Latin America Mining – Page 112

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

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.

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

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.

Why Colombia halted a US company’s coal exports – by John Otis (Global Post – January 20, 2014)

January 20, 2014

http://www.globalpost.com/

Drummond Co. helped make Colombia the world’s No. 4 coal exporter. But after alleged dirty deeds, now Bogota’s punishing the Alabama firm.

BOGOTA, Colombia — By shipping 80,000 tons of coal per day, the Alabama-based Drummond Co. has helped turned Colombia into the world’s fourth largest coal exporter — but it’s always been a dirty business.

From Drummond’s Caribbean port near the resort city of Santa Marta, cranes loaded Drummond coal onto open-air barges for delivery to ships. This process kicked up coal dust that fouled the air, water and beaches, angering local fishermen, beachgoers, hotel owners and environmental activists.

But it all came to a halt Jan. 13 after the Colombian government ordered Drummond to stop loading coal until it meets new environmental standards. Under a Colombian law that took effect Jan. 1, coal must now be loaded directly onto ships via enclosed conveyor belts, a much cleaner system.

RPT-INTERVIEW-Chile’s environment lawyers say they’re just warming up – by Alexandra Ulmer and Fabian Cambero (Reuters India – January 20, 2014)

January 20, 2014

http://in.reuters.com/

SANTIAGO, Jan 17 (Reuters) – Chile’s leading environmental lawyers, who have helped stall around $30 billion in mining and energy projects, say the battle is only just beginning – and copper investments are poised to come under increasing fire this year.

In a significant shift for business-friendly Chile, empowered social groups are successfully suing massive projects over threats to glaciers, health, indigenous rights and biodiversity.

Power projects have so far fared the worse, but Santiago-based lawyers Alvaro Toro and Lorenzo Soto say many communities are now turning up the heat on mining in the world’s top copper producer.

“This year is going to be very conflictive,” Alvaro Toro, a lawyer with environmental NGO OLCA, told Reuters in his tiny office, just a block from the headquarters of world No.1 copper miner, Codelco.

“Projects are increasingly being set up in fragile places. People’s opposition is completely rational,” he said on Friday.

Chilean miners in bitter dispute over rescue movie rights – by Jonathan Franklin (The Guardian – November 8, 2013)

January 15, 2014

http://www.theguardian.com/uk

As filming begins on Hollywood movie telling story of dramatic rescue, some miners claim they were tricked out of royalties

When 33 Chilean miners were hauled to the surface after 69 days trapped in a collapsed copper mine in 2010, more than a billion people around the world tuned in to watch as the rescue was broadcast live on television.

It was inevitable, then, that the dramatic story would be made into a movie. But just weeks before filming is set to begin for a multimillion dollar Hollywood film starring Antonio Banderas and Martin Sheen, the miners are locked in a bitter legal dispute over the contract in which they signed away their life rights.

Several of the men, including Luis Urzúa, who was foreman of the group at the time of the mine collapse, claim they were tricked out of royalties by lawyers and abandoned by the Chilean justice system.

“We have to fix our affairs with the lawyers and with the [movie] producer that is in the United States. With the march of time, we have had various complications with respect to our life story,” said Urzúa,. “I don’t think we are going to make a movie and then later realise we feel bad [because] our rights were infringed.”

Legal and Regulatory Environment Risk Atlas 2014 – by Maplecroft Global Risk Analytics (January 8, 2014)

January 9, 2014

http://maplecroft.com/

Myanmar has been identified as the country making the greatest improvements to its business environment for 2014. Strides have been made through reforms to address issues such as corruption; rule of law; the regulatory framework; respect for property rights; and corporate governance, reveals Maplecroft’s annual Legal and Regulatory Environment Risk Atlas (LRERA). Senegal, Guatemala, Mozambique and Rwanda, meanwhile, are among the countries with best performance over the last five years.

The fifth annual Legal and Regulatory Environment Risk Atlas includes 21 risk indices developed to enable companies and investors to monitor the ease of undertaking business in 173 countries. Since 2009 some of the biggest increases in legal and regulatory risk have been experienced by foreign investors in Argentina, Bahrain, Bangladesh and Egypt. Maplecroft states that the business environment in these countries is being curtailed by factors such as a lack of respect for the rule of law and property rights; weak investor protection; increasing regulatory burdens; and poor governance resulting from instability.

Legal mechanisms and regulatory structures are typically well entrenched features of a country that are not subject to fast change without significant political will and reform. However, over the last five years the LRERA reveals that a number of countries have made steady improvements. Senegal has risen 23 places from 28th to 51st (1st place is considered the highest risk in the LRERA), Guatemala went from 32nd to 61st, Mozambique 40th to 71st, and Rwanda 66th to 101st.

