Latin America Mining – Page 105

Small Brazilian iron ore miners soldier on amid low prices – by Stephen Eisenhammer and Marta Nogueira (Reuters U.S. – November 12, 2014)

November 14, 2014

http://www.reuters.com/

Nov 12 (Reuters) – Small Brazilian iron ore miners are proving resilient in the face of low global prices, pushing ahead with expansion projects even as that reduces the chance of a quick rebound in prices.

Interviews with five iron ore “juniors” operating in Brazil showed players in this section of the industry, helped by cheap development bank loans and the flexibility to sell locally or abroad, are not being forced out of business at the pace larger rivals hope.

The price of iron ore has fallen 40 percent this year as new capacity from major Australian mining companies entered the market just as Chinese demand growth slowed.

The “big three” in iron ore, Brazil’s Vale, Australia’s BHP Billiton and Rio Tinto, argue the self-inflicted price drop will drive higher-cost producers out of the market, making it possible to retrieve market share and for the price to rise.

But such a process is complicated. Many predicted a similar process when coal prices dropped last year, but coal mines have been slow to close, keeping prices down.

NEWS RELEASE: Barrick Appoints Executive Project Director for Pascua-Lama

November 13, 2014

TORONTO, November 13, 2014 — Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (Barrick or the “company”) today announced the appointment of Sergio Fuentes as Executive Project Director for Pascua-Lama. Mr. Fuentes was most recently Vice President, Projects for Codelco and has nearly 30 years of mining industry experience, with a proven track record of engineering, optimizing and constructing complex mining projects, including high-altitude operations in the Andes.

As Executive Project Director, Mr. Fuentes will focus on optimizing detailed engineering, improving the project’s economics and developing a robust execution plan for remaining construction activities at Pascua-Lama. He will work with the project leadership team to advance Pascua-Lama in an environmentally responsible manner, in compliance with legal and regulatory requirements. In the short term, he will lead the completion of final engineering for the water management system in Chile and will work to reduce ongoing care and maintenance expenditures at the project.

Mr. Fuentes will work closely with Eduardo Flores, Executive Director, Chile and Guillermo Calo, Executive Director, Argentina to ensure alignment of all project activities in both Chile and Argentina and will support the development of enduring partnerships with governments, communities and other stakeholders in both countries.

A decision to restart the Pascua-Lama project will depend on resolution of permitting and legal matters in Chile and improved project economics. The company will only proceed with construction if the project meets minimum return-on-investment thresholds.

Canada injects $300m in Chile’s copper giant Codelco – by Cecilia Jamasmie (Mining.com – November 12, 2014)

November 12, 2014

http://www.mining.com/

Export Development Canada (EDC) said Wednesday it has granted a US$300 million loan to Chile’s owned copper producer Codelco to help it with a much needed massive investment program aimed to guarantee the firm’s status as the world’s biggest copper producer.

The Chilean miner will procure goods and services from Canadian companies down the road, particularly small-to-medium sized enterprises.
As part of the agreement, the Chilean miner will procure goods and services from Canadian companies down the road, particularly small-to-medium sized enterprises.

“Such loans have been very productive in the past, especially with Codelco, where they have helped promote Cdn$888 million worth of purchases from more than 150 Canadian companies in the last five years,” a spokesman for EDC told MINING.om.

Jean Cardyn, EDC’s Regional Vice-President in South America said in a statement that the Canadian trade finance agency has identified Chile as a market that holds tremendous promise and potential for growth.

Late last month President Michelle Bachelet enacted a special law to spur the company’s output, which grants Codelco an extra injection of S$4 billion between 2014 and 2018.

Iron ore and the dangers of living by the sword – by Andy Home (Reuters U.S. – November 11, 2014)

November 11, 2014

http://www.reuters.com/

LONDON – (Reuters) – The price of spot iron ore has sunk to $75.50 per ton this week, its lowest level since 2009. The scale of the price collapse has been breath-taking. Iron ore has dropped by over 35 percent since the start of the year, a significantly worse performance than any other industrial metal.

