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Latin America Mining

‘Ethical gold’ aims to curb mining’s toll in South America – by Lucas Iberico Lozada (Reuters U.S. – March 4, 2014)

http://www.reuters.com/

RELAVE, Peru – (Reuters) – Tucked between two desert ridges in southern Peru, Relave looks like any of the hundreds of ramshackle mining towns that blight the landscape in the world’s sixth-largest gold exporter.

Its name in Spanish means “tailings,” a nod to the heaps of mining waste that the town, a sprawling collection of wooden shacks and simple concrete huts, sits upon.

But Relave is also home to Aurelsa, one of the first small-scale mines in the world to produce gold certified and marketed as “ethical” as part of a scheme aimed at reducing the harmful impact of illegal mining in mineral-rich developing countries.

“When we arrived we didn’t have anything … Now we’re exporting internationally,” said Juan Coronado, the chief executive at Aurelsa who came to Relave in the late 1980s to sift through what was left of an abandoned gold mine after leaving his family farm in the Andean highlands.

He used to collect the abandoned mine’s tailings, mix them with mercury, and sell the amalgam to middlemen in a nearby town.

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UPDATE 3-Vale vows spending austerity as metals price outlook improves – by Jeb Blount and Guillermo Parra-Bernal (Reuters U.S. – February 28, 2014)

http://www.reuters.com/

RIO DE JANEIRO/SAO PAULO Feb 27 (Reuters) – Vale SA , the world’s largest iron ore producer, will continue reining in costs this year even as the outlook for prices and sales volumes is improving, its chief executive officer said on Thursday.

“We plan to continue with austerity,” Murilo Ferreira, the company’s CEO told investors at a conference call to discuss fourth-quarter earnings.

The company will also continue efforts to sell underperforming units and control investments as it sharpens its business focus on iron ore, responsible for about three-quarters of revenue and nearly all of its profit.

His remarks come as Vale reported a net loss of $6.45 billion in the quarter, its largest since Brazil’s government sold control to investors in 1997 and more than twice the shortfall of the year-earlier period. The loss was due to non-recurring events such as a one-time income tax settlement and the write-off of an abandoned potash project in Argentina.

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Vale Rallies as Chinese-Led Iron Ore Demand Boosts Earnings – by Juan Pablo Spinetto (Bloomberg News – February 27, 2014)

http://www.bloomberg.com/

Vale SA (VALE), the world’s largest iron-ore producer, rallied the most in three weeks after fourth-quarter earnings before taxes and other items beat estimates on rising prices for the steel-making material.

Vale rose as much as 2.7 percent to 29.81 reais in Sao Paulo today, the most intraday since Feb. 6, before closing at 29.31 reais. The gain pared its loss this year to 10 percent. The benchmark Ibovespa index of Brazilian shares rose 2.2 percent.

The world’s third-largest mining company is increasing cash generation after Asian-led demand pushed up average iron-ore prices 12 percent in the fourth quarter. While iron ore declined this quarter because of rising supplies and monetary constraints in China, it will remain at profitable levels for Vale for a sustained period of time, Executive Director for Ferrous and Strategy Jose Carlos Martins said.

“The price will continue to be very favorable and very profitable for Vale,” Martins told analysts on an earnings conference call today. “There is a very strong resistance in price in the range of local Chinese iron-ore costs.”

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Catholic Church opposition to mining a myth – Cedron – by Dorothy Kosich (Mineweb.com – February 26, 2014)

http://www.mineweb.com/

“The industry needs a new and better approach to the Church,” says Professor Mario Cedron, ‘The visit of a delegation of mining executives to the Vatican last September is a start.”

SALT LAKE CITY (MINEWEB) – In a presentation to the Society of Mining, Metallurgy and Exploration Wednesday, Professor Mario Cedron of the Catholic University of Peru said the supposition that the Catholic Church opposes mining is based in myth and has no substance.

Some members of the clergy may express personal positions that are opposed to mining, Cedron advised, but no popes in modern memory have expressed anti-mining sentiments.

