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Latin America Mining

Canadian miners caught in the middle – by Jason Fekete (Vancouver Sun – October 11, 2013)

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

Spying allegations latest issue facing companies working in Latin America

Allegations of Canada spying on Brazil’s mines and energy ministry could prove the latest political and economic headache for Canadian extractive companies already encountering problems operating in Latin America.

Federal government documents obtained by Postmedia News under access to information laws show Canadian companies – trying to improve a bruised reputation – face increasing political uncertainty and challenges earning “social licence” in Latin American countries such as Brazil, Chile and Mexico, even before the latest spying allegations.

The Canadian government is being accused at home and abroad of industrial espionage, following allegations the supersecret Communications Security Establishment Canada targeted the metadata of emails and phone calls to and from the Brazilian ministry of mines and energy.

Questions are also mounting about what specific information Canadian security agencies and federal officials have been sharing with Canadian energy companies during secret meetings.

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Legislation to protect Chile’s glaciers and water supplies worries important mining industry – by Associated Press (Washington Post – October 09, 2013)

http://www.washingtonpost.com/

SANTIAGO, Chile — Just how to define a glacier is at the heart of a Chilean congressional battle that could determine the future of mining in the world’s largest copper-producing country.

The revival of legislation to ban mining in glacial areas is spawning debate among miners, farmers and environmentalists about how to protect both vital water supplies and Chile’s mining industry. If the bill passes, mining experts fear it could shutter multibillion-dollar mining projects and slow investment.

The key will be in the fine print of whether the final bill defines glaciers as including frozen areas around them, too, and whether the protections would apply retroactively to mines already operating next to glaciers.

“If it passes as a law with tough conditions, it could harm not only the operation of current projects but also future projects,” said Juan Carlos Guajardo, head of the Chilean mining think tank CESCO. “Depending on the conditions, the scenarios would make mining activity very difficult in high mountain areas.”

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Canada, Brazil and how snoops are threatening free trade [mining espionage] – by Erica Alini (MacLean’s Magazine – October 10, 2013)

http://www2.macleans.ca/?cid=navlogo

What really happened

Was a top-secret slideshow suggesting that Canada’s intelligence targeted Brazil’s Mines and Energy Ministry a “war game”? A fake? A completely hypothetical “paper exercise,” as Ray Boisvert, former head of counter-terrorism at CSIS, has been telling the media since the latest Snowden leak unexpectedly thrust Ottawa at the centre of a political and diplomatic spying scandal?

“I don’t buy that for a minute,” says Wesley Wark, a professor at the University of Ottawa and one of Canada’s leading experts on national security and intelligence. The slides, which surfaced for the first time in a Brazilian TV documentary last Sunday, detail “the beginning of an intelligence targeting effort” by the Communications Security Establishment Canada on Brazil’s Mines and Energy Ministry, according to Wark. Jeffrey Carr, founder and CEO of Seattle-based cyber security firm Taia Global, gave Econowatch much the same assessment: The slides are no simulation.

So that takes care of the first question that this bizarre Brazilian affair raises: There is one answer out there being spun by former Canadian intelligence officials and a different one give by authoritative, independent experts. It’s up to you to decide which you want to believe, but in this post, I’m going with the latter.

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UPDATE 1-Protests close world No. 2 ferronickel mine in Colombia – by Luis Jaime Acosta and Peter Murphy (Reuters India – October 10, 2013)

http://in.reuters.com/

BOGOTA, Oct 9 (Reuters) – Cerro Matoso, the world’s No. 2 ferronickel producer owned by multinational BHP Billiton and located in Colombia, said it has temporarily shut its mine after two weeks of protests by indigenous groups, halting 4 percent of world output.

The impact of the stoppage on the nickel market is likely to be subdued amid a global surplus of nickel that has caused prices to tumble about a quarter in the last year but adds to near-constant disruption in Colombia’s mining sector this year.

