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Glencore expected to writedown billions – by Reuters/Star Staff (Sudbury Star – August 20, 2013)

http://www.thesudburystar.com/

Glencore Xstrata is expected to write down the value of assets inherited from Xstrata by as much as $7 billion when it reports first-half earnings on Tuesday — the first full set of results since the takeover that created the mining giant in May.

Glencore’s management, no strangers to Xstrata given the trader’s 34% stake in the miner, have been reviewing Xstrata’s assets as owners over the past three months and they had been expected to book a hit alongside maiden results.

Analysts and an industry source said the group writedown, mostly on the value of former Xstrata assets, would likely amount to $5 billion to $7 billion.

Nickel assets — including Xstrata’s $5 billion Koniambo operation in New Caledonia — are likely to take the brunt of the pain as nickel prices languish at less than a third of their 2007 highs and supply continues to exceed demand.

Glencore’s local operations, now officially known as the Sudbury Integrated Nickel Operations, include Fraser Mine and Nickel Rim South Mine, Strathcona Mill and the Sudbury smelter. Nickel and copper are its main products.

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BHP reveals corruption probes by U.S., Australian authorities – by Dorothy Kosich (Mineweb.com – August 19, 2013)

http://www.mineweb.com/

A slow-moving investigation of BHP Billiton’s business practices, which began in 2009, is heating up.

RENO (MINEWEB) – U.S. and Australian authorities are cooperating on an investigation into “possible corruption” within Australian über miner BHP Billiton, stepping up a probe that began four years ago concerning BHP’s Olympic sponsorship, hospitality and gifts given to top Chinese officials, and now reportedly involves the company’s attempts to secure a bauxite project in Cambodia.

The allegations are being investigated by the U.S. Department of Justice and the Australian Federal Police as well as the U.S. Securities and Exchange Commission.

In a statement released on Friday by BHP Billiton, the company disclosed it had commenced an internal investigation when it received a request for information in August 2009 from the SEC. “As a result, the Group commence an internal investigation and disclosed to relevant authorities including the U.S. Department of Justice (DOJ) evidence that it uncovered regarding possible violations of applicable anti-corruption laws involving interactions with foreign government officials,” the company said.

“As has been publicly reported, the Australian Federal Police has indicated that it has commenced an investigation,” the company confirmed.

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Gold Bears Retreat as Prices Reach Two-Month High: Commodities – by Tony C. Dreibus (Bloomberg News – August 19, 2013)

http://www.bloomberg.com/ 

Speculators cut bullish and bearish bets on gold simultaneously for the first time in two months as prices advanced to the highest since mid-June on signs of strengthening physical demand.

The net-bullish position rose 18 percent to 56,604 futures and options by Aug. 13, as the 17 percent contraction in short bets exceeded the 3 percent drop in long wagers, U.S. Commodity Futures Trading Commission data show. Net-long holdings across 18 U.S.-traded commodities expanded 23 percent as the position in silver more than doubled and investors turned positive on copper for the first time since February.

Gold tumbled a record 23 percent last quarter as some investors lost faith in the metal as a store of value. The rout spurred losses for billionaire John Paulson, who joined George Soros in selling bullion holdings in three months ended June 30, government filings showed last week. Lower prices spurred demand in India and China, the top buyers, driving global coin and bar purchases to record in the second quarter and jewelry purchases to the highest since 2008, the World Gold Council said Aug. 15.

“People became more interested in holding gold as the price dropped,’ said Tom Stringfellow, the president of San Antonio-based Frost Investment Advisors LLC, which manages about $9 billion.

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COLUMN-Mongolia, Rio Tinto playing high stakes on copper mine – by Clyde Russell (Reuters U.S. – August 19, 2013)

http://www.reuters.com/ 

Aug 19 (Reuters) – Is Rio Tinto’s dispute with the Mongolian government over the expansion of the Oyu Tolgoi copper and gold mine the signal that the nation’s commodity boom is over, or is it just a hiccup?

Certainly, Mongolia’s reputation as a desirable investment destination and one of the few remaining countries ripe for developing natural resources has taken a battering recently.

