Special Report: Why gold threatens Ivory Coast’s peace – by Joe Bavier (Reuters U.S. – May 7, 2015)

http://www.reuters.com/

GAMINA, IVORY COAST – (Reuters) – Nestled among the cocoa plantations of western Ivory Coast is a gold mine that does not feature on any official maps. It is not run by an industrial mining company, nor does it pay taxes to the central government.

The unlicensed mine is a key part of a lucrative business empire headed by the deputy commander of the West African nation’s elite Republican Guard, United Nations investigators allege. He is one of the principal players in a network of senior officers – former rebel commanders who have integrated into the Ivorian army – that has seized control of mines that generate tens of millions of dollars a year, and that engages in illegal taxation, smuggling and racketeering, they say.

Interviews with more than two dozen military insiders, diplomats, U.N. officials, local authorities, analysts and miners also reveal that the network of former rebels continues to maintain loyalist fighters under their exclusive control. A confidential U.N. arms inventory, reviewed by Reuters, showed that one former rebel commander possesses enough weapons – from surface-to-air missiles to millions of rounds of ammunition – to outgun the Ivorian army.

A senior Ivorian army officer said that the network represents a parallel force within the military that threatens the stability of the country, which has emerged from a 2011 civil war as one of Africa’s fastest growing economies.

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PRECIOUS-Gold down as strong shares, U.S. yields offset weaker dollar – by Clara Denina (Reuters U.S. – May 6,2015)

http://www.reuters.com/

LONDON, May 6 (Reuters) – Gold edged down on Wednesday, as the impact of stronger European shares and higher U.S. real yields counteracted the effects of a weaker dollar and prospects that the Federal Reserve will not raise interest rates at its meeting in June.

Spot gold was down 0.2 percent at $1,190.53 an ounce by 1011 GMT, while U.S. gold futures for June delivery lost $3.20 an ounce at $1,190.00.

Gold was depressed by rebounding European shares as strong euro zone services data and corporate results offset a sell-off in the region’s government bonds and a rise in the euro.

The metal, which pays no interest, was also under pressure from a two-month high in the benchmark 10-year U.S. Treasury yield.

“One might be puzzled why the gold price is not reacting to a weaker dollar  but you have to look at U.S. real yields, which correlate the most to the gold price, and these have risen,” Macquarie analyst Matthew Turner said.

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UPDATE 2-Glencore disappoints with weak first-quarter metals output – by Silvia Antonioli (Reuters U.K. – May 5, 2015)

http://uk.reuters.com/

LONDON, May 5 (Reuters) – Miner and commodity trader Glencore reported weaker than expected first quarter output at some of its mining assets, with production of its top earner, copper, down 9 percent due to lower grades at two South American mines.

Glencore has a bigger exposure to base metals than iron ore compared with its large rivals. The company has a large commodity trading division, in addition to its mining and oil assets.

Bernstein analyst Paul Gait called the production figures “disappointing”, with base metals and coal lagging expectations.

Copper output was 350,700 tonnes in the first quarter, below most analysts forecasts. The fall was due to lower grades at the Alumbrera mine in Argentina and the Antamina mine in Peru, and to a maintenance shutdown at Collahuasi, in Chile.

Coal production rose 4 percent in the first quarter to 35.6 million tonnes, thanks to the commissioning of two new thermal coal projects in South Africa.

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BHP Wins as Modi Fails to Get India Coal Trains Running on Time – by Rajesh Kumar SinghDebjit Chakraborty (Bloomberg News – May 3, 2015)

http://www.bloomberg.com/

Prime Minster Narendra Modi’s plans to shift India’s economy toward manufacturing and away from agriculture and services are being held up by a coal shortage.

Actually, there’s plenty of coal, just not enough trains to get it to the power plants. While about 200 railway convoys arrive every day at Coal India Ltd.’s depots, Technical Director Nagendra Kumar said the company needs 230 of them. The state-run company supplies more than 80 percent of the nation’s coal.

India will need to upgrade its railway network for Coal India to open more mines and deliver its product, said Deven Choksey, managing director at KR Choksey Shares & Securities Pvt., a Mumbai-based brokerage.

“The infrastructure bottlenecks are stopping Coal India from rising to its full potential,” Choksey said. Coal generates about 60 percent of India’s electricity.