The London-traded nickel contract ended 1.7 percent lower at $13,660 per tonne on Wednesday. Cerro Matoso took the decision to close its mine for workers’ safety, it said in a statement, adding that protesters were demanding “monetary indemnification”. It did not say why, merely that the dispute could only be resolved in the courts.

“This implies that from now there will be no ferronickel production or associated activities … until conditions enable the company to operate normally,” it said. A mining ministry source said the protesters were demanding compensation for alleged harm to their health from pollution caused by the open-pit project which the source said generates about $185,000 a day for the government in royalties.

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Spying allegations throw cold water on Canada’s trade and business plans in Brazil – by Stephanie Nolen (Globe and Mail – October 9, 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.

Rio de Janeiro — All of Canada’s negotiations and new ventures with Brazil may be put on ice until there is a resolution to the question of what a Canadian spy agency was doing snooping on one of the South American country’s ministries, says a leading Brazilian expert on relations with North America.

“If they take the same position with Canada as they took with the United States [after similar revelations of spying last month] then everything will be stopped, all the major things,” said Rubens Barbosa, a former Brazilian ambassador to the United States. “The agreements, anything to do with government and the U.S., was put on hold and is still on hold and they may take the same view with Canada.”

n Sunday, the Brazilian news program Fantastico made public documents from the trove acquired by Edward Snowden, a former contractor with the U.S. National Security Agency (NSA). They included a slide presentation that appears to show that Communications Security Establishment Canada (CSEC) was surveying the telecommunications of the Brazilian Ministry of Mines and Energy – a revelation that has sparked outrage here.

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Vale Sees Iron-Ore Market Oversupplied From 2015 on New Capacity – by Juan Pablo Spinetto (Bloomberg News – October 7, 2013)

http://www.bloomberg.com/

Vale SA, the world’s largest iron-ore producer, said supply of the steelmaking raw material is expected to grow faster than demand, reducing support for future increases in price.

Iron-ore producers may have between 5 percent and 6 percent more capacity than demand by as early as 2018 as China steel consumption slows and companies boost output, Vale’s head of Ferrous & Strategy Jose Carlos Martins told reporters in Sao Paulo yesterday. While iron-ore prices are expected to remain above $100 a metric ton, the extra supply will make prices less volatile and unlikely to repeat spikes seen previously, he said.

“We will probably start to have some surplus capacity around 2015,” Martins said at the World Steel Association’s annual congress. “Peak prices are unlikely to happen again.”

Vale, based in Rio de Janeiro, is spending almost $20 billion in its Serra Sul mine and logistics venture in Carajas, the world’s largest iron-ore complex, which is the industry’s most expensive project.

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Canada’s Brazilian spy machine makes little sense, but somebody should explain it – by Terence Corcoran (National Post – October 8, 2013)

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

Is the department of defence using its bureaucrats to hunt down commercial information — at a time when the world is awash in terror and other genuine security threats? That seems highly unlikely

State Capitalism Update: News today from Malaysia and Brazil, where state-owned enterprises (SOEs) are making headlines and generating fresh evidence that Canada has its hands full with the emerging global business of government business.

First to Rio de Janeiro, where an eight-minute documentary report on Brazil’s Globo TV network painted a mighty bleak picture of dark Canadian government espionage, an image that is now the focus of high-level Brazilian corporate and political agitation. Canada’s ambassador to Brazil has been called to account. Big-name Brazilian corporations — state-owned Petrobras and Electrobas, Aneel, Epe — are said to be the targets.

The eight minutes begin slow, with long shots of a massive office complex of distinctly Brazilian design overlayed with creepy music of the kind that’s now mandatory whenever TV networks need to build a story of sinister doings.

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Canada has ability to spy on Brazil, but lacks motive, security officials say – by Peter Koven and Stewart Bell (National Post – October 8, 2013)

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

Canadian security officials and mining companies were skeptical Monday over claims Canada had spied on Brazil’s mining and energy department, even as Brazil’s president accused Canada of apparent industrial espionage.

