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Potash prices head for 20 pct drop after cartel disintegrates – by Ron Bousso (Reuters U.S. – September 6, 2013)

http://www.reuters.com/

LONDON, Sept 5 (Reuters) – Potash prices are poised to drop some 20 percent after the surprise breakup of the world’s largest producer cartel sent buyers and sellers scrambling to establish new valuations, traders said.

Global trade in the material – one of three nutrients vital for agriculture – remains largely on ice after Russia’s Uralkali in July quit the partnership Belarusian Potash Co (BPC), which together with a rival North American cartel controlled some 70 percent of the market.

Belarus’ retaliatory arrest of Uralkali’s chief executive Vladislav Baumgertner in Minsk last week further highlighted the deep rift between the Russian and Belarusian producers.

“As a cartel, producers were able to cut supplies in order to control prices. As competitors, producers will reduce prices rapidly to gain business,” an industry source said.

BPC co-founder Belaruskali appears to be particularly keen to secure new supply deals after the split left it with limited global trading infrastructure, which had been dominated by its Russian partner, traders and industry sources said.

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Glencore to vaunt successes of $46 billion Xstrata deal one year on – by Clara Ferreira-Marques (Reuters India – September 6, 2013)

http://in.reuters.com/

LONDON (Reuters) – Almost a year after winning the battle for Xstrata, Glencore (GLEN.L) is set to show investors evidence of early successes, with costs to come down more than targeted, asset sales in hand and key staff retained.

Glencore Xstrata, which has yet to shed a reputation for opacity, will bring its entire management team to London on Tuesday to outline progress after four months in control of Xstrata, following the $46 billion takeover that became the mining sector’s largest to date.

In its first major presentation on the deal since it was completed, analysts expect the trading and mining conglomerate to impress with tougher cost cutting targets. These are likely to include a significant improvement on the $500 million per year synergy goal provided at the time of the acquisition.

That covered only marketing benefits – not costs to be squeezed out of Xstrata’s mines – and Glencore has already said it expects a final number “materially in excess” of that. Analysts at RBC Capital Markets said this week they expected marketing synergies of $600 million – as more Xstrata products go through the Glencore trading machine.

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Feathers fly as officials cry fowl on fed’s Chicken gold miners raid – by Dorothy Kosich (Mineweb.com – September 6, 2013)

http://www.mineweb.com/

Did the EPA need to send in a federal-state SWAT-type team to enforce the Clean Water Act in Alaska’s Fortymile Mining District? Alaska officials say, “No!”

RENO (MINEWEB) – Outraged by what his office called a “needless show of force,” Alaska Gov. Sean Parnell Thursday ordered an investigation into the practices of the Alaska Department of Environmental Conservation’s Environmental Crimes Unit and the U.S. Environmental Protection Agency’s Criminal Investigation Division after armed government agents, wearing body armor, swooped in on 30 placer gold mining operations along the Fortymile River near Chicken, Alaska.

“With a mere last minute notification to our DEC commissioner, Alaska’s attorney general, and the Department of Public Safety, the EPA, BLM and a DEC investigator took it upon themselves to swoop in on unsuspecting miners in remote Alaska,” said Parnell. “This level of intrusion and intimidation of Alaskans is absolutely unacceptable. I will not tolerate any state agency’s participation in this sort of reckless conduct.”

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Chris Verbiski Turned A Nickel Mine Discovery Into Two Of The Finest Fishing Lodges In The World – by Monte Burke (Forbes Magazine – September 4, 2013)

http://www.forbes.com/

This story appears in the September 23, 2013 issue of Forbes.

The best Atlantic salmon fishing outfit in Labrador–and just possibly in all of North America–was born in the gloaming of Sept. 16, 1993, when two mineral prospectors made the discovery of a lifetime. Chris Verbiski, then 25, a college dropout from Newfoundland with an obsession for rocks, had teamed up with a man named Albert Chislett, then 45, to scour the wild, windswept crags of Labrador for diamonds on behalf of a small mining company.

It had been a rough summer. The two men were sun-blistered and swollen with bug bites. They’d burned through their advance money and were nearly broke. Worse: Only a few weeks remained before the weather shut down prospecting in this harsh, beautiful region on the northeast coast of Canada.