With output climbing at Coal India, the fuel is piling up at the mines. At the same time, slumping global prices mean customers are turning to imports from the likes of Glencore Plc, BHP Billiton Ltd. and Indonesia’s PT Bumi Resources.

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India a year after Modi’s election: The bullish case – by Vaishali Gauba (CNBC.com – May 5, 2015)

http://www.cnbc.com/

Almost a year after the world’s biggest democracy sent a reform-minded, pro-business candidate to its top political office, the bulls still have a case to make in favor of India—at least in the longer term.

Narendra Modi’s election whipped up an optimism that soon played out in India’s markets. The BSE Sensex, India’s chief stock index, shot up roughly 40 percent after his election last year. But things have cooled a lot in 2015, with the Sensex lower by 1.8 percent year-to-date.

But in the longer term, the bulls are still making a case for India. The nation is likely to become an increasingly important source of labor for global corporations. It has the best demographics among the big emerging-market countries, said Jim O’Neill, the former Goldman Sachs Asset Management chairman who famously coined the term “BRIC”—a catch-all for Brazil, Russia, India and China. A strong domestic market and a credible legal system are factors that make India slightly more balanced than China, he said.

“India has fantastic demographics. With urbanization in its early stages, size of the working population and productivity, India has great growth potential,” said O’Neill, now a visiting research fellow at leading European think tank Bruegel.

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The Environmental Disaster That is the Gold Industry (Smithsonian Magazine – February 14, 2014)

http://www.smithsonianmag.com/

The mining industry has had a devastating impact on ecosystems worldwide. Is there any hope in sight?

A global campaign to boycott what activists are calling “dirty gold” gained its 100th official follower three days before Valentine’s Day.

The pledge was launched in 2004 by the environmental group Earthworks, which has asked retail companies not to carry gold that was produced through environmentally and socially destructive mining practices. Eight of the ten largest jewelry retailers in the United States have now made the pledge, including Tiffany & Co., Target and Helzberg Diamonds. The No Dirty Gold campaign is anchored in its “golden rules,” a set of criteria encouraging the metal mining industry to respect human rights and the natural environment.

While the list of retailers aligned in their opposition to dirty gold continues to grow longer, most gold remains quite filthy. The majority of the world’s gold is extracted from open pit mines, where huge volumes of earth are scoured away and processed for trace elements. Earthworks estimates that, to produce enough raw gold to make a single ring, 20 tons of rock and soil are dislodged and discarded.

Much of this waste carries with it mercury and cyanide, which are used to extract the gold from the rock. The resulting erosion clogs streams and rivers and can eventually taint marine ecosystems far downstream of the mine site.

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BHP’s South32 Has a Big Plus: China’s Not Its Chief Customer – by David Stringer (Bloomberg News – May 4, 2015)

http://www.bloomberg.com/

The mining industry’s biggest spinoff in almost a decade will offer investors a once unthinkable big plus. China’s not its biggest customer.

The world’s biggest buyer of metals will account for about 11 percent of sales for South32 Ltd., while parent BHP Billiton Ltd. and its biggest competitor Rio Tinto Group rely on China to generate more than a third of their revenue.

With less dependence on China and no iron ore mines, the new Perth-based company offers a different proposition to producers that have focused on feeding the Asian nation’s hunger for steelmaking, according to Aberdeen Asset Management Ltd.

The China story has changed since the start of the decade. Growth slowed last year to the weakest pace since 1990, while steel consumption will probably decline this year, according to the China Iron and Steel Association.

“If you’ve got a softening of growth in China, or a move to a more sustainable path, do you want all your eggs in that one basket?” said Andrew Preston, a Melbourne-based senior investment manager at Aberdeen, which oversees about $12 billion in Australia, including BHP shares.

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Norway’s oil fund slashes coal investments after criticism – by Stine Jacobsen (Reuters U.S. – May 4, 2015)

http://www.reuters.com/

May 4 (Reuters) – Norway’s $900 billion sovereign wealth fund, the world’s biggest, has reduced the value of its coal mining portfolio by almost 40 percent in the first quarter, its head told parliament on Monday.

Environmental groups and some Norwegian politicians have accused the fund of having too large an exposure to coal and not making enough use of its influence to reduce carbon emissions.

As of March 31 the fund had coal mining assets worth 493 million crowns ($3.75 million), down from 805 million at the end of 2014.