In fact, Pope John Paul II, a former coal miner, condemned the Liberation Theology political movement, which interprets the teachings of Jesus Christ in relation to liberation from unjust economic, political or social conditions. Cedron observed, “Many people call it Christianized Marxism.”

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First cartels, now vigilantes target Mexico mines – by Agence France-Presse (Global Post – February 25, 2014)

http://www.globalpost.com/

Dozens of trucks carry iron ore out of a mine in western Mexico, spinning dust into the air as they barrel past a guard booth peppered with scores of bullet holes.

The pockmarks are the scars of darker days, when the mine in the town of Aguililla, Michoacan state, was under the yoke of the Knights Templar drug cartel, which extorted the business.

The gang was chased out of town, but the mine still has to pay outsiders. The mine now forks out “compensation” to a vigilante movement which celebrated on Monday the first anniversary of a revolt that has driven the gang out of Aguililla and around 20 other towns in Michoacan.

The civilian militias say the mines are helping to finance their cause against the cult-like cartel which was deeply entrenched in Michoacan’s economy and terrorized the community through extortion, kidnappings and murder. Farmers and ranchers are also making donations to the militias that have liberated their towns.

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BRICs Creator O’Neill Wowed by New Lula’s Success: Mexico Credit – by Nacha Cattan (Bloomberg News – December 18, 2013)

http://www.bloomberg.com/

Jim O’Neill has been tracking economic reform initiatives in countries across the world during his 33-year career on Wall Street. Only a few of them, he said, rank higher than what Mexico achieved this year.

“I can’t think of many other countries that have had a period of such deep reforms,” said O’Neill, who coined the term BRICs while serving as a top Goldman Sachs Group Inc. economist in 2001, correctly predicting a surge in growth for Brazil, Russia, India and China. “Markets are only just really starting to give Mexico any credibility now that the energy reform is going through.”

President Enrique Pena Nieto shepherded through at least 10 constitutional amendments in his first year in office, including measures to open Mexico’s oil industry to private investment for the first time in 75 years. He is slated to enact as soon as this week the new drilling rules, which are aimed at luring oil majors from Exxon Mobil Corp. (XOM) to Chevron Corp. (CVX), after a majority of states ratified the changes adopted by the national congress.

O’Neill estimates the reforms will boost Mexico’s long-term economic growth to 5 percent from the current 3 percent, helping trigger a bond rally that will top gains in other emerging markets next year. Barclays Plc predicts the reforms will spark investor demand for bonds in coming weeks, with yields on longer-term securities falling about 0.25 percentage point by year-end.

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UPDATE 2-Vale may sell Brazil potash project on tax dispute -CEO (Reuters U.S. – February 19, 2014)

http://www.reuters.com/

BRASILIA, Feb 19 (Reuters) – Vale SA may sell a $4 billion potash fertilizer project in Brazil’s northeastern state of Sergipe if it is unable to reach a tax accord with municipal authorities, Chief Executive Officer Murilo Ferreira said on Wednesday.

Shareholders “cannot be subject to fiscal uncertainties” about the project Ferreira said during a hearing before a Senate committee in Brasilia. Vale, the world’s No. 3 mining company by market value, is the world’s largest iron ore producer and a growing fertilizer producer.

Vale plans to shut down its planning work at the site on Feb. 28 if there is no resolution, Ferreira said. Sergipe Governor Jackson Barreto said at the same hearing that the state will find a solution to the tax problem. The impasse stems from a battle between rival Sergipe towns Capala and Japaratuba over the location of the mine’s planned processing facility on their territory so they can reap the expected tax benefits.

“We won’t do anything to hurt the state, but lacking a political solution we’ll hire a bank to sell the project to somebody interested in developing it,” Ferreira said.

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Brazilian government to help pay for potash mine – by Henry Lazenby (MiningWeekly.com – February 18, 2014)

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

TORONTO (miningweekly.com) – Brazil-focused fertiliser development firm Verde Potash on Tuesday said the Brazilian government would help fund construction of its flagship Cerrado Verde project, located within the country’s largest agriculture market.

The company announced that the project was selected to receive financing from a special financing programme of the government.

