Japan’s nuclear plan is bad news for LNG, coal – by Clyde Russell (Reuters U.S. – June 2, 2015)

http://www.reuters.com/

LAUNCESTON, Australia, June 2 (Reuters) – The rise of China and India as energy importers has largely consigned Japan to the sidelines, but the world’s third-largest economy still exerts significant influence in some markets.

That’s why Japan’s long-term energy vision is too important to be ignored, given it is the world’s top importer of liquefied natural gas (LNG), number three in coal and four in crude oil.

A consultative committee on Monday endorsed the government’s blueprint for the energy mix it hopes to achieve by 2030, with the proposal now open for public comment for a month ahead of a likely formal approval by the trade ministry mid-July.

While the proposal has attracted controversy over a plan for nuclear energy to generate 20-22 percent of the nation’s electricity, it’s also worth noting how it sees the rest of the generating mix.

Renewables are set at 22-24 percent, LNG at 27 percent and coal at 26 percent. This represents a decline in nuclear’s share of electricity generation from the 30 percent it held before the Fukushima disaster following the March 2011 earthquake and tsunami.

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Chileans Bet Apple Will Pay a Premium for Clean Rare Earths – by Eduardo Thomson (Bloomberg News – June 2, 2015)

http://www.bloomberg.com/

The future of rare-earth minerals used in everything from iPhones to Tomahawk missiles lies under the pine plantations of southern Chile, and in a secret formula, according to closely held junior miner Mineria Activa.

Elements such as neodymium and dysprosium are contained in clays near the city of Concepcion in concentrations similar to those found in southern China, which has all but cornered global supply until now. The similarities end there, Arturo Albornoz, who heads Activa’s Biolantanidos project, said in an interview.

While operations in China typically pump ammonium sulfate into the ground and wait for the chemical to seep out with the minerals, at Biolantanidos the plan is to dig out the clay, put it through a tank-leaching process with biodegradable chemicals and return it cleaned to the ground, replanting pine and eucalyptus trees.

It may be laborious, but Albornoz is hoping companies such as ThyssenKrupp AG, Apple Inc. and Tomahawk cruise missile maker Raytheon Co. will end up paying a premium, knowing their suppliers aren’t destroying the planet.

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Mine closures, job losses on Brazil’s iron ore frontline – by Stephen Eisenhammer (Reuters U.S. – June 1, 2015)

http://www.reuters.com/

CONCEIÇÃO DO MATO DENTRO, Brazil, June 1 A giant truck carries chunks of sparkling mountainside to a web of yellow conveyor belts at a huge mine in eastern Brazil, a few more hundred tonnes of iron ore that are good for its owner Anglo American but bad for a battered global market.

Part of a new generation of massive mines contributing to a supply glut, the Minas-Rio mine has the scale and modern design to produce iron ore, the main ingredient in steel, at well below the costs of more traditional projects.

“We’ll be competitive wherever the price is,” Paulo Castellari, the iron ore head for Anglo in Brazil, said on a recent visit.

But only a four-hour drive away, in the sleepy town of Itatiaiucu, workers at older mines are being laid off. Almost everyone in the town of 12,000 people follows the price of iron ore and for the last year they have watched it drop in half to near the lowest level in a decade. With it, about 20 percent of mining jobs in the town have been cut, the local union says.

“I go to work every day wondering if I’ll be next,” said José Roberto, 55, who has worked for 27 years at a local mine now owned by steelmaker ArcelorMittal, where the union says 30 of about 300 workers have been laid off in recent months.

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Lifton says forget the Wall Street Journal on rare earths. – by Jack Lifton (InvestorIntel.com – June 1, 2015)

http://investorintel.com/

Yesterday’s (May 31’s) Wall Street Journal had a really poor article about the impending fate of Molycorp, bankruptcy from failure to meet payment on debts, as it reflects, in the WSJ’s opinion, the rare earth market(s).

The rare earth share market “mania” that began in the USA in 2007 when a group of funds and an entrepreneur bought the defunct, moribund, and on “care and maintenance” Molycorp from Chevron with the stated purpose of bringing it back into production was an attempt to “get ahead” of the “market” as then perceived by this group.