The Brazilian Foreign Minister summoned the Canadian ambassador to “transmit the indignation of the Brazilian government and demand explanations,” the Foreign Ministry said in a statement that followed the revelations that were aired Sunday night on Brazil’s Globo network. The report said the metadata of phone calls and emails from and to the ministry were targeted by Communications Security Establishment Canada (CSEC) to map the ministry’s communications. It didn’t indicate if emails were read or phone calls listened to.

Ray Boisvert, who was director general of counter-terrorism at the Canadian Security Intelligence Service, said on Monday Canada would have little reason to spy on Brazil’s mining sector. “Like any crime drama, you look for capability and intent. Could CSEC do Brazil? Of course, it has significant capability to collect intelligence in the national interest. But on motive, you come up way short. If it was Iran, nobody would be surprised. But this is Brazil,” he said. “I’m really short on motive.”

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Brazil summons Canadian ambassador over spying allegations – by By Laura Payton (CBC News Politics – October 07, 2013)

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

Canadian officials refuse to say whether they monitored Brazil’s Mines and Energy Ministry

Brazil’s foreign affairs minister summoned Canada’s ambassador to the country to explain spying allegations, a Canadian official confirmed to CBC News Monday.

The summons, a serious diplomatic measure, comes the day after a Brazilian television report said the Communications Security Establishment Canada used phone and email metadata to map the communications of Brazil’s Mines and Energy Ministry.

Brazil’s Foreign Affairs Minister Luiz Alberto Figueiredo Machado summoned Jamal Khokhar, Canada’s ambassador in Brasilia, on Monday.

Brazilian President Dilma Rousseff tweeted Monday that her country’s Foreign Affairs Department would demand an explanation from Canada regarding the allegations, Reuters reported.

Canadian officials have refused to respond to questions by reporters about the allegations by TV Globo that the Communications Security Establishment Canada used phone and email metadata to map the communications of Brazil’s Mines and Energy Ministry.

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Canadian spies targeted Brazil’s Mines and Energy Ministry: report – by The Associated Press (Globe and Mail – October 7, 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.

RIO DE JANEIRO, Brazil — A Brazilian television report that aired Sunday night said Canadian spies targeted Brazil’s Mines and Energy Ministry.

The report on Globo television was based on documents leaked by former U.S. National Security Agency contractor Edward Snowden and was the latest showing that Latin America’s biggest country has been a target for U.S., British and now Canadian spy agencies.

The report said the metadata of phone calls and emails from and to the Brazilian ministry were targeted by the Communications Security Establishment Canada, or CSEC, to map the ministry’s communications, using a software program called Olympia. It didn’t indicate whether emails were read or phone calls were listened to.

A spokesman for Prime Minister Stephen Harper would neither confirm nor deny the allegations when asked to respond to the report late Sunday night. The “CSEC does not comment on its specific foreign intelligence activities or capabilities,” said Harper’s communications director Jason MacDonald.

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Calgary-based mining company suing Costa Rica for more than $1 billion – by Jeremy Hunka (Global News – October 4, 2013)

http://globalnews.ca/

LA TIGRA, Costa Rica – A billion-dollar showdown is looming in Central America this week as a Calgary-based mining company announced it will sue the country of Costa Rica, infuriating residents who say their sovereignty is being taken away.

Infinito Gold was hoping to operate an open-pit gold mine in the Crucitas region of Costa Rica’s north. On its website, the company says it “…completed all the environmental, social and technical studies and obtained all approvals required under Costa Rican law to develop and operate the Las Crucitas Project.”

But the project was held up in court, and after irregularities were found in the approval process the mine’s approval was declared illegal. In 2011, Costa Rica banned all open-pit metal mining.

“It took a lot of effort,” says Otto Mendez, who fought against the mining project. “It took a lot of people and a lot of money.” But now, Infinito Gold says it will take the country of Costa Rica to international arbitration.

