International Media Resource Articles – Page 663

Turn Out the Lights: Australia Calls Commodity Spending Boom End – by David Stringer (Bloomberg News – May 27, 2015)

May 27, 2015

http://www.bloomberg.com/

Australia, an engine room of the decade-long global commodity boom, is forecasting a staggering 90 percent plunge in spending on projects, calling time on its biggest resources bonanza since the 1850s gold rush.

After a collapse in prices from oil to iron ore, the value of Australia’s approved and financed mining and energy projects is forecast fall to about A$15 billion ($12 billion) in 2017, from A$226 billion at the end of April.

Planned iron ore projects worth at least A$10 billion have been canceled since October, according to the Department of Industry and Science. Billionaire Gina Rinehart’s Roy Hill — due to ship later this year — is Australia’s last remaining mining project being developed worth A$5 billion or more.

“The value of committed projects is about to start declining substantially,” Mark Cully, the department’s chief economist, said Wednesday in a statement. “It is clear that this will not be offset by new investments coming through the pipeline.”

Waning demand growth in key markets including China, the biggest commodities consumer, and programs by miners to cut capital expenditure mean there’s a lack of projects toward the end of this decade, the department said in a report.

The 1959 Copper Strike: Local Event has National Ramifications – by John Hernandez (Copper Area.com – May 26, 2015)

May 27, 2015

http://www.copperarea.com/pages/

The Voice of the Copper Corridor. [Arizona]

In 1959, Dwight D. Eisenhower was in the last year of his presidency. The dictator Fulgencio Batista fled Cuba as communist revolutionaries led by Fidel Castro took control of the island nation 90 miles from the United States. Alaska and Hawaii would become states. A little known actor, Clint Eastwood appeared on a new television series, Rawhide. Teenagers were saddened by “The Day the Music Died” when Buddy Holley, Richie Valens and the “Big Bopper” J.P. Richardson were killed in a plane crash in Iowa.

In the prospering mining town of San Manuel the contracts with the unions and the San Manuel Copper Corporation were set to expire June 30. Competing unions, the United Steelworkers of America and the International Union of Mine, Mill & Smelter Workers, were still battling each other to represent the workers.

Early in the year, smelter workers petitioned the National Labor Relations Board (NLRB) and asked that their union, the United Steelworkers of America, be recognized as the bargaining agent for San Manuel rather than Mine Mill. Mine Mill had defeated the Steelworkers in the 1956 elections. The election was challenged by the Steelworkers but their protest was denied by the NLRB.

Another unit of San Manuel Copper Corporation, the heavy equipment operators, joined with the smelter workers and asked that elections be held to determine which union would be the collective bargaining agent for the workers.

Blood on the Mountain: New Film Chronicles Coal’s War on Appalachia – by Jeff Biggers (Huffington Post – May 26, 2015)

May 26, 2015

http://www.huffingtonpost.com/green/

One of the most telling moments in the new documentary film Blood on the Mountain draws from 2008 footage of former Massey Energy CEO Don Blankenship calmly mumbling his replies to numerous questions on mine safety at a hearing. When asked if he knew how many coal miners had died in Massey mines in the eight years since Massey became a publicly traded company, the notorious “dark lord” of the coal industry shook his head and said no.

Filmmakers Mari-Lynn Evans and Jordan Freeman allow for a gut-wrenching moment of silence, having methodically chronicled the industry’s treadmill of violation-ridden disasters, and then provide the answer: 52 deaths under Blankenship as CEO of Massey Energy.

China cash lining up for Fortescue Metals Group – by Matthew Stevens, Amanda Saunders and Julie-anne Sprague (Australian Financial Review – May 25, 2015)

May 26, 2015

http://www.afr.com/

Chinese-linked companies have applied to the Foreign Investment Review Board seeking permission for an investment involving Fortescue Metals Group.

Australia’s third-largest iron ore producer has held discussions with China’s largest steel producer, Baosteel, and China’s largest conglomerate, CITIC, about a recapitalision to shore up its balance sheet.

It is unclear if the applications to FIRB are from CITIC or Baosteel but sources said there is interest in Fortescue from one or more companies which are Chinese or part-Chinese owned.

There are no moves to take over Fortescue. Instead, the companies are interested in buying a stake or increasing an existing stake, sources said. A deal could involve the partial selldown by the company’s founder, chairman and biggest shareholder, Andrew Forrest.