But what’s really shocking is that the price is now at a level that until recently was collectively deemed impossibly low. It was only in April that José Carlos Martins, executive officer of ferrous and strategy at Vale, the world’s largest producer of iron ore, told analysts that “one thing is for sure, the price will not go below $110 on a sustainable basis”.

This was not irrational producer exuberance. Martins was only voicing the prevailing consensus view when he went on to argue that “we have many times seen the price going below this level but recovering very fast”. Well, here we are with the price trading not just below $110 but a lot lower still. And sustainably so.

That tells you that something has gone very wrong with the iron ore narrative. This market is in a place it was not supposed to be.

And while big producers such as Vale, Rio Tinto and BHP Billiton are sticking to that narrative, they are now facing the unpredictable consequences of a pricing war they collectively started.

NEWS RELEASE: Largo initiates exploration program on potential new discovery of chromite and PGMs

November 10, 2014

Symbol: LGO (TSX.V)

www.largoresources.com

TORONTO, Nov. 10, 2014 /CNW/ – Largo Resources Ltd. (“Largo” or the “Company”) is pleased to announce that it has begun an exploration program for chromite and PGMs (platinum group metals) at its Capivara Prospect which is located in the Maracas region of Bahia, Brazil, but outside of the current mining area of its Maracas Menchen Mine.

Largo has recently discovered a new chromite showing on its Capivara Prospect (Figure 1). The Capivara Prospect lies 32 km north of the Campbell pit at the Maracas Menchen Mine. The original objective was to evaluate the known magnetite horizon which includes high grade vanadium values. While evaluating this magnetite horizon, the discovery was made of a number of zones containing chromite layers with fine grained sulphides. Samples have been collected and submitted to the lab with results pending.

The chromite layers have been traced over an area of 3km (north-south) by 0.5 km (east-west). There are at least two zones of chromite layers from 20 to 25 metres wide at surface. These zones lay 400 metres west of the Magnetite horizon that contains vanadium and anomalous platinum. The chromite layers are hosted in a thick ultramafic sequence including olivine gabbro, olivine pyroxenite and dunite. In the zones, the chromite layers consist of fine-grained massive chromite (˃ 60% chromite) and disseminated sulphides that could potentially contain PGMs. These massive chromite layers are 0.50 metres to 1.0 metre thick separated by material containing lesser chromite (˂ 10% chromite) and disseminated sulphides.

Disaster down deep — inside the 2010 Chilean mine collapse – by Héctor Tobar (National Post – November 3, 2014)

November 3, 2014

The National Post is Canada’s second largest national paper.

In the San José Mine, sea level is the chief point of reference. The five-by-five-metre tunnel of the Ramp begins at Level 720, which is 720 metres above sea level. The Ramp descends into the mountain as a series of switchbacks, and then farther down becomes a spiral. Assorted machines and the men who operate them drive down past Level 200, into the part of the mountain where there are still minerals to be brought to the surface.

On the morning of Aug. 5, 2010, the men of the A shift are working as far down as Level 40, some 2,230 vertical feet below the surface, loading freshly blasted ore into a dump truck. Another group of men are at Level 60, working to fortify a passageway near a spot where a man lost a limb in an accident one month earlier. A few have gathered for a moment of rest, or idleness, in or near El Refugio, the Refuge, an enclosed space about the size of a school classroom, carved out of the rock at Level 90, that serves as both emergency shelter and break room.

The mechanics led by Juan Carlos Aguilar find respite from the oppressive heat by setting up a workshop at Level 150, in a passageway not far from the vast interior chasm called El Rajo, which translates loosely as “the Pit.” The mechanics have decided to start their workweek by asking Mario Sepúlveda to give them a demonstration of how he operates his front loader. They watch as he uses the clutch to bring the vehicle to a stop, shifting from forward directly to reverse without going into neutral first. He’s mucking up the transmission by doing this, wearing out the differential. “No one ever showed me,” Sepúlveda explains when asked why he’s operating the machine that way. “I just learned from watching.”

