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

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

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

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

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

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

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

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Is the tide turning for junior gold stocks? – by Lawrence Williams (Mineweb.com – November 6, 2013)

http://www.mineweb.com/

The AIM and TSXV junior mining indices appear to be flattening, or even beginning to pick up. Is this the time for investors to move in again, or is it another false dawn?

LONDON (MINEWEB) – Junior gold stocks remain close to rock bottom, although the scare stories of the demise of perhaps half the juniors on the TSX Venture exchange for example remain unfulfilled. According to Graham Dallas, Head of Business Development EMEA for the Toronto Stock Exchange, speaking at the Global Mining Finance conference in London yesterday, so far this year only six companies have delisted from the TSXV at their own request, and some of these are dual listed stocks which have reverted to their primary exchange as a cost-cutting measure.

Furthermore none so far have been delisted for failure to meet continued listing requirements. While the remainder of the year may indeed see more delistings it seems to this observer that the predicted junior gold stock Armageddon will not come about. Small juniors have the capability of reducing activities to an almost dormant state, cutting fieldwork, staff and executive salaries to a minimal level and conserving enough cash to pay for their listings and just hang in there until things improve.

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Foreign investors cry foul as Mongolia revokes mine licenses (Reuters India – November 7, 2013)

http://in.reuters.com/

ULAN BATOR – Nov 7 (Reuters) – Mongolia has annulled more than 100 exploration licenses as part of an investigation into mining sector corruption, raising further concerns among foreign investors about the risks of doing business in there.

Mongolia-focused Kincora Copper said on Thursday that it had received a letter from the Mineral Resources Authority saying that two of its licenses had been revoked following a criminal investigation into former government officials accused of illegally issuing a total of 106 exploration licenses between 2008 and 2009. All of the 106 licenses have been cancelled.

Kincora Copper said the move, which will affect the licenses of an estimated 11 foreign and 67 domestic firms hoping to explore for a range of minerals, highlighted the uncertainty facing a growing legion of foreign investors.

“Security of tenure and a transparent legal system are key cornerstones for both domestic and foreign private sector investment,” said Sam Spring, president and chief executive of Kincora Copper, in an email.

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UPDATE 3-Vale Q3 profit doubles on higher iron ore sales, prices – by Jeb Blount and Sabrina Lorenzi (Reuters India – November 7, 2013)

http://in.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.

Net income for the three months ended Sept. 30 soared 114 percent to $3.50 billion from $1.64 billion in the same period a year earlier, the company said. The result was 6 percent higher than the $3.3 billion average profit estimate of seven analysts surveyed by Reuters.

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.

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Difficult year for junior miners – Jonathan Migneault (Sudbury Northern Life – November 05, 2013)

http://www.northernlife.ca/

But some glimmers of hope exist

Uncertainty surrounding world markets and a lack of investor confidence clouded the 2013 Ontario Exploration and Geoscience Symposium Tuesday.

“This is probably the hardest year I’ve ever seen,” said Gary Clark, the executive director of the Ontario Prospectors Association, which organized the event. “I’ve been in the business since 1983.”

Clark said junior mining companies have had difficulty securing funding due to declining investor confidence tied to mining exploration. “This year the amount of exploration dollars being spent worldwide, let alone in the province, is way down,” he told Northern Life.

That slump, Clark said, has been due primarily to shrinking demand for raw materials from China. Despite a poor year for mining exploration Clark said there are glimmers of hope things will improve.

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Vale Delivering More Profits on Reduced Costs: Corporate Brazil – by Juan Pablo Spinetto (Business Week – November 04, 2013)

http://www.businessweek.com/

Vale SA (VALE5) is poised to deliver its first quarterly profit increase in more than two years after costs declined and iron-ore prices beat analysts’ forecasts.

