International Media Resource Articles – Page 760

On Canada’s upstart exchange: A rose by any other name… – by Christopher Ecclestone (Mineweb.com – April 2, 2014)

April 3, 2014

http://www.mineweb.com/

Here Christopher Ecclestone of Hallgarten and Company weighs in the chances the TSX Venture’s chief Canadian competitor gains appeal.

LONDON – Circumstances brought us, over the last month, to ponder the Canadian Securities Exchange (CSE) for a number of reasons. Not having focused before on the alphabet soup of alternative markets in that country, it came as a bit of a surprise to see that the entity that was known until recently as the CNSX had not started to lift its game and seriously challenge the dominance of the now bank-owned TMX combine.

The main motor for this change was the acquisition of 50% of the equity of the CNSX by Ned Goodman, one of the doyens of the Canadian mining investment scene and owner of the mighty Dundee group.

There was much bewailing in 2013 that the old spirit of the Vancouver Stock Exchange had been desexed by the merger with the TSX (though no-one bewailed the demise of the Montreal Exchange). From what we can gather Goodman wants to harvest some of this dissatisfaction and is targeting companies fed up with the TSXV and encouraging them to move the way of the CSE.

BHP Billiton Signals Confidence in Its Coal Business – by Rhiannon Hoyle (Wall Street Journal – April 2, 2014)

April 2, 2014

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

Coal Chief Speaks Out as Group Mulls Asset Sales

SYDNEY—The head of BHP Billiton Ltd. BHP.AU +0.86%’s coal business signaled confidence in the outlook for the strained global coal industry, forecasting increases in world demand for decades to come.

Dean Dalla Valle said he expects most demand growth to come from outside China, which has been the primary driver of global commodity prices in recent years. China currently accounts for about half of the world’s coal consumption.

“Over the next couple of decades we expect global growth in demand for both energy coal and metallurgical coal,” he said in a speech in Brisbane Wednesday. Although “the likes of India, a country not overly endowed with metallurgical coal, [is] anticipated to be the most significant source of new demand” for coal used in steelmaking, he said.

India is the world’s third-largest importer of coal, after China and Japan, according to the World Coal Association. China, the largest producer of metallurgical coal, will continue to be a major importer of the raw material from mining hubs like Australia and Indonesia, Mr. Dalla Valle said. Additional Chinese demand for steelmaking coal is expected to be mostly met by domestic mines.

South African mining: Stuck in the past (Financial Times – April 1, 2014)

April 2, 2014

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

Critics warn that the migrant labour system threatens the stability of important gold and platinum producers

Mcingelwa Maqotyna still remembers the humiliation that came with applying for the job: being forced to strip naked in a room full of other men, then stepping on to scales to be weighed.

Once he had landed the job, he travelled hundreds of miles from his village to a mine, where he had to get used to plunging deep beneath the surface of the earth at lightning speeds. Seeing the cage-like lift for the first time, he fearfully wondered if its exposed cables would hold.

For Nicolson Mkananda it was the contrast between the tranquil rural environment in which he had grown up and the hustle and bustle of life at a mine that struck him: the individualism, the strange languages and the strict control and discipline imposed on workers. “It was very, very frightening to go there,” he says.

These men, who left their remote villages near Lusikisiki in South Africa’s Eastern Cape in the 1960s and 70s, were part of a vast pipeline of cheap labour that allowed the country’s gold and platinum sectors to flourish. This system of migrant labour was developed during colonialism and extended under apartheid, becoming a pillar of the economy.

World copper statistics 2013 (International Mining – April 1, 2014)

April 2, 2014

http://www.im-mining.com/

The International Copper Study Group (ICSG) has released preliminary data for December 2013 world copper supply and demand in its March 2014 Copper Bulletin. In 2013 world apparent use is estimated to have increased by 4% (805,000 t) to 21.2 Mt. World mine production is estimated to have increased by 8% (1.3 Mt) to 18 Mt. World refined production is estimated to have increased by around 4.5% (879,000 t) to 21 Mt. According to preliminary ICSG data, the refined copper market balance for December 2013 showed an apparent production surplus of 34,000 t as, despite strong Chinese apparent demand, refined usage was weak in major consuming regions during the yearend holiday period.

When making seasonal adjustments for world refined production and usage, December showed a production deficit of 57,000 t. The refined copper balance for the full-year 2013, including revisions to data previously presented (including a major revision to India’s refined usage series), indicates a production deficit of 193,000 t (a seasonally adjusted deficit of 337,000 t). This compares with a production deficit of 266,000 t (a seasonally adjusted deficit of 419,000 t) in the same period of 2012.