On that early evening, as they headed back to camp in the Inuit community of Nain, they spotted something from their helicopter: a thick stripe of rust-colored rock on a hill above Voisey’s Bay. They hovered over it. Verbiski marked the spot on his survey map. But they were low on fuel and couldn’t descend. It seemed promising–perhaps the indicator of a surge of metals that had been pushed to the earth’s surface a billion years ago. After the fruitless summer that hope was all they had.

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Mining subsidising inefficient beneficiation beggars belief – chamber president – by Martin Creamer (MiningWeekly.com – September 5, 2013)

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

JOHANNESBURG (miningweekly.com) – The possibility of the South African mining industry providing effective subsidies to underpin inefficient mineral beneficiation beggars belief in a modern country trying to assert its regional economic credentials.

That is the view of Chamber of Mines of South Africa president Mark Cutifani, who adds that it is critical that the economics of mining are clearly understood, along with the conditions required to invest in an uncertain outcome.

“In mining we know very little about the resources we mine and we have to make large capital decisions on limited knowledge. If we then have to be the supporter of downstream inefficiency, we are setting ourselves up for failure.

“The possibility that the mining industry will provide effective subsidies to support inefficient industries beggars belief in a modern country trying to assert its regional economic credentials.

“Let me be clear: it is not that the mining industry does not support beneficiation, but the laws of economics are simple and all-powerful.

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REFILE-UPDATE 5-S.African gold miners’ union offers some compromise as strike bites – by Xola Potelwa (Reuters India – September 5, 2013)

http://in.reuters.com/

WESTONARIA, South Africa, Sept 4 (Reuters) – A strike for higher pay hit production at most of South Africa’s gold mines on Wednesday, but the main union behind the stoppage said it was willing to relax some of its demands.

The stoppage, called by the National Union of Mineworkers (NUM), began at the evening shift on Tuesday, with many miners refusing to go underground.

Producers grouped in the Chamber of Mines said output at 16 of the 23 mines currently involved in talks was partially or severely affected on Wednesday morning. The operators of the mines include South Africa’s main producers AngloGold Ashanti, Gold Fields, Harmony Gold and Sibanye Gold.

“The majority of Harmony’s operations have been severely affected, although all essential services personnel are at work,” the company said in a statement.

However, the NUM, which represents two thirds of the country’s gold mine workers, has already opened the prospect of a compromise, saying it was prepared to lower its pay increase demands for some specific employee categories.

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COLUMN-Fed tapering may boost coal, crimp oil in Asia – by Clyde Russell (Reuters India – September 5, 2013)

http://in.reuters.com/

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

(Reuters) – The turmoil in some Asian currencies created by the likely tapering of monetary stimulus in the United States is likely to spill over into commodity markets. While it’s obvious that as a currency depreciates, the local cost of commodities, which are normally priced in U.S. dollars, increases.

But what is less obvious is what the impact will be on the supply-demand balance for various commodities. Take crude oil and coal for instance. Both are major sources of energy, priced in U.S. dollars and easily traded.

But for many Asian countries, the price of oil has risen dramatically this year, while that for coal has remained steady, or even declined. The focus has been on India in recent weeks, given the South Asian nation’s efforts to stem the slide of the rupee, which has lost some 23 percent of its value against the U.S. dollar this year.

Brent crude is now at record highs in rupee terms, and is 26 percent above the level that prevailed at the start of the year. Given that crude is India’s biggest import in value terms, it’s clear that the government will want to spend less on oil in order to lower the current account deficit.

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BC First Nation blocks road to proposed coal mine – by Henry Lazenby (MiningWeekly.com – September 5, 2013)

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

TORONTO (miningweekly.com) – Members of the Tahltan First Nation, in British Columbia (BC), on Tuesday began blockading a road leading to project developer Fortune Minerals’ proposed openpit coal mine and which is also used to travel to traditional hunting camps, as Tahltan Central Council (TCC) leaders prepared for talks with government on Wednesday.

Tahltan community members said they were concerned that Fortune started using the access road after the Iskut First Nation, in preparation for the hunting season earlier in the summer, repaired it.

The First Nation said in a statement that its leaders would meet with provincial Ministers to discuss the impact of the proposed mine and to develop a long-term plan to protect the area surrounding Mount Klappan in the north-west of the province.

