Vale Proposes Dividend Cut Amid ‘Uncertain’ Commodities Outlook – by Paul Kiernan (Wall Street Journal – September 28, 2015)

http://www.wsj.com/

Company proposes cutting second part of 2015 dividend to $500 million from $1 billion

RIO DE JANEIRO—Brazilian mining giant Vale SA proposed cutting dividends even more than planned Monday as it grapples with an “uncertain scenario” for commodity prices.

Vale’s management proposed reducing the second tranche of its 2015 dividend to $500 million, or about $0.10 per share as of Aug. 31. The board of directors is set to review the proposal at an Oct. 15 meeting, and payment would take place on Oct. 30.

If approved, the payment would come in at half the $1 billion that Vale doled out in the first tranche of 2015 dividends in April. The company said in January that it expected to pay $2 billion in dividends this year.

The downturn in prices for commodities like nickel and iron ore, of which Vale is the world’s largest producer, has since proved more lasting than mining companies had expected.

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NEWS RELEASE: Horizonte consolidates Araguaia nickel project through acquisition of Glencore project

/PUBLICATION, RELEASE OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN THE UNITED STATES OR ANY OTHER JURISDICTION IN WHICH SUCH PUBLICATION, RELEASE OR DISTRIBUTION WOULD BE UNLAWFUL./

LONDON, Sept. 28, 2015 /CNW/ – Horizonte Minerals Plc, (AIM: HZM, TSX: HZM) (‘Horizonte’, ‘HZM’ or ‘the Company’) the nickel development company focused in Brazil, is pleased to announce that it has reached agreement to indirectly acquire through wholly owned subsidiaries in Brazil the advanced high-grade Glencore Araguaia nickel project (‘GAP’) in north central Brazil (the ‘Proposed Transaction’). GAP combined with Horizonte’s 100% owned high-grade Araguaia nickel project (‘Araguaia’ or ‘Araguaia Project’) creates one of the world’s largest nickel saprolite projects in terms of size and grade, in a premier mining jurisdiction that has a defined path to feasibility.

Highlights

  • The combination of GAP and Horizonte’s Araguaia Project will create one of the largest saprolite nickel projects in the world (the “Enlarged Project”).
  • Additional resources with potential to provide ore grading 2% nickel for the first 10 years of mine life.
  • Higher nickel grades are expected to improve project economics delivering a shorter capital repayment period and a lower break even nickel price.
  • Upfront consideration on closing of US$2M to be satisfied through issue of HZM shares.
  • Total acquisition cost US$8M.
  • Placing of new shares to raise £1.55M through existing cornerstone shareholders.

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Peru mining protests prompt alarm – by James Wilson (Financial Times – September 27, 2015)

http://www.ft.com/

More than 4,000 metres above sea level in Peru’s central highlands is one of the biggest construction sites in the western hemisphere.

Some 16,000 workers are building Las Bambas, a huge copper mine. It is already 95 per cent complete and when the project owned by MMG, controlled by China Minmetals, starts producing next year it should quickly ramp up to become one of the largest in the world.

The vast mineral wealth of projects such as Las Bambas have made Peru one of the focal points for mining investment in recent years. But while the resources have not changed, the climate has.
Las Bambas may mark the end of a period of substantial mining spending in Peru that has seen one mine, Hudbay’s Constancia, reach commercial levels of production this year, as well as the imminent completion of a big expansion of Freeport-McMoRan’s Cerro Verde copper mine.

“In the past four or five years, we have seen important investments in mining projects,” says Carlos Gálvez, president of Peru’s National Society for Mining, Petroleum and Energy. “But, unfortunately, we are now dropping.”

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Argentina’s presidential candidates want mining to be platform for country’s recovery – by Cecilia Jamasmie (Mining.com – September 24, 2015)

http://www.mining.com/

Only weeks before Argentina heads to the polls to choose its new leader, analysts are saying that President Cristina Fernandez’s chosen successor, Daniel Scioli, would probably be the best outcome for miners, as he has promised to maintain financial incentives designed to bolster investments, as well as oil and gas production.

