International Media Resource Articles – Page 746

Minnesota’s Worst Mining Disaster – by Angie Riebe (Mesabi Daily News – February 27, 2014)

February 28, 2014

http://www.grandrapidsmn.com/

Horrific history at Milford Mine

Feb. 5, 1924. A day of history for Minnesota. A day of heartache and heroism for young miner named Frank Hrvatin Jr. It was a day like most others at the Milford Mine, two miles north of Crosby in Crow Wing County.

Miners were laboring underground on the 175-foot and 135-foot levels of the 200-foot-deep manganese mine, owned by George H. Crosby. Frank Jr., and his dad, Frank Sr., were both hard at work that afternoon — the elder Hrvatin performing his duties as a blaster, the son laboring aside his veteran partner, Harry Hosford.

The miners had blasted an underground shaft near the adjacent Foley Lake, and Frank had just dumped ore down a transfer chute, when a sudden gust of wind hit him. It was rather strange, he thought.

But he had little time to consider it further, as rushing water appeared on the level below. “Look at the water, Harry!” Frank shouted to his partner. “Oh, my God! For God’s sake run!” replied Harry. “The whole lake has come in!” Harry’s observations proved correct. The boggy water from Foley Lake roared into the mine, filling it in no time to within 15 feet of the surface.

UPDATE 3-Vale vows spending austerity as metals price outlook improves – by Jeb Blount and Guillermo Parra-Bernal (Reuters U.S. – February 28, 2014)

February 28, 2014

http://www.reuters.com/

RIO DE JANEIRO/SAO PAULO Feb 27 (Reuters) – Vale SA , the world’s largest iron ore producer, will continue reining in costs this year even as the outlook for prices and sales volumes is improving, its chief executive officer said on Thursday.

“We plan to continue with austerity,” Murilo Ferreira, the company’s CEO told investors at a conference call to discuss fourth-quarter earnings.

The company will also continue efforts to sell underperforming units and control investments as it sharpens its business focus on iron ore, responsible for about three-quarters of revenue and nearly all of its profit.

His remarks come as Vale reported a net loss of $6.45 billion in the quarter, its largest since Brazil’s government sold control to investors in 1997 and more than twice the shortfall of the year-earlier period. The loss was due to non-recurring events such as a one-time income tax settlement and the write-off of an abandoned potash project in Argentina.

U.S. Navy eyes greater presence in Arctic – by Andrea Shalal (Reuters India – February 28, 2014)

February 28, 2014

http://in.reuters.com/

WASHINGTON – (Reuters) – The U.S. Navy is mapping out how to expand its presence in the Arctic beginning about 2020, given signs that the region’s once permanent ice cover is melting faster than expected, which is likely to trigger more traffic, fishing and resource mining.

“The Arctic is all about operating forward and being ready. We don’t think we’re going to have to do war-fighting up there, but we have to be ready,” said Rear Admiral Jonathan White, the Navy’s top oceanographer and navigator, and director of the Navy’s climate change task force.

“We don’t want to have a demand for the Navy to operate up there, and have to say, ‘Sorry, we can’t go,'” he said.

The Navy this week released an “aggressive” update to its 2009 Arctic plan after a detailed analysis of data from a variety of sources showed that seasonal ice is disappearing faster than had been expected even three years ago.

The document said the Bering Strait was expected to see open water conditions about 160 days a year by 2020, with the deep ocean routes of the Transpolar transit route forecast to be open for up to 45 days annually by 2025.

Vale Rallies as Chinese-Led Iron Ore Demand Boosts Earnings – by Juan Pablo Spinetto (Bloomberg News – February 27, 2014)

February 27, 2014

http://www.bloomberg.com/

Vale SA (VALE), the world’s largest iron-ore producer, rallied the most in three weeks after fourth-quarter earnings before taxes and other items beat estimates on rising prices for the steel-making material.

Vale rose as much as 2.7 percent to 29.81 reais in Sao Paulo today, the most intraday since Feb. 6, before closing at 29.31 reais. The gain pared its loss this year to 10 percent. The benchmark Ibovespa index of Brazilian shares rose 2.2 percent.

