International Media Resource Articles – Page 760

Mine ruling a test of political mettle, says Rio – by Sarah-Jane Tasker (The Australian – November 14, 2013)

November 14, 2013

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

MINING giant Rio Tinto has warned that a new planning application for its Warkworth coalmine in NSW is a “litmus test” for the ability of governments to deliver regulatory results to match their economic aspirations.

The miner has been fighting to expand its coalmine in the Hunter Valley region after the Land and Environment Court put the brakes on plans earlier this year, after Rio had already received government approvals to proceed.

Rio has appealed the court decision but its chances of winning are slim, leading the miner to look to a short-term measure to keep the operation open and 1300 people in a job. The company this week lodged an application to access 350m of land to keep its production at an economic level.

Rio Tinto Coal Australia managing director Chris Salisbury said that seeking access to the extra land was the only real option Rio had to avoid further significant impacts on production and jobs. “Importantly, it will also provide us with two years to look at options for further planning approvals to provide a longer-term future for the mine,” he said.

CORRECTED-INSIGHT-Rebel defeat boosts Kabila but peace in Congo distant – by Pete Jones (Reuters India – November 13, 2013)

November 13, 2013

http://in.reuters.com/

KINSHASA, Nov 11 (Reuters) – The defeat of Democratic Republic of Congo’s most important rebel group has strengthened President Joseph Kabila’s grip on political power, but bringing peace to his vast central African nation remains a remote prospect.

“Thank you, Kabila,” sang thousands of women dressed in white who marched through the centre of the sprawling riverside capital Kinshasa last week, celebrating the army offensive that routed the M23 rebels in Congo’s distant east.

A peace deal to be signed on Monday in Entebbe, Uganda, aims to draw a line under the 20-month rebellion, the most serious conflict in Congo since a major war ended in 2003.

It caps a dramatic turnaround for the 42-year-old president, whose reputation was in tatters just a year ago, accused by the opposition of rigging a 2011 election and humiliated by M23’s capture of Goma, the largest city in eastern Congo.

“It is historic. It’s hard to exaggerate this moment,” said Jason Stearns, project director at the Rift Valley Institute. “This is the first time this Congolese army has defeated a serious armed group militarily … Kabila is riding high.”

Vale Sells $1.8 Billion Stake in Norway’s Norsk Hydro – by Juan Pablo Spinetto & Firat Kayakiran (Bloomberg News – November 12, 2013)

November 13, 2013

http://www.bloomberg.com/

Vale SA (VALE5), the world’s biggest iron ore exporter, sold its stake in aluminum-maker Norsk Hydro ASA (NHY) for $1.8 billion, about half the holding’s value when the Brazilian company acquired it in 2011.

Vale sold 407.1 million shares in Oslo-based Hydro for 25 kroner each, the Rio de Janeiro-based company said today in a statement. If an over-allotment option of 40.7 million shares is exercised in full, Vale will have disposed of its entire 22 percent stake for 11.2 billion kroner ($1.82 billion).

The miner is selling assets, putting projects on hold and focusing on its more profitable iron-ore business in a bid to recover profit margins after commodity prices fell. In September, it sold stakes in a cargo unit for about 2.7 billion reais ($1.2 billion) to Japan’s Mitsui & Co. and a Brazilian government fund after $1.47 billion of asset sales last year, including a coal mine in Colombia and 10 large vessels.

At 25 kroner a share, the deal prices the stake slightly above its value on Vale’s books, said Alan Glezer, an equity analyst at Banco Bradesco SA.

Security of supply concerning platinum end-users – Johnson Matthey – by Martin Creamer (MiningWeekly.com – November 12, 2013)

November 13, 2013

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

JOHANNESBURG (miningweekly.com) – Security of platinum supply is concerning platinum end-users, Johnson Matthey GM research Peter Duncan said on Tuesday.

Speaking to Mining Weekly Online in a video interview (see attached), Duncan said the lack of capital investment even in the replacement of platinum production capacity in the last few years was making it difficult for South Africa to grow its supply at a time of promising demand prospects.

