International Media Resource Articles – Page 680

Southern Copper Cancels Peru Project Over “Anti-Mining Terrorism” (Latin American Herald Tribune – March 30, 2015)

March 30, 2015

http://www.laht.com/index.asp

LIMA – Southern Copper Corp. has decided to cancel its Tia Maria copper project in southern Peru because of “anti-mining terrorism” in the area.

“After evaluating the complete politicization of the (Tambo) Valley and the lack of decisiveness by the relevant authorities … I’m here to announce the cancelation of the Tia Maria project and the total withdrawal of our investment from the Arequipa region,” Southern Copper’s spokesman in Peru, Julio Morriberon, told RPP Noticias radio.

The announcement will be made official by top management via the “relevant procedures before the relevant agencies,” he said. “We’ve done our best as a company and as people to carry out a project that was going to bring great benefits for Tambo and for Peru,” Morriberon said.

Southern Copper, a unit of Mexico City-based Grupo Mexico, had been planning to invest some $1.2 billion in the construction of Tia Maria, which has an estimated mine life of 18 years and had been projected to produce 120,000 metric tons of copper cathodes annually from the start of operations in 2016.

The project had been halted for two years after peasant protests in 2011 in the small town of Islay left three dead and 44 wounded, and as a result the Peruvian government did not award construction permits until the beginning of this year.

Coal Producers: Obama Royalty Reform May Shut Us Down – by Mark Drajem (Bloomberg News – March 25, 2015)

March 30, 2015

http://www.bloomberg.com/

(Bloomberg) — The Obama administration has proposed to change how it collects royalties on coal mined from federal land, a move that environmentalists hope, and the industry worries, will cut use of the fuel linked to climate change.

The Interior Department says the accounting change is needed to update rules adopted almost three decades ago, and streamline the program for companies such as Peabody Energy Corp. and Arch Coal Inc. And more changes are on the way.

“It’s time for an honest and open conversation about modernizing the federal coal program,” Interior Secretary Sally Jewell said in a speech last week to the Center for Strategic and International Studies in Washington. “How do we manage the program in a way that is consistent with our climate-change objectives?”

For industry, the broad effort is seen through the prism of their ongoing complaints that President Barack Obama is waging a “War on Coal.” Sales of federally owned coal from the Powder River Basin in Wyoming and Montana — the biggest source — topped 350 million tons last year, generating company revenues of almost $5 billion, government data showed.

The Interior Department wants to assess the royalty when mining companies sell the coal to an unaffiliated buyer, not when sales are made to related intermediaries.

Lusaka paying for its indecision – by Victor Kgomoeswana (Independent Online – March 29 2015)

March 30, 2015

http://www.iol.co.za/news

While Zambia see-saws over its mining tax regime, the DRC has overtaken it as a copper source, writes Victor Kgomoeswana.

Johannesburg – The African week went by pretty quickly for me, especially with the Monetary Policy Committee (MPC) of the SA Reserve Bank leaving interest rates unchanged. I need to pay off those debts, while the current rates last.

This MPC meeting happened while African finance ministers and a number of central bank governors met in Addis Ababa, continuing on that long road towards the alignment of Africa’s fiscal and monetary policy landscape.

Back in South Africa, Eskom gave us another grim reminder of the power crisis hovering above and leaving most people whispering in the dark, even as unions are calling for the axing of the chairman of the power utility.

Egypt also had to ration its electricity supply due to a fuel shortage. How’s that for Cape to Cairo? Our cricket team bowed out of the semi-finals, setting up their opponents for a final clash with Australia – although I would plead with my fellow South Africans to stop using the C-word this time around.

Teck, Antofagasta Said to Explore Copper Mining Merger – by Matthew Campbell and Dinesh Nair (Bloomberg News – March 30, 2015)

March 30, 2015

http://www.bloomberg.com/

(Bloomberg) — Teck Resources Ltd. and Antofagasta Plc are exploring a merger that would create one of the world’s largest copper producers, people with knowledge of the matter said.

The companies have held early-stage talks, and any agreement hinges on the approval of the families that control both miners, the people said, asking not to be identified discussing private information. There’s no guarantee they will reach a deal, which would be primarily stock based, the people said.

Teck shares in Toronto rose as much as 15 percent Monday, the most since April 2009 and were trading at C$20.03 ($15.78) as of 3:13 p.m. local time.

A combination of Teck, based in Vancouver, and London-based Antofagasta would be the first major mining transaction since an across-the-board slump in commodity prices hammered the industry. Both companies have extensive copper operations in Chile which could be combined by a merger, potentially reducing costs. Representatives for both companies declined to comment.