The party is ending for Latin America – by John Paul Rathbone (Financial Times – October 30, 2014)

October 30, 2014

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

In the past 10 years, South America never had it so good. The continent surfed a global commodity price boom, helped by abundant global capital. In Sir Martin Sorrell’s clever marketing phrase, the 2010s were to be the “decade of Latin America”. Maserati dealerships opened in Bogotá, while Brazil minted 22 millionaires a day . Nor was it only the rich who gained. Poverty fell and, uniquely, social inequality shrank across the continent.

Like all good things, though, the party is ending. As commodity prices fall with China’s slowing economy, there is a new sense of anxiety. Everywhere, countries are vibrating with mildly suppressed panic – and the end of US quantitative easing does not help the mood. As the economic cycle turns, many governments seem confused as to which direction to take. Given how much has been achieved, there is often profound disagreement about what should come next.

Growth is already slowing fast, to just 1.2 per cent for the region this year. As the World Bank warns in its most recent regional outlook: “It is not clear whether the slowdown is bottoming out.” Levels of investment that had reached heights comparable to those in Asia, spurred by the “commodity supercycle”, are falling. Meanwhile, social protest is on the rise – through both the ballot box, as in Brazil’s closely fought election, and direct action, such as last year’s Colombian farmers’ protests or Brazil’s street riots. Everywhere, the region fizzes with social effervescence.

This mood of agitation spans the political divide. At one end of the spectrum lies Venezuela, a spectacularly mismanaged country blessed with the world’s largest energy reserves yet flirting with default, thanks to a state so incompetent that it gives fresh meaning to the word “lemming”.

‘Please tell people about this:’ London students’ horror at Dominican Republic mines – by Mark Spowart (Metro News – October 27, 2014)

October 27, 2014

http://metronews.ca/

Three London students were shocked by what they found last winter during a trip to the Dominican Republic. Canadian mining companies, they say, are destroying lives in the country.

“We visited the Barrick Gold mine, and while we were there, we spoke with a woman named Juliana (Rodriguez). She is 82 years old and has lived in the area for all of her life,” Klaire Gain said. “She told us the last four years, which (has seen) Barrick Gold mining in the region, have been the worst years of her life.”

Now, Gain, Claire Morrow and Natasha Jimenez — all recent graduates of the social justice and peace program at King’s University College — are working to show the world what they witnessed. Using their own money, and some brought in through fundraisers, the trio travelled back to the region this summer.

They spent two months living in the area, working on farming co-ops, meeting and talking with as many residents, along with environmental and academic experts, as they could. They also hired former CBC cameraman Mark Visser, and flew him to the region where he filmed more than 100 hours of footage for a documentary expected to be ready by spring 2015.

The limits of Ecuador’s shakedown statism – by Peter Foster (National Post – October 24, 2014)

October 24, 2014

The National Post is Canada’s second largest national paper.

Ecuador is run by the left-wing caudillo windbag Rafael Correa, whose hero was Hugo Chavez

The great eighteenth century lexicographer and wit Samuel Johnson described second marriage as the “triumph of hope over experience.” How then might one characterize the tendency of Canadian mining companies to return again and again to the altar of commerce with foreign government partners who recall Glenn Close in Fatal Attraction?

This week, Vancouver-based Lundin Group confirmed that a subsidiary would take over the Fruta del Norte prospect in Ecuador from Toronto-based Kinross Gold Corporation for US$240 million. Ecuador is run by the left-wing caudillo windbag Rafael Correa, whose hero was Hugo Chavez, the man who turned oil-rich Venezuela into a basket case.

Mr. Correa’s preferred mode of money-raising is the shakedown. The two most spectacular examples in recent years have been an attempt, via the “Yasuni Initiative,” to blackmail the rest of the world into putting up US$3.6 billion in return for Mr. Correa (italics) not (close italics) drilling for oil in an Amazonian nature reserve; then there is a beyond-fiction trumped-up court case against California-based Chevron Corp. seeking (at last count) US$9.5 billion for alleged damage to the rainforest.

