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Latin America Mining

Mining Is Bolivia’s Second Source of Income (Telesurtv.net – October 8, 2014)

http://www.telesurtv.net/english/index.html

President Evo Morales pushed forward legislation to give the mining sector the dignity it lacked since the Spanish Colonization.

Since the Spanish colonization of America, Bolivia has been a mining country. This sector represents the second source of income, behind hydrocarbons. From 2006 to 2012, the mining industry contributed to the Bolivian economy with an average of US$201 million in taxes, according to official reports. The amount represented an increase of over 1,156 percent in regards to the period 1999-2005.

Mining also contributed US$4.8 billion to the Gross Domestic Product by 2011. The export of mining products contributed to the Bolivian economy with over US$11.2 billion between 2006 and 2011.

The Mining activity has always been a crucial source of income in Bolivia, although it had been marginalized for over 190 years. It was not until Evo Morales came to power that the sector was taken into consideration, becoming highly regarded due to the recently approved Mining and Metallurgy Law.

The law, which was the result of an important citizen consensus, replaced the pre-existent privatized norm that was tailored to privilege international investment.

The new law also gives the government constitutional authority over the management, administration and control of mineral resources in favor of the Bolivian people’s interest.

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UPDATE 1-Goldcorp’s El Morro mine halted by Chile Supreme Court (Reuters India – October 7, 2014)

http://in.reuters.com/

Oct 7 (Reuters) – Chile’s Supreme Court has halted the development of the El Morro gold and copper mine owned by Canada’s Goldcorp, saying that local indigenous groups who oppose the $3.9 billion project need to be better consulted.

The court said on Tuesday that an environmental permit awarded last year should be stopped until a fresh consultation, based on an International Labor Organization convention, has taken place with the local Diaguita community.

Goldcorp has just received the ruling and is reviewing it, spokeswoman Christine Marks said. “Goldcorp remains committed to open and transparent dialogue with its stakeholders.”

The decision is the latest in a string of rulings that have found against mining companies looking to invest in the top copper exporter. Like many of its resource-intensive Latin American peers, Chile is struggling to find a balance between mining-led growth and environmental protection.

Billions of dollars worth of projects have been put on ice or delayed in recent years, snarled up in red tape and opposed by local communities.

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Lundin bulks up on copper with purchase of Freeport mine – by Rachelle Younglai (Globe and Mail – October 7, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Canada’s Lundin Mining Corp. has agreed to buy a Freeport-McMoRan Inc. copper mine for $1.8-billion (U.S.), a move that will double its production as the red metal slumps on fears of weaker Chinese demand.

Lundin’s deal to acquire 80 per cent of Freeport’s Candelaria mining complex in Chile comes at a rocky time in the mining industry. Mining giants such as Phoenix-based Freeport are trying to divest assets to pay down hefty debt loads incurred during the commodity boom.

Meanwhile, economic growth in China, the world’s largest consumer of copper and other commodities, is slowing. And big new copper mines are expected to start producing next year, which will add to an already well-supplied market and likely weigh on prices for some time.

For Lundin, however, the downturn represents a buying opportunity. The base-metals miner will fund the deal through debt and an equity financing.

Toronto-based mining royalty company Franco-Nevada Corp. will help finance the deal by paying Lundin $648-million for a stream of Candelaria’s future gold and silver production. The Candelaria complex includes an open-pit copper mine, infrastructure and the nearby Ojos del Salado underground copper mines.

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End of the Iron Age – by James Wilson and Neil Hume (Financial Times – September 29, 2014)

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

A collapse of ore prices throws miners’ strategies into doubt and threatens an industry shakeout

Iron is one of the most abundant elements on earth but pulling it out of the ground efficiently can be a daunting undertaking. Snaking through the low, green hills of southern Brazil is a 530km pipeline, the decisive link in Anglo American’s $8.2bn Minas-Rio project to extract iron ore in the Brazilian interior and ship it from a new Atlantic port. Way over its original $3.6bn budget and two years late, Minas-Rio is finally close to the point of “first ore on ship”.

