Natural Resources’ abandoned Wabush iron ore mine into a small township in the eastern Canadian province of Newfoundland and Labrador is putting a focus on the liability of miners that seek creditor protection and walk away from assets.

Iron ore and coal miner Cliffs Natural Resources Inc announced in February 2014 it was shutting down its Wabush mine. This year it sought creditor protection for its Canadian assets.

The fate of the deserted mine is in limbo until it is either acquired by a rival or Cliffs is able to restructure and exit creditor protection.

Local residents say the abandoned site has many open pits, with drilling equipment, trucks and other equipment stranded on the site.

“Now that the company has gone into closure, it is very hard to maintain a relationship with them. From a corporate level, we have not heard anything from them in almost a year, if not longer,” said Colin Vardy, mayor of the town of Wabush.

Spectre of illegal mining looms over India – by Ajoy K Das (MiningWeekly.com – June 22, 2015)

June 23, 2015

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

Kolkata (miningweekly.com) – Is illegal mining rearing its head in India again?

The concern has moved centre stage following the murder of a journalist in the central province of Madhya Pradesh for opposing the mining mafia and moving the courts against illegal mining.

Even though three people, all involved in illegal manganese mining and part of the mining mafia in the region, have been arrested on charges of murder, sections within the federal and provincial governments have expressed concern about whether the murder was an isolated incident or whether it signalled the re-emergence of the mining mafia despite changes in legislation and stringent punitive action.

Data collated from Indian Bureau of Mines showed that provincial governments had filed 727 cases during the past year following the inspection of 2 427 operational mines. The courts upheld charges in the cases of 25 mines.

Of the mines inspected, as many as 1 347 were operating in violation of the newly promulgated Mines Minerals Development and Regulation Act (MMDRA) 2015 and 357 mines had their mining licences cancelled over the past year.

COLUMN-Technology may lower commodity prices, widen nation gaps – by Clyde Russell (Reuters U.K. – June 23, 2015)

June 23, 2015

http://uk.reuters.com/

LAUNCESTON, Australia, June 23 (Reuters) – The image of miners as mainly burly blokes in hard hats and high-vis vests is likely to change in the next decade to one of computer geeks controlling automated machines while sitting thousands of kilometres away from the pit.

That’s certainly the scenario outlined in a major report called “Australia’s future workforce?”, released last week by the Committee for Economic Development of Australia (CEDA), a think-tank encompassing businesses, community groups and academic institutions.

More than five million jobs, or about 40 percent of Australia’s current workforce, have a “moderate to high” likelihood of disappearing in the next 10 to 15 years, CEDA said in the report.

What is relevant for commodities in this scenario is that mining and agriculture are among the sectors likely to be affected the most because of technological advancements.

The report notes that technological changes, while disruptive, often lead to higher incomes and increased employment opportunities as more wealth is created and productivity boosted.

China’s Zijin targets Australian gold miner in M&A spree – by James Regan (Reuters U.S. – June 22, 2015)

June 22, 2015

http://www.reuters.com/

SYDNEY – Zijin Mining Group launched a bid for Australian gold explorer Phoenix Gold on Monday, the Chinese company’s third planned acquisition of a foreign mining asset in less than a month.

Long-dormant M&A activity in Australia and other mining-intensive countries is showing signs of a rebirth, with Zijin the most acquisitive to date and with the deepest pockets.

“The company is open to opportunities around the world,” Zijin Executive Director and Vice President George Fang told Reuters. “It is a goal to find more gold or other assets.”

In May Zijin announced it was issuing shares to raise 10 billion yuan ($1.61 billion) for acquisitions. Before launching its A$47 million ($36.55 million) offer for Phoenix, it accumulated a 17.9 percent interest in the company.

Zijin, one of China’s largest gold mining companies, unveiled two acquisitions in May for more than $700 million, one in Papua New Guinea and one in Democratic Republic of Congo.

A missed opportunity for marginal iron ore producers – by Stephen Bartholomeusz (The Australian – June 22, 2015)

June 22, 2015

http://www.theaustralian.com.au/business

Has the slide in the iron ore price over the past week signalled the closing of a small window for the recapitalisation of marginal producers?

For a few weeks the price had been firming to hold around the $US64 a tonne level, well above the $US47 a tonne seen earlier this year when the collapse in the price was seen as the death-knell for smaller and higher-cost producers. It was that plunge that triggered the failed Fortescue Metals campaign to try to force/coerce Rio Tinto and BHP Billiton into winding back their production.

But over the past week, the price, which had seen some previously mothballed production brought back into the market, has slipped back towards $US60 a tonne. That raises the possibility, indeed probability, that the firming of the price was an aberration.

The most likely explanation for the bounce in the price is that supply disruptions in April and May caused by weather affecting output from the Pilbara and the timing of shipments from Brazil coincided with a low-point in the inventory cycle of China’s steel producers. If that were the case, it would be a temporary phenomenon.

If the edging down in the price over the past week does reflect a gradual return to settings that better reflect the underlying balance of supply and demand, the period that preceded it could represent a missed opportunity for some of the smaller players trying to survive and position themselves for a potentially very prolonged period of much lower prices.

Yellen Surprises Gold Bulls in Retreat by Reviving Rally – by Megan Durisin (Bloomberg News – June 21, 2015)

June 22, 2015

http://www.bloomberg.com/

Janet Yellen took the gold market by surprise. Bullion had its biggest rally in a month after Federal Reserve Chair Yellen and her fellow policy makers cut their long-term projections for U.S. interest rates. Money managers had anticipated officials would tighten monetary policy faster and reduced their net-long position in gold to a five-week low the day before the central bank’s statement.

The outlook for gradual rate increases sparked renewed investor interest, and more than $880 million was added last week to the value of assets in exchange-traded products backed by the metal. Higher rates curb bullion’s allure because the commodity doesn’t pay interest or give returns like other assets such as bonds and equities. The Bloomberg Dollar Spot Index fell for two straight weeks.

“The Federal Reserve has signaled they will be moving in a glacial manner, which is causing the U.S. dollar to decrease,” Chad Morganlander, a money manager at Stifel, Nicolaus & Co. in Florham Park, New Jersey, which oversees about $170 billion, said by phone. “There’s an upward bias to gold, and we believe it’s being directly related to dollar weakness.”

Morganlander expects bullion prices to stabilize before being dragged lower by improving U.S. economic growth.

Why would we choose not to make money? Rio’s iron ore boss speaks out – by Vicky Validakis (Australian Mining – June 22, 2015)

June 22, 2015

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

Rio Tinto’s iron ore boss Andrew Harding says long-term demand for the commodity is strong, but warned high-cost producers would not last long in the current market.

Speaking to Rio’s M2M magazine, Harding said while demand growth for iron ore isn’t as strong as it was, the long-term outlook was sound.

Pointing to the continued urbanisation of people in China, India, Africa, and South America, Harding said the need for steel would remain strong.

“As developing countries urbanise, and people move from rural to urban ways of life, infrastructure needs change. They build tall apartment blocks and link up the urban areas with roads, railway lines, airports and bridges – all using massive amounts of steel,” Harding said.

Harding also highlighted the importance of demand from the developed world in replacing ageing infrastructure.

“Even though Japan, for instance, has had no to very low growth for a considerable period, it’s still been importing around 130 million tonnes of iron ore every year,” Harding explained.