“There is some concern amongst particularly the automotive industry original-equipment manufacturers about security of supply,” he said. A fall in productivity is estimated to have lost South Africa some 300 000 oz and further strikes or stoppages in the final quarter of 2013 could eliminate any increase in South African supplies.

Production losses owing to one-off factors such as strikes and safety stoppages totalled 100 000 oz in the first half. The uncertainty of platinum supply comes against a forecast of rising demand from expected increased upcoming vehicle and many new phases of platinum-demand-boosting emission standards to be introduced globally next year.

HudBay Minerals Meets a Legacy of Guatemalan Violence in Canadian Court – by Joseph Kirschke (Engineering and Mining Journal – November 11, 2013)

November 13, 2013

http://www.e-mj.com/

Five years ago, officials at Canada’s Skye Resources Inc. had a simple goal: to become a mid-tier nickel producer representing 1% of the global market by 2015 through developing their open-pit Phoenix project in El Estor, Guatemala, with a local subsidiary.

But as with many things in the troubled Central American nation, the focus was doomed from the start. Within two years, the Vancouver-based miner and Compania Guatemalteca de Niquel (GCN) would stand accused of colluding with private security forces and the local military in the gang rape of 11 indigenous women and two other attacks that left one man dead and another paralyzed, while clearing land for operations.

Such incidents are not unique to Guatemala. Indeed, the nation of 13 million heaves equally under drug trafficking violence and the simmering legacy of a brutal 36-year civil war, which claimed more than 250,000 lives and displaced more than 1.5 million. What is novel about this case, however, was its arrival before HudBay Minerals Inc.—which bought Skye in 2008 and abandoned Phoenix in 2011—in three separate lawsuits in a Canadian court this summer.

These will be the first such trials in the world’s top mining nation following three attempts by other foreign plaintiffs to hold Canadian miners accountable to their own court systems since 1997.

Gabriel Resources still confident of way forward for Rosia Montana – by Alex Williams (Mineweb.com – November 12, 2013)

November 13, 2013

http://www.mineweb.com/

While Romania’s parliamentary committee voted overwhelmingly against legislation that would have fast tracked the mine, CEO, Jonathan Henry remains positive.

LONDON (MINEWEB) – Rosia Montana has a future as a gold mine, Gabriel Resources CEO, Jonathan Henry, told Mineweb on Tuesday. “I’m confident that there’s a way forward,” he said. “We just need to see it.”

On Monday a parliamentary committee overwhelmingly voted against legislation that would have fast-tracked the mine’s construction by declaring it a “public utility.”

However, the company views Monday’s committee decision as a rejection of the legislation supporting Rosia Montana, rather than a rejection of the project itself. The committee has left open the possibility of a wide-ranging review of its mining laws, under which Rosia Montana could technically be approved in the future.

Implications of Indonesia mining law clear but consequences are not – by Peter Alford (The Australian – November 13, 2013)

November 13, 2013

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

IT took 4 1/2 years for regulations to be published giving teeth to the foreign investment provisions of Indonesia’s mining law – but what teeth!

Ministry of Energy and Mineral Resources Regulation 27/2013, when it appeared two months ago, crystallised almost everything that worried foreigners about the tone and intent of the mining law passed in 2009.

Although one key intent was to re-create a reliable framework for foreign investment – which, outside coal, remains critical to developing Indonesia’s mineral resources – the law is characterised by a general suspicion of mining activity, a particular impatience with foreign ownership, unsparing regulation and government rent-seeking.

Under MEMR 27/2013 the divestment schedule for mine production licences (production IUPs) is as severe as foreshadowed – from maximum 80 per cent foreign ownership in year six to 49 per cent in year 10 – with national, provincial and local governments having first rights of acquisition.

Exploration cuts shortsighted move for global mining sector – by Lawrence Williams (Mineweb.com – November 12, 2013)

November 12, 2013

http://www.mineweb.com/

Cutting exploration may be a shortsighted move for major and mid-tier mining companies, but meantime it does look as if the global fall in exploration activity may be flattening out.