“Inova Agro’s decision is immensely important not only for Brazil, but for the world’s population, ever so reliant on Brazil’s food production. Thanks to a ground-breaking funding programme in the agriculture sector, Brazil takes a step towards reducing its economy’s debilitating dependency on imported potash,” president and CEO Cristiano Veloso said.

Inova Agro is a Brazilian government programme intended to fund innovative projects in the agriculture sector, including those focused on fertilisers. Selected projects would be considered for subsidised interest rates, equity investment and non-reimbursable project investment grants from the Brazilian Development Bank and/or the Financing Agency for Studies and Projects, both of which are arms of the Brazilian government with a mandate to support domestic projects.

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NEWS RELEASE: New York Times Best-Selling Author Launches Campaign Surrounding the Anniversary of Tragic Event That Killed 65 Men

VANCOUVER, BRITISH COLUMBIA–(Marketwired – Feb. 19, 2014) – Local New York Times Best Selling Author Napoleon Gomez, today launches a campaign across Canada to bring attention to a tragic event that happened eight years ago, taking the lives of 65 innocent workers, whose bodies remain unrecovered.

Retold in his acclaimed book Collapse of Dignity, Gomez recounts the explosion deep in a Mexican mine and the ensuing half-hearted rescue attempts and government cover-up. Inspired by examples of public solidarity for social justice both in Canada and around the globe, Gomez was compelled to launch a bold campaign to mark the anniversary this year.

The campaign kicks off in Gomez’ home-base of Vancouver on key transit routes, supplemented and rolled out across Canada in newspapers, social media campaigns and a personal call to Napoleon’s peers and colleagues within Canada’s most reputable and largest labour unions. His message is clear: there are bodies still buried underground today and the lost miners deserve justice. Their families have never received support and their plight has never been resolved.

Frustrating for Gomez is the stark contrast to the Chilean mine tragedy in 2010, which was highly publicized and celebrated when the 33 miners were safely rescued. A Hollywood film about the 33 miners is currently in production. The Chilean accident took place just four years after the Mexican mining tragedy that saw little media support.

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Brazil land disputes spread as Indians take on wildcat miners – by Lunae Parracho and Caroline Stauffer (Reuters India – February 14, 2014)

http://in.reuters.com/

JACAREACANGA, Brazil – Feb 17 (Reuters) – As Brazil struggles to solve land disputes between Indians and farmers on the expanding frontier of its agricultural heartland, more tensions over forest and mineral resources are brewing in the remote Amazon.

The government of President Dilma Rousseff gave eviction notices to hundreds of non-Indian families in the Awá-Guajá reserve in Maranhão state in January and plans to relocate them by April, with the help of the army if necessary, Indian affairs agency Funai says.

The court order to clear the Awá territory follows the forced removal of some 7,000 soy farmers and cattle ranchers from the Marãiwatsédé Xavante reservation last year, a process profiled by Reuters that resulted in violent clashes. [link.reuters.com/dew27t ]

Anthropologists say evictions from Awá territory could be even more complicated. It is thought to be a base for criminal logging operations and is also home to some indigenous families who have never had contact with outsiders, a combination that worries human rights groups lobbying for the evictions.

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Barrick Gold Production Seen Hitting Nine-Year Low – by Liezel Hill (Bloomberg News – February 11, 2014)

http://www.bloomberg.com/

Barrick Gold Corp. (ABX) is poised to cut output to a nine-year low, a sign the world’s largest gold miner is making headway on its plan to put profits before growth.

Barrick may produce 6.3 million ounces of gold this year, based on the average of four analysts’ estimates compiled by Bloomberg. That would be as much as 15 percent less than last year and the lowest since the company became the gold industry leader in 2006.

The Toronto-based miner, which is expected to issue 2014 forecasts when it reports fourth-quarter earnings Feb. 13, isn’t alone in its strategy. Gold producers have cut budgets, sold mines and curtailed operations after the metal plunged last year by the most in more than three decades.

“Barrick represents a turnaround situation,” Robert Gill, who helps manage C$3.3 billion ($3 billion) including Barrick shares at Lincluden Investment Management, said yesterday by phone. “It’s a different company now than what it was for much of its existence.”

