International Media Resource Articles – Page 747

South Africa’s mines minister: from hunter to strike buster – by Zandi Shabalala and Ed Stoddard (Reuters India – May 29, 2014)

May 29, 2014

http://in.reuters.com/

JOHANNESBURG – (Reuters) – In his spare time, South Africa’s tough new mines minister, Ngoako Ramatlhodi, enjoys stalking game with a rifle in the wild bush of his native Limpopo province.

Hunting season is in full swing but Ramatlhodi has his eye on bigger game: a solution to a crippling platinum strike, the longest in the history of the country’s mines, which threatens to tip Africa’s most advanced economy into recession.

“I am focused on the strike. It’s my breakfast, lunch and supper,” Ramatlhodi told Reuters in an interview. Sworn in on Monday, he has waded straight into the fray, dragging the mining union and platinum firms back to the negotiating table after the latest round of talks collapsed.

Ramatlhodi looks determined to bring an end to the 18-week strike which has hit 40 percent of global production of the precious metal used to make catalytic converters that reduce pollution from automobiles.

“He summoned the parties back and said we are going to talk,” a union source familiar with the matter told Reuters after talks again stalled on Wednesday. Ramatlhodi has set-up a government mediation team which includes treasury officials.

PRECIOUS-Gold slips to 16-week low on firm equities, steady dollar – by Clara Denina (Reuters U.S. – May 29, 2014)

May 29, 2014

http://www.reuters.com/

LONDON, May 29 (Reuters) – Gold extended losses to a third straight session on Thursday, hitting fresh 16-week lows on investor risk appetite and as the dollar hovered near a two-month high, while weak physical demand in top buyer China also weighed.

Spot gold fell to $1,251.50 an ounce – its lowest since Feb. 4 – in earlier trade and was down 0.4 percent at $1,253.33 by 1200 GMT. It dropped nearly 3 percent over the past two sessions.

U.S. gold futures for June delivery were down $6.20 an ounce at $1,253.10 an ounce. “Gold seems to have found a new level below its previous trading range between $1,280 and $1,310… and the next significant support lies around $1,238- $1,240,” Mitsubishi Corp analyst Jonathan Butler said.

The dollar hovered just below a two-month high against a basket of major currencies, but gains were capped by lower 10-year U.S. Treasury yields, which stood below 2.5 percent. Global shares traded near an all-time peak on bets the European Central Bank would unveil new stimulus measures next week.

ECB policymakers have opened the door to a rate cut and to a refinancing operation aimed at supporting businesses when its board meets on June 5.

Scotiabank positive on nickel – coal and uranium at rock bottom – by Dorothy Kosich (Mineweb.com – May 29, 2014)

May 29, 2014

http://www.mineweb.com/

As world nickel supplies plunge 20% this year, Pat Mohr forecasts an average nickel price of US$8.30 this year, US$10.75 in 2015, and US$12.50 in 2016.

RENO (MINEWEB) – “Indonesia’s ban on the export of all unprocessed nickel-containing ores will turns today’s world supply & demand balance from ‘surplus’ to ‘deficit’ by early 2015,” says Scotiabank economist Patricia Mohr.

In the latest edition of the Scotiabank Commodity Price Index published Wednesday, Mohr observed that Chinese stainless steel producers’ inventories of Indonesian ore “will largely be depleted by year-end.” As a result, Chinese mills urgently boosted imports of FeNi (nickel & iron) by 70% during the first quarter of this year.

“The strength in Chinese nickel orders is coming at a time of improving stainless steel demand in the United States and signs of firmer stainless orders in Europe,” Mohr said. “This reflects more favorable market conditions in the U.S. auto, heavy truck & transportation sectors and in the energy and chemical processing industries.”

LME nickel prices—important to the Sudbury Basin, Thompson Manitoba, Raglan in northern Quebec and Voisey’s Bay in Newfoundland and Labrador—have surged from a weak US$6.31 per pound early this year to as high as US$9.62 in mid-May, up 52%.

UPDATE 2-Barrick reaches initial deal with Pascua-Lama mine opponents -lawyer – by Fabian Cambero (Reuters U.S. – May 28, 2014)

May 28, 2014

http://www.reuters.com/

May 28 (Reuters) – Canadian miner Barrick Gold has come to an initial agreement with local indigenous peoples who have opposed its stalled Pascua-Lama mining project on the Chilean-Argentine border, the lawyer for the communities said on Wednesday.

Barrick, the world’s largest gold miner, halted the gold and copper project last year after investing $5 billion in it.