But others differ. One of them is Santiago Dondo, a mining specialist at Pensar, the think tank of leading opposition candidate Mauricio Macri’s party. He told Reuters that the former mayor of Buenos Aires and ex-president of the popular Boca Juniors soccer team, may be a better choice. This, as Macri would give provincial governments a larger chunk of profits from companies operating in the country. The candidate, he added, has vowed to improve environmental inspections across the industry.

“The main challenge … is to generate trust at home, which would also give investors stability,” Dondo said. But according to the country’s mining chamber, any of the three candidates running in the upcoming October election is a good option, as they all have said they see mining as the platform for Argentina’s recovery.

“Scioli has said mining should be an engine for the economy, Macri has been consistent in his support and [opposition candidate] Sergio Massa has said the sector deserves attention,” the president of the Argentine Mining Chamber, Martin Dedeu, said earlier this year, according to País Minero (in Spanish).

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BARRICK GOLD NEWS RELEASE: Processing Restrictions at Veladero Lifted

http://www.barrick.com/

TORONTO, September 25, 2015 — Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (Barrick or the “company”) today announced that restrictions on processing activities at the Veladero mine in San Juan province, Argentina, have been lifted.

A local court previously restricted the addition of new reagents to the mine’s heap leach circuit following the failure of a valve on a pipe carrying cyanide solution at the leach pad, which led to a release of solution.

The safety of people and the environment has been the company’s top priority since the faulty valve was detected. Barrick immediately implemented a comprehensive downstream water monitoring program. This monitoring, as well as testing results from an independent third-party laboratory, have confirmed that there are no risks to the health of downstream communities as a result of this incident.

These findings are consistent with independent water testing results released by other third parties in San Juan province, including the Public Health Department and the state water distribution company.

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Barrick’s cyanide spill five times larger – by Herald Staff (Buenos Aires Herald – September 24, 2015)

http://www.buenosairesherald.com/

Company’s own new figures show leak had been massively underestimated

The amount of cyanide solution that spilled from Barrick Gold’s Veladero mine in San Juan province is almost five times more than previously believed, the company acknowledged yesterday as a second federal prosecutor moved to investigate national and provincial officials and mining executives amid growing environmental concerns.

By Barrick’s own estimates, approximately 1,072 cubic metres (1.072 million litres) of cyanide solution made it into the Potrerillos River, due to a valve failure and a sluice gate being left open on September 12.

Previous upper estimates of the spill had been in the realm of 224,000 litres. The Canadian multinational chalked up the revised number to the pinpointing of the approximate time of the valve failure, believed to be around 8pm. The cyanide solution is used to leach gold from processed rocks, a common method for the extraction of gold from ore.

Despite the revised estimate, Barrick insists the spill will not lead to any health risks for area residents.

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Editorial: Political risk never far in Guatemala – by John Cumming (Northern Miner – September 16, 2015)

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

As miners active in Guatemala sit on the sidelines with furrowed brows, Guatemala has been embroiled in a political turmoil stoked by an anti-corruption drive that has led to the arrest of President Otto Perez Molina and the rise of a genial comic actor as the leading candidate to replace him.

This latest round of national instability kicked off on April 16 with the release of a report by the internationally staffed UN anti-corruption agency International Commission Against Impunity in Guatemala (CICIG) that implicated senior government officials with organized crime — including Vice-President Roxana Baldetti, Guatemala’s first-ever female VP.

The CICIG, working with the country’s attorney general Thelma Aldana, had uncovered a scam known as “La Linea” whereby government officials accepted bribes from importers in return for reducing tariffs.

Popular outrage soon led to the peaceful assembly of tens of thousands of ordinary citizens in Guatemala City to protest government corruption — a remarkable feat for a country with a deeply rooted history of political violence, including death squads.

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UPDATE 2-Vale vows deeper iron ore cost cut as China’s steel demand peaks – by Manolo Serapio Jr and Ruby Lian (Globe and Mail – September 23, 2015)

http://www.reuters.com/

QINGDAO, China, Sept 23 (Reuters) – Iron ore miner Vale said it will cut its production cost to less than $13 per tonne by 2018, as the world’s largest producer of the commodity maximises profit margins in an era of weak prices.