The miner led an industrywide pursuit of expansion over the past decade as gold producers sought to capitalize on prices that rose for 12 straight years.

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Peru’s copper sector the one with highest growth potential in the world—Chilean expert – by Cecilia Jamasmie (Mining.com – February 5, 2014)

http://www.mining.com/

It is not usual to hear Chileans praising their Peruvian neighbours, especially when the matter in question is the copper industry, Chile’s most precious resource, which accounts for 60% of the nation’s exports and 20% of its GDP.

But Juan Carlos Guajardo, the Chile’s Centre for Copper and Mining (CESCO) director, told Peruvian newspaper Gestión (in Spanish) that the production gap between the two mining countries is “set to narrow,” as Peruvian copper projects are solid, competitive and less costly in terms of energy needs.

He added that rather than seeing Peru’s copper sector as a threat, Chileans miners should evaluate the many opportunities for cooperation between both industries.

Actually Peru is already looking to boost cooperation agreements on copper processing technology with Chile as the country, the world’s top copper producer, has decades of experience extracting the red metal.

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Cuba to cut nickel plant output for major overhaul (Reuters U.S. – February 3, 2014)

http://www.reuters.com/

Feb 3 (Reuters) – Cuba will reduce production at one of its two nickel plants this year so it can carry out maintenance and capital improvements to make the plant competitive at low international prices.

A report on the evening government newscast on Sunday said the Ernesto Che Guevara processing facility in eastern Holguin province would be given a major overhaul.

The state-owned plant, built with Soviet technology and opened in 1986, has a capacity of about 30,000 tonnes of unrefined nickel plus cobalt a year at a cost of more than $12,000 a tonne.

Spot nickel prices on the London Metals Exchange opened at $13,695 a tonne on Monday. The broadcast quoted the plant’s head of maintenance as saying it would be the biggest overhaul in the plant’s 28-year history and that workers face the challenge of producing 14,700 tonnes of unrefined nickel plus cobalt while it is taking place.

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First Quantum reveals larger copper forecast for Cobre Panama – by Peter Koven (National Post – January 29, 2014)

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

TORONTO – When First Quantum Minerals Ltd. acquired Inmet Mining Corp. for almost $5-billion early last year, the key rationale is that it expected to find enormous cost savings at Cobre Panama, Inmet’s flagship project and one of the world’s largest undeveloped copper deposits.

On Tuesday, nearly a year later, First Quantum finally released its Cobre Panama projections. The headline number was an eye-opener, as the company’s proposed capital cost of US$6.4-billion is actually higher than the US$6.2-billion that Inmet was talking about. However, First Quantum also plans to produce a lot more copper than Inmet did.

“The re-engineering of the Cobre Panama project has resulted in a very much larger project of substantially lower capital intensity, and with a considered but clearly defined timeline to completion,” President Clive Newall said on a conference call.

Vancouver-based First Quantum plans to churn out a whopping 320,000 tonnes of copper a year at Cobre Panama, roughly 20% more than Inmet proposed. It also expects to produce 100,000 ounces of gold, 1.8 million ounces of silver and 3,500 tonnes of molybdenum per year from the mine.

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UPDATE 1-Timmins Gold joins new mining rush to equity markets – by Euan Rocha (Reuters U.S. – January 22, 2014)

http://www.reuters.com/

Jan 22 (Reuters) – Timmins Gold Corp, which owns the San Francisco gold mine in Mexico, said on Wednesday it will sell C$25 million ($22.7 million) in equity to a syndicate of banks, the latest in a slew of recent share offerings from Canadian miners.

The Timmins deal, designed to strengthen its balance sheet, builds on a wave of offerings that may signal a thaw in the financing environment for miners, which have long been out of favor with investors.

The bank syndicate, led by RBC Capital Markets, will buy the shares at C$1.50 each, a significant discount to Timmins’ closing price of C$1.73 on the Toronto Stock Exchange on Tuesday. The transaction was done as a bought deal.

A bought deal occurs when an underwriter, or a syndicate, buy shares from an issuer before selling them to the public.

While these deals typically occur at a slight discount to a company’s last trading price, the large discount that Timmins agreed to underscores the challenges still facing gold miners.

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