Development of the mine, which the local Diaguita people have strongly opposed, had been frozen by environmental regulators in Chile who demanded that infrastructure to prevent water pollution be built.

The memorandum of understanding that has now been struck between 15 of the 18 communities and Barrick is an initial step towards bringing the two sides together, Lorenzo Soto, the lawyer for the Diaguita, said on Wednesday.

“This is historical, never seen in Chile’s mining history,” Soto told Reuters in an interview. The “traditional model” of concession and environmental permits “that could go ahead even if it trod all over the rights of the local communities” has now changed, he said.

Still ‘solid business case’ for mines in Canada’s North – by Dorothy Kosich (Mineweb.com – May 28, 2014)

May 28, 2014

http://www.mineweb.com/

Despite pressure from lower metal prices, the economic outlook for Canada’s three Northern territories is good, driven by gold, base metal and diamond mining.

RENO (MINEWEB) – ‘With market conditions difficult in 2013, mining companies remain cautious”, says The Conference Board of Canada’s Territorial Outlook: Spring 2014. “And that sentiment can still be felt. Many companies are against budgeting for power spending on mineral exploration this year, led by a significant pullback in Nunavut.”

“Financing remains difficult to obtain for new projects and exploration programs,” said the report.

Nevertheless, “The business case for many of the mining projects in the North remains strong,” the document forecasts. “Future demand for minerals will be sturdy as the world continues to claw its way back from the Great Recession. In fact, Nunavut and Yukon will see their economics advance at a steady pace over the next two years as investment to expand mineral production provides a big boost to job creation and economic development over the next few years.”

“Long-term demand prospects for base metals and gold are positive and will lead to the active development of several more mines over the next decade,” said the three Conference Board of Canada’s economists—Justine Cook, economist;

South Africa Raises Effort to End 18-Week Platinum Strike – by Andre Janse van Vuuren (Bloomberg News – May 28, 2014)

May 28, 2014

http://www.bloomberg.com/

South Africa’s new mining minister called on the nation’s treasury and labor departments to assist in ending a four-month strike over pay that’s crippled local operations of the world’s three largest platinum producers.

The government team set up by Minister of Mineral Resources Ngoako Ramatlhodi, who took office two days ago, will meet officials from Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. (IMP) and Lonmin Plc (LMI) tomorrow as well as representatives from the main union at their operations, his department said in a statement on its website. This follows talks with producers today and the union yesterday.

More than 70,000 members of the Association of Mineworkers and Construction Union have been on a pay strike since Jan. 23. The industry’s longest and costliest stoppage saw its economic contribution drop the most in 47 years in the first quarter, resulting in the first contraction in gross domestic product since a 2009 recession, according to Statistics South Africa.

“All parties are hurting,” Ramatlhodi said in the statement. “We have no option but to find an amicable solution.” The parties will “explore all possibilities for a resolution” tomorrow and “report back by the end of the day on what is possible,” he said.

Australia Mining Investment Drops – by Robb M. Stewart (Wall Street Journal – May 28, 2014)

May 28, 2014

http://online.wsj.com/home-page

MELBOURNE, Australia—The amount of money invested in Australia’s resources industry continued to fall as large projects were completed and mining companies reduced spending.

Money committed by mining and energy companies such as BHP Billiton and Rio Tinto to start or expand projects fell to 229 billion Australian dollars (US$212 billion) in the six months through April from A$268 billion a year earlier, the Bureau of Resources and Energy Economics said Wednesday. For the six months through October, the figure was A$240 billion.

The amount fell mainly because more than A$25 billion in minerals-and-energy developments were completed, the agency said. New projects weren’t sufficient to fill the void.

The transition of new projects to the output phase is likely to increase exports of coal, iron ore and other commodities, which resource-rich Australia ships to China, Japan and elsewhere. But it also could weigh on prices as increased supplies enter the global market.

Australian resources companies approved the construction of eight new projects at a combined value of A$12.8 billion, in the latest six months. A year earlier, 21 projects were approved for more than double that amount.

UPDATE 1-Australia’s opposition leader concedes carbon, mining taxes to go – by James Regan (Reuters India – May 28, 2014)

May 28, 2014

http://in.reuters.com/

CANBERRA, May 28 (Reuters) – Australia’s opposition Labor Party on Wednesday said two contentious taxes on mining and carbon emissions introduced during its years in power would likely be repealed this year.

Before being elected prime minister last September, Tony Abbott made abolishing the taxes a centrepiece of his campaign.