The world’s third-largest mining company is increasing cash generation after Asian-led demand pushed up average iron-ore prices 12 percent in the fourth quarter. While iron ore declined this quarter because of rising supplies and monetary constraints in China, it will remain at profitable levels for Vale for a sustained period of time, Executive Director for Ferrous and Strategy Jose Carlos Martins said.

“The price will continue to be very favorable and very profitable for Vale,” Martins told analysts on an earnings conference call today. “There is a very strong resistance in price in the range of local Chinese iron-ore costs.”

Dream of U.S. Oil Independence Slams Against Shale Costs – by Asjylyn Loder (Bloomberg News – February 26, 2014)

February 27, 2014

http://www.bloomberg.com/

The path toward U.S. energy independence, made possible by a boom in shale oil, will be much harder than it seems.

Just a few of the roadblocks: Independent producers will spend $1.50 drilling this year for every dollar they get back. Shale output drops faster than production from conventional methods. It will take 2,500 new wells a year just to sustain output of 1 million barrels a day in North Dakota’s Bakken shale, according to the Paris-based International Energy Agency. Iraq could do the same with 60.

Consider Sanchez Energy Corp. The Houston-based company plans to spend as much as $600 million this year, almost double its estimated 2013 revenue, on the Eagle Ford shale formation in south Texas, which along with North Dakota is one of the hotbeds of a drilling frenzy that’s pushed U.S. crude output to the highest in almost 26 years. Its Sante North 1H oil well pumped five times more water than crude, Sanchez Energy said in a Feb. 17 regulatory filing. Shares sank 7 percent.

“We are beginning to live in a different world where getting more oil takes more energy, more effort and will be more expensive,” said Tad Patzek, chairman of the Department of Petroleum and Geosystems Engineering at the University of Texas at Austin.

COLUMN-Asia utilities in dicey bet on cheap, low-rank Indonesia coal – by Clyde Russell (Reuters India – February 27, 2014)

February 27, 2014

http://in.reuters.com/

Clyde Russell is a Reuters market analyst. The views expressed are his own.

SINGAPORE, Feb 27 (Reuters) – Many power utilities in Asia appear to be making what seems like an increasingly risky bet: that poorer quality coal from Indonesia will remain cheap and plentiful.

Generators from India to Southeast Asia and China are building or planning new coal-fired units designed to run on low-rank, sub-bituminous coal from Indonesia. Such coal has been growing in supply and currently trades at a discount of 24 percent to higher quality bituminous coal from rival supplier Australia.

But two factors are calling into the question the wisdom of building long-term projects reliant on low-rank Indonesian coal.

The first is that the Indonesian government is planning new rules and taxes designed to increase its revenue from coal mining, and the authorities appear not to mind if the result of these policies is a sharp reduction in exports.

UPDATE 2-Vale quarterly loss more than doubles after tax payment – by Jeb Blount (Reuters U.S. – February 27, 2014)

February 27, 2014

http://www.reuters.com/

Feb 26 (Reuters) – Vale SA, the world’s No. 3 mining company by market value, said on Wednesday its net loss more than doubled in the fourth quarter after it took a $6.5 billion charge for an income-tax settlement with the Brazilian government and wrote off part of a failed potash investment.

Vale lost $6.45 billion in the three months ended Dec. 31 compared with a loss of $2.62 billion in the fourth quarter of 2012. The loss was well above the $3.83 billion average loss forecast of seven analysts in a Reuters poll and its worst quarterly since at least 1997 when Brazil’s government sold the company to private investors.

Vale’s full-year profit was $584 million in 2013, the worst annual result in more than a decade.

While the tax settlement resulted in one of the company’s worst ever losses, Vale continues to dispute the payments, which it considers double taxation of its overseas operations. By making the payment in November it was able to cut its potential liability in half. If a protest against the charges prevails in Brazil’s Supreme Court, the company has said it expects a rebate.

EDITORIAL: Mining bosses find their voice at last (Business Day – February 26, 2014)

February 26, 2014

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

TOP executives at South Africa’s mining companies may at last be “finding their collective backbone” — as an investor once pointedly suggested they do — judging by recent public statements by Sibanye Gold CEO Neal Froneman and Northam Platinum CEO Glyn Lewis.