Rio Tinto, the world’s second-largest mining company, said on Aug. 14 that it will cut 1,700 jobs at Oyu Tolgoi after a $5 billion expansion of the project was put on hold last month.

The dispute is over how the expansion gets financed, and the Mongolian parliament has been recalled from its summer recess for an emergency session to try and deal with the matter.

But the real issue is how long it will take for Mongolia to get significant amounts of money from the mine, which is slated to boost the economy by 35 percent by 2020. 

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Mining projects on Range can be safe, profitable – by Rolf Westgard (St. Cloud Times – August 17, 2013)

http://www.sctimes.com/ 

This is the opinion of Rolf Westgard, a professional member of the Geological Society of America. He teaches classes on energy subjects for the University of Minnesota Lifelong Learning program.

In 2011, we humans extracted and burned some 15 billion tons of coal, oil and natural gas, or 4,000 pounds for everyone on Earth. That put more than 30 billion tons of greenhouse gases into the atmosphere.

Nature passed over Minnesota on its way to states such as North Dakota and Texas where it placed the sedimentary basins in which fossil fuels such as oil formed. Minnesota was not totally forgotten, and we got minerals such as iron ore and the non-ferrous group of copper, nickel, cobalt, palladium, platinum, etc. We’ve dug up most of the iron. But nestled in a wide band, meandering along the Archean granite of the Iron Range, is a world-class deposit of non-ferrous metals worth billions of dollars and thousands of jobs.

Total world annual production of those metals is just 30 pounds or so per person, and their demand and price is rising. Manufacturing wind turbines, solar panels, electric vehicles, catalytic converters and smart grid power lines requires copper, nickel, cobalt, palladium and platinum. 

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Don’t allow sulfide mining without answers to concerns – by Paul Austin, Paul Dancic and Scott Strand (Duluth News Tribune – August 18, 2013)

http://www.duluthnewstribune.com/ 

Paul Austin of Minneapolis is executive director of Conservation Minnesota, Paul Danicic of Minneapolis is executive director of Friends of the Boundary Waters Wilderness and Scott Strand of St. Paul is executive director of the Minnesota Center for Environmental Advocacy. They wrote this for the News Tribune on behalf of the grass-roots group Mining Truth (miningtruth.org), which is promoting the four questions discussed in the commentary.

Water is written into our state’s identity: We are the Land of 10,000 Lakes. What we do to protect Minnesota’s lakes and rivers today will determine what future we leave for our children and grandchildren.

Later this summer, Gov. Mark Dayton and the Department of Natural Resources will be faced with an important decision about the future of Minnesota’s lakes and rivers. The new draft environmental impact statement for the PolyMet mining project near Hoyt Lakes is expected to be released, and the Dayton administration will have to decide how or whether the project should proceed.

The PolyMet project is the first proposed sulfide mine in Minnesota, located near waters that flow into Lake Superior. Another proposed mine by Twin Metals would operate next to the Boundary Waters Canoe Area Wilderness. Sulfide mining is different from our traditional iron mining and holds the potential for long-lasting toxic pollution. 

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Rigorous standards will ensure clean mines – by Frank Ongaro (Duluth News Tribune – August 18, 2013)

http://www.duluthnewstribune.com/

Frank Ongaro is executive director of Duluth-based MiningMinnesota (miningminnesota.com), which supports the development of metals mining in the state.

From President Obama to Gov. Mark Dayton, elected officials have made jobs a top priority. In Minnesota, one thing is certain: There is no better opportunity for creating thousands of great-paying jobs, providing millions of dollars in tax revenue for local governments and generating more than $2 billion in royalties for our schools than the proposed copper/nickel strategic metals mineral development projects.

Mining already represents 30 percent of our region’s Gross Domestic Product (tourism is 11 percent). And, with the development of these strategic metals projects, we easily can double the size and benefit of the overall mining industry in Minnesota.

Fortunately, we can have these jobs and the spin-off economic benefits they bring — and an environment with clean air and water. There is no debate. We all want the same thing: clean air and clean water. 

