Nickel’s Waning Price Boom Leaves BHP With Unwanted Mines – by David Stringer (November 12, 2014)

http://www.bloomberg.com/

The failure to find a buyer for its Australian nickel business has left BHP Billiton Ltd. (BHP) with unwanted smelters and pits after the collapse of a price boom.

The metal reached a two-year high on May 13, a day before the world’s biggest miner outlined a plan to sell all or part of the unit. Since then, the price has declined 27 percent. Nickel West, which includes mines, concentrators, the Kalgoorlie smelter and Kwinana refinery, didn’t attract a suitable bid, the company said today in a statement.

While Glencore Plc (GLEN) Chief Executive Officer Ivan Glasenberg said earlier his company planned to examine Nickel West and would be “kicking its tires,” no acceptable offers were made, BHP said.

The biggest miners have found some units more difficult to divest as they trim portfolios amid lower commodity prices. Rio Tinto Group (RIO), the second-largest, halted work last year to try and sell its diamond unit after failing to find a buyer.

BHP said the nickel unit will remain within the company’s main portfolio, after CEO Andrew Mackenzie signaled it wouldn’t be included in a planned spinoff next year of smaller assets. The division doesn’t fit with either BHP’s core businesses, or operations, which will form the proposed new company, he said in August.

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As China demand slows, Indian iron ore imports surge to record – by Manolo Serapio Jr (Reuters India – November 11, 2014)

http://in.reuters.com/

SINGAPORE, Nov 11 (Reuters) – India’s iron ore imports jumped to a record 5 million tonnes in April-October, industry data showed, as a deepening shortage at home forces steelmakers to turn overseas for the raw material.

Gathering momentum in Indian imports should absorb some of the global surplus of iron ore and help stabilise prices that have been hammered by slowing demand from top buyer China.

But analysts warned that shipments to India, a country that holds vast reserves of iron ore and which was once the world’s No. 3 supplier, would not wholly make up for the drop in Chinese appetite or fuel a sharp rebound in global prices from their lowest since 2009.

India imported 5.06 million tonnes of iron ore in the first seven months of the fiscal year ending in October, according to data emailed to Reuters by industry consultancy SteelMint. The firm tracked shipments from 17 major ports.

Data collected separately by consultancy OreTeam puts April-October imports at 4.9 million tonnes. Official government data only covers April-August, with imports totalling 2 million tonnes.

Mining curbs due to court action against illegal mining have constricted iron ore supply in India.

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No strong U.S. mining policy trends evident in 2014 General Election – by Dorothy Kosich (Mineweb.com – November 10, 2014)

 http://www.mineweb.com/

Perhaps, the Election vote demonstrates a lack of confidence among Alaska voters regarding the viability of the Pebble Project.

RENO (MINEWEB) – Across the United States, voters not only generated a Republican tsunami which solidified GOP control of both houses of the U.S. Congress, but cast their votes on 146 ballot issues last Tuesday, including two-mining specific initiatives in Alaska and Nevada.

“The results of the 2014 midterm election highlight opportunities for advancing important issues for the next election cycle—even if elected officials are unable or unwilling to act,” said the Ballot Initiative Strategy Center.

So, what lurked in the hearts and minds of U.S. voters when it came to mining-related ballot issues in the 2014 campaign?

This reporter, among many other voters, expected that Nevada voters would overwhelmingly vote in favor of State Question No. 2, which would have amended the Nevada Constitution to remove the cap on the taxations of minerals and other requirements relating to the taxation of mines, mining claims and minerals.

For an election campaign teeming with all kinds of political ads revolving around Nevada candidates and ballot issues, the lack of any advertising related to the measure was astounding.

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LBMA-Shaken gold bulls learn to accept ‘new normal’ – by Clara Denina (Reuters U.S. – November 11, 2014)

http://www.reuters.com/

LIMA – Nov 11 (Reuters) – Blinking from sweeping reform on price benchmarks, even the most die-hard gold enthusiasts accepted the market’s glory days had faded for now, as the bullion industry’s annual conference agreed prices would nurse losses over the next year.

Gold, which hit a four-year low of $1,131.85 an ounce last week, was expected to stabilise around $1,200 an ounce by October 2015, some of the 400 delegates at the London Bullion Market Association annual conference in Lima, Peru, forecast.

Spot gold has shed around five percent this year, in the wake of last year’s 28-percent tumble that halted a 12-year rally. It is currently trading at around $1,170.

“The question is not anymore whether gold prices can rise, but how long they will languish at current levels,” one banking delegate said.

Dollar strength, boosted by the end of the Federal Reserve’s monthly bond purchase program, confidence in the U.S. economy and expectations that interest rates will be raised, are seen dictating the metal’s trajectory in coming months.