But there have been questions over Abbott’s ability to meet his promises, given signs of opposition from independent lawmakers including billionaire Clive Palmer’s party, which will hold the balance of power in the upper house from July.

“The mining tax, I suspect will be repealed despite Labor’s position,” opposition leader Bill Shorten said in response to questions at a meeting of mining executives in Canberra. Shorten also said that he believed the carbon tax would go this year, after a new upper house senate is sworn in July.

Opponents of the carbon tax say it has added to the costs facing industry and the public and done little to cut emissions, something disputed by its supporters.

ANALYSIS-U.S. industry gears up to fight Obama’s climate rules – by Roberta Rampton (Reuters India – May 28, 2014)

May 28, 2014

http://in.reuters.com/

WASHINGTON – May 28 (Reuters) – This summer is likely to see a series of attacks by industry opponents of a U.S. plan to curb carbon emissions from power plants in a bid to stir voter anger ahead of elections in November, when voters in states such as Kentucky and West Virginia may determine whether Democrats keep control of the Senate.

On Monday, the Environmental Protection Agency is expected to propose new rules to crack down on power plant emissions, part of President Barack Obama’s efforts to combat global climate change. The U.S. Chamber of Commerce will release a report Wednesday analyzing the effect the yet-to-be-announced regulations will have on the economy.

Coal industry lobbyists say the new rules will probably raise household electricity costs, prompt power brown-outs during heat waves and cold snaps, and destroy jobs at coal mines and manufacturing plants.

“We fully expect that whatever comes out will be overly stringent, and will be something that is not good for American consumers or businesses,” said Laura Sheehan, spokeswoman for the American Coalition for Clean Coal Electricity.

In March, Sheehan’s group, which represents coal mining companies as well as owners of coal-fired plants like American Electric Power and Southern Co, released a report warning that the EPA plan might cause retail electricity prices to rise in 29 states and kill more than 2.85 million jobs.

COLUMN-Pain of low coal prices finally too much for Australian miners – by Clyde Russell (Reuters U.S. – May 27, 2014)

May 27, 2014

http://www.reuters.com/

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

LAUNCESTON, Australia, May 27 (Reuters) – Like a pot of water being slowly brought to boil, it’s taken a long time for Australian coal miners to reach the point where the pain becomes too much to bear.

In recent weeks a slew of announcements of mine closures, production cuts and job losses has served to underscore that ultimately the sustained low-price environment would have to result in lower output from the world’s largest coal exporter.

So far the announced closures have been modest, but the chances are increasing that they are merely the harbinger of more cutbacks in the beleaguered coal industry. The cost of producing about half of Australia’s thermal coal and about 45 percent of its coking coal is above the prevailing prices, Morgan Stanley said in a report on Monday.

The spot price of thermal coal at Newcastle Port , an Asian benchmark, was $74.33 a tonne in the week to May 23, close to a 4-1/2 year low of $72.98 hit in March. It has lost 45 percent since the post-2008 recession high of $136.30 reached in January 2011.

Rio, Guinea Agree on Terms for $20 Billion Iron-Ore Mine – by Jesse Riseborough (Bloomberg News – May 27, 2014)

May 27, 2014

http://www.businessweek.com/

Rio Tinto Group (RIO), the world’s second-biggest mining company, agreed financial terms with the government of Guinea for a potential $20 billion iron-ore mine, port and rail project that may start by the end of this decade.

The accord will underpin talks with new investors for the rail and port component of developing the Simandou resource, Rio and its project partners Aluminum Corp. of China Ltd., International Finance Corp. and the government of Guinea said yesterday in a joint statement. The parties gave no commitment on when production will start.

Simandou is the world’s largest untapped iron-ore resource and Rio has estimated the mine could produce 100 million tons of the steelmaking ingredient a year. The project could double the West African nation’s current gross domestic product and add 45,000 jobs in the country, according to the statement.

The accord doesn’t commit Rio to building the project and analysts have said a legal dispute over the ownership of adjacent ground at Simandou could delay first production into the next decade. The agreement signed yesterday covers two of four mining permits for an ore-rich area in the southeast of Guinea.

Stainless-Steel Sales Jump as Nickel Costs Spur Stockpile – Maria Kolesnikova (Bloomberg News – May 27, 2014)

May 27, 2014

http://www.bloomberg.com/

Mining companies aren’t the only ones benefiting from this year’s nickel rally. Stainless-steel makers in Europe, who use the metal, are seeing a surge in sales as customers stock up to avoid higher raw-material surcharges.

