Glaciers, protests and court cases slow Barrick in Pascua-Lama – by Catherine Solyom (Montreal Gazette – December 17, 2012)

http://www.montrealgazette.com/index.html

This series was made possible thanks to a Bourse Nord-Sud grant attributed by the Fédération professionnelle des journalistes du Québec and financed by the Canadian International Development Agency.

At the beginning of November, Barrick Gold’s CEO, Jamie Sokalsky, announced yet another jump in the estimated capital costs of the Pascua-Lama mine, from less than $1 billion in 1997, to $3 billion in 2009, to $8 billion in July, to $8.5 billion last month – with “first gold” extracted from the Andean mine closer to the end of 2014 than to the beginning.

But, Sokalsky assured shareholders once again, Pascua-Lama is the company’s “top priority.”

There are, however, a number of obstacles remaining on the bumpy road to Pascua-Lama, to the delight of some and the dismay of others, from legal wrangling in Chile over the deeds to the vast, frigid territory, to a Supreme Court of Argentina decision over whether any mining can take place there at all, given the presence of glaciers so close to the mine pit.

Capital costs, which may yet rise again when the company releases its year-end results in February might be the least of Barrick’s worries.

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The seduction of gold in Pascua-Lama – by Catherine Solyom (Montreal Gazette – December 15, 2012)

http://www.montrealgazette.com/index.html

This series was made possible thanks to a Bourse Nord-Sud grant attributed by the Fédération professionnelle des journalistes du Québec and financed by the Canadian International Development Agency.

Who can resist it? Not Canadian giant Barrick, which is sinking $8.5 billion into a mine in the snow-capped Andes. Not Chile and Argentina, whose border is home to the massive project. Not a portion of the arid region’s residents who are benefiting from Barrick’s largesse. But with seduction comes risk, division and fear.

PASCUA-LAMA, ON THE BORDER OF CHILE AND ARGENTINA — Standing on a precipice 5,200 metres above sea level, the air is thin and the vistas are long.

Just breathing is difficult at this altitude, with a howling wind disturbing the utter majestic silence of the snow-capped Andes mountains, threatening to blow you over the edge. You’d think you were alone at the top of the world.

But what happens up here in Pascua-Lama, where Canadian mining giant Barrick Gold is developing the first open-pit gold mine to straddle two countries, will have a huge impact on the people living in the valleys below on both sides of the border – for better or for worse.

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“Pascua-Lama is a third country in the Andes cordillera” – by Catherine Solyom (Montreal Gazette – December 15, 2012)

http://www.montrealgazette.com/index.html

This series was made possible thanks to a Bourse Nord-Sud grant attributed by the Fédération professionnelle des journalistes du Québec and financed by the Canadian International Development Agency

Barrick Gold’s Pascua-Lama mine project will have its own hospital, complete with operating room and X-ray facilities, an indoor sports centre, and housing for up to 10,000 people. It has its own customs and immigration office at one of the highest border crossings in the world, at an elevation of 3,700 metres.

And exclusive charter flights leave La Serena, Chile, and the country’s capital, Santiago, carrying engineers, mine workers and the occasional journalist, just barely clearing the tops of the jagged Andes mountains before landing on the Pascua-Lama airstrip.

It even has its own soccer team – probably a successful one, given the altitude at which the players train.

It is governed by a special tax treaty, which establishes how it will pay taxes and royalties to Chile and Argentina, and by the rules set down in the Bi-National Integrated Mining Treaty signed between the two countries in 1997.

Among other things, the mining treaty gives a company exclusive rights to use the water and other natural resources found within the territory, and suspends both countries’ constitutional prohibitions on economic activity or foreign property ownership near the border.

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More than just costs are a concern at Barrick Gold’s $8.5B Pascua-Lama megamine – by Catherine Solyom (National Post – December 16, 2012)

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

Pascua-Lama, on the border of Chile and Argentina — Standing on a precipice 5,200 metres above sea level, the air is thin and the vistas are long.

Just breathing is difficult at this altitude, with a howling wind disturbing the utter, majestic silence of the snow-capped Andes mountains, threatening to blow you over the edge. You’d think you were alone at the top of the world.

But what happens up here in Pascua-Lama, where Canadian mining giant Barrick Gold is developing the first open-pit gold mine to straddle two countries, will have a huge impact on the people living in the valleys below on both sides of the border — for better or for worse.

