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ANALYSIS-South Africa’s platinum strike will hasten restructuring – by Ed Stoddard and Jan Harvey (Reuters Africa – April 8, 2014)

http://af.reuters.com/

JOHANNESBURG/LONDON, April 8 (Reuters) – As a strike by South African platinum miners enters its eleventh week, the likelihood that employers will bow to demands for better pay is receding and a drastic overhaul of the loss-making industry is looking more inevitable.

Faced with the tough bargaining stance of the Association of Mineworkers and Construction Union (AMCU), the companies appear increasingly likely to close or sell mines that are bleeding cash while they lie idle.

Before the strike began, around half of the country’s platinum shafts were losing money because of rising energy and labour costs and waning demand for the metal, used mainly in jewellery and in catalytic converters for cars.

To pacify AMCU, Anglo American Platinum, Impala Platinum and Lonmin would have to double entry-level pay over the next three years to 12,500 rand ($1,200) a month – a demand they flatly refuse. The industry has idled some production to shore up margins, but held back from tougher cuts for fear of a political backlash that could compromise its wider interests.

But the miners’ strike, the longest and most damaging in South Africa in decades, has now cost the industry over $1 billion in lost revenue and there is a growing sense that the companies have little to lose.

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Veolia Pushes Into Water Treatment at Mines Amid Tougher Rules – by Tara Patel (Bloomberg News – April 8, 2014)

http://www.bloomberg.com/

Veolia Environnement SA (VIE), Europe’s largest water utility, seeks to more than double sales to the mining industry to $2.1 billion by 2020 amid water scarcity and tougher environmental rules.

The added revenue would come from orders to treat water and waste from extraction industries as well as helping to boost energy savings at sites, the Paris-based utility said.

“The more the mining industry booms, the more mines are being located in areas where there are water shortages,” Chief Executive Officer Antoine Frerot said today at a press conference. Tougher environmental rules are also creating business for Veolia.

The CEO has sought to cut Veolia’s debt and narrow its global focus while at the same time targeting contracts with industry which can carry higher profit margins than municipal water agreements. The utility seeks to increase revenue and some measures of profit this year following a turnaround plan marked by asset sales and management changes.

“Water issues can be key, they can put projects on hold,” Christopher Howell, global director of mining and metals at Veolia, said today at the press conference. Mining companies are coming under increasing pressure from indigenous populations over water rights.

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REUTERS SUMMIT-Mining investor says Congo is cleaning up its act – by Peter Jones (Reuters India – April 8, 2014)

http://in.reuters.com/

(Reuters) – Democratic Republic of Congo has improved its business environment but plans to raise mining taxes could deter investors in a country where massive infrastructure challenges remain, the CEO of a major foreign miner said.

Pieter Deboutte, manager of the Fleurette company that holds Israeli billionaire Dan Gertler’s mining and oil interests in Congo, said Prime Minister Augustin Matata Ponyo had made progress in tackling corruption and improving government administration.

Congo has huge deposits of gold, diamonds, copper, cassiterite and coltan that attract investors from across the globe but has been unable to lift its 60 million people out of poverty due to mismanagement, graft and conflict in its east.

The country ranks 154th among 177 nations on Transparency International’s corruption perceptions index. Ponyo, who served for two years as finance minister before taking over as premier in 2012, has won praise from investors and multilateral lenders for curbing inflation and the national debt.

“Ponyo has done a good job introducing more strictness in government,” Deboutte told the Reuters Africa summit. “There is corruption everywhere – and of course it is here – but everything is professionalising now.”

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INTERVIEW-China’s economic problems not serious, miner Antofagasta says – by Alexandra Ulmer and Fabian Cambero (Reuters India – April 7, 2014)

http://in.reuters.com/

SANTIAGO, April 7 (Reuters) – China’s economic problems are minor and are unlikely to trigger a crisis in the world’s biggest metals consumer, the chief executive officer of Chilean miner Antofagasta Minerals Plc told Reuters on Monday.

Copper prices fell to 3-1/2-year lows in March after a bond default by a Chinese company aroused fears about credit problems in the country. Prices have since steadied, though investors remain wary of slowing growth rates in the Asian giant.

Mining industry veteran Diego Hernandez, who used to head Chilean state copper producer Codelco and base metals at BHP Billiton, brushed aside major fears about the health of the buyer of 40 percent of the world’s copper.

