Latin America Mining – Page 90

Pressure mounts on Vale’s highwire act – by Stephen Bartholomeusz (The Australian – January 13, 2016)

January 13, 2016

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

Vale’s drawdown of 60 per cent of its available revolving credit facilities overnight highlights the tightrope the Brazilian mining giant is walking as it tries to negotiate the collapse in commodity prices and maintain a heavy capital expenditure program with a weak balance sheet within a recessed economy.

Vale said yesterday that it had drawn down $US3 billion of its $US5bn facility to increase liquidity and bridge its potential cash flow needs pending the conclusion of its divestment program, particularly the sale of an interest in its Mozambique coal project to Japan’s Mitsui & Co.

The statement encapsulates the challenges the group faces, with the collapse in commodity prices, but most particularly the plunge in iron ore prices to $US40 a tonne, as it ploughs ahead with its giant $US16bn to $US17bn S11D project aimed at adding 90 Mtpa of iron ore to an already oversupplied market. The project is expected to be completed by the end of this year, reaching its full capacity in 2018.

Torex CEO reflects on journey to first gold at Morelos (Northern Miner – January 11, 2016)

January 12, 2016

http://www.northernminer.com/

VANCOUVER — Nearly six years ago Torex Gold Resources (TSX: TXG; US-OTC: TORXF) began to consolidate a promising claim block 180 km southwest of Mexico City — called Morelos Norte — via a US$150 million deal with Teck Resources (TSX: TCK.B; NYSE: TCK). Since then the company has authored one of the few recent success stories in the gold space, and now stands poised to hit commercial production at its El Limon-Guajes (ELG) open-pit mine in the second quarter.

The achievement is even more notable since Torex could be viewed as one of the final chapters in the previous bull-run in commodities markets. The company raised around US$800 million via debt and equity to build a bulk-tonnage gold mine at Morelos, and saw its market capitalization jump from roughly US$400 million to over US$1 billion since mid-2010.

On Dec. 29 Torex announced its first gold pour from the ELG deposits, and president and CEO Fred Stanford spoke with The Northern Miner to reflect on the company’s path to production.

[KGHM] Poland studies energy sector mergers, copper concerns (Reuters U.S. – January 11, 2016)

January 11, 2016

http://www.reuters.com/

WARSAW – Poland surprised the markets on Monday with plans to merge its biggest oil and gas firms to forge central Europe’s No.1 energy company and prevent any hostile takeover threat.

Treasury minister Dawid Jackiewicz is considering tie-ups between the state-run oil refiners PKN Orlen PKN.WA and Lotos LTSP.WA, and gas firm PGNiG PGN.WA, with the analysis to be ready by the end of this quarter.

Put together their joint market value would stand at 60 billion zlotys ($15 billion), almost twice as much as Austria’s OMV (OMVV.VI) and three times the market cap of Hungary’s MOL MOLB.BU.

Brazil mine disaster: Samarco downgrades Rio Doce waste levels – by Barry Fitzgerald (The Australian – January 9, 2016)

January 11, 2016

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

Satellite imagery has prompted the BHP Billiton and Vale-owned Samarco to claim that the volume of waste material released into the Rio Doce river system when its tailings dam in Brazil’s Minas Gerais state collapsed is less than first thought.

Initial reports after the devastating November collapse put the volume of tailings (a non-toxic mix of water, silica, fine iron ore and manganese) at more than 50 million cubic metres. That has now been downgraded to about 32 million cubic metres.

The lower figure nevertheless represents one of the biggest ever tailings dam failures. It was also one of the most deadly, with 17 people killed and two still listed as missing.

Brazil cautious on re-starting hydro dams after mining spill – by Luciano Costa (Reuters U.S. – January 8, 2016)

January 11, 2016

http://www.reuters.com/

SAO PAULO – Four hydroelectric dams along Brazil’s Rio Doce remain closed for an indefinite time after a deadly mining spill in November flooded the river with thick mud, according to water agency ANA.

ANA said in an emailed statement that only one of four hydro plants along the 800 km (497 mile) river, which runs through states of Minas Gerais and Espirito Santo, had requested to power up as the others continue to assess potential damage from the spill.

