International Media Resource Articles – Page 754

Zambia Said to Withhold Up to $500 Million of Mine Refunds (2) – by Matthew Hill (Bloomberg News – January 23, 2014)

January 23, 2014

http://www.businessweek.com/

Zambia’s government has withheld as much as $500 million in value-added tax repayments from mining companies failing to provide importer documentation, according to two people with knowledge of the matter.

Zambia’s revenue authority is holding back the repayments after last year introducing rules requiring the provision of documents from importers, the people said, asking not to be identified because the matter isn’t public. They said they estimated the amount because they don’t have the exact figures.

Vedanta Resources Plc (VED) and other miners in Africa’s biggest copper producer say they can’t comply with the rules because they sell to commodity traders and don’t know the final destination of their output. The tax authority also stipulated that export revenue must be paid directly to a Zambian bank, while some mining companies are paid via foreign accounts.

Mumbuna Kufekisa, a spokesman for the Zambia Revenue Authority in the capital, Lusaka, declined to comment. Emmanuel Mutati, president of the Chamber of Mines of Zambia, couldn’t immediately comment when called on his mobile phone.

SPECIAL REPORT-How Caterpillar got bulldozed in China – by Clare Baldwin and John Ruwitch (Reuters U.S. – January 23, 2014)

January 23, 2014

http://www.reuters.com/

ZHENGZHOU, China, Jan. 23 (Reuters) – Asia’s top mergers and acquisitions bankers gathered two years ago at the swanky Island Shangri La in Hong Kong to celebrate the top deals of 2012. As the transactions were being toasted, one was unraveling.

Advisers on Caterpillar Inc’s $677 million purchase of ERA Mining Machinery Ltd picked up an award for cross-border deal of the year. The purchase was billed as a coup for Caterpillar, the world’s top maker of tractors and excavators. ERA was the holding company for Zhengzhou Siwei Mechanical & Electrical Equipment Manufacturing Co Ltd, one of China’s biggest makers of hydraulic coal-mine roof supports. Siwei would help Caterpillar gain traction in the world’s largest coal industry.

“Siwei was going to be our Chinese business card,” said a person with direct knowledge of Caterpillar’s strategy.

The night of the awards on Nov. 16 three Caterpillar lawyers were wrapping up an eight-hour grilling of Wang Fu, Siwei’s chairman. Major accounting problems had been unearthed at Siwei headquarters in the gritty Chinese city of Zhengzhou. Two months later, on Jan. 18, 2013, Caterpillar said it had discovered “deliberate, multi-year, coordinated accounting misconduct” at Siwei.

Freeport, Newmont Say Indonesian Rules Infringe on Pacts – by Liezel Hill (Bloomberg News – January 23, 2014)

January 23, 2014

http://www.bloomberg.com/

Freeport-McMoRan Copper & Gold Inc. (FCX) and Newmont Mining Corp. (NEM), the largest U.S. miners, said new Indonesian rules on metal export duties infringe on contracts they have with the government.

Indonesia issued regulations on metal exports this month that curbed the shipping of unprocessed ore and placed duties on exports of copper concentrate, a semi-processed ore that’s shipped from mines to smelters. The rules have resulted in delays to obtain export permits, and Freeport plans to defer some production, according to the Phoenix-based company, the world’s biggest publicly traded copper producer.

The duties on copper, which begin at 25 percent and will rise to 60 percent by mid-2016, took Freeport by surprise, Chief Executive Officer Richard Adkerson said yesterday on a conference call with analysts. Indonesia, where the company operates its biggest mine, the Grasberg copper and gold operation, accounted for 19 percent of its third-quarter revenue, according to data compiled by Bloomberg. Newmont’s Batu Hijau mine in the country contributed 6.8 percent of the miner’s total sales, the data show.

“It would get pretty rough for Freeport if Indonesia stuck to its guns on this,” Dan Rohr, an analyst at Morningstar Inc. in Chicago, said yesterday in a phone interview.

UPDATE 1-MMG warns output from key Australia zinc mine to drop – by James Regan (Reuters U.S. – January 23, 2014)

January 23, 2014

http://www.reuters.com/

SYDNEY, Jan 23 (Reuters) – Output from Australia’s Century zinc mine, the world’s third biggest, could drop 5 percent this year as it nears the end of its operating life, exacerbating an emerging global supply pinch.