In 2013 world apparent usage is estimated to have increased by 4% (805,000 t) to 21.2 Mt compared with that in 2012. Chinese apparent demand increased by 7% from that in 2012: a decline in net imports of refined copper of 216,000 t (that occurred mainly in the first half of the year) was more than offset by an increase in refined production of around 675,000 t. Actual demand in China in 2013 may have exceeded apparent demand as the lower net imports level was accompanied by a decline in unreported inventories held in bonded warehouses in China.

Mining bosses doubt private equity investors can strike gold – by SILVIA ANTONIOLI AND DMITRY ZHDANNIKOV (Reuters U.K. – April 1, 2014)

April 2, 2014

http://uk.reuters.com/

LAUSANNE, Switzerland – (Reuters) – Private equity firms, which have been showing an increased interest in investing in the mining industry, will have a hard time even if they are betting on recovery in the longer term, the bosses of Anglo American (AAL.L) and Glencore Xstrata (GLEN.L) said on Tuesday.

Private equity firms such as Warburg Pincus have hired executives from the mining industry to start investing in the sector and some top industry veterans such as Vale’s (VALE5.SA) former chief executive Roger Agnelli and Mick Davies, head of Xstrata before its takeover by Glencore, have also lined up funding for new ventures.

X2, the investment vehicle run by Davies for example, said on Monday it now has $3.75 billion (2.25 billion pounds) backing his plans to create a new medium-sized diversified mining company.

But the chief executives of the two biggest diversified miners said choppy commodity markets and unpredictable returns will make it hard for the highly geared private equity firms to pay interest on their debt.

Commodities Defy Citigroup ‘Death Bells’ With Quarter’s Best (3) – by Elizabeth Campbell (Bloomberg Business Week – April 01, 2014)

April 2, 2014

http://www.businessweek.com/

A year after Citigroup Inc. declared the decade-long run of commodity gains over, wacky weather, dead piglets and Vladimir Putin have gotten in the way.

While Citigroup rang “death bells” in April 2013 for the synchronized super cycle fueled by economic growth in China, extreme weather and supply squeezes led to surprise rallies in 2014’s first three months. Coffee hit a two-year high, cattle and hogs rose to records and nickel had its best quarter since 2010. Gold rebounded from the worst rout in 32 years after Putin’s incursion into Ukraine’s Crimea region set off the biggest standoff between Russia and the U.S. since the Cold War.

Commodities are “still a powerful hedge,” Rob Haworth, a Seattle-based senior investment strategist at U.S. Bank Wealth Management, which oversees $115 billion, said in a telephone interview. “Things happen that we don’t anticipate, whether it’s an invasion in Ukraine or twice as much snow in the middle of America as we normally get. Our clients benefit from having a little exposure to protect against the unanticipated.”

Commodities topped returns for stocks, bonds and currencies, the first quarterly outperformance against all asset classes since 2012. New York-based Citigroup and Goldman Sachs Group Inc. say the rally won’t last as supply surpluses start to emerge in everything from sugar to zinc.

The Most Dangerous Coal Mine In The World: Mongolia’s Illegal Nalaikh Pits – by Jacopo Dettoni (International Business Times – April 01 2014)

April 2, 2014

http://www.ibtimes.com/

ULAANBATAAR, Mongolia — Deep inside the earth, the eyes of blackened miners shimmer under spotlights as they hammer endlessly upon rock, tapping the vein of Mongolia’s largest illegal coal mine. The Nalaikh mine, 40 kilometers (25 miles) from the capital, Ulaanbaatar, is both a vision from the past and a rogue operation from the present.

Coal dust streaks the miners’ cheeks, their hands, their worn clothes. In many cases, whether they know it or not, their lungs are being ruined by coal and nicotine. They risk their lives every time they go into the pits.

Frequently, theirs is a losing bet. The miners here are part of a booming complex of illegal mining in Mongolia, the seamy underside of an expansion of legal mining in the past several years. Fatal accidents take place at a higher rate here than in the infamously deadly China mines, as private operators seek to maximize profits by skimping on safety gear.

The miners crawl in the darkness for hundreds of meters through narrow, rambling passages before reaching the working face, where the new coal is cut. Dug with shovels and picks, the tunnels have few timber supports — a minimum safety standard in any coal mine, and the walls crumble as carts loaded with coal slide up, pulled from the outside by trucks.