Fortescue and Baosteel already work closely. In June 2012 the two companies merged their magnetite iron ore assets in the Pilbara into a venture called FMG Iron Ore Bridge, which is 88 per cent controlled by the Perth company and 12 per cent owned by the Chinese steel giant.

Up North Report: Inside North America’s biggest construction project – by Aaron Brown (Minneapolis Star Tribune – May 25, 2015)

May 26, 2015

http://www.startribune.com/

Construction is accelerating at the long awaited $1.9 billion Essar Steel Minnesota mine near Nashwauk, while Essar now says it’s optimistic about producing direct reduced iron products here.

In a tour of the Northern Minnesota site on May 21 with Mitch Brunfelt, Essar’s assistant general counsel and director of government and public relations, I took pictures and observed progress at the site of the biggest construction project on the Mesabi Iron Range in a generation.

This is currently the largest greenfield construction project on the continent, and it’s hard to understate the sheer size, commontion, and labor involved. The site produces a steady drone, easily heard from my home eight miles away.

After years of starts and stops, Essar now says it is finally fully financed and has increased its contractor workforce at the site. About 400 workers were on site the day I visited. Brunfelt said they will soon see 600-800 workers on site each day as summer arrives in force.

Essar has officially amended its construction timeline to reflect the realities of the company’s progress. Brunfelt said Essar engineers are now eying production of taconite by late June or July of 2016.

Sweden to relocate entire city to meet China’s energy needs – by Dominic Hinde (Washington Times – May 24, 2015)

May 26, 2015

http://www.washingtontimes.com/

KIRUNA, Sweden — To feed China’s growing appetite for raw materials, this venerable mining town 90 miles north of the Arctic Circle is poised to become a cutting-edge Tomorrowland as it prepares to move buildings, residents and even a century-old wooden church to a new location a few miles away.

“These will be the first to go,” said Kjell Torma, editor of KirunaTidningen, the local newspaper, pointing to a row of red brick apartment blocks surrounded by construction fences. “If you want a cheap kitchen fan or some radiators, get in there.”

Over the next 10 years, Kiruna officials plan to demolish the apartments and most other buildings in this town of 18,000 residents and then rebuild them as far as three miles away — all part of an ambitious $375 million project to make way for the expansion of a giant iron mine as demand from China has suddenly made extraction here worth the investment.

But officials aren’t constructing an exact duplicate of Kiruna, founded in 1900 as the most northerly town in Sweden. With funding from Sweden’s state-owned mining company — Luossavaara-Kiirunavaara AB, or LKAB — officials in Kiruna aim to create one of the most environmentally friendly cities in Europe.

South African miners accelerate job cuts to 35,000 over two years – by Andrew England (Financial Times – May 25, 2015)

May 26, 2015

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

Johannesburg – South Africa’s mining industry has shed more than 35,000 jobs in two years as it has been battered by labour unrest, rising costs and weak commodity prices.

The scale of the job losses — equivalent to one out of 14 workers in the sector — indicates how the labour unrest that has plagued the industry since the police shooting of 34 striking miners at Marikana in 2012 has accelerated restructuring in the sector.

Mining is one of the biggest private sector employers in South Africa and the new data from the Chamber of Mines — seen by the Financial Times — provide the first detailed analysis of the extent of job losses since the shooting.

The majority of the losses between 2012 and last year occurred in gold and platinum, with those sectors’ workforces shrinking by about 23,100 and 10,800 respectively, according to the chamber. These amount to labour reductions of 16 per cent and 5 per cent respectively.

A further 1,600 jobs — or 7 per cent of the workforce — have been cut in iron ore mining between 2012 and last year.

“Work stoppages, which reduce mining volumes, reduce profitability,” said Monique Mathys, economist at the chamber.

China Pollution War Boosts Anglo Iron Prospect 10,000 Miles Away – by Juan Pablo Spinetto (Bloomberg News – May 26, 2015)

May 26, 2015

http://www.bloomberg.com/

Anglo American Plc’s Brazilian iron foray was fraught with misfortune from billion-dollar overruns to a global glut. As the $8.4 billion mine finally ramps up, it’s catching a break from China’s greener approach to making steel.