“We think the Chinese economy is fairly solid,” he said during an interview in his office in Chile, the world’s top producer of the red metal, as part of the CESCO/CRU copper conference. “It may have some problems, but they’re minor.”

Still, the copper market could tilt into a small surplus if new and expanded deposits come on line as promised, Hernandez said. Contributing to that would be the London-listed company’s own production, as first-quarter output was on target, Hernandez said.

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Greater tension could do systemic harm to Russian firms-Norilsk – by Silvia Antonioli (Reuters U.S. – April 4, 2014)

http://www.reuters.com/

LAUSANNE, Switzerland – (Reuters) – Any worsening of tension between Moscow and the West that leads to stiffer sanctions would do systemic damage to Russian companies by deterring investors and making borrowing more difficult, a Norilsk Nickel executive said.

Russia’s annexation of Ukraine’s Crimean peninsula has marked the biggest East-West crisis since the Cold War and prompted the United States and Europe to impose sanctions.

Norilsk Nickel, the world’s largest nickel and palladium miner, has not been hit by the political tension so far, but all Russian companies would suffer should the situation escalate, its deputy chief executive officer for government and investor relations said in an interview.

“The impact would be felt if the situation further aggravated and there would be some systemic implications for companies, like for example a decrease in the ratings…lack of interest from investors, an exodus of some of the investors from the shareholder base, tightening of the terms of financing,” Andrei Bougrov said.

“All this we do not see at the moment. But this is more of a systemic issue that may or may not evolve. One has to trust the politicians that they will be able to find a solution.”

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Throwing stones in a glass Dacha: The West’s metal vulnerabilities – by Christopher Ecclestone (Mineweb.com – April 4, 2014)

http://www.mineweb.com/

Christopher Ecclestone of Hallgarten & Company addresses supply issues the West faces with Russia as adversary.

LONDON – Some have accused the EU and U.S. of soft-pedaling on the Crimea/Ukraine issue. But might these economic powers think twice before stirring up too much of a ruckus? The EU is particularly vulnerable to Russia cutting off natural gas exports and the U.S. has to play nice with Russia to keep getting cheap uranium supplies.

According to the US Energy Administration, in 2011 the United States mined nine percent of the uranium consumed by its nuclear power plants. The remainder was imported, principally from Russia (50%), Canada, and Australia. As uranium bulls will ceaselessly inform you the supply situation is tight and if it wasn’t for those pesky Russians the price would be a lot higher.

We usually do not make common cause with the tin-foil-hatted but would beg to agree with the uranium bulls. It is a truism that the unwinding of the Soviet stockpiles have beggared the global uranium mining industry and that the great day will be when an end to this attrition is seen.

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Copper Titans Gather as Decade-High Glut Overshadows Earthquakes – by Matt Craze and Juan Pablo Spinetto (Bloomberg News – April 06, 2014)

http://www.businessweek.com/

The world’s strongest earthquake in a year and hundreds of aftershocks rattled the copper-rich Atacama Desert last week, forcing almost a million people to seek refuge from tsunamis. The copper market barely reacted.

The metal is down 0.6 percent in London since Anglo American Plc to Antofagasta Plc temporarily halted some operations after an 8.2-magnitude temblor struck on the evening of April 1. Investors’ indifference is explained by surging global output at a time of waning Chinese demand growth.

As tremors continue to shake northern mines, it will be the prospect of the biggest global glut since the so-called super-cycle began — and how miners are reacting by shelving expansions and shoring up balance sheets — that dominate discussion at the industry’s annual get-together in Santiago this week. Chile, the top producer, is opening three mines in a year, more than it has started in the past decade.

“Demand is not going to grow by the same margin, which is going to generate a significant surplus,” Alvaro Merino, head of research at Chilean mining society Sonami, said in an April 4 interview. “You are really going to see this increase in the second half of this year.”

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At South African Mine, It’s a Long, Long Way Down – by Christopher Torchia (Associated Press/ABC News – April 4, 2014)

http://abcnews.go.com/

For those who grumble about their daily commute, imagine this ride to work: clamber into an elevator cage and plummet 2.4 kilometers (1.5 miles) into the earth, so fast that ears pop from the changing air pressure. Then board a small railroad car that creaks and grinds the same distance to the outer reaches of a South African gold mine.