The mine will yield between 465,000 and 480,000 tonnes of zinc in concentrate in 2014 against 2013 output of 488,233 tonnes, said Chinese owner MMG Ltd.

The decline comes amid a supply deficit driven by rising galvanised steel production. Zinc is primarily used as a rust-inhibitor in the galvanising process.

MMG’s nearby Dugald River mine is under development and was supposed to start yielding zinc in late 2015, partially replacing lost output from the Century mine, which MMG forecasts will run dry in mid-2015.

But MMG last month warned Dugald River would miss its start date due to poor ground conditions. An additional A$57 million has been allocated to study problems at the project, according to MMG.

US miners hit out at Indonesia copper tax – by Ben Bland (Financial Times – January 23, 2014)

January 23, 2014

http://www.ft.com/home/us

Jakarta – US mining majors Freeport McMoRan and Newmont have hit out at Indonesia’s new tax on the export of copper concentrate, saying it is in breach of their long-standing contracts of work with the government.

Both companies, which employ thousands of people at their vast copper and gold mines in Indonesia, said on Wednesday they were in talks with the government to resolve the situation. Newmont said it was considering other remedies including “possible legal action”.

Indonesia, a major global exporter of metals such as bauxite, copper, and nickel, implemented a hotly-contested ban on the export of unprocessed mineral ores on January 12 as part of a drive to promote the development of a refining industry. Freeport and Newmont, which together contribute well over $1bn a year in taxes and royalties to the Indonesian government, initially won a reprieve, getting permission to export their partially processed copper concentrate until 2017.

But the finance ministry delivered a sting in the tail when it announced shortly afterwards that the companies would have to pay a progressive export tax that will start at 25 per cent and rise to 60 per cent by 2017.

Record iron-ore and coal production at BHP Billiton’s operations – by Staff (Business Day Live – January 22, 2014)

January 22, 2014

http://www.bdlive.co.za/ [South Africa]

GLOBAL resources group BHP Billiton has reported a strong operational performance for the six months ended December 2013, with production records achieved across 10 operations and several commodities.

Releasing its operational update for the second half of the year on Wednesday, the group said it had maintained strong momentum in the period. Full-year production guidance was retained for its petroleum, copper, iron-ore and coal businesses.

Iron-ore production was up 19% in the half-year to a record 98-million tonnes, while metallurgical coal production rose 22% to a record 22-million tonnes. Alumina production improved 8% to a record 2.6-million tonnes.

“A strong operating performance across our diversified portfolio in the December 2013 half-year delivered a 10% increase in production, and volumes are expected to grow 16% over the two years to the end of the 2015 financial year,” CEO Andrew Mackenzie said.

“Iron ore and metallurgical coal were particularly strong and are very well positioned to achieve guidance, notwithstanding the general uncertainty that exists as we enter the wet season,” he added.

Essar comes under Greenpeace attack (Business Standard – January 22, 2014)

January 22, 2014

http://www.business-standard.com/ [Mumbai]

Greenpeace activists scale Essar’s 21-storey headquarters in Mumbai to protest against the company’s proposed mine in Mahan forest, Singrauli, Madhya Pradesh

After taking on the Tatas, the Adanis and the Vedanta group, activists of pro-environment body Greenpeace took on the Essar group on Wednesday regarding the Mahan coal mining project in Madhya Pradesh. It organised demonstrations outside the Essar offices here and in London.

An Essar spokesperson said Greenpeace activists, masquerading as building cleaning agents, gained access to the company’s office in Mumbai. “In this illegal act, the trespassers misused the office premises to spread anti-corporate, misleading and false propaganda,” the spokesperson said. “These people suspended themselves from the top of the building. In doing so, they endangered lives of those working in the building and disrupted normal working of the employees,” he said. The police later arrested all activists for trespassing, the official said.

The Supreme Court had last year allowed gram sabhas (village councils) in Odisha to decide the fate of Vedanta’s Lanjigarh plant, meant to make aluminium by excavating bauxite from the Niyamgiri hills, the latter revered by the villagers as a sacred place.