A global glut and falling Chinese steel demand have dragged iron ore prices to less than $60 a tonne from a high of nearly $200 in 2011. The price is forecast to drop to $50 over the next two years, a Reuters poll showed.

“Vale is progressing to reach the lowest cash cost of the industry and will be competitive at any price scenario,” Claudio Alves, global director of marketing and sales at Vale, told a conference in China’s port city of Qingdao.

The cost reduction will come after the completion of Vale’s 90-million-tonne expansion project known as S11D in the Brazilian Amazon, Alves said, as the miner focuses on producing more high-quality material.

Vale’s overall cost stood at $15.80 per tonne by the second quarter.

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Sherritt moves to protect liquidity (Northern Miner – September 18, 2015)

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

Sherritt International’s (TSX: S) president and CEO David Pathe did not mince words when he said the firm must take action to protect its balance sheet in order to withstand lower commodity prices at a time when “more than 60% of global nickel production is underwater on a cash cost basis.”

After markets closed on Sept. 17 Sherritt suspended its 1¢ per share quarterly dividend, noting that at current spot prices of US$4.50 per lb., nickel is down 32% since the company last cut its dividend in the first quarter of 2014 from 4.3¢ per share to 1¢ per share.

A world leader in the mining and refining of nickel from lateritic ores and the largest independent energy producer in Cuba with oil and power operations across the island, Sherritt said prices for nickel and crude oil haven’t traded this low since 2009.

Sherritt also said it would cut capital expenditures in 2016 by as much as 25%-35%. Earlier this year the company trimmed its 2015 capex guidance by $15 million to $195 million.

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Analysis – Copper market may get a 2003-style supply shock from Glencore closures – by Josephine Mason (Reuters U.K. – September 22, 2015)

http://uk.reuters.com/

NEW YORK – As copper miners start to slash spending and shutter mines because of the plunge in the price of the metal, experts who analyse the market in the base metal are suddenly getting a little more cheery.

They are seeing the potential for a re-run of 2003 when Chile’s Codelco [COBRE.UL], the world’s top copper producer stockpiled 200,000 tonnes of the metal that is used in everything from pipes to autos, providing the market with a supply shock that soon drove copper prices back up.

This time around hopes are pinned on the announcement earlier this month from Glencore (GLEN.L) of a sweeping strategy to shore up cash and cut spending, including plans to shutter two major, high-cost copper mines in Zambia and the Democratic Republic of Congo over the next 18 months. That will cut company output by 400,000 tonnes and remove some 2 percent of global supply from the market.

For Glencore CEO Ivan Glasenberg, the plan helped placate shareholders worried about $30 billion (£19 billion) of debt as prices of its main products from copper to coal sank to six-year lows amid worries about China’s waning appetite for such commodities.

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Peru: Pope Gets Pushback on Environment – by Justin Catanoso (Pulitzer Center.org – September 20, 2015)

http://www.pulitzercenter.org/

LA OROYA, Peru – In Pope Francis’ teaching doctrine on climate change and environmental sustainability, released in June to worldwide attention, he intertwines two threads that often dangle separately: nature and the world’s poor.

“A true ecological approach always becomes a social approach,” Francis writes in his papal encyclical. “It must integrate questions of justice in debates on the environment, so as to hear both the cry of the earth and the cry of the poor.”

There are few places on Earth where the cry of both is louder than in this city of 33,000 more than 2 miles high in the central Andes. La Oroya, Peru, is recognized as one of the world’s most polluted places. A smoke-belching smelting plant for copper, zinc and lead, operating from 1922 to 2009, made it so. Chernobyl makes those same lists.

Every child in town has excessive levels of lead in his or her blood, according to health officials. The soil is contaminated with sulfur dioxide. Portions of the Montaro River, which flows past the smelting plant, has been dead for years. Seven decades of acid rain chemically transformed the mountains surrounding the plant so that they look like molten wax, not solid rock.

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Barrick closing Utah office and copper unit in cost-cutting effort – by Rachelle Younglai (Globe and Mail – September 18, 2015)

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.