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Shift from ‘blame seeking’ will aid efforts to tackle SA’s AMD challenge – by Leandi Kolver (MiningWeekly.com – August 16, 2013)

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

JOHANNESBURG (miningweekly.com) – Current mining industry players are faced with the challenge of who should be responsible for and deal with the subsequent financial impact of the legacy issue of acid mine drainage (AMD).

The mining industry has been a significant driver of the country’s economy, dating back many years; however, as many of the mining houses that pioneered the industry in South Africa have moved on to other areas, or have evolved into other companies or consortiums, the challenge of assigning responsibility for current issues is a real concern, says minerals industry consultancy Venmyn Deloitte environmental industry adviser Sarah Dyke.

As South Africa’s water systems are interconnected, AMD, if not treated, could potentially decrease the country’s water supply quality, which will impact on industries, such as agriculture and manufacturing, Deloitte strategy and innovation consultant Sabatha Mhlanga says.

Out of the 120 mining companies that once mined in the Witwatersrand, only six remain, and there are about 6 000 ownerless and abandoned mines, as well as about 270 tailings dams in the area containing six-billion tons of pyrite – a catalyst for AMD.

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China and India may not be enough to rescue gold – by Clyde Russell (Reuters India – August 16, 2013)

http://in.reuters.com/

LAUNCESTON, Australia – (Reuters) – With gold demand slumping to the lowest in four years in the second quarter, bulls are grasping to hold on to anything positive and right now that means India and China.

If there was a bright spot in the World Gold Council’s (WGC)quarterly report, it was that demand in the world’s top two consumers surged.

India regained its lead over China by buying 310 tonnes in the second quarter, up 71 percent from the same period in 2012 and 21 percent above first quarter purchases.

China bought 275.7 tonnes in the second quarter, a jump of 87 percent from the same period last year, but 6 percent below the first quarter’s demand.

But even the strong demand in the Asian giants wasn’t enough to offset the dramatic outflows from exchange-traded funds (ETFs), which saw 402.2 tonnes of sales, more than double the 176.5 tonnes that flowed out in the first quarter.

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Iron ore prices moving higher as China steel production rises – by Lawrence Williams (Mineweb.com – August 15, 2013)

http://www.mineweb.com/

After a bit of a dip, iron ore prices are on the rise as Chinese steel production begins to increase again and the world’s top diversified miners will be the likely principal beneficiaries.

LONDON (MINEWEB)  – It should not have escaped anyone who follows the global mining sector’s attention that the world’s three biggest mining companies by a long way, BHP, Rio Tinto and Vale, are also the three biggest miners of high grade iron ore.

There had been much discussion of how these would fare in a Chinese downturn, given that China is by far the world’s largest importer of iron ore and there was comment that iron ore prices would fall dramatically, thus decimating the big three’s revenues and profits – exacerbated perhaps by the fact that they are all growing production with the inevitable additional costs that involves.

What the observers seemed to have failed to take into account is that China, in a recession, is still the equivalent of anyone else in a mega growth phase! Growth falling perhaps from 10% plus per annum to maybe 6 or 7% – figures western economies would give their eye teeth for!

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Indonesia to see declining revenue from mineral – by Amahl S. Azwar (The Jakarta Post – August 16, 2013)

http://www.thejakartapost.com/

The government is preparing to see a decline in revenue from the mineral sector as the ban on the exports of unprocessed mineral ore is expected to take effect next year, a top official has said.

The restrictions on raw ore exports is aimed at giving added value to the mining products as well as moderating mineral exploitation.

The Energy and Mineral Resources Ministry’s coal and minerals director general, Thamrin Sihite, said on Thursday the country needs to tame the overexploitation of minerals in a bid to protect its resources.

“It is very crucial for us to control the current production to ensure the sector will be sustainable,” he said.

According to the 2009 Mining Law, miners will have to process their mineral ore at their own smelters or at independent smelters as of January 2014, before exporting their mineral production.

Miners that do not have a smelter or are reluctant to process their raw minerals at other smelters will be banned from shipping their unprocessed ore overseas.

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Analysis – On ‘massacre’ anniversary, South Africa mines still volatile – by Peroshni Govender (Reuters U.K. – August 15, 2013)

http://uk.reuters.com/

MARIKANA, South Africa – (Reuters) – A year after South Africa’s bloodiest post-apartheid labour incident awoke the world to the potential for unrest in the country’s mines, the industry still suffers from worker poverty, pay disputes, shrinking profits and a violent union feud.