Reverse the resource curse – by Jana Morgan (The Hill – January 22, 2014)

January 22, 2014

http://thehill.com/ [Washington D.C.]

Groups representing more than 1,300 mining companies, including some of the largest in the world, are backing mandatory disclosure of payments to governments, similar to a rule created by the 2010 Dodd-Frank Act.

Canadian mining industry associations and civil society organizations recently released recommendations to the Canadian government after nearly a year and a half of consultation and negotiation.

These recommendations, modeled after Section 1504 of Dodd-Frank, are aimed at reversing the resource curse – where countries with abundant natural resources suffer from severe poverty, instability and corruption. Seven of the ten lowest-scoring countries in the UN Human Development Index, which measures life expectancy, income and education, rely on oil and mineral revenues for a majority of their exports.

A 2013 report by the Africa Progress Panel, chaired by former UN Secretary General Kofi Annan, estimated that Africa alone loses $63 billion every year to corruption. Shedding light on secretive resource deals will help track this money and stem the flow of corruption.

The recommendations would require that all mining companies listed on Canadian stock exchanges disclose the payments they make to governments where they operate.

UPDATE 1-Timmins Gold joins new mining rush to equity markets – by Euan Rocha (Reuters U.S. – January 22, 2014)

January 22, 2014

http://www.reuters.com/

Jan 22 (Reuters) – Timmins Gold Corp, which owns the San Francisco gold mine in Mexico, said on Wednesday it will sell C$25 million ($22.7 million) in equity to a syndicate of banks, the latest in a slew of recent share offerings from Canadian miners.

The Timmins deal, designed to strengthen its balance sheet, builds on a wave of offerings that may signal a thaw in the financing environment for miners, which have long been out of favor with investors.

The bank syndicate, led by RBC Capital Markets, will buy the shares at C$1.50 each, a significant discount to Timmins’ closing price of C$1.73 on the Toronto Stock Exchange on Tuesday. The transaction was done as a bought deal.

A bought deal occurs when an underwriter, or a syndicate, buy shares from an issuer before selling them to the public.

While these deals typically occur at a slight discount to a company’s last trading price, the large discount that Timmins agreed to underscores the challenges still facing gold miners.

Unrealistic demands threaten companies, employees and country – Platinum bosses – by Zandi Shabalala and Ed Stoddard (Mineweb.com – January 22, 2014)

January 22, 2014

http://www.mineweb.com/

The chief executives of Anglo American Platinum, Impala Platinum and Lonmin, in a rare joint statement, said strikes have cost the companies over $1.15bn in the last 2 years.

JOHANNESBURG (REUTERS) – Bosses of the world’s top three platinum producers accused South Africa’s AMCU union of making “unaffordable and unrealistic” demands on Tuesday ahead of a strike this week which could hit over half of global output of the precious metal.

The chief executives of Anglo American Platinum, Impala Platinum and Lonmin made the dramatic warning as signs of some divisions emerged in the hardline Association of Mineworkers and Construction Union, which has called the stoppage for Thursday.

In a rare joint statement that throws down the gauntlet in a bruising standoff between capital and labour, the trio said that “it is of great concern … that employees are being made promises by AMCU that cannot be delivered upon.”

UPDATE 1-Indonesian mining group challenges ore export ban in court – by Fergus Jensen (Reuters India – January 22, 2014)

January 22, 2014

http://in.reuters.com/

Jan 22 (Reuters) – Indonesia’s Mineral Entrepreneurs Association (APEMINDO) has filed a legal challenge against a ban on ore exports introduced less than two weeks ago.

President Susilo Bambang Yudhoyono signed off on the controversial ore export ban on Jan. 12, although last-minute amendments eased the impact of the export ban on mining giants Freeport McMoRan Copper & Gold and Newmont Mining Corp which are now subject to an export tax.

Indonesia is the world’s biggest exporter of nickel ore, refined tin and thermal coal and is an important producer of copper and gold. It is seeking to increase added value from its mineral wealth but has been widely criticised for the ore export ban, seen by many as unfeasible.

