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World Coal: UN climate chief Figueres ‘ignoring reality’ – by Sophie Yeo (Responding to Climate Change – December 2, 2013)

http://www.rtcc.org/

The head of the World Coal Association (WCA) has accused UN climate chief Christiana Figueres of ‘ignoring reality’, following her call to the coal industry to invest in more efficient technologies.

In an interview World Coal chief executive Milton Catelin told RTCC that Figueres’ lack of expertise in the mining and energy sectors meant she “misses some of the fundamentals about the energy sector”.

He was responding to a speech Figueres made to a ‘Climate and Coal Summit’ on the sidelines of UN negotiations in Warsaw two weeks ago, where she told the audience that “coal must change rapidly and dramatically for everyone’s sake.”

Figueres called for the closure of all low-efficiency subcritical plants, a roll out of carbon capture and storage (CCS) technology and a collective decision to leave most coal reserves in the ground. The UN climate chief was heavily criticised by green groups for attending the gathering, but her message does not seem to have gone down well with the coal investors and representatives inside.

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Chinese firms want to buy coal assets overseas, but on the cheap – by Sonali Paul (Reuters U.S. – December 1, 2013)

http://www.reuters.com/

MELBOURNE, Dec 2 (Reuters) – Chinese companies are on the hunt to buy overseas coal mines as Beijing’s switch to cleaner fuels stokes demand for higher-quality coal produced in countries such as Australia, according to people familiar with the firms’ strategies.

A renewed appetite for acquisitions by the world’s biggest coal consumer will be a big boost for miners who are trying to dispose of assets worth billions of dollars to boost shareholder returns. These include Rio Tinto, which has put Australian and Mozambique coal operations on the block, and Linc Energy , which is selling its New Emerald Coal business.

The Chinese, however, are not rushing to buy. They see asset values coming under further pressure as coal prices remain depressed amid a supply glut that has already driven prices down about a third since 2011.

“We have clients who are interested in taking stakes in coal assets. But the view is the market’s not going to get any better for two years. So why buy something today when it’s going to be a lot cheaper in eight months’ time,” said Sam Farrands, a Hong Kong-based partner at law firm Minter Ellison.

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FAQ: Everything you need to know about PolyMet – by Elizabeth Dunbar and Dan Kraker (Minnesota Public Radio – December 2, 2013)

http://minnesota.publicradio.org/features/

What is PolyMet proposing?

PolyMet wants to mine copper, nickel and precious metals for 20 years at a site located just north of Hoyt Lakes in the Superior National Forest. The NorthMet Deposit is part of what is known as the Duluth Complex, which stretches from about 150 miles north of Duluth all the way to the Canadian border. PolyMet would build three open pits and blast and drill to get to the ore containing minerals. Ore would be put in rail cars and shipped seven miles west to an old iron ore processing plant — LTV Steel — which closed in 2001. PolyMet is repurposing the facility to process up to 32,000 tons of copper and nickel per day.

How significant are the deposits?

The Duluth Complex is considered one of the biggest copper-nickel deposits in the world. PolyMet’s mine would tap into just a small part of that, with the possibility of expanding later. PolyMet’s goal is to produce 72 million pounds of copper, 15 million pounds of nickel and 106,000 ounces of precious metals annually.

How does this proposal compare to other copper-nickel mines in the U.S.?

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UPDATE 2-Finland’s Outokumpu announces major financing plan, divests assets – by Jussi Rosendahl (Reuters India – November 30, 2013)

http://in.reuters.com/

HELSINKI/FRANKFURT, Nov 30 (Reuters) – The world’s No. 1 stainless steel maker Outokumpu said it planned to raise 650 million euros through a rights issue and divest assets back to ThyssenKrupp in an unexpected package of steps aimed at shoring up its finances.

The move will partly reverse Finnish Outokumpu’s 2012 acquisition of Thyssenkrupp’s stainless steel business Inoxum as it transfers a large steel plant in Terni, Italy, and high-performance alloy unit VDM back to the German group.

Outokumpu has been hit hard by Europe’s economic slowdown and by overcapacity in the industry, pushing up its debt and leading to speculation that it may need more cash from its shareholders.