The world’s largest iron-ore producer on Nov. 6 will post third-quarter net income of $2.8 billion, data (VALE:US) compiled by Bloomberg show. That would be 70 percent more than a year earlier and the first increase since the second quarter of 2011. Vale’s 96 percent estimated increase in year-on-year earnings per share is the most among 14 global peers, according to Bloomberg Industries.

Vale, a supplier of iron-ore for steelmakers from ArcelorMittal to China Steel Corp., cut $1.65 billion of costs in the first half and is benefiting from rising demand from steel mills in Asia. Iron-ore prices averaged $132.5 a ton in the third quarter, 18 percent more than last year and above the $121 a ton forecast expected by analysts when 2013 started.

“There are better realized prices and an improved performance in terms of costs,” Goldman Sachs Group Inc. analyst Marcelo Aguiar said by telephone from Sao Paulo. “We expect an increase in the production of the company’s three main businesses: iron-ore, nickel and copper.”

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Platinum Giants Ready to Stare Down Union Over Pay Demand – by Andre Janse van Vuuren (Bloomberg News – November 6, 2013)

http://www.bloomberg.com/

Rising costs and falling prices may prompt South Africa’s largest platinum mines to stare down a union threat to halt 70 percent of global production over pay demands, pushing the industry toward a prolonged strike.

The Association of Mineworkers and Construction Union, the largest at the platinum mines, has rejected pay offers exceeding South Africa’s 6 percent inflation rate. An AMCU-led strike would halt operations at Anglo American Platinum Ltd. (AMS), Impala Platinum Holdings Ltd. and Lonmin Plc, which together employ about 150,000 workers and contractors on the world’s richest deposits of the precious metal.

“The health of the industry is already in question,” Tyler Broda, an analyst at Nomura International Plc in London, said by phone. “It is going to be very difficult to give much more. The companies are unfortunately heading toward a path where they will take their chances with a protracted strike.”

The three companies have all in the last year either turned to investors for funds, set plans to shut mines or cut production and scaled back on capital spending to confront a slump in the price of platinum, down 16 percent from its highest level in 2013.

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Mining benefits 8 in 10 South Africans ‘directly, literally’ – Cutifani – by Martin Creamer (November 5, 2013)

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

JOHANNESBURG (miningweekly.com) – Eight out of every ten South Africans benefited “directly and literally” from mining, outgoing Chamber of Mines of South Africa president Mark Cutifani said on Tuesday.

Cutifani, who is also Anglo American CEO, told the chamber’s 123rd annual general meeting (AGM) in Johannesburg that the mining industry was South Africa’s best chance of eradicating poverty. “In the end, we are an industry for the people,” he said.

The National Development Plan (NDP), which was endorsed by most constituencies, clearly reasserted the conviction that the mining sector was at the epicentre of the economic growth strategy and it was critical that all South Africans understood that they were actually the owners of the South African mining industry.

For example, more than 60% of Anglo American’s operating South Africa assets in coal, platinum, iron-ore, diamonds and manganese were held by the historically disadvantaged – “a massive transformation of ownership”.

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Mine Tales: Copper isn’t the only mineral common in Arizona – by William Ascarza (Arizona Daily Star – November 4, 2013)

http://azstarnet.com/

In 2012, Arizona produced more than $2 billion in nonfuel mineral commodities. While Arizona leads the nation in copper production, additional minerals ranked according to value include molybdenum concentrates, sand and gravel (construction), cement (portland) and silver.

Industrial minerals found in Arizona include sand, gravel, limestone, clay, marble, gypsum, asbestos, perlite, talc, zeolites and landscape rock.

Industrial minerals mined in Arizona such as sand and gravel produced from flood plains, washes and alluvial fans are used in the construction of highways, airports, buildings, dams and bridges.

Gravel and aggregate (a combination of rocks and sand used in the manufacture of concrete) are the most common industrial minerals in Arizona. One hundred tons of sand and gravel are needed in the construction of a standard 1,600-square-foot house.

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