Finland’s Outokumpu OYJ (OUT1V) reported a 9.1 percent jump in stainless-steel deliveries from the fourth quarter, orders at Madrid-based Acerinox SA are “the highest in at least three years,” and Germany’s ThyssenKrupp AG, says customers are adding to inventories. The sales jolt is reviving prospects for in an industry mired in losses since the financial crisis.

While nickel accounts for half the cost of stainless steel, mills impose surcharges to cover any increase in the expense. Nickel surged 41 percent this year after Indonesia, the largest supplier to China, banned ore exports to spur investment in domestic smelters. The supply halt is boosting profit for mining companies including Glencore Plc and may help create what Credit Suisse Group AG called a “supercycle” in prices.

“The biggest winners are nickel producers, and the second-biggest are the producers of stainless steel,” said Markus Moll, the founder of Reutte, Austria-based Steel & Metals Market Research GmbH who has studied the industry for three decades. “Usually such a surge in nickel prices triggers a strong speculative buying wave. The biggest loser is the end user, who has to pay higher price for stainless.”

Protesters burn vehicles, buildings at New Caledonia nickel mine – by Cecile Lefort and Melanie Burton (Reuters U.S. – May 26, 2014)

May 27, 2014

http://www.reuters.com/

SYDNEY – (Reuters) – Dozens of protesters caused tens of millions of dollars in damage to vehicles, equipment and buildings at Vale’s nickel mining site in New Caledonia, as anger boiled over at a chemical spill into a local river.

The $6 billion Vale plant at Goro in southern New Caledonia was closed earlier this month after some 100,000 liters of acid-tainted effluent spilled, killing about 1,000 fish and sparking protests at the mine site.

The Vale plant had been expected to produce about 40,000 metric tons of nickel this year, out of global supply of around 2 million metric tons. But it has been beset by problems in recent years, including several chemical spills and violent protests.

Tensions between the local population and Brazil-based Vale escalated over the weekend with young protesters frustrated at the latest spill by the Brazilian-based giant and a lack of response from indigenous Kanak chiefs, according to local media reports. Television footage showed images of burnt mining vehicles and equipment.

“There was damage at the site, but no damage to the plant. We had burned vehicles, one administration building was damaged, but no damage to the plant itself,” Vale spokesman Corey McPhee told Reuters.

Untested new South Africa mines minister faces baptism of fire – Ed Stoddard (Reuters India – May 26, 2014)

May 26, 2014

http://in.reuters.com/

JOHANNESBURG, May 26 (Reuters) – South African President Jacob Zuma’s appointment of a new mines minister unfamiliar to the sector but known for his black empowerment views adds uncertainty to prospects for ending a crippling four-month-old platinum strike this is hurting growth.

The stoppage at Anglo American Platinum, Impala Platinum and Lonmin is already the longest in the country’s history and has damaged Africa’s most advanced economy. It is also showing signs of descending into violence. Five miners have been killed in the past two weeks as some seeking to return to work face strike pickets. The latest round of wage negotiations to try to end the dispute, mediated by a labour court judge, has made little headway.

This will mean a baptism of fire for Mines Minister Ngoako Ramatlhodi, a 58-year-old lawyer and former deputy minister in the prison service, who was named as part of Zuma’s new-look cabinet on Sunday.

By contrast, the promotion to finance minister of Nhlanhla Nene, who takes over from the respected Pravin Gordhan, was taken as a sign of continuity in the reshuffle, which follows the ruling African National Congress’s convincing re-election on May 7.

COLUMN-Tale of two iron ore curves: Which to believe? – by Clyde Russell (Reuters U.S. – May 26, 2014)

May 26, 2014

http://www.reuters.com/

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

LAUNCESTON, Australia, May 26 (Reuters) – Iron ore swaps traded in Singapore are suggesting that the worst may be over for the steelmaking ingredient, but futures in the Chinese city of Dalian point to further price weakness.

Both can’t be correct, but the divergence of the two contracts does raise the question as to which group of investors has a more accurate gauge on the current balance of risks.

The Singapore Exchange (SGX) iron ore swaps <0#SGXIOS:> tend to be favoured by miners and traders, while the Dalian Commodity Exchange (DCE) futures <0#DCIO:> are mainly used by Chinese steel mills and domestic investors.

The SGX iron ore swaps curve tends to move into backwardation prior to a price decline, reversing the process ahead of a rally by moving into contango.

The shape of the current SGX curve is extremely mild backwardation from the second month onwards, with the second-month contract priced at $97.25 a tonne early on Monday, the six-month at $96.58 and the 12-month at $97.