“If this policy is carried out it will kill mining businesses,” Revly Harun, a lawyer for APEMINDO, told Reuters on Wednesday. “If they want to make smelters they need money for that. We don’t think this ore export ban is realistic.”

New Copper Mine Under Construction in Lyon County [Nevada] – Paul Nelson (KTVN.com – January 20, 2014)

January 21, 2014

KTVN Channel 2 – Reno Tahoe News Weather, Video –

http://www.ktvn.com/

Nevada Copper is in the process of building an underground mine at Pumpkin Hollow – a rural area about 8 miles southeast of downtown Yerington.

“There’s nothing out there. There’s no protected habitat. There’s no environmental issues. It’s a perfect mining situation,” says Lyon County Manager Jeff Page. Once the 2,140 feet deep mine shaft is complete, they will start mining more than one billion pounds of high-grade copper.

“To us, this is like hitting the mother lode. This is amazing,” says Korin Barnes, Nevada Copper project geologist. Equipment will be assembled inside the mine shaft and will remove ore from about 35 miles of tunnels resembling an underground city.

INTERVIEW-Greenland eyes mines as melting ice cap unlocks mineral riches – by Balazs Koranyi (Reuters India – January 21, 2014)

January 21, 2014

http://in.reuters.com/

TROMSOE, Norway – Jan 21 (Reuters) – Greenland will push ahead with a uranium and rare earths mine despite the objections of its former colonial ruler and main benefactor as the melting of the polar ice cap unlocks the country’s natural resources, its prime minister said.

Arctic Greenland, with the lowest population density in the world, could open its first big iron ore mine in five years and award the first rare earths exploitation licence by 2017, hoping for riches that could attract thousands of workers and leave the locals in a minority, Aleqa Hammond told Reuters.

“We simply refuse to go under as a culture because of climate change,” Hammond, 48, said on Tuesday on a visit to Norway. “We have to adapt because the ice is disappearing and hunting is no longer the main source of income.

“But climate change gives us a new chance to survive because our minerals become accessible so we’ll adapt,” Hammond, an Inuit woman brought up to skin seals, said. “We are one of the very few countries around the world where climate change is giving us benefits.”

Silicosis: The curse of Lesotho’s miners – by Victoria Schneider (Al Jazeera.com – January 20, 2014)

January 21, 2014

http://www.aljazeera.com/

A legacy of injustice and an under-resourced healthcare system has led to generations of workers becoming gravely ill.

Maseru, Lesotho – When Lebina Liphapang last went down the world’s deepest gold mine, he was already feeling sick. He had worked underground in South Africa for 29 years, far away from his wife and children back home in Lesotho. He was a general labourer, a winch driver, then a stoker.

It was harsh, he says, working underground. The darkness, the heat. “In the early days, we didn’t have mouth or nose protection. It was hardly bearable,” he said.

He wanted to continue working, despite the conditions. But one day in 2003 he asked for his retirement package. “I thought: ‘If I continue to work here I am going to die.’ As much as it is necessary to go to South Africa and work and provide a living for my family, this work was completely hazardous to me.”

Bristow warns on Kibali gold mine – Don’t rock the boat! – by Lawrence Williams (Mineweb.com – January 21, 2014)

January 21, 2014

http://www.mineweb.com/

Building the big Kibali gold mine in the DRC has been a remarkable achievement but Randgold CEO, Mark Bristow, warns against the status quo being adversely affected by possible future legislation.

LONDON (MINEWEB) – In a media presentation in Kinshasa, Randgold CEO Mark Bristow has set out the company’s achievement in bringing the big Kibali gold mine in the north eastern Democratic Republic of Congo (DRC) into production and highlighted some specifics.

Commenting, though, that this remains very much a work in progress as development continues, he also used the presentation to perhaps advise the DRC government not to tinker with possible forthcoming new mining legislation so as to undo the great work done in building the new mining operation with all the advantages it has brought to the area in which the mine is located and to the DRC in general.

“At the national level” Bristow commented, “government is urged to take care that its proposed revision of the Mining Code does not deter further investment in the development of the country’s mineral wealth and rather work with us and other investors to build on what we have all worked so hard to deliver.” In other words – ‘please don’t rock the boat!’