Kinross took a massive flier by buying Fruta del Norte in 2008 for $1.2 billion when Ecuador had no clear mining policy. The company’s attempt to develop FDN turned out to be the proverbial marriage from hell.

How the Fruta del Norte project is another high-risk, high-reward gamble for Lundin Group – by Peter Koven (National Post – October 23, 2014)

October 24, 2014

The National Post is Canada’s second largest national paper.

If anyone was going to tackle the Fruta del Norte project, it would naturally be Lukas Lundin.

The Vancouver-based mining entrepreneur has never shied away from investing in the most politically challenging parts of the world. And by getting into countries including Argentina and the Democratic Republic of Congo ahead of the pack, the Lundin Group has taken hold of many world-class projects at low cost and made a fortune for its shareholders.

Fruta del Norte (FDN) fits the bill for Mr. Lundin perfectly. It is arguably the world’s best undeveloped gold deposit, with 6.8 million ounces of very high-grade reserves. It is also in Ecuador, a country that has been inhospitable for mining investment and has scared away the rest of the gold sector. As a result, the asset was available at a bargain-basement price.

“One of those things the Lundin family has done so well over so many years is [obtaining] great assets,” Ron Hochstein, chairman of Lundin shell company Fortress Minerals Corp., said in an interview. “And also having the ability to work with governments and with the population to see them through.”

Fortress announced late Tuesday it will buy FDN from Kinross Gold Corp. for US$240-million in cash and stock. Fortress will be renamed Lundin Gold Inc. and plans to use FDN as the foundation to build a significant gold producer.

Iron ore giants win first round in global battle but knockout unlikely – by Clyde Russell (Reuters U.S. – October 23, 2014)

October 23, 2014

http://www.reuters.com/

LAUNCESTON, Australia – Oct 23 (Reuters) – There is now no doubt that the big three global iron ore miners are producing record amounts in their bid to dominate the industry. The question remains, what will happen if they succeed?

Anglo-Australian giants Rio Tinto and BHP Billiton both reported record output in their latest quarterly reports, and affirmed they were on track to boost production even further.

Top producer, Brazil’s Vale is also increasing output, with Brazilian trade figures showing iron ore exports rose 16.7 percent in September from August to 33 million tonnes.

These figures show that the output side of the plan to dominate global seaborne iron ore trade is going quite well for the big three.

In the case of BHP and Rio Tinto, they are well-placed to continue to put pressure on competitors based in their home turf of Western Australia state, as well as those in other parts of the world.

With the lowest cash costs, in the region between $20 to $30 a tonne, and plans to strip out even more costs, they can survive and prosper even if iron ore prices remain weak.

Mexico’s Antidrug Push Weighs on Iron-Ore Trade With China – by Chin-Wei Yap (Wall Street Journal – October 20, 2014)

October 21, 2014

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

Mexico’s Total Iron-Ore Exports Likely to Fall 80%

TIANJIN, China—Mexico’s exports of iron ore have plunged in the wake of a bid by authorities to break the grip of drug cartels on parts of the country’s iron-ore industry, a Mexican official said.

Mexico will likely export just 2 million metric tons of iron ore this year, in part because of a crackdown on cartel-linked shipments to China, Mario Cantú, Mexico’s coordinator general of minerals, said on the sidelines of an industry conference in the northeastern Chinese city of Tianjin. Last year, Mexico exported about 10 million tons of the mineral, 9 million of which were bound for China.

It isn’t clear the extent to which exports specifically to China will drop this year, Mr. Cantú said, but the decrease will likely correspond with the 80% drop in total Mexican iron-ore exports.

The export collapse is linked to Mexico’s moves to combat drug cartels operating in the country’s top ore-producing state, Michoacán, and their expansion into lucrative shipments of the mineral to China, the world’s biggest buyer of iron ore.