With a market value of about C$11.3 billion, Teck is Canada’s third-largest mining group after Goldcorp Inc. and Barrick Gold Corp.

The Iron Ore Bust into a Housing Boom – by Greg Canavan (Daily Reckoning Australia – March 30, 2015)

March 30, 2015

http://www.dailyreckoning.com.au/

Irony is thick on the ground this morning as we head into a shortened Easter trading week. Just as Sydney property prices go absolutely bonkers, the iron price crashes.

Of course, revenue from the great iron ore boom helped to fuel the housing bonfire, along with regular petrol douses from RBA boss Glenn Stevens. But now, with iron ore crashing, property prices continue to detach from reality. It’s a cheap money driven boom if there ever was one.

In case you missed it, the benchmark iron ore price finished trading on Friday down US$2.22 to US$53.14, a new low. It was another dose of irony that probably knocked the price lower.

Last week, Fortescue Metals [ASX:FMG] Chairman and major stakeholder Andrew Forrest implicitly called on iron ore miners to form a cartel to control the price (and save his company from a slow death). Rio Tinto [ASX:RIO] boss Sam Walsh replied with scorn, which the market interpreted to mean that Rio will continue to dig up as much red dirt as it can. Hence the price crack on Friday.

The comments from Forrest indicate just how much damage the iron ore bear market is having on marginal cost producers. Aussie juniors won’t survive this price rout. It’s just a matter of time before they fold.

Mining for tourists? A dubious economic savior in Appalachia – (Chattanooga Times Free Press – March 29, 2015)

March 30, 2015

http://www.timesfreepress.com/

Associated Press – SECO, Ky. (AP) – Mines built this company town. Could vines – the wine grapes growing on a former strip mine in the hills above – help to draw visitors here?

Jack and Sandra Looney sure hope so. Their Highland Winery – housed in the lovingly restored, mustard-yellow “company store” – pays tribute to coal-mining’s history here, as do their signature wines: Blood, Sweat and Tears.

“The Coal Miner’s Blood sells more than any of them,” Jack Looney says of the sweet red. He and his wife have converted the store’s second and third floors into a bed and breakfast. They’ve also bought and restored a couple dozen of the old coal company houses as rentals, and rooms fill up during their annual spring Miner’s Memorial Festival.

Seco, like so many Central Appalachian communities, owes its existence to coal – its very name an acronym for South East Coal Company. But as mining wanes, officials across the region are looking for something to replace the traditional jobs and revenues.

In some of the poorest, most remote counties, about the only alternative people can come up with is tourism – eco-, adventure, or, as with the Looneys, historical and cultural.

My turn: Mine development in British Columbia raises concerns – by Abe Tanha (The Juneau Empire – March 29, 2015)

March 30, 2015

http://juneauempire.com/

Abe Tanha is owner and operator of Hooked On Juneau, a locally operated fishing tour company.

As owner of a sportfishing business based in Juneau, I join a large group of Alaskans including Sens. Lisa Murkowski and Dan Sullivan, Rep. Don Young, 11 municipalities including CBJ and the Southeast Conference of Mayors, tribes, fishermen and tourism operators who are deeply concerned with the scale and speed of mine development in British Columbia. Thank you, Juneau Empire, for a thorough job documenting this issue for your readers.

Last week the Empire responded to a litany of outrageous claims from B.C.’s Minister of Energy and Mines, Bill Bennett, about the Mount Polley mine tailings dam failure and development in the transboundary region. Bennett’s remarks are a total mischaracterization of Alaskans’ concerns and the widespread call from Alaskans for International Joint Commission involvement.

As unprecedented as the Mount Polley catastrophe may have been, the tailings dam failed because of regulatory oversight. Bennett claimed government inspectors could not have detected the glacial silt layer; however, they did identify a plethora of issues related to poor design and maintenance of the dam. These went unaddressed by Imperial Metals.

Petrobras Nominates Vale CEO as Its Next Chairman – by Will Connors and Luciana Magalhaes (Wall Street Journal – March 27, 2015)

March 27, 2015

http://www.wsj.com/

Brazilian state-run oil company is in the midst of a widespread corruption scandal

RIO DE JANEIRO—Brazil’s government on Friday nominated the chief executive of mining giant Vale SA as the next board chairman of state-run oil firm Petroleo Brasileiro SA, disappointing those who were looking for sweeping changes at the oil company that has been devastated by a kickback-and-bribery scandal.

Murilo Ferreira’s nomination will be voted on at the next Petrobras shareholders meeting on April 29. If approved, as expected, he will succeed Guido Mantega, Brazil’s former finance minister, who has headed the Petrobras board since March 2010. The company on Thursday said that Luciano Coutinho, head of the country’s development bank, known as BNDES, will serve as interim chairman of Petrobras until next month’s board vote.