“Building an openpit coal mine on the Sacred Headwaters, which supports three salmon-bearing rivers and has been vital for hunting for thousands of years, is a step too far. It is time to be proactive about protecting our own interests and those of everyone in the region,” TCC president Annita McPhee said.

Chief Marie Quock of the Iskut First Nation explained that some of the community’s people asked Fortune to leave so that they could camp on Mount Klappan as usual, without being interrupted by traffic and helicopters.

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Indonesia plans to soften foreign miners’ divestment rule (Reuters U.S. – September 5, 2013)

http://www.reuters.com/

JAKARTA – (Reuters) – Indonesia plans to relax a rule forcing foreign miners to sell majority stakes and allow those who make downstream investments to keep bigger holdings, a spokesman at the Energy and Mineral Resources Ministry said on Thursday.

Last year, the Indonesian government said foreign companies must reduce their stake in a mine to 49 percent or less within 10 years of production starting, though it has been unclear how the rules will be applied.

The rule was part of a push by Indonesia, which is the world’s top nickel ore, refined tin and thermal coal exporter, to generate more profits and influence in commodities markets.

“For those companies that integrate the upstream and downstream mining activities, they may have that divestment relaxation policy. Instead of divesting 51 percent to be achieved on year 10 of its activity,” ministry spokesman Saleh Abdurrahman said in an email.

“They may divest less than that, depends on the negotiation,” he said, adding there would be a revision to the current government regulation. He gave no timeframe for the change, but new regulations and rules can often get delayed in the lengthy Indonesian legislature system.

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UPDATE 1-Australia ships more iron ore to China as demand stays strong – by Wayne Cole (Reuters U.K. – September 5, 2013)

http://uk.reuters.com/

SYDNEY, Sept 5 (Reuters) – Australian shipments of iron ore to China looked to have stayed strong in August, a month after Australia boasted its second-highest exports ever to the Asian giant and a sign of healthy demand for resources.

Iron ore exports to China from Port Hedland, which handles about a fifth of the global seaborne market for the steel-making raw material, rose 9 percent in August from July.

Ore shipments of 22.3 million tonnes were up a hefty 33 percent on August last year and not far from all-time highs hit in May. Since the figures are released just a few days after the end of the month, they offer a timely leading indicator of demand in China.

Australia is the single largest supplier of the ore to China, ahead of Brazil. Iron ore is Australia’s single biggest export earner, bringing in around A$60 billion ($54.9 billion) in a good year. The strength of shipments increases the chance that Australia will report a trade surplus for August, and also add to economic growth.

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New high grade zone drilled on Duluth base and precious metals complex – by Lawrence Williams (Mineweb.com – September 5, 2013)

http://www.mineweb.com/

New drill holes on the Twin Metals Minnesota Maturi deposit on the massive Duluth metallurgical complex indicate the presence of yet another high grade nickel-copper zone.

LONDON (MINEWEB) – In what Duluth Metals CEO, Chris Dundas, described in an email to Mineweb as yet another ‘exciting’ piece of news, the company has reported that a new high grade zone of nickel-copper mineralisation has been intersected on the southern edge of its Maturi deposit within the Duluth/Antofagasta Twin Metals Minnesota (TMM) project in north eastern Minnesota, USA.

The Duluth Complex possibly contains the world’s largest undeveloped polymetallic resource containing nickel, copper, cobalt, platinum, palladium, gold and more. It is somewhat comparable in size to the Sudbury nickel complex in Canada, Norilsk in Russia and the Bushveld Compex in South Africa as massive bodies containing huge amounts of strategic metals, but these others are already being worked extensively. The Duluth Complex is believed to contain the world’s third largest nickel resource and the second largest concentration of copper and platinum group metals.

Duluth Metals with TMM is one of the biggest concession holders in the area, if not the biggest, having acquired Franconia in 2011, although PolyMet is perhaps more advanced towards production with the smaller, but still significant-sized, NorthMet project on another part of the Complex, while Teck is among other companies which are looking at other areas there.

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Wisconsin iron ore project accused of ‘sweetheart’ dealmaking – by Dorothy Kosich (Mineweb.com – September 4, 2013)

http://www.mineweb.com/

The fight over the return of Wisconsin iron ore mining is not finished, as opponents try to prove the Gogebic Taconite project will harm water quality in wetlands.