COLUMN-China PMI not that strong, but may be good for commodities – by Clyde Russell (Reuters India – April 1, 2014)

April 1, 2014

http://in.reuters.com/

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

LAUNCESTON, Australia, April 1 (Reuters) – China’s official Purchasing Managers’ Index for March probably isn’t as strong as it looks, but that’s likely not a bad thing for commodity demand in the next few months.

The National Bureau of Statistics (NBS) PMI rose to 50.3 in March from 50.2 in February, matching the consensus expectation and indicating that the factory sector expanded slightly in the month.

The official measure, which focuses more on large, state-owned enterprises, is somewhat at odds with the HSBC PMI, which fell to an 8-month low of 48 in March, its third straight month below the 50 level that separates expansion from contraction.

It’s likely that the HSBC survey is painting a more accurate picture of current conditions in China, given the NBS measure tends to be seasonally strong in March, as this is the first month after the Lunar New Year holidays, which this year straddled January and February.

Why are platinum and palladium not meeting analyst expectations? – by Lawrence Williams (Mineweb.com – April 1, 2014)

April 1, 2014

http://www.mineweb.com/

The impact of the 10 week old strike which has halted production at a number of South Africa’s platinum mines so far seems to have had little impact on pgm prices. Why?

LONDON (MINEWEB) – While every now and again some analyst or other comments that perhaps palladium is outperforming gold, or platinum is, on the year to date both the pgms have moved up pretty well pari passu with gold overall. All three metals are around 7-8% up since the beginning of the year. Indeed gold moved up substantially further during the height of the Ukraine crisis and while the pgms followed they did not quite do so to the same extent. As gold has fallen back though, the pgms have caught up again.

Many analysts have been preaching the investment merits of the pgms in the light of the long running platinum strike in South Africa which has seen a number of mines effectively shut down so far for some ten weeks – with no end in sight to the strikes yet.

The more aggressive AMCU which has become the dominant player among the platinum mine unions, has been demanding an effective doubling of the workers’ wages which the mining companies have concertedly said they cannot afford – and with many of the deep narrow reef platinum producers finding it tough to make any kind of profit even at current platinum prices they do have a point.

CFMEU slams Rio Tinto’s warning on robots replacing Aussie workers – by Ben Hagemann (Ferret.com – March 31, 2014)

April 1, 2014

http://www.ferret.com.au/

The Construction, Forestry, Mining and Energy Union (CFMEU) has struck back after Rio Tinto’s warned that Australian mining labour forces could be replaced by robots.

Rio Tinto CEO Sam Walsh has cautioned Australia against allowing resource projects to shut because of local cost pressures, and warned that Australian society and Australian workers had to ensure they didn’t price themselves out of the market.

He said that the carbon and mining taxes were an issue, and that Rio Tinto is banking on the repeal of both the mining and carbon taxes. “It’s awfully important Australia maintains its competitiveness,” Walsh said.

He said Rio Tinto’s push into the “robotisation” of mining was partly due to the massive wages the company has been forced to pay in Australia. Walsh first introduced automated workshops when he headed Nissan’s manufacturing operations, and said that was done because Australians didn’t want to do the hard, dirty work.

“Some people have expressed concern about automation but quite frankly it’s getting harder and harder to attract young people to remote areas,” he said.

Inside ‘big coal country’ as coal-fired energy demand returns – by Brad Quick (CNBC – April 1, 2014)

April 1, 2014

http://www.cnbc.com/

More U.S. power plants have been burning coal to meet rising energy demand. CNBC’s Brad Quick offers an inside look from the Powder River Basin in Montana and Wyoming, one of America’s largest coal regions. Montana often is known as “big sky country.” But ask any local, and they’ll tell you the phrase “big coal country” is just as fitting.

Along with Wyoming, Montana is home to the Powder River Basin—a region that boasts some of the biggest coal mines in the world. The two states account for 40 percent of all the coal produced in the U.S. So if you thought coal was a fading fuel—upstaged by natural gas and solar panels to power homes and businesses—guess again.

Reports of coal’s demise are greatly exaggerated

The frigid winter that froze much of the country also caused a surge in electricity demand. Natural gas prices soared to their highest level in years. So U.S. power plants trying to balance higher energy demand with rising fuel costs fired up more coal burners to keep consumer energy costs at bay.