After more than a decade of intense debate — often played out in front of the Canadian embassies in Santiago and Buenos Aires — the mine is set to open in 2014, and to produce 850,000 ounces of gold a year, as well as vast amounts of copper and silver.

Up to 10,000 people, many of them from the villages closest to the mine, will be employed during the construction phase and another 1,650 will operate the mine for at least the next 25 years.

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Why Latin America is a magnet for Canadian businesses – Tavia Grant (Globe and Mail Editorial – December 5, 2012)

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.

If there is one word that signifies the march of millions of Brazilians out of poverty and into the middle class, it is this: perfume.

Brazil is now the world’s largest fragrance market, and third in the $300-billion-plus global beauty market. Its consumer class, the biggest in the continent, also has a voracious appetite for cellphones, flat-screen TVs and tablet computers.

It’s not just Brazil. A sea change is rippling through Latin America, a region once better known for hyper-inflation, political instability and high poverty rates. In the past decade, 50 million people have joined the middle class, a World Bank study showed last month. The massive shift means the middle class and the poor now account for about the same share of region’s population, at about 30 per cent.

With rising fortunes come shifts in consumption patterns, from needs to wants, from low-priced goods to middle and high-end products such as fridges and cars. It explains why companies are so keen on the region, where Dorel Industries is selling more car seats, Lush Fresh Handmade Cosmetics more soap, Research In Motion more BlackBerrys and Bank of Nova Scotia more mortgages. It’s also where Canada’s biggest public pension manager is pouring investments – into Brazilian shopping malls and Chilean toll roads – a long-term bet this trend will only gather steam.

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TOP 10 MINERS: A tough year, for CEOs and for stock prices – by Barry Sergeant (Mineweb.com – December 6, 2012)

http://www.mineweb.com/

The CEO’s of major top miners have faced relentless pressure this year, both from poor metal price performance and, increasingly demanding shareholders.

JOHANNESBURG (MINEWEB) – For listed mining companies everywhere, this year has been all about stock prices facing headwinds, along with relentless pressure on CEOs.

The benchmark stock, BHP Billiton, the world’s biggest diversified resources group, saw its stock price in US dollar terms peak out in the latter stages of 2010. Given the wobbles in the global economy, the fall from there has been relatively modest, from around US$26.00 a share to recent trades around US$19.00. Vale, the world’s No 2 miner by market value, has seen its stock price fall by just over 50%, to current levels around US$17.00 a share.

Over the past 12 months, Vale and Anglo American have underperformed, probably on the back of a heavier exposure to developing markets, where regulatory uncertainty has been on the rise, over the past two years, in particular. This week in Johannesburg, outgoing Anglo American CEO Cynthia Carroll decried a number of factors that had contributed to uncertainty in this country, and appealed, in effect, for improved leadership at all levels.

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Investors bid up Inmet as copper mine battle looms – by Pav Jordan (Globe and Mail – November 30, 2012)

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.

Investors are betting on a battle for Inmet Mining Corp. to control the coveted Cobre Panama project in Central America, one of the world’s largest undeveloped copper plays.

Inmet shares have catapulted 23 per cent in the two tradings sessions since the company disclosed it received and promptly rejected two takeover offers in the past month from First Quantum Minerals Ltd., one of Canada’s largest copper miners.

Inmet also said it adopted a shareholder rights plan, known as a poison pill, but said that was not meant to prevent takeovers so much as give it time to consider options in the event of a hostile bid.

“I think they are effectively saying we’re probably for sale at the right price,” said Terry Thib, a portfolio manager with Norrep Funds in Toronto that holds Inmet shares. “From my perspective, I’m kind of thinking something north of $80 might get it done; shareholders might be happy with that.”

First Quantum’s latest cash-and-stock bid valued Inmet at $4.9-billion, or $70 a share. Its shares traded up nearly 6 per cent on Thursday to $65.50. Before the bids were made public, Inmet was trading at $52.80.

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BRICS mining: the lay of the land – by Chris Lo (Mining Technology.com – January 5, 2012)

http://www.mining-technology.com/

The so-called BRICS nations (Brazil, Russia, India, China and South Africa) are the world’s emerging powerhouses, in more ways than one. As well as exerting an ever-growing influence on the global political stage, these burgeoning economies are building up an industrial base that is closing the gap with the developed western world – or, in some cases, even surpassing it.