LONDON (MINEWEB) – At the Randgold Resources Q3 results presentation in London, the company’s CEO, Mark Bristow, made a scathing comment about the recent moves by a number of major and mid-tier mining companies to cut back on mineral exploration as a part of their new found austerity programmes. While cash strapped juniors are cutting back, or ceasing exploration activity altogether, this is of necessity as they move into cash preservation mode to try and stay alive.

Many juniors have thus ceased exploration drilling altogether, laid off staff, reduced head office costs, and cut executive salaries to the bare minimum, but Bristow sees no reason for companies with good balance sheets and ample cash to do the same, largely as a sop to increasingly active institutional shareholders who look to short term bottom line figures rather than the long term future of the companies. As we noted here a few days ago in reporting on the Randgold results, Bristow commented that shareholders can be ‘brutal’ when the companies in which they are invested are seeing falling profits and cashflow.

China Tries to Clean Up Toxic Legacy of Its Rare Earth Riches – by Kieth Bradsher (New York Times – October 22, 2013)

November 12, 2013

http://www.nytimes.com/

TIANJIN, China — In northern China, near the Mongolian border, radioactively contaminated leaks from two decades of rare earth refining have been slowly trickling underground toward the Yellow River, a crucial water source for 150 million people.

In Jiangxi province in south-central China, the national government has seized control of rare earth mining districts from provincial officials after finding widespread illegal strip-mining of rare earth metals.

And in Guangdong province in southeastern China, regulators are struggling to repair rice fields and streams destroyed by powerful acids and other runoff from open-pit rare earth mines that are often run by violent organized crime syndicates.

Communities scattered across China face heavy environmental damage that accumulated through two decades of nearly unregulated rare earth mining and refining. While the Chinese government has begun spending billions of dollars to clean up the damage, the environmental impact is becoming an international trade issue, with a World Trade Organization panel in Geneva expected to issue a crucial draft report on Wednesday.

Canada Uses Protest Lesson to Develop C$50B Ring of Fire – by Greg Quinn (Bloomberg News – November 7, 2013)

November 8, 2013

http://www.bloomberg.com/

The Canadian federal minister overseeing projects to develop C$50 billion ($48 billion) of mineral deposits said he’ll use lessons learned from aboriginal protests to temper resistance that has slowed other projects.

Increased job training, infrastructure and participation in environmental reviews are helping build trust with aboriginal communities adjacent to the so-called Ring of Fire deposits in northern Ontario, Greg Rickford said in an interview. The Idle No More protest movement that emerged last year showed anger with “politics at every level” and demonstrated that aboriginals want to share the benefits of resource development, he said.

The protests “give us important guidance on how to proceed, and we have been following that playbook,” Rickford, minister responsible for Ring of Fire and economic development in northern Ontario, said in an interview at Bloomberg’s Ottawa newsroom.

While Prime Minister Stephen Harper has said he wants Canada to become an energy superpower, those efforts have been slowed by protests against projects such as Enbridge Inc.’s Northern Gateway pipeline to bring Alberta oil to the west coast for export.

COLUMN-New nickel projects ramping up…slowly – by Andy Home (Reuters U.S. – November 7, 2013)

November 8, 2013

http://www.reuters.com/

Oct 7 (Reuters) – You don’t need to look very far to understand why nickel has been the consistent underperformer of the London Metal Exchange (LME) base metals pack since the middle of the year.

The explanation comes on a daily basis in the form of the LME’s morning stocks report.

Today’s showed registered inventory rising by a net 558 tonnes to 240,408 tonnes, an all-time record high – the latest in a long series of them – as surplus units spill into exchange warehouses. Nickel is a market in chronic oversupply resulting from systemic over-production.

Supply needs to be cut if the market is to rebalance. But this market’s supply profile is complex, with at least three moving parts.

The first is China’s nickel pig iron (NPI) sector. There are still few signs that the expansion momentum in NPI is slowing. Rather, price pressures are forcing producers to switch to lower-cost technology, in effect reducing the collective cost curve.

UPDATE 1-Vale eyes Sudbury deal with Glencore to cut costs (Reuters U.S. – November 7, 2013)

November 8, 2013

http://www.reuters.com/

Nov 7 (Reuters) – Brazil’s Vale confirmed on Thursday it is in talks with Glencore Xstrata over potential cooperation between the mining groups’ nickel operations in Canada’s Sudbury basin, in an effort to cut costs as prices languish.