For years, huge mining projects such as these have formed the backbone of global economic expansion. The world’s most important commodity after crude oil, iron ore has been devoured by Chinese steel mills, emerging as the raw material for an infrastructure-led growth spurt.

But Minas-Rio is about to deliver its first ore into a much less welcoming world. The price of iron ore has plunged more than 40 per cent this year, the worst performance across metals and bulk commodities in 2014. From an average price of $135 per tonne last year, the benchmark iron ore contract sank last week to less than $80 for the first time since the global financial crisis.

“The iron ore market is in the midst of a transition without precedent in recent commodity history,” says Macquarie, the Australian bank.

Behind the change is a big increase in iron ore exports – and not just the 26.5m tonnes that Minas-Rio will bring to market when fully operational in 2016.

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For Miners, Increasing Risk on a Mountain at the Heart of Bolivia’s Identity – by William Neumansept (New York Times – September 16, 2014)

http://www.nytimes.com/

POTOSÍ, Bolivia — The silver in this mountain helped finance the Spanish empire. It created vast fortunes for some and misery for many more. It fueled the early growth of European capitalism, setting the stage for the modern era.

But now, after centuries of hauling out its riches, miners working near the peak have clawed away so much of the interior of the mountain that it is caving in from the top down.

At the peak of this historic mountain — known as Cerro Rico, or Rich Hill, standing at more than 15,600 feet — a giant sinkhole has opened, a jagged mouth in the blood-red rock. In June, Unesco warned that the mountain, depicted at the center of Bolivia’s flag, faced a critical risk of collapse at its summit.

“Since the internal structure of the upper part of the Cerro Rico is severely weakened due to continuous exploitation,” it said, “there is a significant risk that miners could die from collapses inside the tunnels.”

In July, the government said that it planned to shut down mines above 14,435 feet, where about 1,500 miners work in conditions that can range from rudimentary to brutal. Many thousands of miners work in mines farther down the mountain.

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Colombian court orders mining companies to return land to natives (Reuters India – September 25, 2014)

http://in.reuters.com/

BOGOTA – (Reuters) – A Colombian legal tribunal has ordered 11 companies to halt gold-mining operations in a 50,000-hectare (124,000-acre) reserve in the northwest of the country and return the land to the native tribe that previously lived there.

The ruling, the first of its kind in the Andean nation, restores the territory in Choco department to the 7,270-person Embera Katio tribe, which inhabited the area before it was forced out by mining activities and violent illegal armed groups.

Choco, located on the Pacific coast, is strategically valuable to drug traffickers, Marxist guerrillas and right-wing paramilitary groups. The Embera Katio were victims of killings and forcible recruitment when they lived there.

“The natives who inhabited the reserve … were forcibly displaced to large urban centers,” reads the ruling, to which Reuters has access.

The government awarded mining concessions in the Bagado municipality beginning in 2008 and received applications to conduct operations in some 31,000 hectares, 62 percent of the reserve, the ruling said.

The decision orders the National Mining Agency, in coordination with the military, to “remove people from outside the community who are carrying out mining activities within the reserve.”

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Putting the Cuban nickel and cobalt resources back into its orbit – by Christopher Ecclestone (Investorintel.com – September 25, 2014)

http://investorintel.com/

To those with fertile imaginations Cuba conjures up images of rum and cigars, but even those remain forbidden fruit for US consumers as long as the troglodytic Helms-Burton Act remains extant. What also remains off-limits for the US industrial consumer is Cuban cobalt and nickel. I thought it timely to visit the theme of Cuba as it relates to US resource security, one of my recurring themes.