“The most savvy investors have already moved away from gold at this point, there is not much interest,” Bank of Scotia-Mocatta managing director Sunil Kashyap said.

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Nickel West bids fail to find magic number – by Nick Evans (The West Australian – November 12, 2014)

https://au.news.yahoo.com/thewest/

BHP Billiton has shelved the $800 million sale of Nickel West after bids for the struggling unit failed to meet its price expectations.

It remains unclear what the mining giant now plans to do with a business that employs about 1800 people across its mines, concentrators, nickel smelter and refinery.

BHP would not comment yesterday. Chief executive Andrew Mac- kenzie has made clear he does not want to keep the unit, which is part of the proposed NewCo spin-off that will house second-tier assets, including Worsley alumina.

Mr Mackenzie said three months ago that Nickel West was “neither a good fit with BHP Billiton nor with NewCo” and the best outcome was for it to be owned by an operator “much more committed to the nickel business”.

Industry sources said no final bids received over the past fortnight came close to the $500 million to $800 million valuation BHP is said to have initially put on Nickel West.

The failure of suitors to see sufficient value in the business came despite talk that BHP had dramatically revised its price expectations as the sales process dragged on.

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Book review: John Grisham’s ‘Gray Mountain’ is a searing look at Big Coal – by Patrick Anderson (Washington Post – October 19, 2014)

http://www.washingtonpost.com/

At the start of “Gray Mountain,” John Grisham’s angry and important new novel, Samantha Kofer — age 29, Washington native, graduate of Georgetown and Columbia Law — is a third-year associate at a huge New York law firm. She works 100 hours a week, doing boring chores that she hates, but she’s earning $180,000 a year and expects to be a $2 million-a-year partner by age 35.

Or she did expect that, until September 2008, when the economy tanked and panicked law firms began ridding themselves of associates and partners. We meet Samantha at the moment — “day ten after the fall of Lehman Brothers” — when the ax falls for her, with only one consolation offered. If laid-off associates will agree to intern with a nonprofit agency, they can keep their health benefits and will be considered for rehiring if prosperity returns. Thus it is that Samantha finds herself at the Mountain Legal Aid Clinic in tiny Brady, Va., in the heart of Appalachia.

That opening scene, wherein a world of privilege abruptly vanishes for astonished young people who have known only success, is startling, but no more than Grisham’s portrait of the world of poverty and injustice that Samantha soon enters. The author does justice to the physical beauty of Appalachia and to the decency of most of its people, but his real subject is the suffering inflicted on those people by mining companies and politicians who pander to them.

Samantha’s new boss, Mattie Wyatt, has kept the Mountain Legal Aid Clinic alive for 26 years. The first case she assigns to Samantha is that of a woman who needs protection from a husband who deals in crystal meth and beats her.

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China commodity imports don’t fit soft economic narrative – by Clyde Russell (Reuters U.S. – November 10, 2014)

http://www.reuters.com/

LAUNCESTON, Australia – (Reuters) – It’s becoming increasingly hard to make Chinese commodity import data fit with the prevailing narrative of a softening in the world’s second-biggest economy.

Trade figures released Nov. 8 showed ongoing strength across a broad spectrum of commodity imports, with the only consistent weak spot this year being coal.

October iron ore imports may have slipped 6.3 percent from the previous month’s high to 79.39 million tonnes, but they are still up 16.5 percent in the first 10 months of the year over the same period in 2013, on track for the strongest annual growth since 2009.

Unwrought copper imports gained 2.6 percent from September, and are 9.3 percent up in the first 10 months of 2014, while imports of copper ores and concentrates have jumped 17.2 percent so far this year.

Crude oil showed a 15.5 percent decline on a barrels per day (bpd) basis from September, dropping to 5.67 million bpd in October, but total imports have gained 9.2 percent in the first 10 months of the year over the same period in 2013.

Only coal looks as anemic as many commentators suggest the overall Chinese economy is, with imports dropping 4.9 percent in October from September, taking the year-to-date decline to 7.7 percent.

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New tech-dependent nations desperate for non-Chinese REE sources – by Dorothy Kosich (Mineweb.com – November 11, 2014)

http://www.mineweb.com/

In recent years, Chinese production has accounted for about 95% of the REE global market.

RENO (MINEWEB) – The U.S. Geological Survey has released a report, which supports scientific research to determine where undiscovered/undeveloped resources of rare-earth elements may occur, as well as trends in the supply and demand of rare-earth elements domestically and internationally.

Because of the many important uses of REEs, nations dependent on new technologies, such as Japan, the United States and members of the European Union, which now must rely on Chinese REE exports, are encouraging discoveries of economic REE deposits and bringing them into production, says the Geological Survey.

