International Media Resource Articles – Page 671

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

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.

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

May 4, 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.

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

May 4, 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.

Uranium Mines Dot Navajo Land, Neglected and Still Perilous – by Leslie MacMillan (New York Times – March 31, 2012)

May 4, 2015

http://www.nytimes.com/

CAMERON, Ariz. — In the summer of 2010, a Navajo cattle rancher named Larry Gordy stumbled upon an abandoned uranium mine in the middle of his grazing land and figured he had better call in the feds. Engineers from the Environmental Protection Agency arrived a few months later, Geiger counters in hand, and found radioactivity levels that buried the needles on their equipment.

The abandoned mine here, about 60 miles east of the Grand Canyon, joins the list of hundreds of such sites identified across the 27,000 square miles of Navajo territory in Arizona, Utah and New Mexico that are the legacy of shoddy mining practices and federal neglect. From the 1940s through the 1980s, the mines supplied critical materials to the nation’s nuclear weapons program.

For years, unsuspecting Navajos inhaled radioactive dust and drank contaminated well water. Many of them became sick with cancer and other diseases.

The radioactivity at the former mine is said to measure one million counts per minute, translating to a human dose that scientists say can lead directly to malignant tumors and other serious health damage, according to Lee Greer, a biologist at La Sierra University in Riverside, Calif.

Rio Tinto CEO says iron ore demand still strong in Asia – by Vicky Validakis (Australian Mining – May 4, 2015)

May 4, 2015

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

Rio Tinto CEO Sam Walsh says commodity markets must remain open as debate continues to rage over his company’s iron ore strategy.

Speaking in Seoul, Walsh said when the commodity cycle became tough, there was a temptation to turn inward. “But we must keep our minds and our markets open,” Walsh said.

“There is a temptation to be parochial, to believe that artificial and temporary barriers will alleviate the pain of awkward transition — when to the contrary, being parochial may delay necessary change or amplify the response required.

“We can see such requests and pleas for new barriers, from some in government and some in business.”

While Walsh did not tie his comments directly to iron ore or the company’s Pilbara mines, they came at the same time FMG’s chairman Andrew Forrest had another go at Rio for its plans to ramp up production.

With iron ore prices down to around $US57 a tonne, major miners BHP and Vale announced revised plans to limit some production.

Vale ups stakes in iron ore war – by Stephen Bartholomeusz (The Australian – May 1, 2015)

May 1, 2015

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

Of far greater consequence to Rio Tinto, BHP Billiton and Australia than Andrew Forrest’s complaints about their volume and cost-driven iron ore strategies is what the “other” major seaborne producer does in response to the crash in iron ore prices.

They might be encouraged by the commentary that accompanied Vale’s first-quarter results overnight.

The Brazilian group is the larger of the three major seaborne iron ore producers and is in the midst of an ambitious and expensive ($US17 billion) program to increase its production by 40 per cent, to almost 460 million tonnes a year from last year’s 327 million tonnes.

As with all the other producers, Vale is slashing costs to try to dampen the impact of the dive in iron ore prices and was able to proclaim that, for the first time in its history, cash costs were less than $US20 a tonne. A significant component of the $US13 a tonne reduction in cash costs was a 20 per cent, or $US4.50 a tonne, fall in freight costs.

Vale has traditionally been competitive with Rio (RIO) and BHP (BHP) in production costs and its ore is generally of higher quality. Its disadvantage has been distance from China and the impact that freight costs have had on its landed costs.

Vale Delays Possible Base-Metal Division IPO – by Paul Kiernan (Wall Street Journal – April 30, 2015)

May 1, 2015

http://www.wsj.com/

Nickel prices have fallen sharply from when the base-metal IPO idea was hatched

RIO DE JANEIRO—Brazilian mining firm Vale SA said Thursday it has pushed back the timeline of a possible initial public offering of its base-metals division after an expected rebound in nickel prices failed to materialize.

Vale had said in December that it was considering selling between 30% and 40% of the division on Toronto’s stock exchange around August. On Thursday, Chief Executive Murilo Ferreira said his management team’s new goal is to be ready to present a recommendation to Vale’s board of directors by the end of this year so that Vale might have the option of carrying out the transaction in 2016.

When they hatched the idea for the nickel IPO, Vale executives were predicting nickel prices would rise to around $21,000 per metric ton. Thanks to higher prices and production ramp-ups at a number of new or troubled facilities, they estimated the base-metals division would generate cash flows of between $4 billion and $6 billion this year.

Rio Signals Ready to Step Up on Dealmaking as Market Bottoms – by David Stringer (Bloomberg News – May 1, 2015)

May 1, 2015

http://www.bloomberg.com/

With the mining sector seen nearing the bottom of the cycle, Rio Tinto Group signaled to analysts it’s ready to resume mergers and acquisitions.

