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Barclays favours nickel in 2014, bearish on gold and oil – by Barani Krishnan (Reuters U.K. – December 10, 2013)

http://uk.reuters.com/

NEW YORK – (Reuters) – Base metals, led by nickel, appear set to trend higher in 2014 due to tighter supplies, while unfavorable economics should keep pressure on gold and oil and prompt investors to avoid much of the commodity complex, Barclays said on Monday.

In another negative outlook on commodities from a major investment bank, London-based Barclays PLC (BARC.L) said that outflow of money from the sector will not end soon, at least not in the first quarter.

It cited a litany of reasons, including comfortable supply levels in most raw materials; a still-sluggish global economy and the likely scaling back of the Federal Reserve’s stimulus that had supported commodities.

“It is unlikely investors will warm to commodities in the near term,” said Barclays, which until a few years ago was one of the biggest proponents of the sector. Goldman Sachs (GS.N), often regarded Wall Street’s most authoritative voice on commodities, and Citigroup (C.N) have issued similarly sanguine outlooks in recent weeks.

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State releases long-awaited impact statement for PolyMet mine, opens public comment period – by Josephine Marcotty (Minneapolis Star Tribune – December 7, 2013)

http://www.startribune.com/

State regulators unveiled their forecast Friday of the way Minnesota’s first copper mine would affect the air, water and lives of people in northeastern Minnesota, a document that is expected to escalate an already polarizing debate about what could be a new era of mining in the most beautiful and untouched part of the state.

The release of the environmental impact statement, a dense, 2,200-page document that took five years and cost $22 million, sets the stage for a 90-day public comment period starting Dec. 14 and, potentially, for a much larger debate over Minnesota’s future.

PolyMet Mining Corp., which promises a $650 million investment and 300 to 360 jobs over 20 years, is only the first of many companies lining up to tap one of the world’s largest untouched deposits of copper, nickel and other precious metals lying beneath the forests and lakes of northeast Minnesota. Many on both sides of the issue say the debate in the coming months, which is expected to generate tens of thousands of public comments, will influence how and whether copper mining in the state becomes a reality.

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The 2014 Metals Outlook: Nickel – by Cole Latimer (Australian Mining – December 9, 2013)

http://www.miningaustralia.com.au/home

Australian Mining has investigated the current state of Australian metals and looks into how they will perform in the coming year. In the third part of this five part series we look at nickel.

The nickel industry has always been one of sharp busts and booms, with the busts now lasting longer and longer. To sum up the sector in a single word – volatile.

After an astounding leap in revenues in 2006-07, where it skyrocketed 132.9 per cent after shrinking 5.7 per cent the previous year, nickel has undergone a series of sharp price corrections, seeing an annualised fall of 12.1 per cent in revenues from 2008 through to this year.

This was due to prices retreating from unsustainably high levels. However after two years of serious gloom for the sector, following another brief spike in 2010-11, nickel is predicted to grow again, according to IBISWorld reports.

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Miners eye Jakarta’s planned iron ore ban – by Barry Filzgerald (The Australian – December 10, 2013)

http://www.theaustralian.com.au/business

NO one is getting too excited just yet, but there is a chance that Indonesia of all places may be about to do Australia a big favour — more particularly, our tin, nickel and bauxite producers.

Like the rest of the mining sector, all three could do with a bit of early Christmas cheer. Apart from the broader fallout from the recent spying scandal and the ongoing tragedy of boatpeople, Indonesia has not exactly endeared itself to the local resources industry, with its regular shocks and horrors when it comes to security of tenure.

But if the Indonesians deliver on their big commodities threat of early 2014, much of that will be quickly forgiven. The big threat is to follow through on the government’s plans to proceed with a mineral ore export ban from January 12 — a drastic attempt to force through value-adding processing of minerals with all the attendant jobs and investment creation.

Until the recent backing of parliament, few if any observers thought the ban would see the light of day. But the fact the parliament followed through — presumably after intense lobbying by those interests opposed to the move — means mineral export market watchers are beginning to factor in the potential for the Indonesians to do what they say they are going to do.