This original core group of Molycorp investors had noted that a rapidly growing demand for the rare earths in high tech consumer goods was going to have to depend on the tumultuous but unpredictable (with regard to the impact of governance by the state as well as private interests) Chinese domestic economy, because at that time (as it remains today) China was the overwhelmingly largest producer of the rare earths.

Today Molycorp has failed as a business even though it has raised and spent between 2 and 3 billion dollars to re-start its California mine and base-level separation facility.

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Molycorp Struggles to Survive Rare-Earths Bubble – by John W. Miller (Wall Street Journal – May 31, 2015)

http://www.wsj.com/

U.S. rare-earths miner is expected to skip loan payment, which could lead to bankruptcy filing

MOUNTAIN PASS, Calif.—In the dusty mountains of the California-Nevada border, 4,800 feet above sea level, the U.S.’s only miner and processor of rare-earths elements is struggling to squeeze a profit out of its small open-pit mine and plant.

On Monday, Molycorp Inc. said it would skip a $32.5 million loan payment, triggering a 30-day grace period that could lead to a bankruptcy filing before the end of June.

The company is trying to survive one of the biggest commodity bubbles in economic history. Five years ago, export restrictions by China, the world’s dominant supplier, and a global political spat inflated the value of rare earths—15 elements used as niche ingredients in magnets, batteries, catalytic converters and other high-tech products—and propelled Molycorp’s stock-market value to over $6 billion.

Since then, rare-earths prices have been on a long slide downward. Now with a market capitalization of around $150 million, Molycorp is indebted and unprofitable. Customers are putting in orders, but the company hasn’t met production targets at Mountain Pass, and is in restructuring talks with firms representing its creditors.

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Wealth Fund Ban Betrays Norway’s Awkward Fossil Fuel Goals – by Saleha Mohsin and Mikael Holter (Bloomberg News – May 31, 2015)

http://www.bloomberg.com/

Western Europe’s biggest oil producer has decided coal is too dirty to invest in.

Norway’s $890 billion sovereign wealth fund, built on more than four decades of extracting crude from the North Sea, was ordered by lawmakers on Wednesday to limit holdings of companies that produce or burn coal. That could trigger at least $4.5 billion in divestments of stocks such as RWE AG and Duke Energy Corp.

“There’s this incredible logic that coal is the climate problem, and Norway is helping solve the world climate problem by producing gas that can replace coal in Europe and reduce emissions,” Rasmus Hansson, a lawmaker for the Green Party, said in a phone interview.

“That logic has unbelievably been accepted by the Norwegian majority as credible — which it isn’t.”

The cognitive dissonance is on display in Stavanger, Norway’s oil capital. The local Scandic hotel, which charges around $200 a night, tells guests it runs on wind and hydropower. The view is of the North Sea, where Norway — a country that boasts the highest per capita income in Europe after Luxembourg — spends billions extracting its oil.

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China Inc circling Australian iron ore – by Tess Ingram (Sydney Morning Herald – June 1, 2015)

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

The sustained lull in iron ore prices has put iron ore miners under considerable pressure, with Chinese investors circling distressed Australian companies.

Chinese investors are circling distressed Australian iron ore miners, according to local dealmakers fielding growing interest in the commodity’s struggling mid-tier ranks.

The sustained lull in iron ore prices has put iron ore miners under considerable pressure, causing market values to plummet and a handful of Australian producers to suspend operations.

The price of iron ore has slumped close to 50 per cent in the past 12 months to hover at around $US63 a tonne, after slumping as low as $US47 a tonne in April.

Against this backdrop, an increasing number of Chinese entities had expressed interest in providing debt or equity to iron ore miners, acquiring an asset or attempting a takeover, Minter Ellison West Australian managing partner Adam Handley said.

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Finding Minnesota: The ‘Grand Canyon Of The North’ – by Mike Binkley (CBS Minnesota – May 31, 2015)

 

http://minnesota.cbslocal.com/

HIBBING, Minn. (WCCO) – This year, thousands will take a side trip to a giant hole in the ground in northern Minnesota that locals like to call “the Grand Canyon of the North.”