Mr Lewis got stuck into the government, citing “dysfunctional legislation” and an “overregulated environment”. Mr Froneman raised the possibility of clashes over the Mining Charter ending up in the Constitutional Court.

Such comments stand out because they are so unusual. Over the past five years or so only two mining executives spring to mind as having been prepared to openly challenge government utterances “on the record”. First was former Anglo American CEO Cynthia Carroll, who pulled no punches in her opposition to nationalisation proposals being bandied about.

New Anglo CEO Mark Cutifani followed suit. Addressing a dinner at last year’s mining lekgotla, he commented: “We must remove uncertainty and that means the state must stop threatening ownership.”

The norm for mining executives has been to keep quiet despite repeated provocation from government ministers and bureaucrats — some of it blatantly incorrect.

Gold market breaches ‘covered up’ – by Andy Verity (BBC Newsnight – February 25, 2014)

February 26, 2014

http://www.bbc.com/news/

Dubai’s biggest gold refiner committed serious breaches of the rules designed to stop gold mined in conflict zones from entering the global supply chain, a whistleblower has revealed.

Amjad Rihan led an Ernst & Young team that audited Kaloti and found it was failing to carry out the proper checks. But after he told the Dubai regulator, it changed its audit procedures. He said that allowed details of the most serious findings to be covered up, with Ernst & Young turning a blind eye.

The regulator, Ernst & Young and Kaloti all say they acted properly. Mr Rihan told BBC Newsnight: “The risk of conflict gold entering Dubai and entering the global supply chain is extremely high.”

The audit team, which visited Kaloti last year, alerted the Dubai Multi Commodities Centre (DMCC) and also urged superiors at Ernst & Young to notify other regulators and the gold-buying public.

In May the DMCC’s guidance required the audit team’s initial findings to be made public but by November that requirement had disappeared.

Prospectors Say Drought Has Created California’s 2nd Gold Rush – by Art Barron (CBS Los Angeles – February 24, 2014) February 24, 2014

February 26, 2014

http://losangeles.cbslocal.com/

LYTLE CREEK (CBSLA.com) — Is 2014 a repeat of the great Gold Rush of 1849?

Prospectors in Southern California are heading to the hills, saying the severe drought has exposed gold that has never been touched by human hands. As water levels continue to drop more nooks and crannies are easier for these gold hunters to access.

“A lot of time you would just see a husband. Now you’re seeing the whole family out,” said Kevin Hoagland, of the Gold Prospectors Association of America.

Prospectors at Lytle Creek, 60 miles from Los Angeles in San Bernardino County, pan for gold, using metal detectors and sluice boxes. CBS2/KCAL9 reporter Art Barron witnessed veteran prospector Jack Barber pull up large pieces of the precious metal.

UPDATE 1-Australia’s Rinehart nears $7.8 bln mine finance deal – sources – by Sharon Klyne, Joyce Lee and Prakash Chakravarti (Reuters India – February 26, 2014)

February 26, 2014

http://in.reuters.com/

Feb 26 (Reuters) – Australian billionaire Gina Rinehart’s Roy Hill iron ore project is close to finalising a $7.8 billion financing deal, sources said, a vital step towards an end-2015 start for the giant mine in Western Australia’s iron-rich Pilbara district.

The 55-million tonnes-a-year project, which would make Roy Hill Australia’s fourth-largest iron ore producer, will add to hefty new supplies coming on line from Rio Tinto, BHP Billiton and Fortescue Metals Group.

It could also add to the wealth of mining magnate Rinehart, already Australia’s richest person with a $17.7 billion fortune, according to Forbes. Roy Hill is likely, however, to be the last new project of this scale to get off the ground, given worries over shaky underlying demand for iron ore in China, the world’s biggest consumer of the steel-making raw material.

Other miners are rethinking expansion and cutting costs as iron ore prices drop. At just below $120 a tonne .IO62-CNI=SI on Wednesday, prices have fallen more than 11 percent so far this year and are down almost 40 percent from a record high of $200 reached in February 2011.