RENO (MINEWEB) – Wisconsin tribes, lawmakers and miners are fighting over an emergency bill introduced in the Wisconsin State Legislature over the long Labor Day weekend and scheduled for hearing Wednesday, which would allow a controversial iron ore project to restrict public access to a parcel of land near the project.

The Gogebic Taconite iron ore company, owned by West Virginia coal magnate, Chris Cline, aims to construct a $1.5 billion iron ore mine in northern Wisconsin after the state legislature enacted permitting reform in March 2013 to bring back iron ore mining to the state. The mine would operate for at least 35 years and generate 700 jobs in an economically hard-hit area of Wisconsin.

However, the battle over the project is far from over as Native Americans have been regularly protesting against it, prompting accusations of “eco-terrorism” by mining officials. In June, protestors were accused of slashing tires, damaging equipment, and knocking over fences on the minesite. Opponents argue the new mine permitting legislation has relaxed environmental regulations that will lead to pollution of the Bad River watershed, which flows north from the proposed mine area into Lake Superior.

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Australian coal miners hope election will see new govt cut red tape – by Sonali Paul (Reuters India – September 4, 2013)

http://in.reuters.com/

MELBOURNE – (Reuters) – You know you’re in trouble when you’re ranked worse for red tape than India. The World Economic Forum this week put Australia 129th out of 148 countries, ranking it 25 spots lower than India, in terms of the burden of government regulation.

And Australia’s red tape is hurting growth in its key mining sector at a time when other sectors are struggling to fire up to fill the gap left by a fading mining investment boom.

Australian miners sitting on coal lodes that could produce 100 million tonnes a year say they are frustrated by layers of state and national approvals that take years to secure, anti-coal campaigners using the courts to delay projects, and carbon and mining taxes eating into potential returns.

“Green tape in Australia really has become very stifling for business, to the point now where it’s difficult to tell the difference between green and red tape, it’s so embedded,” said Whitehaven Coal Chief Executive Paul Flynn, referring to lengthy environmental reviews by state and federal agencies.

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Rio to BHP Invest $244 Billion as Glasenberg Warns: Commodities – by Elisabeth Behrmann & Jesse Riseborough (Bloomberg News – September 4, 2013)

http://www.bloomberg.com/

The biggest mining companies are set to spend about $244 billion on expansions to 2015, slow to heed Glencore Xstrata Plc Chief Executive Officer Ivan Glasenberg’s call for austerity to end an oversupply in mineral markets.

That’s just a 2.4 percent drop from the $250 billion in capital expenditures made in the previous three-year period, according to forecasts compiled by Bloomberg for the 20 largest mining companies by market value. Glasenberg joined a chorus of investors pushing for spending cuts after the companies had to make $60 billion of writedowns over 18 months.

From BHP Billiton Ltd. (BHP), the world’s biggest, to Rio Tinto Group, industry members are telling investors they’ve become more optimistic for demand growth in the U.S. and China, the biggest minerals buyer, and that future capex will be more disciplined. The Bloomberg World Mining index has jumped about 16 percent from a four-year low in July.

“Institutional shareholders still feel that management need to prove to them that over the long term the discipline associated with capital allocation is there,” Catherine Raw, co-manager of BlackRock Inc. (BLK)’s $7 billion World Mining Fund, said yesterday in a phone interview from London. “They could always do more. Shareholders are not releasing the pressure.”

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COLUMN-China PMI may not signal rising commodity demand – by Clyde Russell (Reuters India – September 3, 2013)

http://in.reuters.com/

(The author is a Reuters columnist. The opinions expressed are his own.)

(Reuters) – Commodity producers and traders have no doubt been cheered by the recent recovery in China’s key manufacturing sector, but the boost may be more to sentiment than actual demand.

This is because there is a fairly weak correlation between movements in China’s official Purchasing Managers’ Index (PMI) and imports of key commodities such as crude oil, iron ore and copper. There is a far better correlation between China’s imports and the price of these commodities.

This suggests that while stronger, or weaker, industrial growth helps set the direction for imports, the actual size of the movement in imports is more related to price.

The official PMI rose to a 16-month high of 51.0 in August, beating market expectations for a reading of 50.6, with the breakdown showing better conditions across the factory sector, including the key export orders category.

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