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COLUMN-Leave critical minerals to the market – by John Kemp (Reuters India – December 9, 2013)

http://in.reuters.com/

(John Kemp is a Reuters market analyst. The views expressed are his own)

Dec 9 (Reuters) – The Critical Minerals Policy Act of 2013, backed by a bipartisan group of 18 senators, is one of those pieces of special-interest legislation that deserves to die in the U.S. Congress.

The bill (S 1600), pending before the Senate Committee on Energy and Natural Resources, directs the secretary of the interior to designate a list of up to 20 “critical minerals” based on the risk of potential supply restrictions and their importance to the economy.

The bill identifies minerals that must be imported and are therefore at risk from trade embargoes, military action, cartels and other anticompetitive behaviour, for designation, particularly if they are used in important sectors such as energy production, defence, agriculture, consumer electronics and healthcare.

The bill authorises the federal government to spend up to $20 million to compile a comprehensive national assessment for each critical mineral, including how much is produced domestically and how much is imported. It makes $8 million available to speed up the inter-agency review process for issuing mining permits on federal lands.

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Friedland’s fireside remarks potentially inflammatory to SA platinum mining – by Henry Lazenby (MiningWeekly.com – December 6, 2013)

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

TORONTO (miningweekly.com) – Legendary mining entrepreneur and self-made billionaire Robert Friedland ran the risk of inflaming tension in South Africa at a very sensitive time for platinum miners with his recent “fireside” remarks that underground platinum miners in the country were underpaid, market analysts at SP Angel, in London, said on Friday.

Political leaders and mining companies had worked hard to restore peace and jobs to the platinum sector after the Marikana incident, which was whipped up by competition between competing mining unions the Association of Mineworkers and Construction Union (AMCU) and National Union of Mineworkers (NUM). The Marikana miners’ strike or Lonmin strike was a wildcat strike at a mine owned by Lonmin in the Marikana area, close to Rustenburg, South Africa, on August 16, 2012.

The event garnered international attention following a series of violent incidents between the South African Police Service, Lonmin security, the leadership of AMCU and NUM and strikers themselves, which had resulted in the deaths of 44 people, the majority of whom were striking mineworkers. At least 78 workers were also injured.

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Glasenberg Raises Glencore’s Bet on Coal as BHP Pauses: Energy – by Thomas Biesheuvel & Jesse Riseborough (Bloomberg News – December 5, 2013)

http://www.bloomberg.com/

Ivan Glasenberg, the billionaire running commodities supplier Glencore Xstrata Plc, is investing more in thermal coal than his three closest competitors combined even as investors warn the fuel’s outlook is deteriorating.

The former coal trader is betting on prices rebounding from a three-year drop. The Swiss company, in which he owns 8 percent, is spending $4.75 billion, largely on projects inherited in the takeover of Xstrata Plc, to boost output 21 percent through 2016. At the same time, BHP Billiton Ltd., the biggest mining company, Rio Tinto Group and Anglo American Plc, have stalled new investments, sold mines or halted others.

Glasenberg, 56, is deepening his bet on coal as appetite wanes among some investors for companies that extract fuels blamed for making the biggest contribution to climate change. Share prices of the four largest single-commodity thermal-coal producers have tumbled an average 25 percent in the past 12 months as an explosion in lower-cost supplies of U.S. shale gas compounds a weaker outlook for exports to China.

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Rio Tinto looks to cut costs before selling aluminium business – by Angela Macdonald-Smith and Michael Hobbs (Sydney Morning Herald – December 4, 2013)

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

Rio Tinto chief executive Sam Walsh has signalled he will take more costs out of the aluminium business before any potential spinoff, after taking what he says was ”one of the hardest decisions of my life” to close the loss-making Gove alumina refinery in Arnhem Land.

Mr Walsh said the focus for Rio’s reintegrated aluminium division, as for energy, diamonds and industrial minerals, was on ”improving the business, reducing the cost, running it for cash, taking advantage of the capital that is already invested”.