The assets will be transferred to ThyssenKrupp in exchange for the cancellation of a 1.25 billion euro ($1.7 billion) loan note that Thyssen granted to Outokumpu when their original deal was done in 2012.

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Transform or ship out, Shabangu warns as Zuma praises GlencoreXstrata – by Martin Creamer (MiningWeekly.com – November 29, 2013)

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

HOTAZEL (miningweekly.com) – Mining companies that refused to transform had no place in South Africa, Minerals Resources Minister Susan Shabangu said on Friday, shortly before President Jacob Zuma, from the same platform, praised the confidence that London-listed GlencoreXstrata had demonstrated in South Africa by listing on the JSE.

Both were speaking at the launch of the integrated manganese mine and sinter plant, in the Northern Cape, and a planned manganese smelter at Coega, in the Eastern Cape. “Beneficiation is the way the whole of Africa has to go,” Zuma said, quipping that he had instructed Shabangu to make it a mining licence condition. The President has just returned from Ghana, which, he said was also striving for maximum local minerals beneficiation.

Earlier Kalagadi Manganese chairperson and co-founder Daphne Mashile-Nkosi, the woman who led the project in the teeth of the world’s worst financial crisis since the Great Depression, said of the final leg of the project: “The smelter must be constructed. Forward we go, backwards, never”, to cheers from her team.

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Analysis: Madagascar faces struggle to restore mining industry – by Alain Iloniaina and Richard Lough (Reuters India – December 2, 2013)

http://in.reuters.com/

ANTANANARIVO – (Reuters) – Madagascar’s next president will struggle with low metals prices and distrustful companies as he seeks to revive a mining industry that was the main source of foreign investment until a 2009 coup cut flows to a trickle.

The primary risk is that neither of the two candidates clearly wins a mandate on December 20, prolonging political turmoil. But both say they aim to restore mining, which five years ago attracted $8 out of every $10 in foreign direct investment to the Indian Ocean island.

“The mining sector is sick,” Mines Minister Rajo Daniella Randriafeno told Reuters. “It’s like a person who is slowly losing the blood that keeps him alive.”

Madagascar’s deposits of nickel, titanium, cobalt, iron, coal and uranium as well as its hydrocarbon prospects had previously encouraged foreign firms to queue for deals. Among them, Rio Tinto (RIO.L) began mining ilmenite, an ingredient used as pigment in paints, paper and plastics.

The political turmoil that has followed the 2009 power grab by President Andry Rajoelina, however, has choked off the issuance of all but a handful of new mining permits.

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Platinum and copper the metals for the end of the decade – Friedland – by Lawrence Williams (Mineweb.com – December 2, 2013)

http://www.mineweb.com/

Robert Friedland’s presentation at MineAfrica in London avows that the supercycle is not dead and sees huge value ahead for his Ivanhoe company’s new Pt, Cu and Zn projects in South Africa and the DRC.

LONDON – There are two mining related events on in London today – Mines and Money’s first day (of three) – and MineAfrica (just today) – luckily they are not being held so far apart as to make attending some of both impossible. So, so far today I have taken in talks from Frank Holmes and John Meyer at the former event – both presenting a relatively optimistic picture for mining over the next few years – Holmes looking at what he terms the E7 countries – for the most part those with the largest populations and enormous growth potential as witnessed by China’s huge urbanisation programmes which have totally transformed the country’s economy – and the feeling that this process could be underway in the others too. Holmes also felt that gold and gold stocks have been hugely oversold and is looking for a turnaround here.

From Mines and Money a quick journey to MineAfrica and to hear Robert Friedland’s take on the industry over the next few years. Obviously Friedland was talking his Ivanhoe book with his very positive views on Africa in general and on his Platreef, Kamoa and Kipushi Projects – the first in South Africa and the next two in the Democratic Republic of Congo – in particular. As expected he was hugely positive on all three – Platreef as a game-changer for the platinum sector, Kamoa as one of THE copper projects of the future as a far higher grade option than most, if not all, other major known new copper projects and Kipushi as having huge high grade zinc mining potential, but with copper, gold and silver also.

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Silver State, mining go deep – by Jennifer Robison (Las Vegas Review-Journal – December 1, 2013)

http://www.reviewjournal.com/

Editor’s Note: Nevada 150 is a yearlong series highlighting the people, places and things that make up the history of the Silver State.