Catholic Church opposition to mining a myth – Cedron – by Dorothy Kosich (Mineweb.com – February 26, 2014)

February 26, 2014

http://www.mineweb.com/

“The industry needs a new and better approach to the Church,” says Professor Mario Cedron, ‘The visit of a delegation of mining executives to the Vatican last September is a start.”

SALT LAKE CITY (MINEWEB) – In a presentation to the Society of Mining, Metallurgy and Exploration Wednesday, Professor Mario Cedron of the Catholic University of Peru said the supposition that the Catholic Church opposes mining is based in myth and has no substance.

Some members of the clergy may express personal positions that are opposed to mining, Cedron advised, but no popes in modern memory have expressed anti-mining sentiments.

In fact, Pope John Paul II, a former coal miner, condemned the Liberation Theology political movement, which interprets the teachings of Jesus Christ in relation to liberation from unjust economic, political or social conditions. Cedron observed, “Many people call it Christianized Marxism.”

First cartels, now vigilantes target Mexico mines – by Agence France-Presse (Global Post – February 25, 2014)

February 26, 2014

http://www.globalpost.com/

Dozens of trucks carry iron ore out of a mine in western Mexico, spinning dust into the air as they barrel past a guard booth peppered with scores of bullet holes.

The pockmarks are the scars of darker days, when the mine in the town of Aguililla, Michoacan state, was under the yoke of the Knights Templar drug cartel, which extorted the business.

The gang was chased out of town, but the mine still has to pay outsiders. The mine now forks out “compensation” to a vigilante movement which celebrated on Monday the first anniversary of a revolt that has driven the gang out of Aguililla and around 20 other towns in Michoacan.

The civilian militias say the mines are helping to finance their cause against the cult-like cartel which was deeply entrenched in Michoacan’s economy and terrorized the community through extortion, kidnappings and murder. Farmers and ranchers are also making donations to the militias that have liberated their towns.

EXCLUSIVE-Small miners size up mergers, deals may be elusive -Reuters survey – by Allison Martell and Euan Rocha (Reuters India – February 25, 2014)

February 25, 2014

http://in.reuters.com/

Feb 25 (Reuters) – Many of the small Canadian-listed mineral explorers that supply global major miners with new projects are considering merging with peers, according to a Reuters survey, but for most it may be tough to close deals.

Just over half the Toronto Stock Exchange and TSX Venture-listed miners and explorers that participated in the Reuters survey said they are at least somewhat likely to announce a “merger of equals” over the coming 12 months, but only a handful said such a deal is “very likely.”

Out of favor with investors, most explorers – or junior miners – badly need cash. And the few with strong balance sheets figure there must be some great deals around. Several industry leaders have argued that consolidation could fix the sector.

But such discussions often come to a halt when executives at target companies realize that they will have to sell cheap. Some stocks have dropped more than 90 percent over the last two years, and bids reflect the low valuations.

“The guys running these small companies are promoters. They’re dreamers, and they’ll hang in until the cows come home,” said Tom Caldwell, head of brokerage and wealth manager Caldwell Securities. “Most would rather hang in there and end up with $10 in the treasury and start the game all over again in two years.”

Illegal mining getting out of control – Shabangu – by Leandi Kolver (MiningWeekly.com – February 21, 2014)

February 25, 2014

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

JOHANNESBURG (miningweekly.com) – Illegal mining in South Africa was getting out of control with about 6 000 people estimated to be involved in the practice of illegal underground mining and another 8 000 in illegal surface mining, Mineral Resources Minister Susan Shabangu said on Friday.

She pointed out that it was estimated that, in 2011, illegal mining subtracted about R6-billion from the country’s fiscus, adding that as the practice grew this figure would also grow and, therefore, it was something that had to be dealt with.

Shabangu on Friday met with local stakeholders, aiming to establish a local Ekurhuleni illegal mining forum, including unions, mining industry players, the Metro Police, the South African Police Service (SAPS) and the Department of Home Affairs.

After the meeting, she told media that while there was a Gauteng provincial forum on illegal mining, it was “not really moving in a way that helps us to take this process [forward] and deal with the matter decisively” and, therefore, the decision to set up the Ekurhuleni forum was made.