Barrick Gold Corp. is shutting a major American office and dismantling its copper unit, the company’s latest steps to cut costs and overhaul operations amid the slump in gold prices.

The closing of its Salt Lake City office along with the unwinding of its copper business will help the world’s biggest gold producer save $2-billion (U.S.) by the end of next year, the company said.

Four years of declining gold prices have forced a broad retreat at Barrick and battered the company’s share price. In addition to selling a slew of mines and non-core assets, Barrick recently reduced its dividend again and sold a stake in its top copper mine in Chile as well as part of one of its most profitable gold mines, in the Dominican Republic.

Barrick’s Salt Lake office, which employs about 110 staff, will close in November after supporting the miner’s core Nevada operations for nearly two decades. It follows the shutdown of Barrick’s Perth bureau and job cuts in its Santiago office.

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Chile Begins Relief Efforts After Powerful Quake Kills Eight – by Javiera Quiroga and Eduardo Thomson (Bloomberg News – September 17, 2015)

http://www.bloomberg.com/

Chile began dispatching emergency crews and assessing damage left by the biggest earthquake in the world this year that claimed 10 lives and forced more than a million people to evacuate coastal areas.

After a tsunami alert was lifted early Thursday, residents of towns in the region of Coquimbo began returning to their homes, many of which had crumbled in the 8.3-magnitude earthquake. Tsunamis caused severe damage to the region’s main port, Interior Minister Jorge Burgos said.

The disaster brought back memories of an even-stronger 2010 quake that trigged a tsunami that killed hundreds. Copper prices, which had jumped after the quake hit at 7:54 p.m. local time Wednesday, retreated after producers said their mines escaped damage. Chile is the biggest producer of the metal.

“Once again we’ve been forced to face a tough blow from nature,” President Michelle Bachelet said in televised remarks. “Today our main focus is on supporting and helping people.”

On Thursday, Bachelet embarked on a tour of the hardest hit areas near the cities of Illapel and Coquimbo.

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The sexiest mining company in the world – by Warren Dick (Mineweb.com – September 16, 2015)

 

http://www.mineweb.com/

And it’s not just Mila Kunis that’s bringing a sparkle to investors’ eyes.

JOHANNESBURG – So you’re probably thinking the world’s sexiest mining company is a gold company? Heavens, no! (BTW that’s so 1980’s). Is it a diamond company? Mmmm, close. But no cigar. So what is it then? Why, it’s actually a coloured gemstone miner called Gemfields, listed in London.

Gemstones comprise rubies, sapphires and emeralds – amongst many others – and Gemfields has been very good at pulling them out, hand over fist, from its Kagem emerald mine (Zambia) and Montepuez ruby mine (Mozambique).

But to call it just a mining company might be a bit restrictive. “We’re in the business of stimulating both demand for, and supply of, our gemstones,” said CEO Ian Harebottle in an interview with Mineweb recently.

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Batista Miner Counting on Trafigura to Emerge From Debt Woes – by Juan Pablo Spinetto (Bloomberg News – September 15, 2015)

http://www.bloomberg.com/

A year ago, former billionaire Eike Batista’s iron-ore unit was halting output and battling creditors as prices plunged. Now it’s planning to reemerge with the help of commodities trader Trafigura Beheer BV.

MMX Sudeste Mineracao SA is selling its mining assets to Amsterdam-based Trafigura as part of a restructuring plan approved by creditors representing about 800 million reais ($207 million) in debt, Ricardo Werneck, who heads the parent company MMX Mineracao e Metalicos SA, said in an interview.

The unit also expects to obtain about 70 million reais from the sale of logistics assets and farmlands, allowing creditors to recover about 30 percent of the value of their claims, he said.

“There is no better option; the alternative is the failure of the company,” Werneck, 44, said. “Trafigura is a big part,” of the recovery plan, he said. MMX, which Batista listed in 2006 when the commodities super-cycle was in full swing, stopped operations at its only producing unit in August 2014 as the value of the steelmaking ingredient plunged and debt mounted.

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