How Peru Could Survive The End Of The Commodities Supercycle – by David Gacs (Business Insider – January 7, 2014)

January 8, 2014

http://www.businessinsider.com/

With a mere 30 million people living within its borders, Peru is only slightly larger than the state of Texas. But as the world’s third-largest producer of both copper and zinc and its sixth-largest source of gold, the country enjoyed an outsized benefit from a cresting wave in global commodities markets over the last decade. Between 2002 and 2012, as the price of most commodities soared, Peru’s average annual GDP growth rate was 6.4 percent. As recently as 2010, the Latin American country’s GDP expanded by 8.8 percent, making it one of the fastest-growing economies in the world.

But the commodities “supercycle” ended in 2013 and seems set to retreat further in the rear-view mirror. The average price of gold in 2012 was $1,699 an ounce, but Credit Suisse commodities analysts say the 2013 year-end average was some 16 percent lower at $1,421 per ounce. Copper prices have fallen sharply too, from $7,971 a ton on average in 2012 to $7,349 this year – a 7.8 percent drop. It’s been quite the precipitous decline: Copper was selling for more than $9,000 a ton in 2010. Mining investment in another major commodities exporter, Australia, has already peaked, prompting a great deal of discussion about how to rebalance the economy.

But though Peru, too, needs to think about diversifying its economy, the situation is different – not least because there is still plenty of mining investment in the pipeline. Credit Suisse analysts and other observers believe resource-rich Peru’s strong domestic economy and healthy public finances should ensure a relatively soft landing.

Chilean miracle miners back in spotlight (AFP/Sydney Morning Herald – January 2, 2014)

January 6, 2014

http://www.smh.com.au/

At the bottom of a dank salt mine in Colombia, a 200-strong film crew featuring Spanish actor Antonio Banderas is reconstructing the incredible tale of 33 miners buried alive for 69 days in Chile in 2010. Actors from multiple countries work in suffocating heat on The 33, which traces the unlikely survival of the men trapped deep underground after a collapse at the San Jose copper mine in the Atacama desert.

“It’s not just about the physical ordeal these 33 men went through – it’s about the emotional one, of wondering if they would live or die, or if they would go crazy waiting to find out,” Gregg Brilliant, a spokesman for the American film production, told AFP.

To depict the incredible story that unfolded more than 600m underground, the production team chose to film at two sites outside the Colombian capital Bogota. Behind a security cordon, curious onlookers try to catch a glimpse of a star, but their Hollywood hopes are repeatedly dashed.

In the salt mines of Nemocon, the humid and musty environment combine with the thin mountain air to recreate the oppressive atmosphere at San Jose, located 800km north of Chile’s capital Santiago.

Colossus shocks market with cancelled financing, low resource estimate – by Peter Koven (National Post – December 24, 2013)

December 24, 2013

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

TORONTO – A Canadian miner on the brink of financial collapse has surprised investors by releasing a shockingly low resource estimate for its flagship gold project.

Late Friday night, Colossus Minerals Inc. unveiled potentially fatal news to the market: that a desperation financing agreement with Arias Resources Capital Management has fallen apart. The Toronto-based miner, which has a small interest payment due on Dec. 31, warned it may not be able to raise capital to carry on business past that date.

Finding that money may not become any easier after what Colossus reported on Monday.

The company released a mineral resource estimate for its Serra Pelada project in Brazil that identified a miniscule 274,000 ounces of gold. Given that Colossus has raised more than $380-million for development of Serra Pelada, and the mine is close to production, this resource figure is absurdly low. Investors figured Colossus possessed millions of ounces at Serra Pelada, a past-producing property.

According to experts, that is likely the case.

Rob McEwen on the outlook for 2014 (Northern Miner – December 23, 2013)

December 23, 2013

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Rob McEwen, chairman and chief owner of McEwen Mining (TSX: MUX; NYSE: MUX), shared his thoughts recently with The Northern Miner about the outlook for the mining industry in 2014. McEwen Mining’s principal assets consist of the San José mine in Santa Cruz, Argentina (49% interest), the El Gallo 1 mine and El Gallo 2 project in Sinaloa, Mexico, the Gold Bar project in Nevada, U.S.A., and the Los Azules copper project in San Juan, Argentina. McEwen owns 25% of the company’s shares.

The Northern Miner: Some would say you are an eternal optimist. Are you optimistic about 2014?

McEwen: Anything can be better than 2013. On a relative value basis, gold is looking very attractive, compared to the broad market. So I think there might be some rotation into gold and gold shares … The producers are going through a lot of rationalization and cost cutting and they’ll be putting out some better numbers in the next few quarters.

And there are a few exploration companies that have put out fantastic drill results lately that have started to move their share prices up, like Reservoir Minerals and Balmoral Resources, and I think you’ll see a little bit more of that with the juniors.

The Canada-Peru relationship: More than mining – by Tiffany Grabski (Peru This Week – December 23, 2013)

December 23, 2013

http://www.peruthisweek.com/

Canada and Peru have a long history of commercial ties thanks to the two countries’ endowments of natural resources which led to a close development of their mining sectors, but these two countries are now looking to diversify their relationship as well as their economies.

The timing is right – as mineral prices fall, concerns are being raised over the stability of Peru’s mineral-dependent economic growth.