The Minas-Rio iron-ore mine, the largest project in Anglo’s 98 years, is scheduled to reach output capacity pace by mid-2016. And while the start of operations coincides with a price rout of the steelmaking ingredient, the London-based miner is betting the higher quality of its product will help shield the venture from the malaise affecting the industry.

Minas-Rio produces pellet feed, an ultra fine type of ore containing about 68 percent iron. That allows Anglo to sell at a premium over the benchmark because steelmakers — including those in China, the biggest buyer — find it more productive and less polluting.

“China is more and more focused on the environmental impact of consuming the iron ore at the steel mills,” Andreas Bokkenheuser, an equity analyst at UBS Group AG, said by telephone from New York. “The lower silica content means they will consume more of it in the future,” he said, referring to the most common impurity.

Oz Minerals CEO Andrew Cole eyes off four takeover targets – by Simon Evans (Australian Mining Review – May 25, 2015)

May 26, 2015

http://www.afr.com/

OZ Minerals chief executive Andrew Cole says the copper and gold company has four potential acquisitions it is doing due diligence on but will only proceed if the price tags are at a level that deliver good value.

Mr Cole says while geographic diversification may be an outcome if OZ does make an acquisition it is not necessarily a driver of the company’s acquisition strategy.

OZ operates just one mine, the Prominent Hill copper and gold mine in South Australia, which employs 1200 workers. He made the comments at the OZ annual meeting in Adelaide, where the company is in the process of shifting its head office to from its previous base of Melbourne.

OZ chairman Neil Hamilton said after the meeting the price paid by Evolution Mining for Barrick’s Cowal mine in New South Wales appeared to be a steep price. “It’s a robust number,” Mr Hamilton said.

Evolution bought the mine in a $US550 million ($702 million) transaction on Monday. Mr Hamilton declined to officially confirm if OZ had also been closely looking at the Cowal mine, as has been heavily speculated. “We don’t comment on speculation about sale processes,” Mr Hamilton said.

How the violence at Southern Copper’s Tia Maria mining project could have been avoided – by Robert Spence (Mining Global – May 25, 2015)

May 26, 2015

http://www.miningglobal.com/

The government of Peru declared a state of emergency on Saturday, calling in national police and armed forces to maintain order as protests at the Tia Maria copper project turned violent.

According to CNN, one protester appeared to be dead from wounds to the head as others battled with police who lobbed tear gas at them.

The announcement follows almost two months of increasingly violent protests against the $1.4 billion copper mining project as oppositions fear the mine will pollute the environment and do very little for the local economy.

“We don’t want the mine,” said Enrique Torres Alvarez, an 85-year-old farmer attending a rally in Cocachacra’s main square. “It will ruin our land, and that will be the end of the farming.”

Development of Tia Maria, which is owned by Southern Copper, a subsidiary of Grupo Mexico, has been suspended since 2011 due to protests.

Earlier this month, Southern Copper CEO Oscar Gonzalez Rocha asked for all parties involved to “present their concerns and fears, identify solutions … and define the responsibilities that all must assume in a reasonable timeframe.”

Australia’s gold miners drive M&A revival – by James Regan (Reuters U.S. – May 26, 2015)

May 26, 2015

http://www.reuters.com/

SYDNEY – May 26 Gold miners are spearheading a wave of merger and acquisition activity in Australia, riding a rebound in local gold prices to pounce on projects promising quick growth.

In the first signs of life since the country’s mining boom went bust three years ago, companies are buying assets from international rivals tightening their belts, and partnering with fellow Australian miners.

“Everyone is looking for assets that enable them to grow. We’ve seen more M&A in Australia in 2015 than in the past five years,” Ian Murray, chairman of Perth-based Gold Road Resources Ltd told Reuters, referring broadly to the level of interest in the sector.

Progressive central bank interest rate cuts aimed at knocking down the Australian dollar and falling labour and mining costs are adding fuel to the frenzy.

Gold output in the world’s second-biggest producing country after China reached a decade high last year and is tipped to rise further in 2015.

The EPA’s Pebble Blame Game – by Kimberley A. Strassel (Wall Street Journal – May 21, 2015)

May 26, 2015

http://www.wsj.com/

The agency digs deep for excuses—and not very good ones—to explain its veto of an Alaskan mine project.