I should be remembered that the US has little, to no, Nickel or Cobalt resources of its own. In fact dusting off the history books one would see that the Moa Bay complex in Cuba was actually developed during the Second World War to plug the US supply gap in these two important metals. Ox-like stubbornness since 1960 by the US “powers that be” might have been justified up until 1989 but subsequent to that the US should have been thinking of its own best interests in getting the Cuban resources in these two metals back into its orbit. Instead it has let petty self-interest of the fallen Cuban oligarchs cut off its nose to spite its face.

Cuba has a history of mining extending over a period of three hundred years. Since 1900 mining has pretty much been a constant activity and, during WWII, the mining of manganese, some copper, and nickel/cobalt was most important.

Cuban mineral production is largely state-controlled, although the government has made steps to amend the mineral laws and legislation. In 1993, Geominera was formed as a private company that utilized state funds. Geominera’s focus is on gold and base metal exploration, whilst foreign investors are currently developing nickel/cobalt and gold resources. I even ran into a Cuban delegation at a London mining event recently and went away with a CD of Cuban salsa music for my troubles.

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UPDATE 2-Workers to strike at Chile’s Escondida copper mine next week – union (Reuters U.K. – September 16, 2014)

http://uk.reuters.com/

(Reuters) – The union at the world’s largest copper mine, Chile’s Escondida, has called a strike for Sept. 22 and 24, aiming to paralyze activity to win improved working conditions, the union said on Monday.

In a surprise announcement on Monday evening, the Sindicato No. 1 union said it would call on its 2,800 members to stage two 24-hour strikes at the mine, which is controlled by global miner BHP Billiton Plc .

The union, which represents the vast majority of workers at the mine, said the stoppage would affect mining and port operations. Escondida, in northern Chile’s copper belt, produced 1.19 million tonnes of copper last year, about 20 percent of the output from Chile, the world’s top copper producer.

The union carried out a similar 24-hour stoppage over pay and conditions last year, without causing any long-term impact on copper production. However, it stunned the copper market in 2011 by staging a two-week strike that sent the mine’s output tumbling.

Escondida “systematically infringed on labor norms,” the union said in a statement on Monday, citing overtime, holidays, hygiene and safety issues. It said on its blog that it held a series of meetings with company representatives on Thursday.

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The quest for improved agricultural productivity spurs investor interest – by Henry Lazenby (MiningWeekly.com – September 11, 2014)

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

TORONTO (miningweekly.com) – Rising demand for protein and more sophisticated diets in developing countries are spurring investors to get excited about investing in fertilisers.

The ‘protein story’ was still providing a good thesis for investment, as the developing world continued to consume more meat and dairy products, which required exponentially more agricultural inputs than traditional staples, which in turn, required improved nutrients to ensure better-yielding crops.

“It bodes well for phosphates, nitrogen and potash,” Brazilian entrepreneur and founder in 2005, at the age of 23, of fertiliser junior Verde Potash, Christiano Veloso told Mining Weekly Online in an interview.

He noted that the protein story was still evolving, with much of Africa still to follow the route Asia had gone in recent years. This would mean increased demand for high-quality fertilisers to achieve improved agricultural output, driven by the need for increased productivity owing to the scarcity of arable land, climate change, scarce water supplies and labour, among other factors.

In Asia and Africa, protein consumption per capita was still far below the norm in Europe and North America. The development of Brazil into what could very well be the world’s food basket for numerous generations to come, augured well for TSX-listed Verde Potash, which was developing the largest potash mine in the country.

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Kinross Gold in talks to sell Ecuador project to Lundin family – by Rachelle Younglai (Globe and Mail – September 11, 2014)

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Kinross Gold Corp. is in talks to sell its mothballed gold project in Ecuador in a move that could see the Lundin family develop the deposit, according to people familiar with the matter.

For about a year, Kinross has been trying to exit Ecuador and divest the Fruta del Norte after clashing with the local government on the economic terms of the project. The Ecuadorean government gave Kinross approval to sell Fruta del Norte last week, one person familiar with the matter said.