A career employee of Vale, which was state-owned until 1997, Mr. Ferreira is a trusted ally of President Dilma Rousseff. His appointment isn’t likely to shake up a board that has served as a rubber stamp for the policies of her ruling Worker’s Party, investors and analysts said.

Critics have faulted Ms. Rousseff for using the oil giant to advance her administration’s agenda, including forcing the company to subsidize fuel for consumers and do business with Brazilian suppliers, moves that have cost the oil giant billions.

A Word From The Editor-in-Chief, March 27, 2015 – by Michael Stutchbury (Australian Financial Review – March 28, 2015)

March 27, 2015

http://www.afr.com/

Andrew Forrest’s eye-popping call for the world’s big iron ore producers to drive the iron ore price back up by capping their production shows what crazy things the desperate can do. Twiggy even made his “national interest” call in Shanghai, among Chinese buyers of the iron ore dug up by his own Fortescue, Rio Tinto, BHP Billiton and Brazil’s Vale and just as he was about to meet Xi Jinping.

The Fortescue founder is a man of bold ambition and enthusiasm: creating the third force in Australian iron ore, enlisting the Pope to help end modern slavery, and pushing Tony Abbott to narrow indigenous disadvantage. He won’t end up behind bars for his latest big idea, but he is calling for what both Joe Hockey and ACCC chairman Rod Sims suggested would be an illegal producer cartel. As our Matthew Stevens asked: What was Forrest thinking?

Twiggy’s call is a spectacular sign of Australia’s big iron ore price squeeze. Forrest became a billionaire in the 2000s by creating Fortescue on the back of the China boom that drove the iron ore price from US$20 or so a tonne to $US180 a tonne. Now supply has belatedly responded to the increased demand, the price has hurtled back into the US$50s. That’s crunching Fortescue’s margins and forced it to keep producing more to keep its head above water.

In fact, in the past four years, Fortescue has boosted output more than Rio or BHP. But that’s just kept driving down the price towards Fortescue’s cost of production.

Posco Said to Be Backing Away From $12 Billion India Project – by Abhishek Shanker (Bloomberg News – March 27, 2015)

March 27, 2015

http://www.bloomberg.com/

(Bloomberg) — Posco is backing away from a planned $12 billion steel complex in India, which has been stalled by local disputes and lease issues since it was proposed a decade ago, people familiar with the development said.

South Korea’s biggest steelmaker has tried to get back the money it gave to government agencies in the eastern state of Odisha to secure some of the land, and for railway connections, according to three people and company letters seen by Bloomberg. Six of 13 employees at Posco’s Indian unit overseeing the project have also “voluntarily” resigned, spokesman I.G. Lee said in a text message.

“Still, we are on and waiting for further progress,” Lee said about the proposed steel complex. He isn’t aware of any letter from Posco seeking a refund, Lee said.

Posco’s Odisha project, the nation’s biggest foreign investment, has failed to take off since 2005 because of opposition from local farmers and the failure to secure iron ore mining leases. The steelmaker was able to overcome local resistance and get the state to acquire about 2,700 acres (1,093 hectares) of land for the first phase.

[Barrick Gold] Unprecedented sage grouse protection deal signed in Nevada – by Scott Sonner (Washington Times – March 26, 2015)

March 27, 2015

http://www.washingtontimes.com/

Associated Press – RENO, Nev. – An unprecedented attempt to protect sage grouse habitat across parts of more than 900 square miles of privately owned land in Nevada will begin under a deal Thursday involving the federal government, an environmental group and the world’s largest gold mining company.

The agreement comes as the U.S. Fish and Wildlife Service approaches a fall deadline for a decision on whether to protect the greater sage grouse, a bird roughly the size of a chicken that ranges across the West, under the Endangered Species Act.

Commercial operations, including mining companies and oil and gas producers, are entering into such deals in an effort to keep the bird off the threatened or endangered list because the classification would place new restrictions on their work.

The deal involves Barrick Gold Corp., The Nature Conservancy and the U.S. Interior Department’s Bureau of Land Management and Fish and Wildlife Service. It establishes a “conservation bank,” providing the mining firm credit for enhancing critical habitat, in exchange for flexibility in future operations. It aims to preserve and restore more habitat than is lost through development while at the same time providing Barrick with more certainty as it maps out new mining plans.

“This is the kind of creative, voluntary partnership that we need to help conserve the greater sage grouse, while sustaining important economic activities on western rangelands,” Interior Secretary Sally Jewell said.