For the last quarter of a century, the mining sector has been the motor of Peru’s growth – with a particularly strong influence in the last decades’ GDP, averaging over 7% growth from 2003-2013. But unlike many resource-dependent countries that have faced certain downward spirals once commodity prices fall or resources production drops, the outlook for Peru’s growth is looking up for years to come.
Local bank BCP even expects Peru’s economy to hit double-digit growth once a series of mega-projects in the mining sector hit production post-2015, the banks economic studies manager Carlos Odar said at a recent press conference.

REPEAT-FEATURE-Dominican gold rush hits a bureaucratic slowdown – by Ezra Fieser (Reuters India – December 23, 2013)

December 23, 2013

http://in.reuters.com/

Dec 23 (Reuters) – Little more than a decade ago, one of the world’s largest known gold deposits sat abandoned in the foothills of the Dominican Republic’s Central Cordillera mountain range. Car-sized boulders leached heavy metals into what locals called the “blood river,” its waters ran so red from contaminants.

Today the mine, which reopened as Pueblo Viejo this year, hums with activity. Trucks with tires twice the size of an SUV roll through its massive open pits on roads that cut through the 11-square-kilometer site (4.24 square miles), transporting tons of rock to a processing facility.

Some 2,000 people already work here, churning out shimmering gold bars that are exported to Canada and the United States, but the mine has the potential to create 12,700 more direct and indirect jobs and contribute $1.3 billion a year in exports. This dynamic, foreign-operated enterprise is part of the country’s effort to develop an industry that could help boost and diversify its tourism-dependent economy.

Yet despite robust commercial production by two of the world’s largest gold mining companies, Canada’s Barrick Gold Corp and Goldcorp Inc, development of the mining sector is vexed by bureaucratic delays and agitation by activists still concerned about pollution and government deals with foreign companies to exploit the nation’s riches.

Chilean communities struggle after halts at Pascua Lama, other mines – by Marta Lillo (Globe and Mail – December 17, 2013)

December 17, 2013

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.

Real estate broker Patricia Cortés began a small corporate events business in the northern Chilean town of Vallenar four years ago, with her eye on a gold mine.

Her hopes for success were pinned on the vast Pascua Lama gold-copper project that had begun taking shape 150 kilometres away in a glacier-covered area of the Andes on the border with Argentina.

Vallenar is the closest commercial centre to Pascua Lama, and the town was set to reap rich benefits from the $8.5-billion (U.S.) project. Once it gets going, Pascua Lama, with 18 million ounces of proved and probable gold reserves, is expected to produce up to 850,000 ounces in its first five years.

But prospects for the Cortés’s business look much bleaker now that Barrick Gold Corp. has shelved construction of the mine, citing lower metal prices and a series of regulatory and legal roadblocks imposed by the Chilean government.

Miners warned about Indonesia, Brazil, India and South Africa investments – by Cecilia Jamasmie (Mining.com – December 12, 2013)

December 12, 2013

http://www.mining.com/

A significant increase in conflict, terrorism and regime instability in the Middle East and North Africa, along with deepened global political violence and resource nationalism, are the main risks mining investors will face in 2014, according to a report published Thursday by UK-based risk consultancy Maplecroft.

In its sixth annual Political Risk Atlas (PRA) the analysts tell investors to pay special attention to possible populist moves in Indonesia, Brazil, India and South Africa as national elections in these countries will likely boost resource nationalist rhetoric and policies.

According to Maplecroft close to 10% of the countries studied have shown a significant increase in their risks levels, with foreign investors facing more political violence, resource nationalism and expropriations.

In the last year alone, says the report, the risk of resource nationalism has increased 15% as a consequence of governments attempts to offset the risk of societal unrest through tax increases, tougher regulations or outright expropriation.

Mexican drug cartels now involved in mining industry (CTV News – November 29, 2013)

November 29, 2013

http://www.ctvnews.ca/

MEXICO CITY — Mexican drug cartels looking to diversify their businesses long ago moved into oil theft, pirated goods, extortion and kidnapping, consuming an ever larger swath of the country’s economy. This month, federal officials confirmed the cartels have even entered the country’s lucrative mining industry, exporting iron ore to Chinese mills.

Such large-scale illegal mining operations were long thought to be wild rumour, but federal officials confirmed they had known about the cartels’ involvement in mining since 2010, and that the Nov. 4 military takeover of Lazaro Cardenas, Mexico’s second-largest port, was aimed at cutting off the cartels’ export trade.

That news served as a wake-up call to Mexicans that drug traffickers have penetrated the country’s economy at unheard-of levels, becoming true Mafia-style organizations.

The Knights Templar cartel and its predecessor, the La Familia drug gang, have been stealing or extorting shipments of iron ore, or illegally extracting the mineral themselves and selling it through Pacific coast ports, said Michoacan residents, mining companies and current and former federal officials. The cartel had already imposed demands for “protection payments” on many in the state, including shopkeepers, ranchers and farmers.