Fruta del Norte, also known as FDN, was at one time seen as critical to Kinross’s growth. The company acquired the precious metal deposit when it bought Aurelian Resources for $1.2-billion in 2008.

But after more than two years of negotiations with the Ecuadorean government, Kinross threw in the towel and said it was not going to waste any more capital developing the mine. It recorded a $720-million charge on the asset in 2013 and slashed its gold reserves by a third to reflect the loss of Fruta del Norte.

“We continue to work co-operatively with the Ecuadorean government on our exit from the country and the FDN project,” Kinross spokeswoman Andrea Mandel-Campbell said. “We do not comment on speculation,” she said.

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Illegal Gold Miners In Brazil Destroying Amazon, Indigenous Tribes At Risk – by Alex Létourneau (Kitco News – September 10, 2014)

http://www.kitco.com/

(Kitco News) – Illegal gold mining is by no means a new phenomenon, but it has been getting more and more attention with gold’s decade-long bull run. In the past, the focus on illegal gold mining has been more about the money countries are losing, but the spotlight is how starting to shift to the impact of these illegal practices on the environment.

At the moment, the Amazon rainforest, Earth’s largest rainforest, is seeing a growing number of illegal miners operating within it, causing environmental damage and disrupting Indigenous tribes living on government protected land.

In a joint statement to Kitco News, Marco W. Lentini, head of the Amazon program of WWF-Brazil, and Jean Timmers, superintendent of public policy at WWF-Brazil, said the region between the Amapá state in Brazil and French Guiana is one area that is experiencing major problems.

The two added that although there aren’t any specific survey’s documenting the number of illegal miners in the area “ it can certainly reach tens of thousands workers across the Amazon.”

“Illegal mining has intensified land use conflicts and also give incentives to encroach and access remote areas within protected areas in the Amazon, frequently with great conflicts with indigenous and other traditional populations,” they said.

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Recent Mining Disasters Underscore Significant Challenges Posed by Huge Open Pit Mining Projects – by Frances Causey (Huffington Post – September 9, 2014)

http://www.huffingtonpost.com/green/

Frances Causey is a documentary filmmaker and journalist.

The Mount Polley mining disaster on Aug. 4 in Canada’s Cariboo Regional District is being called possibly the worst environmental disaster in British Columbia history. A tailings dam collapsed at an open pit copper and gold mine tailings dump, sending huge volumes of toxic waste into critical waterways 370 miles north of Vancouver, British Columbia. The environmental catastrophe wreaked havoc throughout the region, initiating an emergency drinking water ban, severely damaging the region’s important sockeye salmon habitat, a critical food and income source for the area’s First Nation’s communities and abruptly putting a halt to the area’s vibrant tourism.

Years before the disaster, the B.C. Ministry of Environment repeatedly warned the Mt. Polley mine owner, Imperial Metals, that the waste water level of the Mt. Polley tailings pond was too high. The Mt. Polley spill is being compared to the Exxon Valdez disaster in 1989, which spilled 11 million gallons of crude oil into Prince William Sound in Alaska.

The area around the Valdez spill contained a thriving spring herring fishery that has not fully recovered and may never, according to government scientists. The impact and cost to clean up the Mt. Polley spill is still being evaluated and will be for years to come, but one can’t help but wonder what the sockeye salmon run there will look like in 25 years.

And just last week, 25 miles across the border from Arizona, Grupo Mexico’s Buenavista copper mine in Canenea, Sonora, had a tailings dump failure that poured 10 million gallons of copper sulfate acid into a river that supplies water to tens of thousands of people living in rural areas along the Rio Sonora. The river of orange poison reportedly is killing livestock and wildlife.

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Iron ore giants eating little guys now, but cannibalism looms – by Clyde Russell (Reuters U.S. – September 3, 2014)

http://www.reuters.com/

Clyde Russell is a Reuters columnist. The views expressed are his own.