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Fickle nickel takes its toll on market darling Mirabela – by Sarah-Jane Tasker (The Australian – October 4, 2013)

http://www.theaustralian.com.au/business

MIRABELA Nickel once rode the commodities boom, hitting a share price peak of more than $7 in early 2008, but a perfect storm of low prices, debt, decreasing cash balances and a cancelled contract has seen the company join the ranks of the penny dreadfuls. Some 80 per cent has been wiped off the value of its share price in the last month alone — from an already low base.

This is a company that was valued by the market at about $800 million in 2008. Now? $14m. The price of a decent shack on Sydney’s waterfront.

Perth-based Mirabela this week became the latest high-profile casualty of a commodity that has been struggling more than most others.

Perth-based private equity firm Resource Capital Fund is Mirabela’s largest shareholder and is the hardest hit by the share price fall. The resources-focused fund stepped in to support the company last May, tipping in $20m at a share price of 40c, which at the time was at a 17.6 per cent premium to the junior’s share price. It also underwrote a $100m raising. The miner said at the time that the funds would strengthen its balance sheet.

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Iamgold CEO committed to low-grade gold – by Allison Martell (Reuters U.S. – October 3, 2013)

http://www.reuters.com/

Oct 2 (Reuters) – Stephen Letwin is a man of conviction. The chief executive of mid-tier gold miner Iamgold Corp believes low-grade deposits are the future, whether the industry is ready or not.

With prices down and higher costs cutting into margins – already slim at many low-grade mines – explorers that once boasted about the size of their deposits are now wooing investors with tales of high-grade zones.

But Letwin, who was touting low-grade gold last year, before spot prices dropped more than 20 percent, sees no reason to change his tune. “I don’t care who you are – we are all migrating to lower grade,” he said in an interview. “It’s just a fact of life.”

Iamgold’s operations in Africa and South America have relatively low concentrations of gold. At the Rosebel mine in Suriname, for example, the reserve grade is one gram per tonne.

That is not far off the average reserve grades of the senior producers, but unlike some of those companies’ mines, Rosebel and Iamgold’s Essakane mine in Burkina Faso do not produce silver, copper or other valuable minerals that are often recovered with gold.

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Mexico’s mining tax causes concern – by Trish Saywell (Northern Miner September 30, 2013)

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

A proposed 7.5% mining tax on companies in Mexico and as much as 8% on those extracting precious metals is creating uncertainty in the industry about investing in a country that until now has been thought of as one of the world’s most attractive mining jurisdictions.

The mining tax — which some are describing as a royalty, and has yet to be passed into law — would be on earnings before interest, taxes, depreciation and amortization, and is part of President Enrique Pena Nieto’s goal to reform the tax base in the country.

The original proposal in April had been a royalty of 5%, and many executives complain that every time the subject of a royalty is raised, the figure bandied about keeps getting higher.

“They’ve been talking about this for two years and they’ve had something like three different rates,” says John Gravelle, head of the mining group at PricewaterhouseCoopers in a telephone interview from Brazil. “Every time they make an announcement it’s a different rate, and every time it’s higher.”

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As a Boom Slows, Peru Grows Uneasy – by William Neuman (New York Times – August 19, 2013)

http://www.nytimes.com/

LIMA, Peru — From his office window, Henrik Kristensen, the chief executive of the company that runs Peru’s main port, can still look out at rows of newly arrived, shiny Kia automobiles from South Korea and shipping containers stacked four high, full of imported items like television sets and brand-name clothing bound for the growing number of malls that serve this country’s burgeoning middle class.

“This is Peru,” he said. “When you go to the shopping malls they’re full of people, they’re full. That’s a good indicator that people are really spending money.”

Peru’s economy grew an average of 6.4 percent a year from 2002-12 after adjusting for inflation, according to government figures, a remarkable period of sustained expansion that has made it one of the world’s star economies.

But suddenly growth has slowed here, and just beyond the view from Mr. Kristensen’s window, under Lima’s perpetually gray winter sky, the reason becomes clear.

At Dock 5B, ships are loaded with Peru’s mining riches, including copper ore, lead and zinc — the raw materials that fueled the Peruvian boom with their rising prices in recent years.

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