In addition to confiscating iron-ore that officials said was linked to drug cartels and closing facilities where the mineral was processed, Mexican authorities this year introduced a new export permit aimed at curbing illegal shipments.

Chilean copper boom is losing its lustre – by Fabian Cambero and Rosalba O’Brien (Reuters/Daily Mail – October 17, 2014)

October 21, 2014

http://www.dailymail.co.uk/home/index.html

SANTIAGO, Oct 17 (Reuters) – The shine may soon come off Chile’s decade-long copper boom as technical and regulatory problems in getting new mines into production highlight just how hard it will be to keep ratcheting up the supply.

Chile is expected to produce a record 5.83 million tonnes of copper this year, rising to 6.23 million next year, state copper commission Cochilco forecast on Friday. Many in the industry are confident new mines will keep boosting supply, and are worried more by falling demand in the key buyer, China.

But the optimism over output may be misplaced. Already, the official estimate for production in 2014 has been downgraded twice, cut from 6.07 million tonnes – a drop equivalent to the output of a medium-sized mine – after teething problems at three new projects and falling output at older ones.

And soon the growth of recent years will likely grind to a halt, industry experts say. “Next year and towards 2016 we will see the peak of production in this decade but I don’t think we will see very significant increases in Chile until the next decade, when we hope large projects in the pipeline will be unblocked,” said Juan Carlos Guajardo, head of local copper think-tank CESCO.

CESCO sees growth in new production falling off sharply after 2016, with a market “balanced or in deficit through to the end of the decade”, Guajardo said.

Miner Opposition [Canadian Global Mining Sector’s Reputation] – by James Munson (iPolitics.ca – October 1, 2014)

October 20, 2014

http://www.ipolitics.ca/

Where mining and violence meet

James Munson (bitly.com/MinerOpposition) traveled to Guatemala in July to explore the stories of mines caught up in a global debate over the responsibilities of Canadian-owned mining firms in developing countries. With Canada moving toward a new policy for the sector, Munson explores how the Fenix nickel mine in eastern Guatemala became the test case for bringing allegations of murder, rape and assault tied to the mine to an Ontario court room. Meanwhile, Goldcorp Inc.’s Marlin mine in the western part of the country has been the subject of protests and findings that its operations broke human rights standards. The stories of these mines, and the people who live beside them are the starting point for Miner Opposition — http://www.bitly.com/MinerOpposition (Produced with support of the Ford Foundation)

EL ESTOR, GUATEMALA— One night this past April, while poring over legal documents at around four in the morning, Manuel Xo Cu drifted to sleep and had the dream that would save his life.

The dream involved him grabbing onto the roots of two trees to keep from sliding into a dark hole. During a bus ride the next day, he was confronted by three armed men who asked him to move to the back of the bus. He refused, recognizing the back of the bus as the dark hole, and sat beside a woman who he would later use as an excuse to get off at an earlier stop, thinking the would-be assassins could identify him with more certainty if he were to get off at his regular destination.

Chile Seeking to Loosen Major Miners’ Grip on Idle Land – by Matt Craze (Bloomberg News – October 7, 2014)

October 9, 2014

http://www.bloomberg.com/

Chile’s government will seek talks with large-scale mining companies to make more land available for smaller mineral explorers as it seeks to expand the copper industry, the world’s largest.

Two-thirds of land with potential for discoveries is in the hands of major mining companies and vast areas under concession are lying idle, Deputy Mining Minister Ignacio Moreno told a conference in Santiago today. Chile is falling behind Mexico and Peru in capturing mining investment, he said.

“Everyone knows there is a problem that we have to take on,” Moreno said. “For the exploration companies this topic creates a lot of enthusiasm. For the majors it causes concern.”

The government will seek talks with the industry and act with “prudence” to achieve a consensus before reaching a conclusion next year, Moreno said. One proposal under study is to create a tax for land concessions that are not being explored, he said.

Chile, which produces a third of the world’s copper, says major companies including state-owned Codelco, Anglo American Plc and BHP Billiton Ltd. plan to invest more than $100 billion in new copper and gold mines.