The fund owns assets worth 31 billion crowns in general mining, 109 billion in power production and 228 billion in oil and gas production.

The fund, owning around 1.3 percent of all listed companies globally, is still exposed to firms using coal for steel production and those where coal is only one of several business areas, such as large mining conglomerates, the fund’s head Yngve Slyngstad told the parliament’s Standing Committee on Finance and Economic Affairs.

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[Montana Mining History] The Copper King’s Precipitous Fall – by Gilbert King (Smithsonian Magazine – September 20, 2015)

http://www.smithsonianmag.com/

Augustus Heinze dominated the copper fields of Montana, but his family’s scheming on Wall Street set off the Panic of 1907

Frederick Augustus Heinze was young, brash, charismatic and rich. He’d made millions off the copper mines of Butte, Montana, by the time he was 30, beating back every attempt by competitors to run him out of business. After turning down Standard Oil’s $15 million offer for his copper holdings, Heinze arrived in New York in 1907 with $25 million in cash, determined to join the likes of J. P. Morgan and John D. Rockefeller as a major player in the world of finance. By the end of the year, however, the Copper King would be ruined, and his scheme to corner the stock of the United Copper Co. would lead to one of the worst financial crises in American history—the Panic of 1907.

He was born in Brooklyn, New York, in 1869. His father, Otto Heinze, was a wealthy German immigrant, and young Augustus was educated in Germany before he returned to the United States to study at Columbia University’s School of Mines. An engineer by training, Heinze arrived in Montana after his father died, and with a $50,000 inheritance he developed a smelting process that enabled him to produce copper from very low-grade ore in native rock more than 1,500 feet below ground. He leased mines and worked for other mining companies until he was able, in 1895, to purchase the Rarus Mine in Butte, which proved to be one of Montana’s richest copper properties.

In a rapid ascent, Heinze established the Montana Ore Purchasing Co. and became one of the three “Copper Kings” of Butte, along with Gilded Age icons William Andrews Clark and Marcus Daly. Whip smart and devious, Heinze took advantage of the so-called apex law, a provision that allowed owners of a surface outcrop to mine it wherever it led, even if it went beneath land owned by someone else.

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Pebble mine backers aren’t ready to give up the gold – by Erica Martinson (Alaska Dispatch News – May 2, 2015)

http://www.adn.com/

WASHINGTON — Purveyors of the proposed Pebble mine aren’t done fighting federal, activist and state efforts to stop the massive gold and copper mine in its tracks.

This month, the Pebble Partnership will test its arguments that the Environmental Protection Agency jumped the gun in its efforts to stop the project and illegally colluded with the projects’ opponents before doing so. Meanwhile, the EPA’s independent inspector general is nearing completion of an investigation into the agency’s process.

Now it’s down to the lawyers, mining legal documents and unearthing years-old emails. Pebble CEO Tom Collier hopes a few legal wins will breathe new life into the project that many Alaskans consider down and out.

Since 2007, Pebble has spent several hundred million dollars in efforts to move forward on its mineral claims about 200 miles southwest of Anchorage, according to financial statements. Between 1988 and 2013, Pebble drilled 1,355 holes in the ground to test what lies beneath, and found gold, copper and molybdenum worth hundreds of billions of dollars.

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COLUMN-Iron ore reality check shows small, but significant change – by Clyde Russell (Reuters U.K. – May 4, 2015)

https://uk.finance.yahoo.com/

LAUNCESTON, Australia, May 4 (Reuters) – It’s time for a reality check all round in the iron ore market.

In recent weeks there has been a strong rally in prices, tentative signs that the headlong expansion of capacity will be reined in, calls for a producer cartel of some sorts and a small miner scrappily hanging on in the face of seemingly overwhelming adversity.

All of this makes for great drama and news headlines, but also should lead to questions and analysis as to whether anything has actually changed in the iron ore market.

The first reality check is that despite the near 27 percent rally in the spot Asian iron ore price between April 6 and April 27, the price remains extremely weak.

Iron ore ended last week at $56.20 a tonne, having retreated from the $59.20 reached on April 27, leaving the steel-making ingredient down 21 percent so far this year. It’s also roughly half of what it was this time last year and not much better than a quarter of the record $191.90 a tonne in February 2011.

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Black interests opting out of once-mighty [South Africa] ferrochrome business – by Martin Creamer (MiningWeekly.com – May 4, 2015)

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

JOHANNESBURG (miningweekly.com) – Black South African interests are giving South Africa’s once-mighty ferrochrome business the cold shoulder.