It gets humid down below. Sweat flows. For the unaccustomed, the din of drills and other machinery is disorienting. Travelers are weighed down by boots and a jumpsuit, a helmet with a mounted flashlight and a “self-rescuer,” a metal canister with a breathing tube and an oxygen supply in case something goes wrong.

Miners have a chain of command, but the extreme conditions are a kind of leveler.

“We’re all equal underground,” Gerard Pienaar, senior operations manager at South Deep mine, said on a recent tour of the flagship operation of Gold Fields Limited that provided a look at some of the conditions in South Africa’s mining industry that drives the continent’s biggest economy.

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Ghost towns haunt S.Africa’s strike-hit platinum belt – by Zandi Shabalala and John Mkhize (Reuters India – April 4, 2014)

http://in.reuters.com/

MARIKANA, South Africa, April 4 (Reuters) – Shad Mohammed’s electronics and household store in South Africa’s platinum belt has survived a series of mining strikes over the 14 years it has been serving customers in the dusty town of Marikana.

Yet with the latest stoppage now in its 10th week, he has sold just 10 phones instead of well over 100, and has had to branch out into deliveries to avoid giving up and going home to Pakistan, another statistic in a devastating industrial dispute. “Our business is totally dependent on the mine workers,” Mohammed, 38, said among shelves filled with cell phones, laptops and large pots. “If they don’t work we really suffer.”

Members of the Association of Mineworkers and Construction Union (AMCU) have downed tools at Lonmin, the main employer in the tough town of Marikana, and rivals Anglo American Platinum and Impala Platinum in a strike over wages, hitting 40 percent of global production.

The stoppage shows no sides of ending with the two sides still poles apart. AMCU wants a basic-entry level wage in three years of 12,500 rand ($1,200) a month, or annual hikes of around 30 percent, while the companies have offered increases of up to 9 percent and say they can afford no more.

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Feds reach $5.15B settlement over [Arizona] mining cleanup – by FELICIA FONSECA, ERIC TUCKER and DINA CAPPIELLO (Associated Press – April 04, 2014)

http://www.kltv.com/

FLAGSTAFF, Ariz. (AP) – For decades, uranium ore was mined from the Lukachukai Mountains of northeastern Arizona, providing Navajos with much-needed employment but leaving behind a legacy of death and disease on the reservation.

Uranium waste was thrown over the mountainside and carried by rain across the remote but scenic land used by hikers, anglers, medicine men and Navajo shepherds. The roughly 50 mine sites were eventually abandoned without cleaning up the contaminated waste.

The Navajo Nation now has its best chance yet to address what has been a source of heartache for families. The federal government announced Thursday that it reached a $5.15 billion settlement with Anadarko Petroleum Corp. for the cleanup of thousands of long-contaminated sites nationwide. About $1 billion will go to the 50 sites on the country’s largest American Indian reservation.

The settlement that resolves a legal battle over Tronox Inc., a spinoff of Kerr-McGee Corp., is the largest ever for environmental contamination. The bulk of the money – $4.4 billion – will pay for environmental cleanup and be used to settle claims stemming from the legacy contamination. Anadarko acquired Tronox in 2006.

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South Africa’s PIC Says Platinum Producers Should Control Prices – by Franz Wild and Janice Kew (Bloomberg News – April 3, 2014)

http://www.bloomberg.com/

South African platinum producers, which account for almost three quarters of world supply, should consider controlling output to improve prices, said the head of Africa’s biggest fund manager.

Anglo American Platinum Ltd. (AMS), known as Amplats, Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LMI), the world’s largest producers of the metal, need prices to climb to offset rising costs in an industry already beset by a “concerning” 11-week wage strike, said Elias Masilela, 49, the chief executive officer of the Pretoria-based Public Investment Corp., which manages 1.6 trillion rand ($150 billion) of South African government workers’ pensions.

“They may, as an industry, want to think about supply-demand conditions globally to influence the price,” Masilela, 49, said in an April 1 interview in Johannesburg. “South Africa is a major supplier of platinum, but remains a price-taker. There must be a way of balancing that out given it’s size.”

Masilela’s comments echo those by the governments of South Africa and Russia, which together hold about 80 percent of platinum group metal reserves. The countries plan to set up a production bloc resembling the Organization of Petroleum Exporting Countries, a cartel of the biggest oil-producing countries, they said in March last year.