Government agencies have a certain descending order of excuses they employ as a scandal grows. When they reach the point of quibbling over semantics and blaming low-level employees, it’s clear they know they’ve got a problem.

The EPA has a problem: its pre-emptive veto of the Pebble Mine, a proposed project in southwest Alaska. The law says that Pebble gets to apply for permits, and the Army Corps of Engineers gets to give thumbs up or down. The EPA, a law unto itself, instead last year blocked the proposal before applications were even filed.

The agency claims it got involved because of petitions from Native American tribes in 2010, and that its veto is based on “science”—a watershed assessment that purportedly shows the mine would cause environmental harm.

This column reported a week ago on EPA documents that tell a very different story. They reveal the existence of an internal EPA “options paper” that make clear the agency opposed the mine on ideological grounds and had already decided to veto it in the spring of 2010—well before it did any “science.”

Independence Group to Buy Sirius Resources for $1.4 Billion – by Rhiannon Hoyle (Wall Street Journal – May 24, 2015)

May 25, 2015

http://www.wsj.com/

Australian gold and nickel miner Sirius Resources agreed to a cash-and-shares takeover by its larger rival

SYDNEY—A mining company that traces its roots to one man’s hunt for wreckage from a NASA space station in the Outback has become the focus of one of Australia’s biggest resources deals so far this year.

Sirius Resources NL, which is building a vast nickel mine in Western Australia state, on Monday agreed to a cash-and-shares takeover offer worth 1.8 billion Australian dollars (US$1.4 billion) by larger rival Independence Group NL. If approved at shareholder meetings in late August, the deal will create a midtier mining company producing commodities ranging from gold to nickel and zinc.

Modern-day mining companies typically owe their success to the drillbit, but Sirius’s story is a throwback to the days when Australian prospectors headed into the Outback with little more than a shovel, a compass and a map.

In 1979, Mark Creasy drove deep into Australia’s red center to search for debris from the Skylab space station, which was partly strewn across Western Australia instead of falling entirely into the Indian Ocean as the National Aeronautics and Space Administration had hoped.

UPDATE 2-Barrick sells Australian Cowal gold mine to Evolution for $550 mln – by Sam Forgione and Sonali Paul (Reuters U.S. – May 25, 2015)

May 25, 2015

http://www.reuters.com/

NEW YORK/MELBOURNE, May 25 (Reuters) – Barrick Gold , the world’s top gold producer, has agreed to sell its Cowal mine to Evolution Mining for $550 million in a deal that will turn Evolution into Australia’s second largest producer of the precious metal.

The deal gives Evolution a large, low-cost mine that will boost its output to around 800,000 ounces a year, around one-third the output of top Australian producer Newcrest Mining .

“This is a truly transformational acquisition for Evolution,” Executive Chairman Jake Klein said after the deal was announced on Monday. “This is the high quality asset we have been looking for to cornerstone our business.”

Barrick put Cowal up for sale along with its Porgera mine in Papua New Guinea, among other assets, in an effort to cut debt by $3 billion by the end of this year.

Analysts congratulated Evolution for snaring Cowal for well below the $650 million price tag it had been expected to fetch.

Australia’s Scrapped Iron-Ore Inquiry Fires Up Debate Over Output – by Rhiannon Hoyle (Wall Street Journal – May 24, 2015)

May 25, 2015

http://www.wsj.com/

Questions loom over who should control Australia’s natural resources: the nation, or the private companies that own and operate them

SYDNEY—The Australian government’s decision to reject an inquiry into the iron-ore market capped a tumultuous week during which a bitter debate over the industry’s relentless output expansion, despite sinking prices, has dominated the national discourse.

At the heart of the issue: whether a country’s natural resources belong to the nation, or the private companies that own and operate them.

Australia’s Prime Minister Tony Abbott earlier this month backed calls for the parliament’s economics committee to investigate claims that mining giants BHP Billiton Ltd. and Rio Tinto PLC have been driving down iron-ore prices by boosting production in a way that undermines their smaller competitors, as well as harming the country’s economy.

But in a sign of the rift within government itself over the issue, Australia’s Treasurer Joe Hockey late Thursday officially nixed any plans for an inquiry.

His decision followed an unusually outspoken campaign by the normally publicity-shy mining majors, with BHP’s Chief Executive Andrew Mackenzie saying any probe would be “a ridiculous waste of taxpayers’ money.”