The aluminium unit delivered $US450 million of Rio’s $US1.8 billion savings in operating costs in the 10 months to October 2013, with $US1 billion in cuts targeted by the end of 2014.

In August the miner scrapped a plan to spin off the Pacific Aluminium business housing some of its Australian and New Zealand assets after failing to find a buyer, and decided to reintegrate it back into Rio Tinto Alcan. The move sparked speculation Rio may look to offload all of Alcan, but Mr Walsh’s comments show more work is first needed on eliminating costs.

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China nickel importers strike term deals with eye on Indonesia ore ban – by Polly Yam (Reuters U.S. – December 5, 2013)

http://www.reuters.com/

HONG KONG, Dec 5 (Reuters) – China’s refined nickel importers are negotiating 2014 term deals with suppliers that give them the flexibility of adjusting shipment volumes depending on how Indonesia’s proposed ban on ore exports turns out.

The Southeast Asian nation has said it will ban unprocessed ore exports from January 2014, but is rethinking it in order to keep export revenues flowing in. On Thursday lawmakers rejected a government bid to water down the planned ban.

A ban on ore exports from next month will boost China’s demand for refined metal by hurting output of cheaper substitute nickel-pig-iron. Higher imports of spot refined nickel by the world’s biggest user of the metal could support global prices that have fallen nearly 20 percent this year.

Some 60 percent of nickel consumption in China is covered by nickel-pig-iron, a low-grade ferro-nickel used for stainless steel production. So widespread is its use now that China has become the world’s biggest and dominant producer of nickel-pig-iron.

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Coal rush ravages Indonesian Borneo (Malaysian Insider – December 5, 2013)

http://www.themalaysianinsider.com/

Barges loaded with mountains of coal glide down the polluted Mahakam River on Indonesian Borneo every few minutes. Viewed from above, they form a dotted black line as far as the eye can see, destined for power stations in China and India.

A coal rush that has drawn international miners to East Kalimantan province has ravaged the capital, Samarinda, which risks being swallowed up by mining if the exploitation of its deposits expands any further.

Mines occupy more than 70% of Samarinda, government data show, forcing entire villages and schools to move away from toxic mudslides and contaminated water sources. The destruction of forest around the city to make way for mines has also removed a natural buffer against floods, leading to frequent waist-high deluges during the six-month rainy season.

And despite the 200 million tonnes of coal dug and shipped out of East Kalimantan each year, its capital is crippled by frequent hours-long blackouts as the city’s ageing power plant suffers constant problems.

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FEATURE-From kangaroos to SQUID, new technologies transform hunt for minerals – by Clara Ferreira-Marques (Reuters U.S. – December 5, 2013)

http://www.reuters.com/

LONDON, Dec 5 (Reuters) – From intelligent drills to analysing gum tree leaves, an unprecedented push to develop new methods and technologies promises to transform the way miners explore for deposits, allowing them to dig deeper, faster and more cheaply.

The results could ultimately unlock so-called ‘covered’ deposits: riches hidden under hundreds of metres of soil, rock or sea water, sometimes in or near previously explored areas. That could reverse the steady shift away from mining regions such as Australia and Canada to untested, frontier areas, in the search for the next blockbuster find.

Many flagship mines are ageing, producing less and less metal for every tonne of ore pulled out of the ground. This has driven up costs and prompted companies to explore in new parts of Africa or Asia, despite the additional political risks.

“Deposits are becoming increasingly hard to find, and both the technology that we have available to us and the approaches, are less useful when exploring deeper deposits,” said Dean Collett, a geoscience consultant working with Australia’s UNCOVER initiative, which promotes exploration of covered areas.

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Rinehart mining fight: Roy Hill livestock farmers stand up against mining project – by Claire Moodie (Australian Broadcasting Corporation – December 5, 2013)

http://www.abc.net.au/

In the heart of iron ore country in Western Australia’s Pilbara region, brothers Murray and Ray Kennedy are standing their ground against the mining industry.