LAUNCESTON, Australia – (Reuters) – There was maybe more than a touch of hubris in Rio Tinto boss Sam Walsh’s recent comment that it’s time for other iron ore producers to “really feel the consequences” of the current low price.

The chief executive of the world’s No.2 iron ore miner was speaking after his company’s first-half results last month, basically delivering the message that Rio Tinto is going to keep going full-steam ahead on its iron ore expansion plans.

Walsh, along with the bosses of top iron ore miner Vale and No.3 BHP Billiton, is betting that their low-cost, high volume model will force smaller competitors to the wall, leaving them the undisputed kings.

Perhaps he should have a word or two with the chief executives of coal miners, which, oddly enough, includes himself given Rio Tinto’s extensive coal assets.

When the price of both thermal and coking coal started to decline in mid-2011, the word from the industry was that this wasn’t too big a surprise, but no need to worry as Chinese demand will ensure prices don’t fall too far, and all the new capacity brought on and planned will be profitable.

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No Apology From Mining Tycoon German Larrea For Worst Ecological Disaster In Mexico’s History – by Dolia Estevez (Forbes Magazine – September 2, 2014)

http://www.forbes.com/

Grupo Mexico, the mining giant owned by German Larrea Mota Velasco, Mexico’s second richest man, has been in the center of a political storm since one of its mines in northern Mexico caused the worst ecological disaster in Mexican history.

According to Mexico’s federal environmental protection agency, Profepa, on August 6 Grupo Mexico’s subsidiary Buenavista del Cobre mine spilled 10 million gallons (40,000 cubic meters) of copper sulfate acid into the Sonora and Bacanuchi rivers, 25 miles south of the border with Arizona.

The contamination turned the waterways orange and affected the water supply of 24,000 people in seven communities along the rivers, forcing schools to close for several weeks while environmental authorities clean up the mess; 322 wells were shut down and more than 3 million liters of water have been distributed in trucks and bottles. Authorities place the cost of the total cleanup in the “hundreds of millions or billions” of Mexican pesos.

“This is the worst natural disaster provoked by the mining industry in the modern history of Mexico,” said Mexican Environment Minister Juan José Guerra Abud on August 26. Profepa said the mine’s leach solution yard is where the spill originated and ordered it partially shut,citing “imminent risk to the environment.”

The government has taken preliminary action to fine Grupo Mexico more than $3 million for the spill and Mexico’s Attorney General’s Office has opened a criminal investigation into top officials at the Buenavista mine, the world’s fourth largest copper mine by output.

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5 gold miners still trapped in Nicaragua – by Luis Manuel Galeano and Olga R. Rodriguez (USA Today – August 30, 2014)

http://www.usatoday.com/

BONANZA, Nicaragua (AP) — Rescue workers and trapped miners alike frantically dug away at opposite sides of rock and mud that blocked a Nicaragua gold mine, finally succeeding in freeing at least 20 men. Efforts to reach five miners still missing continued Saturday.

Antonio Diaz said the miners tried to cheer each other up inside the dark, cold shaft, attacking the slide with their picks and shovels by the light of helmet lamps. But after 24 hours, they began feeling hungry and some started losing hope.

“The sadness of feeling yourself trapped in a hole is immense but I never lost hope,” said the 32-year-old miner from a hospital bed in the town of Bonanza, near the El Comal gold and silver mine. “I kept thinking I was too young to die and above all, I thought about my two daughters.”

He said the miners finally cut a hole through the blockage and started shouting, but at first there was no answer. “Hours later, someone heard us, and when he answered us we felt life returning to our bodies,” Diaz said. “God had answered our pleas to keep living.”

Bonanza Mayor Alexander Alvarado, a former miner who participated in the rescue efforts, said it took about 100 men working around the clock to reach those trapped and even then, it took about another two hours to bring the first miner out to safety.

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