“Most REEs are not as rare as the group’s name suggests,” says the new report, The Rare Earth Elements—Vital to Modern Technologies and Lifestyles. “Cerium is the most abundant REE, and is more common in the Earth’s crust than copper or lead.”

“All of the REEs, except promethium, are more abundant on average in the Earth’s crust than silver, gold, or platinum. However, concentrated and economically minable deposits of REEs are unusual,” according to the Geological Survey.

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The real story of US coal: inside the world’s biggest coalmine – by Suzanne Goldenberg (The Guardian – November 10, 2014)

http://www.theguardian.com/uk

In the world’s biggest coalmine, even a 400 tonne truck looks like a toy. Everything about the scale of Peabody Energy’s operations in the Powder River Basin of Wyoming is big and the mines are only going to get bigger – despite new warnings from the United Nations on the dangerous burning of fossil fuels, despite Barack Obama’s promises to fight climate change, and despite reports that coal is in its death throes.

At the east pit of Peabody’s North Antelope Rochelle mine, the layer of coal takes up 60ft of a 250ft trough in the earth, and runs in an interrupted black stripe for 50 miles.

With those vast, easy-to-reach deposits, Powder River has overtaken West Virginia and Kentucky as the big coalmining territory. The pro-coal Republicans’ takeover of Congress in the mid-term elections also favours Powder River.

“You’re looking at the world’s largest mine,” said Scott Durgin, senior vice-president for Peabody’s operations in the Powder River Basin, watching the giant machinery at work. “This is one of the biggest seams you will ever see. This particular shovel is one of the largest shovels you can buy, and that is the largest truck you can buy.”

By Durgin’s rough estimate, the mine occupies 100 square miles of high treeless prairie, about the same size as Washington DC. It contains an estimated three billion tonnes of coal reserves. It would take Peabody 25 or 30 years to mine it all.

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Iron ore and the dangers of living by the sword – by Andy Home (Reuters U.S. – November 11, 2014)

http://www.reuters.com/

LONDON – (Reuters) – The price of spot iron ore has sunk to $75.50 per ton this week, its lowest level since 2009. The scale of the price collapse has been breath-taking. Iron ore has dropped by over 35 percent since the start of the year, a significantly worse performance than any other industrial metal.

But what’s really shocking is that the price is now at a level that until recently was collectively deemed impossibly low. It was only in April that José Carlos Martins, executive officer of ferrous and strategy at Vale, the world’s largest producer of iron ore, told analysts that “one thing is for sure, the price will not go below $110 on a sustainable basis”.

This was not irrational producer exuberance. Martins was only voicing the prevailing consensus view when he went on to argue that “we have many times seen the price going below this level but recovering very fast”. Well, here we are with the price trading not just below $110 but a lot lower still. And sustainably so.

That tells you that something has gone very wrong with the iron ore narrative. This market is in a place it was not supposed to be.

And while big producers such as Vale, Rio Tinto and BHP Billiton are sticking to that narrative, they are now facing the unpredictable consequences of a pricing war they collectively started.

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Gina Rinehart children seek profits from iron ore projects including Roy Hill and Hope Downs – by Louise Hall (Sydney Morning Herald – November 11, 2014)

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

Gina Rinehart’s two estranged children are seeking to claw back profits from the mining magnate’s major iron ore projects which they say are rightfully theirs.

But lawyers for Mrs Rinehart, Australia’s richest person, claim John Hancock and Bianca Rinehart’s latest legal action in their long-running family feud should not be allowed to go ahead because it is an abuse of process.

In an urgent hearing in the Federal Court on Tuesday, lawyers for Mrs Rinehart and her flagship company, Hancock Prospecting, asked Justice Peter Jacobson to suppress details of the childrens’ allegations of fraudulent concealment and deceptive conduct because any publicity could affect the US$10 billion ($11.6 billion) Roy Hill iron ore mining project.

The barrister for Mr Hancock and Bianca Rinehart, Christopher Withers, told the court his clients were seeking a constructive trust and an account of profits of four mining tenements, including Roy Hill and Hope Downs.

John Sheahan QC, for Hancock Prospecting, asked the court to suppress the case until he could apply for a stay on the grounds it was an abuse of process.

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PRECIOUS-Gold falls over 2 pct as dollar rises; open interest eyed – by Frank Tang and Jan Harvey (Reuters U.S. – November 10, 2014)

http://www.reuters.com/

NEW YORK/LONDON, Nov 10 (Reuters) – Gold fell over 2 percent on Monday as the dollar rose, nearly wiping out its previous session’s rally, but signs of renewed buying interest in the U.S. futures market could underpin prices, traders said.