No sector illustrates this process better than mining. Competition from low-cost, large-scale mining projects in the BRICS nations has simply been too much for many European and US operations, which are struggling with higher overhead costs and more complex regulatory regimes. As a consequence, countries such as Brazil and China have become hotbeds for international investment.

BRICS countries look outward

BRICS mining investment, however, isn’t just a one-way street – increasingly, these countries are looking to tap into overseas resources in addition to their own domestic deposits. Indian companies including Adani Mining and Lanco Infratech have been assertively investing in Australian coal mining projects, while Brazilian iron ore giant Vale’s funding of iron ore projects in China proves that there are lucrative opportunities in inter-BRICS investment.

In Africa, BRICS countries, particularly China, are becoming more prevalent as investors in new mining projects, both for profit and to provide materials for massive infrastructure and construction projects.

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Inmet rejects First Quantum takeover bid – by Peter Koven (National Post – November 29, 2012)

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

TORONTO — First Quantum Minerals Ltd. has offered $4.9-billion for Inmet Mining Corp. in a bold attempt to get its hands on Cobre Panama, one of the largest mining development projects underway anywhere in the world.

The move puts Inmet’s immediate future into question, as the company is now in play and senior copper miners are certain to take a closer look at Cobre Panama.

Toronto-based Inmet owns 80% of Cobre Panama, and it is a monster. The project holds 32 billion pounds of copper reserves and nine million ounces of gold reserves (along with huge inferred resources), and has a likely mine life of more than 30 years. It also comes with enormous risk: The current cost estimate is US$6.2-billion, and Panama has no history of large-scale mining.

Construction of Cobre Panama has just started, and analysts suggested that if First Quantum has its own development plan for the mine, it needs to get in quickly. First Quantum is recognized for having a strong technical team.

“I see a fit in the sense that [First Quantum] management has been very experienced in building four grassroots projects on time and within reasonable budgets, and also operating in what I would call politically sensitive areas in Central Africa,” said John Hughes, an analyst at Desjardins Securities.

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Inmet Mining snubs $4.9-billion takeover bid by First Quantum – by Pav Jordan and Tim Kiladze (Globe and Mail – November 29, 2012)

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.

First Quantum Minerals Ltd. offered $4.9-billion to acquire Inmet Mining Corp., a bold declaration from one of Canada’s largest copper miners that the commodities supercycle has room to run.

Inmet rejected the bid, describing it as “highly conditional” and not in shareholders’ interests, but analysts said First Quantum could return with a higher offer for one of the world’s largest copper projects in development.

Toronto-based Inmet is developing the $6.2-billion (U.S.) Cobre Panama project that will produce some 300,000 tonnes of copper a year for 30 years, putting it on a scale with major mines in Chile and Peru, the world’s largest producers of the metal.

Inmet revealed that it was the second offer from First Quantum in a month, underscoring global miners’ convictions that copper demand will remain strong into the future, despite slowing growth in China and other major markets. Copper has been one of the most in-demand commodities of the past decade, driven by breakneck development in China as it built power grids and entire cities in its urbanization drive.

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Rights group investigates Canadian-owned mine in Mexico – by CBC News (November 25, 2012)

http://www.cbc.ca/news/canada/

Anti-mine activist’s death tied to local divisions over project

A gold and silver mine in Mexico that’s owned by the Vancouver-based company Fortuna Silver — and the death of a prominent activist opposed to the operation — were the focus of a three-day interational observation mission this past week.

Observers travelled to San José del Progreso in Oaxaca province, where the company began production in September 2011, to investigate the violence that many say appears related to opposition to the mine and its impact on the local water supply.

The mission, led by the Council of Canadians and Blue Planet Project, met with community members for and against the controversial Fortuna Silver mine, as well as representatives from the Canadian company’s local subsidiary, Minera Cuzcatlán.

Two anti-mine activists from the town were killed by gunfire earlier this year year and three others injured. Those killed included the outspoken leader the opposition campaign, Bernardo Vásquez Sánchez.

Residents say the mine has polarized the community. There are reports Vásquez had received death threats in the weeks before he was gunned down in his car last March.