COLUMN-Forrest’s iron ore cap “harebrained” or clever tactics? – by Clyde Russell (Reuters India – March 27, 2015)

March 27, 2015

http://in.reuters.com/

LAUNCESTON, Australia, March 27 (Reuters) – What’s the real thinking behind Andrew Forrest’s remarkable call for iron ore miners to cap production in order to boost prices?

It’s easy to dismiss the comment by the Fortescue Metals Group founder and chairman as “harebrained,” as did Sam Walsh, the chief executive of Rio Tinto, the world’s second-largest iron ore miner.

It’s possible that when Forrest told an audience on Tuesday in Shanghai that he was happy for iron ore miners to “cap our production right here and start acting like grown-ups”, he was merely having a thought-bubble moment.

But while Forrest, whose company ranks fourth in the world in iron ore output, has a reputation as a charming straight-shooter, it’s hard to imagine that he would be so careless as to float an idea that in all likelihood is illegal and would also bring scorn from his bigger rivals.

There is no doubt that debt-laden Fortescue has been hit harder than Rio Tinto or No.3 producer BHP Billiton by the collapse of iron ore prices, with the Asian spot price .IO62-CNI=SI marking a record low of $54.20 a tonne on Monday, before recovering slightly to $55.50 on Thursday.

COLUMN-Bauxite and the limits of resource nationalism – by Andy Home (Reuters U.S. – March 27, 2015)

March 27, 2015

http://www.reuters.com/

(Reuters) – It’s been over a year now since Indonesia imposed its ban on the export of unprocessed minerals. The aim of the January 2014 lock-down is to generate greater value for the country and its citizens by forcing operators to build processing plants and export value-added product not raw materials.

Other resource-rich countries, such as the Democratic Republic of Congo, are travelling the same road but Indonesia is way out in front.

The country’s high-stakes strategy, implemented in the face of considerable opposition from both its own mining sector and overseas buyers, does appear to be largely working.

At a practical level flows of nickel ore and bauxite to Chinese buyers have been halted. Indonesia’s mining ministry says there are now 11 nickel-processing projects under way, many of them backed by Chinese nickel and stainless steel producers.

The country’s two top copper miners, Freeport McMoRan and Newmont Indonesia, have been successfully cajoled into committing to a new copper smelter in return for keeping their mining rights.

UPDATE 2-Iron ore slump set to shrink China’s mining capacity – by David Stanway (Reuters U.S. – March 27, 2015)

March 27, 2015

http://www.reuters.com/

SHIJIAZHUANG, China, March 27 (Reuters) – A slide in iron ore prices is turning the screw on China’s fragmented mining sector, paving the way for closures and consolidation with three-quarters of the country’s mining capacity operating at a loss, industry officials said on Friday.

More mine closures in China, the biggest consumer of the steelmaking commodity, would increase its appetite for imported iron ore and help ease a global glut that has slashed prices by more than half in the past 12 months.

“I would like to thank the big four miners for driving prices down because it has given bigger domestic mines an opportunity and forced small miners to cut production,” Gao Yan, deputy general manager at the mining unit of Chinese steelmaker Angang Group, told an industry conference.

Top global producers Vale, Rio Tinto and BHP Billiton have boosted output despite falling prices, prompting No. 4 iron ore miner Fortescue Metals Group to propose limiting production. The commodity fell to $54.20 a tonne .IO62-CNI=SI this week, the lowest since records began in 2008, and Citigroup predicted prices will drop below $50.

Beijing to Shut All Major Coal Power Plants to Cut Pollution (Bloomberg News – March 23, 2015)

March 26, 2015

http://www.bloomberg.com/

(Bloomberg) — Beijing, where pollution averaged more than twice China’s national standard last year, will close the last of its four major coal-fired power plants next year.

The capital city will shutter China Huaneng Group Corp.’s 845-megawatt power plant in 2016, after last week closing plants owned by Guohua Electric Power Corp. and Beijing Energy Investment Holding Co., according to a statement Monday on the website of the city’s economic planning agency. A fourth major power plant, owned by China Datang Corp., was shut last year.

The facilities will be replaced by four gas-fired stations with capacity to supply 2.6 times more electricity than the coal plants.

The closures are part of a broader trend in China, which is the world’s biggest carbon emitter. Facing pressure at home and abroad, policy makers are racing to address the environmental damage seen as a byproduct of breakneck economic growth. Beijing plans to cut annual coal consumption by 13 million metric tons by 2017 from the 2012 level in a bid to slash the concentration of pollutants.

Shutting all the major coal power plants in the city, equivalent to reducing annual coal use by 9.2 million metric tons, is estimated to cut carbon emissions of about 30 million tons, said Tian Miao, a Beijing-based analyst at North Square Blue Oak Ltd., a London-based research company with a focus on China.