The company is prepared to look for a deal if it can secure the right asset at the correct valuation and win investor backing, Morgan Stanley said after an analysts’ meeting this week with Chief Financial Officer Chris Lynch.

An acquisition would be Rio’s first since 2012, according to data compiled by Bloomberg. As asset valuations get pushed lower, larger producers may be changing their attitude toward deals, according to Argo Investments Ltd.

“If they can buy tier-one assets at valuations that are closer to the bottom of the cycle, then that’s not a stupid thing to do,” said Jason Beddow, chief executive officer of Argo Investments, which manages about A$5 billion ($4 billion) in Australia and holds Rio shares.

The value of completed mining deals fell in 2014 to $51.3 billion, the lowest annual total in 10 years, according to data compiled by Bloomberg.

Barrick Gold hires BlackRock fund manager to help with turnround – by James Wilson (Financial Times – May 1, 2015)

May 1, 2015

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

Barrick Gold, the world’s largest gold producer by output, is hiring one of the UK mining sector’s best known fund managers as part of executive chairman John Thornton’s push to improve the struggling company.

Catherine Raw is joining Barrick’s leadership team from BlackRock, the asset manager, where she was co-head of its largest mining fund and highly critical of the performance and strategy of most of the world’s largest gold miners. The sector needed “to start seeing some really painful decisions being made”, Ms Raw said in December.

Barrick has shaken up its top ranks since Mr Thornton, a former Goldman Sachs banker, took over as executive chairman last year from founder Peter Munk. The Canadian miner has come under fire from investors after three consecutive years of net losses driven largely by writedowns on misfiring projects and acquisitions.

Mr Thornton — who pledged to review Barrick’s management pay policy after it was rejected at an advisory vote at this week’s annual shareholder meeting — has repeatedly said the company needs to do a better job of allocating investment to projects.

Church of England Dumps Coal as Fossil-Fuel Divestment Gains – by Thomas Biesheuvel (Bloomberg News – May 1, 2015)

May 1, 2015

http://www.bloomberg.com/

It appears coal mining isn’t God’s work. The Church of England will dump its holdings in coal and oil-sand producers and has ruled out backing companies with exposure to the most polluting fossil fuels, joining the movement that wants investors to help fight climate change.

The church’s investment arm said on Thursday that it will sell its 12 million-pound ($18.3 million) coal and tar sands investments. The church also vowed not to invest in any business that gets more than 10 percent of its revenue from the fuels, ruling out companies including Peabody Energy Corp. and Suncor Energy Inc.

The move by the church, created by Henry VIII’s split from the Roman Catholic Church in the 16th century and still headed by the Queen, is a victory for environmental activists seeking to stigmatize oil and coal companies in the way South Africa and tobacco companies have previously been targeted.

“Climate change is already a reality,” said the Reverend Richard Burridge, deputy chair of the church’s ethical investment advisory group. “The church has a moral responsibility to speak and act on both environmental stewardship and justice for the world’s poor who are most vulnerable to climate change.”

Chile: Copper bottomed – by Henry Sanderson (Financial Times – April 27, 2015)

May 1, 2015

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

Facing higher costs and lower prices, copper producers are being asked to improve their environmental record

Black flags hang from the doors of the one-storey red brick houses in Caimanes, a village that lies in the hills north of Santiago on the course of the Pupio stream. The banners are the most obvious sign of a bitter environmental protest against a nearby dam, which holds waste from a copper mine — one of Chile’s largest — high up in the Andes.

Last November, a group of up to 150 villagers took matters in to their own hands and blocked access to the dam for 75 days, as the mine ground out copper — used in everything from smartphones to wiring on construction sites in China.

The campaigners felt confident: the previous month Chile’s Supreme Court had ruled that the London-listed mining company Antofagasta — majority owned by the Luksics, one of the country’s richest families — should either demolish the dam or come up with a plan to allow water to flow into the town.

“We deserve respect, it should not just be the mining company doing what it wants,” says Juan Olivares, vice-president of the committee for the defence of Caimanes, as he plans the group’s next move in the small green-painted room that serves as its headquarters.

COLUMN-Gold equities may be better bet than physical metal – by Clyde Russell (Reuters U.S. – May 1, 2015)

May 1, 2015

http://www.reuters.com/

LAUNCESTON, Australia, May 1 (Reuters) – While the price of gold has meandered in a narrow range this year, gold equities have improved somewhat and an analysis of relative performance suggests they may have further to rally.

