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International Media Resource Articles

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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Indian and Chinese “strong hands” continue to boost gold demand – WGC -by Geoff Candy (Mineweb.com – August 15, 2013)

http://www.mineweb.com/

According to the World Gold Council, the gold market continues to re-balance and demand is moving distinctively from West to East.

Gold demand in India and China is expected to account for close to 45 to 50% of the total gold market by year end, the World Gold Council says, as consumer demand for gold continues to ratchet higher.

Speaking to Mineweb on the launch of the group’s Gold Demand Trend report for the second quarter, MD for investments, Marcus Grubb, explained that based on the figures for the year so far, the council has moved its range for total demand to roughly the same level – 900 – 1000 tonnes each.

Both markets are up roughly 45 to 50% for the year to date and “they are remarkably close together; they are still within about 35 tonnes of each other, which is very similar to where they were in the first half of last year (about 30 tonnes apart) in spite of being 50% larger this year.”

Grubb points out that this forecast implies a new all time high total demand figure for China, comfortably higher than the previous record of 776 tonnes.

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UPDATE 2-Platinum miner Lonmin recognises AMCU union, averts strike threat – by Sherilee Lakmidas (Reuters U.S. – August 14, 2013)

http://www.reuters.com/

JOHANNESBURG, Aug 14 (Reuters) – Platinum producer Lonmin and South Africa’s hardline AMCU said they signed a recognition accord on Wednesday in a move that averts threatened strike action by the union.

The agreement, reached two days before the first anniversary of the massacre of 34 striking workers shot by police at Lonmin’s Marikana mine, opens the way for wage talks between the Association of Mineworkers and Construction Union and the company that are expected to start within weeks.

While the deal heads off a potential strike over recognition, the pay talks are expected to be extremely tough, given AMCU is demanding pay hikes as high as 150 percent from Lonmin rival Anglo American Platinum, the world’s top producer of the precious metal.

Members of AMCU, which claims most of Lonmin’s workforce, have twice this year staged brief illegal strikes at its mines and had threatened to down tools again unless the company recognised it as the dominant union.

The agreement formally recognises AMCU as the majority union at Lonmin, the world’s third largest platinum producer.

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Is the rally in global miners too good to be true? – by Ansuya Harjani (CNBC Asia – August 14, 2013)

http://www.cnbc.com/

Even as global resource stocks have had a stellar run-up in the recent weeks, driven by signs of stabilization in China’s economy, cheap valuations and short covering, questions are building over the sustainability of this trend.

Shares of large-cap mining companies such as Australia-listed BHP Billiton and Rio Tinto and U.K.-listed Vedanta have rallied between 11 percent and 14 percent since mid-July.

“There has been a lot of trading money coming into the space by longer-term investors who have wanted to buy the mining space, but haven’t had the clarity because of China, falling commodity prices,” Chris Weston, senior investment strategist at IG Markets told CNBC. “But the easy money has been made. The question now is how much more upside do we think there’s going to be,” he said.

According to Weston, further gains are likely in the near term given improving sentiment around the global economy. But beyond that, he says the outlook for mining stocks remains unclear, pointing to the risk of a selloff in commodities once the U.S. Federal Reserve begins to taper monetary stimulus and potential oversupply in resources such as iron ore in 2014.

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EDITORIAL: Industrial policy gone wrong (South Africa Business Day Live Editorial – August 13, 2013)

http://www.bdlive.co.za/

REPORTS that Eskom stands to lose as much as R11.5bn in revenue as a result of its controversial preferential power agreement with BHP Billiton is a brutal lesson in the pitfalls of ill-conceived industrial policy. It will also hopefully provide a learning opportunity for Eskom as it completes the process of negotiating the present round of renewable energy agreements.

In its annual report last week, Eskom said it expected its liability as a result of an agreement signed in 1992 to provide cut-price electricity to BHP Billiton’s aluminium smelters, Mozal and Hillside, to more than double from the R5.9bn reported in last year’s financial statement. While the potential for revenue losses as a result of the agreement is regrettable, the biggest error in the agreement was failing to build in a stop-loss clause. The extent of the liability is calculated as the opportunity cost of supplying electricity to BHP Billiton on the present special pricing formula compared with the revenue that would be generated if it was to sell that power at regular industrial customer tariffs.

When the agreement was signed in 1992, it was hoped it would serve the dual purpose of utilising the power utility’s excess capacity and developing South Africa’s industrial capacity. However, during the first decade of democracy in particular, economic growth and Eskom’s failure to invest sufficiently in new capacity has meant that excess capacity has been eroded, to the point where there are now other industrial users willing to pay more than BHP Billiton — hence the potential for loss.

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Glencore cuts budget for $5.9 billion Philippine project – by Erik dela Cruz (Reuters U.S. – August 13, 2013)

http://www.reuters.com/

MANILA – (Reuters) – Glencore Xstrata (GLEN.L) will cut up to 920 jobs and slash spending at its $5.9 billion Tampakan copper-gold project in the Philippines, one of several future mines under review since the company was formed in a record-breaking takeover.

Tampakan, a challenging project in a restive region of the southern Philippines, has not been officially put up for sale.

But, like many of the big-ticket mining projects previously held by Xstrata, it is under review by its new owners and is one of four projects Glencore has said it could sell to appease Chinese regulators’ concerns over its dominance in copper – if it is unable to sell the Las Bambas mine in Peru.

Sagittarius Mines Inc, which is 62.5 percent-owned by Glencore, said on Tuesday it had revised its work plan as the project still faced “substantial development challenges” – including a ban on open-pit mining in South Cotabato province.

That means it is unlikely to hit an already revised 2019 target for first production. “No investment decision can be made until the current project challenges are resolved and necessary approvals obtained,” Sagittarius spokesman John Arnaldo said.

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