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Time to monitor Guatemala’s mining sector? – Al Jazeera English (November 24, 2012)

 

http://www.aljazeera.com/

Canadian company Goldcorp is accused of violating human rights and damaging the local environment around Marlin mine.  A Canadian mining company stands accused of violating human rights and damaging the environment in Guatemala.

As the price of gold has rocketed amidst global economic uncertainty, Goldcorp argues it is sharing its record revenues with an impoverished community by providing jobs and economic development.

The company owns the Marlin mine in Guatemala, which was opened in 2005 despite the objections of indigenous communities.

Guatemala has ratified an international convention requiring local consent for such projects; but this did not stop it from proceeding. Nor did it stop the World Bank from giving GoldCorp a $45m loan for the mine in contravention of its own guidelines on local consulatation.

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Troubled Pascua Lama gold project experiences yet another setback – by Dorothy Kosich (November 12, 2012)

http://www.mineweb.com/

Chile’s mine health and safety regulator has requested a number of studies be presented for its consideration before it will allow the resumption of pre-stripping activities at Barrick’s Pascua Lama.

RENO (MINEWEB) – The costs and delays at the troubled Pascua Lama project–which already contributed to the dismissal of former Barrick CEO Aaron Regent–continue to mount as Chilean authorities halted construction work at portions of the project due to concerns about the health of workers at the site.

However, in a statement issued Sunday, Barrick said the order “only affects activities related to pre-stripping in Chile.” “Major construction activities on the Chilean side of the project, including work on the ore tunnel, the crusher and the camp will continue uninterrupted,” Barrick said in a news release. “Construction activities in Argentina are not impacted.”

“At this time, pre-stripping is not a critical path item in the construction schedule and a temporary halt is not anticipated to impact the overall project schedule or cost estimates,” the company said.

The Chilean newspaper La Tercera reported that safety inspectors from Chile’s National Geology and Mining Service (Sernageomin) visited Pascua Lama on October 24 and found there was an excess of fine particulates in suspension in the air.

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Amnesty International Film Festival: Canadian conquistadores exposed in Under Rich Earth – by Martin Dunphy (Georgia Straight – November 1, 2012)

http://www.straight.com/

Villagers in a remote Ecuadorian valley band together to repulse rapacious Canucks

The documentary Under Rich Earth, screening at this year’s Vancouver Amnesty International Film Festival, has been in release for a couple of years now, but don’t let that stop you from checking it out if you haven’t already done so.

Popular docs such as Ai Weiwei: Never Sorry and Big Boys Gone Bananas!*, both of which are also part of this latest installment of Amnesty’s local exposition, do a good job of uncovering government and corporate malfeascence.

The appeal of Under Rich Earth—which details the struggle in Ecuador, a putative democracy, of poor farmers against police, politicians, and paramilitaries in the employ of a Canadian mining company—is how it fits into the part of Amnesty’s mandate that commits the volunteer-activist organization to fight against political killings and disappearances.

Neither of those outrages are inflicted on those portrayed here, but the film details the myriad small steps—including corporate spin-doctoring, police co-optation, economic suasion, the division of communities, and, finally, threats, bogus legal charges, and physical intimidation and harm—that often lead to those ultimate violations of human rights.

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Costs rise again for Barrick’s Andes mine – by Pav Jordan (Globe and Mail – November 2, 2012)

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.

The Andean gold project that is key to driving future growth at Barrick Gold Corp. just got more expensive to build, and the company is still not done looking at costs.

The Toronto-based miner said the Pascua-Lama project, set in the mountains between Chile and Argentina, will now cost as much as $8.5-billion (U.S.) to develop. That’s higher than the shocking $8-billion price tag Barrick issued for the project in July, and more than double a $3-billion forecast when a construction decision was reached in 2009.

“You would expect that when they increased it by such a large amount a few months ago they would have been cautious so that they wouldn’t need to come back and disappoint us once again,” said George Topping, an analyst with Stifel Nicolaus who described the rise as “galling.”

Investors seemed to agree, driving the stock down more than 8 per cent on the Toronto Stock Exchange after Barrick announced the further cost overrun and said third-quarter profit fell by more than 50 per cent. Cash costs edged higher and the company sold less gold at lower prices. Shares of other gold miners also fell, dragged down by falling prices for the metal.

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