The value-adding pursuit, which puts six times more value into chrome and generates three times more jobs than mere raw chrome exportation, was last week ditched by Royal Bafokeng Holdings, the investment arm of the 300-strong Bafokeng community, which has for long been associated with chrome, and earlier by Patrice Motsepe’s African Rainbow Minerals (ARM), which first opted out of ferrochrome in Machadodorp with its Assmang partner and then chose to close the Machadodorp ferroalloys operation altogether and relocate to a new ferroalloys project in Malaysia.

Both steps represent a serious indictment of the government’s beneficiation policy, which is failing when it comes to chrome beneficiation on the scarcity of competitively priced electricity and a lack of incentivisation.

Ironically, China is making use of South Africa’s raw chrome exports to advance to a leadership position in ferrochrome – and is likely to advance further in coming quarters as it lowers power tariffs to stimulate energy-intensive operations and as South Africa enters the more expensive winter tariff electricity period.

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Gold: This chart should scare you – by Magnus Heystek (Mineweb.com – May 4, 2015)

http://www.mineweb.com/

How the death of an industry is felt by everyone.

I started my career in financial journalism in January 1980. The gold price had just hit a record $850 an ounce, the rand was trading at $1.35 – no mistake – and Johannesburg was literally the City of Gold.

At the time, South Africa was the world’s largest producer of gold (over 1,000 tonnes per annum), platinum and other precious metals. We were truly the centre of the mining universe and our politicians of the time couldn’t stop reminding the outside world how important we were to them….

The Johannesburg Stock Exchange (JSE) gold board had over 30 gold mining companies listed; and then there were the mining holding companies: the Anglos, Gencore, Rand Mines, JCI and many smaller ones.

The financial and investment community literally lived from gold-fix to gold-fix, still then relayed to the waiting world from London via telex messages, which came spattering out into the hands of the copy boys whose sole task was to tear a strip of paper with either good or bad news and run to whomever was paying his salary.

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Copper’s Win Streak Hits Seven Days (Wall Street Journal – May 3, 2015)

http://www.wsj.com/

The July contract for copper rose 1.5% on Friday

Copper prices have been running up their largest gains in years, with the market watching China for stimulus moves that might jump-start economic activity and renew demand for the industrial metal.

The most actively traded copper contract, for July delivery, ended higher for a seventh straight trading session Friday, its longest winning streak since December 2013, and has gained 9.9% over the stretch.

Copper is used in the manufacturing of everything from housing to personal electronics, and China’s rapid expansion and heavy investment in infrastructure has made it the world’s largest copper consumer, accounting for 40% of global demand. Copper is also viewed as a key barometer—and beneficiary—of economic growth, and any uptick in Chinese economic activity is viewed as a bullish driver for the market.

China has been aggressively maneuvering to keep its economy humming as it cools down from years of double-digit growth. That has lead to measures such as the one last month to cut the reserve-requirement ratio, allowing banks to lend more money and potentially spur growth.

On Friday, the April reading on China’s official purchasing managers index came in at 50.1, unchanged from March and slightly above market expectations of 50.0.

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U.S. to evaluate uranium mine cleanups on Navajo land -Justice Dept – by Sandra Maler (Reuters U.S. – May 1, 2015)

http://www.reuters.com/

WASHINGTON – (Reuters) – The U.S. government will put $13.2 million into an environmental trust to pay for evaluations of 16 abandoned uranium mines on land belonging to the Navajo Nation in Utah, Arizona and New Mexico, the Justice Department said on Friday.

The Justice Department said the agreement was part of its increased focus on environmental and health concerns in Indian country, “as well as the commitment of the Obama Administration to fairly resolve the historic grievances of American Indian tribes and build a healthier future for their people.”

The investigation of the sites is a necessary step before final cleanup decisions can be made, it said in a statement, adding the work would be subject to the approval of both the Navajo Nation and the Environmental Protection Agency.

“The site evaluations focus on the mines that pose the most significant hazards and will form a foundation for their final cleanup,” Assistant Attorney General John Cruden of the Justice Department’s Environment and Natural Resources Division said in the statement.

The Navajo Nation encompasses more than 27,000 square miles (70,000 square km) within Utah, New Mexico and Arizona.

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