UPDATE 1-BHP Billiton weighs spin-off of unloved assets – by Sonali Paul (Reuters U.K. – April 1, 2014)

April 1, 2014

http://uk.reuters.com/

MELBOURNE, April 1 (Reuters) – BHP Billiton is weighing a range of options to simplify its portfolio of assets, including a possible spin-off of unwanted businesses such as aluminium and nickel into a separate company, the top global miner said on Tuesday.

“We continue to actively study the next phase of simplification, including structural options, but will only pursue options that maximise value for BHP Billiton shareholders,” the company said in a statement.

Chief Executive Andrew Mackenzie has said over the past year that the company plans to focus on its large iron ore, copper, coal and petroleum businesses, while selling off smaller, less profitable operations.

The company’s statement on Tuesday came shortly after The Australian Financial Review newspaper reported that BHP was considering spinning off non-core assets into a separate company, offering shares to existing shareholders.

BHP shares rose as much as 2.2 percent to a three-week high after the report. They last traded up 1.7 percent at A$37.10 in a weaker broader market. Spinning off a company with non-core assets would allow BHP to pare down at a time when it may be difficult to find buyers willing to pay a good price. It could also help flush out a buyer.

Is An Agreement Between Ontario Government And First Nations Good News For Cliffs Natural? – by Trefis Team (Trefis.com – April 1, 2014)

April 1, 2014

http://www.trefis.com/

The Ontario government and Matawa First Nations have reached a negotiation framework agreement to discuss how to develop the world-class Ring of Fire mineral belt in Northern Ontario where Cliffs Natural Resources (NYSE:CLF) owns huge deposits of chromite.

The company has been unable to develop its assets here owing to lack of agreement among stakeholders on key issues related to environment, revenue sharing, community infrastructure, etc. Also, the region is totally isolated from the rest of the country and needs massive investment to develop connecting transportation infrastructure. This itself has been the subject of an acrimonious court battle between Cliffs and KWG Resources, which controls the land where the key transportation route lies. [1]

Therefore, while an agreement on a common framework is definitely a good first step, it is still going to take a lot of time to negotiate and agree to specific terms and conditions. This means that Cliffs’ investors will do good not to get their hopes up for now. The Black Thor project, right now in the suspended state, is unlikely to be revived any time soon.

Potential Of The Chromite Mines

The Ring of Fire region is thought to hold up to $50 billion worth of minerals and is going to be North America’s first major source of chromite.

Tesla to Use North American Material Amid Pollution Worry – by Asher Berube (Investor Intel – March 31 2014)

April 1, 2014

http://investorintel.com/

March 31, 2014 (Source: Bloomberg) — Tesla Motors Inc. (TSLA), the electric vehicle maker co-founded by Elon Musk, plans to use only raw materials sourced in North America for its proposed $5 billion U.S. battery factory.

The Silicon Valley company won’t look overseas for the graphite, cobalt and other materials needed for its so-called Gigafactory, said Liz Jarvis-Shean, a spokeswoman.

“It will enable us to establish a supply chain that is local and focused on minimizing environmental impact while significantly reducing battery cost,” she said in an e-mail.

The move comes amid heightened interest in curbing graphite pollution and a widespread corporate sensitivity about avoiding the use of industrial minerals from global trouble spots such as central Africa. China’s government, for example, has begun to shutter mines producing graphite, a major ingredient in lithium-ion batteries, over air-quality issues, Bloomberg News reported March 14.

Tesla “is a high-profile company that is entering an age of supply-chain transparency,” said Simon Moores, an analyst at Industrial Minerals Data in London.

Glencore closer to iron ore ambition – by Katrina Manson and Javier Blas (Financial Times – March 30, 2014)

March 31, 2014

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

Glencore has cleared a key hurdle in its ambition to become an iron ore miner, reaching a preliminary deal with the west African country of Mauritania for a $1bn contract for access to railway and port facilities.

The commodities giant is keen to expand into iron ore, a key ingredient of steel and a vital source of profits from rivals Rio Tinto, BHP Billiton and Vale of Brazil. The trader is seeking to develop three big projects in Mauritania, two in partnership with state-controlled miner Société Nationale Industrielle et Minière, which has exclusively exported the mineral from the country since the 1960s.

The railway contract is one of the three key obstacles to build the remote Askaf mine. Although Mauritania, which relies on iron ore for half its exports and a quarter of its tiny $4bn economy, wants to boost iron ore production, the two parties have spent two years negotiating access to railway.

Initially, SNIM asked Glencore far too high a price for access to its railway for the next 20-25 years, according to people familiar with the negotiations. But recently both sides reached a preliminary deal, pending some final discussions.