The veteran pastoralists have run Roy Hill cattle station for over forty years but they have become an endangered species.

Many Pilbara stations have been bought up by mining companies but the Kennedys, now in their twilight years, have refused to move on. “I don’t see why we should,” Murray Kennedy said. “Not at 25 percent of the value of the property, no way, that’s just robbery.”

The brothers are well-known in the Pilbara for their tough negotiating skills and the colourful characters are rarely seen without their pet dingo, Baby. “She’s the boss,” Ray Kennedy said with a laugh.

“She rounds up Murray and I and we’ve got to do as we’re told. Simple, she’s a bloody female.” Baby even has her own security pass to the nearby Fortescue Metals Group’s (FMG) Christmas Creek mine and has a meeting room at the mine-site named after her.

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Wieliczka Salt Mine Is an Incredible Polish Underground Amusement Park – by Nina Strochlic (The Daily Beast – November 14, 2013)

http://www.thedailybeast.com/

Ever windsurfed across a saltwater lake or visited a 400-year-old chapel—underground? Try it out in Poland, at an unbelievable mine-turned-subterranean playground outside Krakow.

More than 1,000 feet underground in Poland, seemingly impossible things are happening. Hot-air balloons have been launched. A bungee jumper has taken the plunge. A windsurfer has been propelled across still saltwater. A brass band has bellowed on its instruments.

Stretching nine levels beneath the earth, Poland’s Wieliczka Salt Mine is roomy enough to fit the Eiffel Tower and then some. For centuries, miners have been carving out spectacular chapels and sculptures of the country’s most beloved figures underground, not far from the medieval city of Krakow.

And in the past half century, as salt mining slowed and then halted, and tourists began arriving, the cavernous chambers have been transformed into an incredible underground amusement park of grand halls, health spas, museum-worthy art, and record-setting spectacles.

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The keys to exploration success and mining the market – Friedland – by Alex Williams (Mineweb.com – December 5, 2013)

http://www.mineweb.com/

In a wide ranging conversation with Rick Rule, Robert Friedland discussed among other things, the mining cycle, the need not to punish creatives and institutional stupidity.

LONDON (MINEWEB) – Ivanhoe Mines founder, Robert Friedland urged investors to take a longer term view of the mining industry, on Wednesday, reminding them that the current bear market will turn, at the final event of this year’s Mines & Money Conference in London.

In a conversation with investor Rick Rule, chairman of asset manager Sprott US Holdings, Friedland called the bottom for mining stocks. “This is very much what a bottom feels like,” he said. “Most of the CEOs of the major mining companies have had their heads cut off and used as bowling balls by their chairmen, so the major companies are risk-averse and the junior companies are living in an anaerobic environment where capital is really difficult to achieve.”

“This is going to result in a spectacular bull market,” Friedland said. “It could take a year or two before there’s a sudden and violent turn for the better, but the school of fish will turn.”

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Rio Tinto to Halve Capital Spending by 2015 in Focus on Cash – by Elisabeth Behrmann (Bloomberg News – December 3, 2013)

http://www.bloomberg.com/

Rio Tinto Group (RIO), the world’s second-biggest mining company, will cut capital spending to about $8 billion in 2015, less than half its outlay last year, as mineral producers conserve cash after prices fell.

“Our capex is reducing, and will come down further,” Sam Walsh, chief executive officer of London-based Rio, said today in a statement. “From where I stand, we continue to see market fragility and volatility.”

Rio’s cutback underlines efforts by the world’s largest mining companies to rein in spending as a decade-long boom in metal prices wanes. Vale SA (VALE5), the biggest iron ore producer, yesterday slashed its investment budget for a third straight year to $14.8 billion, the lowest since 2010.

“It’s quite a substantial drop and it does suggest that right now Sam Walsh is concentrated very, very hard on affordability,” Evan Lucas, a Melbourne-based markets strategist at IG Ltd., said by phone.

Rio fell 0.6 percent to A$65.49 at the close in Sydney. BHP Billiton Ltd., the world’s biggest mining company, declined 1.2 percent.

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