Spot gold ended Thursday’s trade at $1,183.85 an ounce, largely unchanged from $1,183.55 at the end of 2014, as the precious metal battles the competing influences of a firmer dollar and concerns over a Greek exit from the euro zone.

However, major gold miners have shown some improvement, with the S&P TSX Global Gold Index gaining 14 percent so far this year.

The Toronto Stock Exchange-based index groups together the world’s top gold producers, including No.1 Barrick Gold Corp , which is up 20.5 percent this year in U.S. dollar terms, and No.2 Newmont Mining Corp, which has gained 40 percent.

The No.3 producer, Johannesburg-listed AngloGold Ashanti , is up 32 percent since the start of the year in dollar terms. These are impressive gains for the top gold miners, especially given the steady price of the precious metal.

History of the Carlin Trend (Elko Daily Free Press – May 1, 2015)

May 1, 2015

http://elkodaily.com/

CARLIN — On May 4, 1965, with little fanfare, Newmont poured its first bar of gold from the Carlin Mine. The pomp and circumstance of the official commissioning of the mine would have to wait a few more weeks. That first bar marked the start of one of the largest and longest-lived mining districts in the world.

In summer 1961, geologists John Livermore and Alan Coope arrived in Carlin to visit the Blue Star mine and the Gold Quarry prospect. Livermore had recently heard a talk by U.S. Geological Survey geologist Ralph Roberts about an area in northern Eureka County that had the potential for hosting gold deposits.

The type of deposit they were searching for was similar to Getchell, Gold Acres and Bootstrap, deposits in which the gold was dispersed as microscopic particles that could not be found using a gold pan. After visiting and examining the local deposits, Livermore and Coope began exploring an area approximately 2¾ miles south of Blue Star on Popovich Hill. They postulated that gold would be found in the limestone rocks below a regional fault known as the Roberts Mountains Thrust.

Drilling on the project began in 1962 and on the third hole intersected 100 feet of mineralization averaging 1.03 ounces of gold per ton, marking the discovery of what would become the Carlin Mine. Drilling to outline the orebody progressed quickly and by the end of 1963 had identified 11 million tons of ore averaging 0.300 ounces of gold per ton, a grade sufficient for mining when gold was selling for $35 per ounce. Construction of the mine and mill began in 1964.

(Nevada Mining) Editorial: The Romance of Mining (Elko Daily Free Press – May 1, 2015)

May 1, 2015

http://elkodaily.com/

(This editorial from 50 years ago is being republished in honor of Newmont Mining Corp.’s celebration of 50 years on the Carlin Trend.)

Historically, Nevada has been a mining state. The great Comstock Lode, which helped to bring this state into the Union, Tonopah’s silver and Goldfield’s gold are part of the romantic heritage which has come down through the years. The great copper mines of Ely and Weed Heights have added to the lustre, to say nothing of the wealth of this state and the nation.

There have been numerous other finds in the state’s history leading to the building of mining towns, some passing into oblivion almost overnight. Mountain City, the great Rio Tinto copper mine, Pioche, Austin, Eureka and such other romantic names as Tuscarora, Cornucopia, the Divide near Tonopah, Gold Aces and many others have passed in review.

As Dr. John Hulse said in his recently written “The Nevada Adventure”, “Nevada was basically unwanted and unloved in those days (before mining). It was a barrier to a promised land, rather than an asset in itself. But this soon changed.”

Yes, it changed with Virginia City and the mining finds which followed throughout the state. James Finney, whose real name may have been James Fennimore, according to Dr. Hulse, was exploring the hills at the head of Gold Canyon in the winter of 1858-1859 when he found a mound, soon to be named Gold Hill.

Iron ore wars get personal as Rio tells Fortescue to get its house in order – by Michael Smith (Australian Financial Review – April 30, 2015)

May 1, 2015

http://www.afr.com/

Fortescue Metals founder Andrew Forrest has not been shy about telling Rio Tinto and BHP Billiton how to run their iron ore operations. Rio Tinto’s iron ore boss Andrew Harding is now offering Forrest some advice of his own: get your own house in order and leave us alone.

“The response to that is to fix your own business – not give business advice to others, and definitely not create an environment in Australia where this long-term strategy, which is good for the country, and good for the company, is cast into question,” Harding said in an interview with The Australian Financial Review.

The comments highlight the growing tension between the nation’s three big iron ore producers as the debate about how to manage supply and demand in a low-price environment spills over into the political arena.

It is not the first time Harding has defended the strategy to run the company’s mines at full capacity. But the campaign on both sides is intensifying and becoming more personal.

Harding has made it clear Rio Tinto is not going to blink. He doesn’t believe BHP Billiton has either, despite some contrary interpretations of last week’s decision to defer infrastructure spending at Port Hedland.