Before there was Nevada, there was mining. In the state’s earliest days, mining wasn’t just our key industry. It was “essentially our only industry,” said Jeremy Aguero, a principal in local research firm Applied Analysis, and author of a September report for the Nevada Mining Association on the role of the sector in our economy.

“The mining industry was instrumental in the formation of the state and the governing laws that we still live with today,” Aguero said. “It was, for the vast majority of the history of the state, its largest single employer, and that’s still true in many rural counties today. We are the Silver State in so many ways. Our mining legacy is everywhere in Nevada, and our economic landscape clearly reflects its long history here.”

Added Tim Crowley, president of the Nevada Mining Association: “We really founded the state.”

That’s tough to argue. Mining’s rich history here traces back to 1859, half a decade before statehood.

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Mine to inject $4 billion locally [Michigan Upper Peninsula] – by John Pepin (The Mining Journal – December 1, 2013)

http://www.miningjournal.net/

HUMBOLDT – A recent in-house economic report projects the Eagle Mine and Humboldt Mill will directly and indirectly inject a total of $4 billion into the Marquette County economy over a 15-year period.

From 2011 through 2025, the Eagle Mine project -which includes the underground nickel and copper mine in Michigamme Township and the Humboldt Mill processing center in Humboldt Township- is expected to have a total positive economic impact of $4.3 billion on Michigan.

In addition to the $4 billion projected to impact Marquette County, $10 million will benefit Baraga County, $179 million for the rest of the Upper Peninsula and $169 million for the Lower Peninsula. “Marquette County’s economy is expected to be nearly 20 percent greater by 2016 when Eagle Mine’s economic contribution peaks than it otherwise would have been without Eagle Mine,” the report stated.

In addition to the economic forecasting, the “Eagle Mine: Economic Impact Assessment” report -which was produced by former project owner Rio Tinto and released Oct. 17 by new owner, the Toronto-based Lundin Mining Corp.- also provides information on employment, purchase of goods and services, government revenue and risks.

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UPDATE 1-Rio Tinto to halt production at Gove alumina refinery (Reuters India – November 29, 2013)

http://in.reuters.com/

SYDNEY, Nov 29 (Reuters) – Miner Rio Tinto said on Friday it will stop alumina production at its Gove refinery in Australia, as the plant is no longer viable amid difficult market conditions.

Rio said it will start winding down production in the first quarter of 2014 and will continue the phase-out during the year. The process would take “some time”, it said.

The announcement was expected after Rio said earlier this week it had decided not to convert the Gove plant to use gas-fired power. The refinery, which employs 1,400 workers, is part of the Pacific Aluminium business that Rio tried to sell, but then reintegrated into its business in August.

The decision comes a day after the mining giant unveiled plans to increase its iron ore capacity towards 360 million tonnes by 2017, cutting costs by $3 billion by not digging new mines and slowing the expansion by about two years.

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Vale to Pay $9.6 Billion to Settle Decade-Long Tax Fight – by Juan Pablo Spinetto – (Bloomberg News – November 28, 2013)

http://www.bloomberg.com/

Vale SA (VALE5), the world’s biggest iron-ore producer, agreed to pay 22.3 billion reais ($9.6 billion) to settle a decade-long tax dispute with Brazil over profits of its foreign units, ahead of a deadline tomorrow.

Vale will pay 5.97 billion reais at the end of this month and 16.4 billion reais in 179 monthly installments, plus interest, after its board decided to join a settlement program offered by the government, the Rio de Janeiro-based company said in a filing late yesterday. Shares jumped.

Brazil’s biggest exporters including Vale, brewer Cia. de Bebidas das Americas and steelmaker Gerdau SA (GGBR4) have been fighting a combined 75 billion reais in tax claims on profit of their foreign subsidiaries, according to the country’s tax agency. The net present value of Vale’s liabilities is $6.6 billion, below the $10 billion that was being anticipated by investors, according to JPMorgan Chase & Co. estimates.

“We view this announcement as positive for Vale,” JPMorgan analysts including Rodolfo Angele wrote in a note to clients. “We now can turn the page on the uncertainties surrounding this legal imbroglio to focus on industry and company fundamentals.”