It’s not a natural wonder. It’s a panoramic collection of cliffs, ridges and valleys that have all been carved up by humans. The Hull Rust Mahoning Mine on the edge of Hibbing is the second largest open pit iron ore mine in the world.

Beauty was not the main objective when miners first arrived there in the 1890s, but after 120 years of blasting, digging and hauling, beauty is what many visitors see. Anne Varda, whose family includes three generations of miners, is now president of the adjacent tourist center.

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Nothing dull about zinc if supply falls – by Trevor Sykes (Australian Financial Review – June 1, 2015)

http://www.afr.com/

Zinc was the hot tip at the Resources Investment Symposium held in Broken Hill last week.

Probably a natural call given that Broken Hill is home to the greatest silver-lead-zinc mine the world has ever known.

In its 130-year life Broken Hill has produced total of 50 million tonnes of lead and zinc combined plus 100 million ounces of silver. It has been mined almost continuously over that time and still has a long life ahead at deeper levels and in exploiting remnant ore.

In his opening address at the symposium, Emeritus Professor Ian Plimer of the University of Melbourne noted that the market for mining shares had been slow and sluggish for the past four years.

He said: “This market will turn around when there is a fundamental commodity shortage and I think that commodity will be zinc. I think we will go into shortage in the first quarter of next year.” It was a big call, because as far as investors are concerned, zinc is the least sexy of all the major metals.

At various times, investors have been excited about diamonds, gold, copper, oil and nickel, but some minerals just don’t seem capable of arousing them. Mineral sands are a good example. Australia is rich in them, but the market is never much better than lukewarm.

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Nevada mining innovates and endures – by Dana R. Bennett (Elko Daily Free Press – June 1, 2015)

http://elkodaily.com/

Dana R. Bennett is the Nevada Mining Association President.

Nevada mining is dynamic—an evolving industry that changes over time. From our 21st century perspective, after many years of solid gold production numbers, it can be hard to imagine a time when gold was not the preeminent mineral in Nevada. There was a time – a long period of time – when gold mining was essentially dying in this state.

In 1942, the U.S. War Production Board ordered the closure of non-essential gold mines in order to concentrate the production of minerals needed for the war effort. Some Nevada mines closed completely, but some, such as the Getchell Mine in Humboldt County, were able to remain open by focusing on the production of industrial minerals.

After World War II ended and gold mines were allowed to open, Nevada’s gold industry was slow to recover. Production continued to decline. Nearly 20 years after the federal government order, Nevada’s gold production dropped to the second-lowest point in all of Nevada history.

Instead, Nevada’s mining industry focused on industrial minerals, producing iron, lead, manganese, tungsten and zinc in the early 1950s. Lander County produced world-renowned turquoise. By 1957, however, even the industrial mineral industry began to slide.

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The Cornish Mines – by Graham Jaehnig (The Daily Mining Gazette – May 30, 2015)

http://www.mininggazette.com/

From the very beginning of the mineral rush in 1843, miners from other countries worked Copper Country lodes. John Hays, in working the area around Copper Harbor, worked teams of German coal miners he had retained from Pennsylvania. Colonel Charles Gratiot, working for the Lake Superior Copper Company, had brought with him a crew of some fourteen Cornish miners from the lead district of Wisconsin.

Cornwall is a small peninsula on the southwest portion of England that juts into the Atlantic Ocean, and enjoys a remarkable mining history. Mining in Cornwall had begun as early as the Bronze Age (2100-1500 BCE) and by the beginning of the 17th century CE, the Cornish had earned the reputation as experts and world leaders in mining and mineral dressing.

At the time when Cornish mines were becoming too deep to be profitably mined, large copper deposits were discovered in England’s North Wales. To compete with these new, shallow mines, Cornish engineers made great advancements in mining technology, such as pumping engines and mineral processing.

By the mid-1840s, as the Cornish copper industry was in major decline, the mineral lands of Lake Superior were just beginning to make world news for their finds of huge masses of pure copper.

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Selling Off Apache Holy Land – by Lydia Millet (New York Times Opinion Pages – May 29, 2015)

http://www.nytimes.com/

Tucson – ABOUT an hour east of Phoenix, near a mining town called Superior, men, women and children of the San Carlos Apache tribe have been camped out at a place called Oak Flat for more than three months, protesting the latest assault on their culture.