The bursting of a dam at the Samarco iron ore mine on Nov. 5 caused Brazil’s worst environmental disaster, releasing between 30 million and 60 million cubic meters (7.9 billion to 15.9 billion gallons) of mining waste. The resulting flood killed at least 17 people, left hundreds homeless and polluted the river.

With the gold industry in a state of flux, the next big price move is up – Rob McEwen – by Henry Lazenby (Mining Weekly.com – January 6, 2016)

January 7, 2016

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

ToRONTO (miningweekly.com) – While gold output is in decline as a result of falling grades, mine closures and new construction projects being deferred, and the situation compounded by gutted exploration budgets and capital markets being effectively closed for the gold industry, the next big price move could only be up, the chief owner, chairperson and CEO of McEwen Mining, Rob McEwen, tells Mining Weekly Online.

“Gold is cheap and gold shares are very cheap. I think we are at the bottom for gold. More consolidation and rationalisation is to come and today’s biggest producers will be surpassed by new leaders emerging from the mid-tier.

“These new leaders will have stronger balance sheets, good growth stories and management – more focused on building their share owners’ wealth first, rather than their personal wealth – will emerge and take the lead,” the founder and former chief executive of the world’s largest gold miner by market capitalisation, Goldcorp, stated in an emailed interview.

Why the right is returning to Latin America – by Shlomo Ben-Ami (Globe and Mail – January 6, 2016)

January 7, 2016

http://www.theglobeandmail.com/

BOGOTA — The crushing defeat of the long-ruling Chavista government in Venezuela’s recent parliamentary elections, together with the end of 12 years of Peronist rule in Argentina, mark the end of a cycle of left-wing hegemony in much of Latin America.

But this is not a political watershed marking the renewal of ideological confrontation. Rather, it is a measured transition toward political pragmatism. And it is very good news.

Perhaps the best evidence that this is not an ideologically driven sea change is to be found in what triggered it: an economic downturn.

Supermines Add to Supply Glut of Metals – by John W. Miller (Wall Street Journal – January 4, 2016)

January 6, 2016

http://www.wsj.com/

CERRO VERDE, Peru—In this volcanic desert, a dusty moonscape patrolled by bats, snakes and guanacos, America’s biggest miner is piling on to the new force in industrial resources: supermines. It’s a strategy that could be driving miners into the ground.

Freeport-McMoRan Inc. is completing a yearslong $4.6 billion expansion that will triple production at its Cerro Verde copper mine, turning a once-tiny, unprofitable state mine into one of the world’s top five copper producers.

As Cerro Verde’s towering concrete concentrators grind out copper to be made into pipes and wires in Asia, it will add to production coming from newly built giant mines around the world, in a wave of supply that is compounding the woes of the depressed mining sector.

In Peru, Distrust of Miners Remains, Even Amid Development – by John W. Miller and Ryan Dube (Wall Street Journal – January 4, 2015)

January 5, 2016

http://www.wsj.com/

AREQUIPA, Peru—The China-led commodity boom has lifted Peru, now the world’s second biggest copper exporter, out of poverty, but mining companies say it is one of the most difficult countries to do business in.

Skepticism about foreign mining firms is deeply ingrained. This year alone, a dozen people have been killed in mining protests.

Economists say mining has been key to Peru’s robust economic growth during the past decade, helping reduce poverty from almost 60% in 2004 to just over 20% last year.

For lower- and middle-class Peruvians, the picture isn’t so clear. Mining “is not a good thing, but it gives us money,” said Daisy Araujo, 28-year-old mother of four whose husband works in an underground gold mine 12 hours away. She sees him for a few days every month.

KGHM seeks global status amid commodities downturn – by Henry Foy (Financial Times – December 30, 2015)

January 4, 2016

http://www.ft.com/

Lubin – A kilometre below the rolling countryside of south-west Poland, scores of men labour in hot, cramped tunnels mining copper that has made KGHM Europe’s second-largest producer of the red metal.

Yet the future of the Polish miner lies halfway around the world, in the rocky hills of Ontario, Canada, and the Atacama Desert of northern Chile.