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Strategic metal mining set to gain traction in Britain – by Harpreet Bhal (Reuters U.S. – April 2, 2014)

http://www.reuters.com/

LONDON, April 2 (Reuters) – Mining firms are looking favourably at Britain as a project destination with deposits of strategic metals leading a small mining revival following the launch of the country’s first new metal mine in 45 years.

The UK has deposits of metals such as tin – used in mobile phones, and tungsten – used to make drilling tools – as well as antimony and tellurium – used in the semiconductor industry – seen as having bullish long-term price outlooks as the appetite for electronic gadgets expands in the developing world.

The southwest counties of Cornwall and Devon experienced extensive mining in the 19th century when metals including copper, lead and tin were keenly sought, but fierce competition from lower cost operations in Latin America, Asia and Africa resulted in projects being shut and many sites abandoned.

While analysts said it is unlikely for Britain to experience another mining boom, the country is being eyed by some as a favourable destination due to competitive labour costs and tax rates, as well as deposits of strategic metals – a vital component in technology and industry.

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Despite Slowdown in China, Rio Tinto Stays Committed to Mining Plans – by Stanley Reed (New York Times – April 3, 2014)

http://www.nytimes.com/

LONDON — Rio Tinto, one of the world’s largest mining companies, has big plans for pulling even more iron ore from the earth.

It is spending billions of dollars to expand its existing operations in the Pilbara region of Western Australia, where driverless trucks the size of three-story buildings haul iron ore out of 15 mines. The trouble is, the buildup comes just as Rio Tinto’s single biggest customer, China, is losing economic steam and global demand for raw materials like iron ore and copper has been cooling.

On a single day in early March, the spot market price of iron ore — the main ingredient in steel — fell by more than 8 percent, and it is down 12 percent for the year. The price of copper, another essential raw material for industry, has recently hovered near four-year lows.

Though mining executives tend to take the long view of their markets, where price cycles are part of the game, some analysts say that this time the industry may be staring at a deeper set of problems from which miners like Rio Tinto could have trouble extracting themselves. Even as China’s decades-old appetite for steel may be abating, there is a potential iron-ore glut coming because so many mining companies increased production to chase prices that for years were alluringly high.

The stock fell by 13 percent from mid-February to mid-March and since then has regained only about half that ground, even as broader indexes have been on the rise.

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Miners in lock-down in Guinea as Ebola death toll hits 84 – by Saliou Samb and Stephanie Nebehay (Reuters India – April 3, 2014)

http://in.reuters.com/

CONAKRY/GENEVA – (Reuters) – Foreign mining firms have locked down operations in Guinea and pulled out some international staff, executives said on Wednesday, as the death toll from suspected cases of Ebola there hit 84.

The West African nation’s government said four new suspected cases of one of the world’s most lethal infectious diseases had been reported in the last 24 hours, bringing the total to 134.

Medical charity Medecins Sans Frontieres (MSF) has warned Guinea was facing an unprecedented epidemic of Ebola that would test weak health systems across West Africa.

Suspected cases of the disease – which has a fatality rate of up to 90 percent – have also been reported in neighboring Liberia and Sierra Leone, while Gambia said two people had been quarantined after arriving from southeastern Guinea.

The epicentre of Guinea’s two-month old outbreak has been in the southeast, close to its main iron ore reserves. The country is also the world’s top exporter of bauxite, the raw material used in aluminum production, and has rich deposits of gold.

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On Canada’s upstart exchange: A rose by any other name… – by Christopher Ecclestone (Mineweb.com – April 2, 2014)

http://www.mineweb.com/

Here Christopher Ecclestone of Hallgarten and Company weighs in the chances the TSX Venture’s chief Canadian competitor gains appeal.

LONDON – Circumstances brought us, over the last month, to ponder the Canadian Securities Exchange (CSE) for a number of reasons. Not having focused before on the alphabet soup of alternative markets in that country, it came as a bit of a surprise to see that the entity that was known until recently as the CNSX had not started to lift its game and seriously challenge the dominance of the now bank-owned TMX combine.

The main motor for this change was the acquisition of 50% of the equity of the CNSX by Ned Goodman, one of the doyens of the Canadian mining investment scene and owner of the mighty Dundee group.

There was much bewailing in 2013 that the old spirit of the Vancouver Stock Exchange had been desexed by the merger with the TSX (though no-one bewailed the demise of the Montreal Exchange). From what we can gather Goodman wants to harvest some of this dissatisfaction and is targeting companies fed up with the TSXV and encouraging them to move the way of the CSE.

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