Three hundred people, mostly Apache, marched 44 miles from tribal headquarters to begin this occupation on Feb. 9. The campground lies at the core of an ancient Apache holy place, where coming-of-age ceremonies, especially for girls, have been performed for many generations, along with traditional acorn gathering.

It belongs to the public, under the multiple-use mandate of the Forest Service, and has had special protections since 1955, when President Dwight D. Eisenhower decreed the area closed to mining — which, like cattle grazing, is otherwise common in national forests — because of its cultural and natural value. President Richard M. Nixon’s Interior Department in 1971 renewed this ban.

Despite these protections, in December 2014, Congress promised to hand the title for Oak Flat over to a private, Australian-British mining concern. A fine-print rider trading away the Indian holy land was added at the last minute to the must-pass military spending bill, the National Defense Authorization Act.

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Platinum sector faces its Kodak moment in fuel cell technology – by Clara Denina and Silvia Antonioli (Reuters U.S. – May 29, 2015)

http://www.reuters.com/

LONDON, May 29 (Reuters) – Platinum miners betting on fuel cell vehicles to help boost demand for the precious metal and lift moribund prices are in danger of having their hopes dashed, at least in the medium term: electric and hybrid cars are taking a bigger share of the market.

The world’s three largest platinum producers Anglo American Platinum (Amplats), Impala Platinum and Lonmin are all investing in projects related to fuel cell technologies, which generate electricity that can power vehicles by combining hydrogen and oxygen over a platinum catalyst.

But analysts doubt fuel cell vehicles will rival the growth of their electric counterparts, mostly because battery recharging stations are less costly and already more widespread than hydrogen refuelling stations.

“As out of the two new technologies only fuel cells use platinum, I guess the miners think they have no choice,” Macquarie analyst Matthew Turner said. “But people are buying electric cars…and that’s not the case for fuel cells.”

Amplats, which has invested about $35 million in the last five years in companies developing new uses for platinum, mostly through fuel cell technology, is mindful of the stakes.

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The iron ore price equation that makes Fortescue attractive for China – – by Anne Hyland (Australian Financial Review – May 29, 2015)

http://www.afr.com/

CITIC Group and Baosteel Group, which are said to be interested in Fortescue Metals Group, are two of the most politicised companies in China. Baosteel is China’s leader in the steel industry and CITIC was anointed to make significant investments outside China, such as the $10 billion Sino Iron project, which has been described as the worst mining investment in Australia in the past decade.

What is almost certain is that CITIC and Baosteel, which is developing an iron ore project with Aurizon, won’t bid against each other for Fortescue or other resource companies. It would be politically unpalatable in China and it’s typically not what China Inc does.

While there would be a dozen companies in China capable of taking out Fortescue, only one would get the green light, say veteran China observers.

At the Stockbrokers Association conference on Thursday, Li Xinchuang, president of the China Metallurgical Industry Planning Association, firmed up speculation with comments that Fortescue would benefit from a Chinese investor, while saying he didn’t believe the argument that there was a global oversupply of iron ore.

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Norway oil fund plans to withdraw from coal-burning utilities – by David Crouch and Pilita Clark (Financial Times – May 27, 2015)

http://www.ft.com/intl/world/europe

Gothenburg and London – Norway’s $916bn oil fund will consider pulling billions of dollars of investments out of coal in a move that threatens European utilities using the fossil fuel to generate power.

Members of the finance committee of Norway’s parliament confirmed on Wednesday night that opposition and governing parties had reached agreement that the fund should withdraw investments from companies whose business relies more than 30 per cent on coal, measured either by revenue from fossil fuel or by the percentage of power they generate from it.

The proposal will be put to parliament on Thursday for a vote on June 5 but cross-party agreement means it is very likely that it will be passed.

Norway’s move is one of the most significant responses yet to a global divestment campaign that aims to ‎stigmatise the use of coal and other fossil fuels because of their input to climate change.

“This will make a huge difference, it will have influence on ordinary miners and energy companies,” said Terje Breivik, a Liberal party member of the finance committee. “The main explanation is that the oil fund itself is aware of the financial risk due to climate problems.”

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