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Shrinking mining budgets will spark government disputes – Chatham House (Mineweb.com – November 28, 2013)

http://www.mineweb.com/

“Future disputes have significant ramifications not only for the economic and political stability of the countries concerned but also for companies’ assets and reputations,” says a new Chatham House report.

RENO (MINEWEB) – A series of bitter disputes in recent years—some of which have involved lengthy litigation, project cancellation or even expropriation—has unsettled mining sector investors and global metals markets, says the Chatham House Report, Conflict and Coexistence in the Extractive Industries.

Over the last decade, more disputes involving mining companies or oil and gas have gone to international arbitration. Between 2001 and 2010 arbitration cases for mining increased nearly fourfold, says the report.

Not so long ago, experts suggested expropriations of mining projects would become a thing of the past, but nationalizations involving Rio Tinto in Guinea and First Quantum Minerals in the Democratic Republic and of the Congo have cost investors billions.

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Zeppelins Seen Hauling Caterpillars to Mine Siberia: Commodities – by Firat Kayakiran & Thomas Biesheuvel (Bloomberg News – November 27, 2013)

http://www.bloomberg.com/

Robin Young of Amur Minerals Corp. wants to dig for nickel and copper in Siberia where forbidding winters and poor roads make it tough to haul in equipment. His best option: fly it in with zeppelins.

Otherwise the London-traded explorer would have to spend about $150 million building a 350-kilometer (218-mile) road to truck in heavy construction gear, Chief Executive Officer Young said in an interview. Peter Hambro, executive chairman of gold producer Petropavlovsk Plc, said he invested in a maker of the airships and foresees the mining industry adopting them.

“To build a bridge to take a Toyota Land Cruiser isn’t horrifically expensive,” Hambro said. “To build a bridge that will take a Caterpillar 777 is very, very expensive,” he said, referring to the 87-ton dump truck used in mines.

Zeppelin and blimp manufacturers need mining contracts to creep back to life, 76 years after the Hindenburg burned and crashed in New Jersey, ending most buyer interest for decades.

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Poland’s road from coal destined to be long – by Jan Cienski (Financial Times – November 25, 2013)

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

Less than six months before Poland hosted more than 10,000 delegates for the UN’s climate talks, Donald Tusk, the prime minister, was in the south-western city of Opole showing where his priorities really are.

He was there to shepherd through an agreement to spend 11bn zlotys ($3.5bn) building an enormous 1.8GW coal-fired power station that Polska Grupa Energetyczna, the country’s leading utility, was so reluctant to build that Mr Tusk had to browbeat Krzysztof Kilian, then chief executive, into going along with the project.

“We are now in the process of shaping the energy mix in which coal will again find its place,” Mr Tusk said during the signing ceremony. “It is important that coal produces energy, that people have work and that Poland has enough energy.”

Poland is under growing pressure from the European Union and elsewhere to move decisively away from coal, which provides about 90 per cent of the country’s electricity. However, there are few immediate alternatives. Natural gas, a much cleaner fuel, is unpopular because most of it has to be imported from Russia. Meanwhile, hopes of a native shale gas industry have failed to materialise until now because of -financial, regulatory and geological hurdles.

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Rio Tinto losing $30m a year from Arnhem Land refinery – by Dennis Shanahan (The Australian – November 27, 2013)

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

RIO Tinto’s decision not to switch its alumina refinery at Gove to cheaper gas supplies has sealed the fate of the plant, which employs 1500 and keeps the Northern Territory’s fourth-largest town of Nulunbuy alive.

The international mining giant confirmed yesterday that it was “reviewing the status” of the refinery in Arnhem Land, which employs hundreds of indigenous workers.

The Rio board is expected to make a decision this week on winding down the refinery operations and instead to export bauxite from the Gove mine on the Gulf of Carpentaria.

Rio Tinto is losing $30 million a year from the refinery and the Northern Territory and commonwealth governments had hoped an offer of subsidised gas to replace high-cost fuel oil to make alumina would keep the refinery open.

Yesterday, Northern Territory Chief Minister Adam Giles said he hoped Rio Tinto would keep the refinery open but the issue was “no longer about gas” for Gove.

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