Vale said on Thursday it was not planning “a corporate joint venture” in Sudbury, but was looking at other options to join forces in mining, milling and smelting to save cash. Nickel prices have fallen by around a fifth since January and are languishing around four-year lows, weighed down by oversupply.

“We are looking at the synergies now and plan to start negotiating next year,” Vale’s chief executive Murilo Ferreira told analysts in a quarterly earnings call, adding an eventual deal would not involve a full merger.

Reuters reported last month that Glencore and Vale had revived talks over long-debated cooperation in Sudbury, with the companies considering a number of options for their mining and processing operations in the area. Sources familiar with the situation said then that talks were at an early stage.

China National Gold Said to Weigh Investments in Ivanhoe Assets – by Zijing Wu (Bloomberg News – November 6, 2013)

November 8, 2013

http://www.bloomberg.com/

China National Gold Group Corp. is considering investing in mines owned by Robert Friedland’s Ivanhoe Mines Ltd. (IVN), including the Platreef project in South Africa, a person with knowledge of the situation said.

China’s largest gold producer values the Platreef platinum and copper mine at about $1 billion, said the person, who asked not to be identified as the information is private.

State-owned China National Gold has also looked at other Ivanhoe projects located in the Democratic Republic of Congo and Gabon, though prefers more developed countries like South Africa, the person said. No terms for a purchase of the Platreef mine have been finalized, and China National Gold could instead consider buying a stake in Ivanhoe itself, the person said.

China National Gold, which ended talks in January to acquire Barrick Gold Corp. (ABX)’s African unit for about $2.3 billion, is also exploring opportunities to buy gold and copper assets in Canada and Australia, the person said.

UPDATE 3-Vale Q3 profit doubles on higher iron ore sales, prices – by Jeb Blount and Sabrina Lorenzi (Reuters U.K. – November 6, 2013)

November 8, 2013

http://uk.reuters.com/

Nov 6 (Reuters) – Brazil’s Vale SA , the world’s second-largest mining company, reported on Wednesday that its third-quarter net income more than doubled from a year earlier, beating analysts’ expectations as iron ore prices and sales volumes rose.

Iron ore prices averaged about a fifth higher in the third quarter of this year than in the same quarter of 2012, according to Thomson Reuters. Net sales, or total sales minus sales taxes, rose 11 percent from a year earlier to $12.7 billion, beating the average analyst estimate of $12.5 billion. The volume of iron ore sales rose 11 percent to 73.4 million tonnes.

“We expected strong volumes, given the robust Brazilian iron ore export figures for July-September, but shipments still exceeded our expectations,” mining analysts Garrett S. Nelson, Mark A. Levin and Nathan P. Martin of BB&T capital markets in Richmond, Virginia said in a report to investors.

“Vale’s results were largely a reflection of iron ore prices that have remained ‘higher for longer’ in the face of widespread oversupply concerns,” they added.

Iron ore miners in $65bn upswing – Matt Chambers (The Australian – November 07, 2013)

November 7, 2013

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

MORE than $65 billion has been added to the value of the nation’s iron ore miners this financial year — $2.3bn of it into Andrew Forrest’s share portfolio — as confidence grows in the strength of prices of Australia’s biggest export.

Iron ore prices remain above $US130 a tonne, outlasting expectations, as Chinese steel mills continue to buy ore and build stockpiles.

But the price increase pales in comparison to the gains of the Australian miners whose revenue depends on the steelmaking ingredient.

Since June 30, the best performing top 200 Australian stocks have been Mount Gibson Iron, up 111 per cent, Arrium, up 93 per cent, and Andrew Forrest’s Fortescue Metals Group, up 92 per cent. In the same period, Australian iron ore prices have risen just 13 per cent, illustrating the surprise around the sustained price strength.

In dollar terms, Rio Tinto and BHP Billiton will be reaping the most benefits, but their size and diversity have diluted the effect on their share prices. Since June 30, BHP is up 21 per cent, or $33bn, and Rio is up 25 per cent, or $21.7bn.