A combination of oil futures tumble and higher U.S. stock markets also weighed down on the yellow metal’s appeal as a safe haven.

On Friday, it rallied almost 3 percent after U.S. payrolls data marginally missed expectations, sending the dollar lower. While most analysts had cited short covering for Friday’s gains, exchange data suggested speculators might have increased new bullish bets in the gold futures market.

CME’s latest data showed COMEX open interest on Friday unexpectedly climbed about 16,000 lots, or 4 percent, to 434,295 lots, a 15-month high. “Some people interpret that as new longs have decided to enter the market,” said Paul Sacks, principal and chief investment officer at Aurum Options Strategies in New York.

Improved physical demand at lower prices and gold’s holding support at its key 38-percent Fibonacci retracement level should also underpin bullion prices, Sacks said.

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Mining companies, investors steer through rising tide of water risks – by Dorothy Kosich (Mineweb.com – November 10, 2014)

http://www.mineweb.com/

573 financial institutions with assets of US$60 trillion are concerned about water risks, including mining corporations.

RENO (MINEWEB) – More than 70% of the western U.S. has been hit by drought, while China has been suffering from a national shortage of water and energy resources, prompting plans to develop 172 major water projects by 2020, says Paul Simpson of the CDP research firm working for institutional investors.

A survey by CDP of the world’s largest listed companies finds an increasing number of corporate executives say water is or soon will become a restraint on their corporate growth. In the CDP Global Water Report 2014, more than two-thirds of the Global 500 companies reported substantive water risks, “therefore investing to conserve, manage or obtain water has become crucial for some sectors,” said Simpson.

For instance, BHP Billiton has invested nearly US$2 billion “in a desalination plant in Chile to ensure adequate water is available for its desert mining operation,”’ he noted.

“Competition for scarce water resources is leading to business disruption, brand damage and the loss of the license to operate. A lack of water, or insufficient water of the right quality, can cut or even halt production,” observed the survey. “This is of growing concern to institutional investors as evidenced by investors’ support for CDP’s water programs.”

573 financial institutions with assets of US$60 trillion were signatories to the CDP 2013 water questionnaire dated Feb. 1, 2014.

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1,500 Tons of Gold on the Line in Swiss Vote to Buy Back Bullion – by Nicholas Larkin and Catherine Bosley (Bloomberg News – November 5, 2014)

http://www.bloomberg.com/

There are people in Switzerland who resent that the country sold away much of its gold last decade. They may be a splinter group of Swiss politics, but they’re a persistent bunch.

And if they get their way in a referendum this month, these voters will make their presence known to gold traders around the world.

The proposal from the “Save Our Swiss Gold” proponents is simple: Force the central bank to build its bullion position up to at least 20 percent of total assets from 8 percent today. Holding 522 billion Swiss francs ($544 billion) of assets in its coffers, the Swiss National Bank would have to buy at least 1,500 tons of gold, costing about $56.3 billion at current prices, to get to the required threshold by 2019.

Those purchases, equal to about 7 percent of annual global demand, would trigger an 18 percent rally, giving a lift to gold bulls who’ve suffered 32 percent losses in the past two years, Bank of America Corp. estimates. With polls showing voters split before the Nov. 30 referendum, the SNB and national government are warning that such a move could undermine efforts to prevent the franc from surging against the euro and erode the bank’s annual dividend distribution to regional governments.

“It would have a major impact if it passes,” said Joni Teves, an analyst at UBS AG in London. “If they do launch a buying program, it would have effectively a constant bid in the market.”

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‘Mining bill shows us where we stand’ – by Chris Barron (Business Day Live – November 9, 2014)

http://www.bdlive.co.za/

HOW ironic that the executive director of Anglo American South Africa, who is also the vice president of the Chamber of Mines of South Africa, Khanyisile Kweyama, should be declared Africa’s most influential woman in mining — at a time when her firm’s South African interests are dwindling and the local mining industry is becoming less influential by the day.

The accolade was bestowed on her by CEO Communications, which owns CEO Magazine. Kweyama, 49, is not sure she agrees about the decline in mining. But the industry she leads contributes just 4.9% of South Africa’s GDP, down from 21% in 1970 and 6% just three years ago. It is 64th out of 112 global mining jurisdictions.

“Even if it is declining in South Africa, relative to the rest of the continent South Africa is still a large mining jurisdiction,” she says.

But South Africa’s prestige and influence as a mining destination in Africa is slipping. It is now only the eighth most important mining country on the continent, out of 16. “That is worrying,” Kweyama says.

To what extent does the local industry have itself to blame for this, and to what extent is it the result of government policy?

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