At Lonmin’s Marikana mine where 34 striking platinum workers were shot dead by police on August 16, 2012 in killings that shocked South Africa and the world, memorial services are planned for Friday by politicians, unions and civic leaders.

President Jacob Zuma, still facing criticism for his African National Congress (ANC) government’s handling of what has come to be known as the “Marikana massacre”, has led a solemn chorus of assurances that such bloodshed must never happen again.

“We must all resolve to do everything possible to prevent a repeat of similar incidents,” Zuma said in a statement listing government steps to keep the peace and improve conditions in the country’s mines, where recurring illegal strikes have badly dented Africa’s biggest economy over the last year.

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Iron ore boom vs. Rudd’s doom – by Barry Fitzgerald and Paul Garvey (The Australian – August 16, 2013)

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

ON the hustings and in his campaign ads, Kevin Rudd has been calling the mining boom over.

“The truth is in 2013 the China resources boom is over,” the Prime Minister said on July 11. At the leaders debate on Sunday: “The truth is, with the ending of the decade-long mining boom, we face new economic challenges.” At almost any media opportunity, the mantra is repeated. But he must have forgotten to tell the Chinese — the world’s biggest buyer of mineral commodities.

Ever since returning as PM on June 26, the price of iron ore — Australia’s biggest export by a big margin — has not looked back as Chinese steelmakers frantically restock on the expectation that while there is a slowdown in the country’s infrastructure and urbanisation boom, an economic growth rate of more than 7 per cent on an already greatly enlarged economy means it still needs to suck in vast amounts of the steelmaking raw material.

Iron ore has surged by 26 per cent, or $US29.80 a tonne, to $US142.80 a tonne since Mr Rudd returned to the Lodge and began mapping a re-election strategy that in part at least, links the claimed end to the mining boom to Australia’s ballooning budget deficits.

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A year after Marikana: The pendulum is swinging, but in which direction? – by Geoff Candy (Mineweb.com – August 16, 2013)

http://www.mineweb.com/

Many things have changed in the 12 months since the massacre by police of striking workers in South Africa’s platinum belt, but is it enough?

GRONINGEN (MINEWEB) – Shorthand for the worst possible outcome, the name Marikana has been mentioned many times in the last 12 months.

It has been used as both a rallying cry and a cautionary tale. But, asked what has changed over the course of the last 12 months either in terms of improving the lot of those who work in the mines or to ensure that such a tragedy can never recur, the answer is almost always: “not enough”.

For the most part, that is where the similarities end. Yes, some progress has been made. The wave of wildcat strike action that plagued the country in the last quarter of 2012 that spilled over into other sectors from the mines has been calmed but, on the mines, continued tension among the unions have led to further shootings.

Government has stepped up to the plate, committing to deliverables by signing the peace and stability framework. But a year later the Farlam Commission is yet to present its findings and the violence on the mines still remains too high.

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UPDATE 1-Job cuts ahead as Rio puts Mongolian expansion on hold (Reuters India – August 14, 2013)

http://in.reuters.com/

LONDON, Aug 14 (Reuters) – Rio Tinto said on Wednesday it would have to cut up to 1,700 jobs in its Mongolian operation, after a more than $5 billion underground expansion of the giant Oyu Tolgoi copper mine was suspended.

The expansion was put on ice last month as the global miner said the Mongolian government wanted parliament, currently in recess, to approve financing for the project. Mongolian Prime Minister Norov Altankhuyag said last week that Rio did not need to seek parliamentary approval for the development’s package.

The delay marked the latest bump in the road for Rio at one of its biggest projects – and one of the world’s largest untapped copper deposits – which started exporting from an open pit mine in July after two last-minute hiccups in securing government approval.

Mongolia has raised concerns about the costs of the Oyu Tolgoi expansion and the potential that rising expenditure will delay when it starts receiving its share of profits.

The government has also complained that locals are not well represented in the management of the project. A Rio spokesman said that the delay was now being implemented.

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