There, the success of two big investments will determine whether KGHM becomes Poland’s first truly global company, or an overambitious regional player that failed to achieve international status.

The state-controlled group has already spent more than $7bn on acquiring and developing the Canadian and Chilean mines, assets that give it control of the world’s fourth-largest copper deposits.

Anger at Vale over Brazil mine accident fed by cautious, slow public response -by Stephen Eisenhammer (Reuters U.S. – December 31, 2015)

January 4, 2016

http://www.reuters.com/

RIO DE JANEIRO – Within hours of a deadly mining spill in November that would become Brazil’s worst environmental disaster, BHP Chief Executive Andrew Mackenzie was in front of a camera offering his sympathies to those affected.

Meanwhile, his counterpart at joint venture partner Vale SA, Murilo Ferreira, took nearly a week after the mine wastewater flood to talk to the press, setting the tone for a media strategy experts say has been slow and clumsy.

While both companies’ legal strategies seem similarly aimed at limiting their direct liability for the dam collapse that caused the disaster, a divergence in public relations tactics has left Vale, the world’s biggest iron ore miner, taking the brunt of social media outrage and street protests over the tragedy, which killed 17 and left hundreds homeless.

BHP Billiton and partner Vale to launch external investigation into a dam disaster in Brazil that left 17 dead – by Robb M. Stewart (The Australian – December 22, 2015)

December 22, 2015

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

BHP Billiton has pledged to release publicly the findings of a New York-based law firm hired to determine the cause of a catastrophic dam burst at a mine in Brazil last month.

The Australian mining company said it and venture partners Vale SA and Samarco Minerao SA had jointly hired US law firm Cleary Gottlieb Steen & Hamilton to launch an external investigation into the cause of a breach of a mine-waste dam and a water dam at the iron-ore operation in Minas Gerais.

BHP said it planned to release the findings and also share the results with other resources companies.

UPDATE 2-Peru sees 66 pct spike in copper output next year thanks to Las Bambas (Reuters U.S. – December 21, 2015)

December 22, 2015

http://www.reuters.com/

Dec 21 Peru’s government said on Monday that copper output in the world’s third biggest producer should rise 65.5 percent in 2016 to about 2.5 million tonnes after MMG Ltd’s massive Las Bambas project starts operations in February.

Ongoing talks with leaders in communities where protests against Las Bambas turned deadly in September have been positive and have not held up the $7.4 billion project, Energy and Mines Minister Rosa Maria Ortiz said.

The Las Bambas mine, in the highland region Apurimac, should produce between 250,000 and 300,000 tonnes of copper in 2016, Ortiz said.

BHP awaits court freeze order on Brazil assets over mine disaster – by James Regan (Reuters U.S. – December 21, 2015)

December 21, 2015

http://www.reuters.com/

SYDNEY – BHP Billiton BLT.L – has not received formal notification that its assets in Brazil have been frozen, a company spokesman said Monday, three days after a court ruled to hold the assets as compensation for the Samarco mining disaster.

“We have yet to receive any formal notification,” BHP Billiton’s Paul Hutchins said by telephone from the company’s Melbourne headquarters. “We hope to have an update tomorrow.”

A judge in Brazil’s state of Minais Gerais on Friday froze the Brazilian assets of BHP and domestic miner Vale SA after ruling their Samarco joint venture was unable to pay for damages following a dam collapse last month at Samarco’s iron ore mine in the state. The disaster killed 16 people, left hundreds homeless, and polluted a nearby river.

COLUMN-Should iron ore miners become an oligopoly to rescue prices? – by Clyde Russell (Reuters India – December 15, 2015)

December 15, 2015

http://in.reuters.com/

Dec 15 – One of the largely unseen side-effects of the massive increase in iron ore supply and the subsequent collapse in prices is that the industry is now one of the most concentrated in the resources sector.

As any student of economics can tell you, highly-concentrated supply tends to lead to oligopolistic behaviour, in which the major producers limit output in order to drive prices higher.

This clearly hasn’t happened, and isn’t currently happening in iron ore, despite about 75 percent of traded supply being delivered by just four producers.