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Our view: ‘Eyes wide open’ on metals mining – Duluth News Tribune Editorial (June 19, 2013)

http://www.duluthnewstribune.com/

A guest speaker in Duluth yesterday long has been a dark cloud over any prediction of economic benefit related to the coming mining of precious metals in northern Minnesota.

A guest speaker in Duluth yesterday long has been a dark cloud over any prediction of economic benefit related to the coming mining of precious metals in northern Minnesota. And he was brought here by Friends of the Boundary Waters Wilderness, a Minneapolis-based anti-mining nonprofit.

So the expectation, naturally, was for a mining-is-evil message. And that’s just what Thomas Power, a Princeton-educated economics professor of 40 years at the University of Montana, delivered. But at least he did so with a history lesson rather than with half-truth propaganda or with picket-sign catch phrases that too often have been the weak tools of the doom-and-gloom, anti-mining crowd.

“My message is to go in with eyes wide open,” Power told the News Tribune Opinion page before speaking over the lunch hour Tuesday at Clyde Iron. “I’ve been doing economic research and teaching courses on Montana’s and on the western states’ economies for 45 years. … It wasn’t possible to study the Montana economy without paying attention to the mining part of it.”

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Copper mining economics questioned by Montana economist – by John Myers (Duluth News Tribune – June 19, 2013)

http://www.duluthnewstribune.com/

University of Minnesota Duluth geologists call it the largest untapped copper-nickel deposit in the world, with millions of tons of valuable metals worth billions of dollars sitting in the Duluth complex of rock under Minnesota’s Arrowhead.

University of Minnesota Duluth geologists call it the largest untapped copper-nickel deposit in the world, with millions of tons of valuable metals worth billions of dollars sitting in the Duluth complex of rock under Minnesota’s Arrowhead.

Supporters and economic reports point to hundreds of new mining jobs if Minnesota’s first-ever copper mines become a reality, along with spinoff employment, huge payrolls and millions in taxes and royalties paid. Mining, already one of Northeastern Minnesota’s largest industries thanks to taconite iron ore, has the potential to become even bigger with copper, nickel, palladium, platinum and gold.

But Thomas Power, former chairman of the University of Montana’s economics department, warned Northland residents Tuesday to be careful in the rush into copper.

At a Duluth lunch forum sponsored by the Friends of the Boundary Waters environmental group, the professor said mining’s economic costs are often overlooked in the luster of a promised boom time. He said many economic reports released around proposed mining projects are ripe with benefits but fail to address costs. That should cause economists, and the public, to bristle, he said.

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Minnesota’s next mining boom has picturesque Ely divided – by Josephine Marcotty (Minneapolis Star Tribune – June 16, 2013)

http://www.startribune.com/

ELY, Minn. – Every year Randy Stender and his family spend Memorial Day weekend at Birch Lake Campground, a tradition that ties him to the wild, unspoiled lands here on the edge of the Iron Range where he grew up. There was a time, he says, when he and his wife would have moved back — if there had been a job like the one his father once had at Reserve Mining.

So when he heard that Birch Lake’s shoreline could become the site of one of the largest copper mines in the country, he immediately grasped the conflict gripping this charming tourist town and spreading across Minnesota. “That’s the catch,” he said, opening his arms wide to the lake that shimmered in the morning light. “Because I kind of like it like this.”

The prospect of a massive new mining industry here is igniting long-simmering tensions — between those who long for the surge in prosperity it could bring and those who say it threatens the splendor of the North Woods and the tourism that relies on it.

At least a dozen companies are exploring for copper, nickel, gold and other precious metals in a vast geological formation called the Duluth complex, which stretches from Tamarack, Minn., to the nearby Kawishiwi River that feeds the Boundary Waters Canoe Area Wilderness. Company officials say hard-rock mining can — and will — be done safely, while creating thousands of jobs and spawning a new industry that could someday dwarf the state’s taconite and frac sand mining operations.

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After 10 years of effort, Rio Tinto clips Eagle Project’s wings – by Dorothy Kosich (Mineweb.com – June 13, 2013)

http://www.mineweb.com/mineweb/

The controversial Kennecott nickel-copper mine destined to usher in a new mining era and more jobs for Michigan’s economically hard hit Upper Peninsula is being sold.

RENO (MINEWEB) – After more than a decade spent studying, permitting and developing the first U.S. primary nickel mine to be built in years, Rio Tinto has decided to sell Kennecott’s Eagle Mine to Lundin Mining for US$325 million in cash.

Since Rio Tinto announced in 2010 that it would invest US$469 million in the development of the Eagle Mine, which was supposed to become the biggest nickel mine in the country, the $325 million-price tag at first appears to be a bargain for Lundin.

Nevertheless, in addition to the total acquisition price of $325 million, remaining investment of Lundin Mining for the balance of 2013 and 3014 to bring the Eagle Mine into production is estimated at $400 million.

Located northwest of Marquette, in the historic mining region of the Upper Peninsula of Michigan, Eagle was to be the first new mining operation to be built in Michigan in years. The “world class” underground nickel-copper mine was also supposed to boost the fortunes of an economically hard-hit region with 500 construction and 220 mining jobs. Rio Tinto had pledged to give 75% of those jobs to local residents.

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Excerpt: From Meteorite Impact to Constellation City: A Historical Geography of Greater Sudbury – by Oiva W. Saarinen

To order a copy of “From Meteorite Impact to Constellation City”, please click here: http://www.wlupress.wlu.ca/Catalog/saarinen-meteorite.shtml

From International Nickel Company to Inco, and Merger with Mond (1902–1928)

Between 1902 and 1928, International Nickel prospered from the pre-war European demands for nickel in armour plate, the military needs of the First World War, increased peacetime uses for nickel in the United States, and the impact of the roaring twenties. By 1903, nickel production from Sudbury exceeded that of its main rival, New Caledonia. This dominance became continuous after 1905. The control of Sudbury’s wealth was paralleled by the dominance of International Nickel within the nickel industry. Through the use of long-term contracts with its consumers, the company was able to thwart competitors from entering the market, especially in the United States.

Its ability to meet the growing global demand for nickel was facilitated by the opening of Creighton mine in 1901 and the growth of this operation by the First World War into the world’s largest operating mine.10 Its output far surpassed that of the company’s other major source, Crean Hill.

Also significant was the opening of a new smelter by the CCC in Copper Cliff in 1904 which heralded the appearance of the first of three great smokestacks which dominated the Sudbury skyline for years to come. These smokestacks served to disperse the sulphur fumes released during the smelting process into the atmosphere.

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Arctic governments stand by as deadly pollution spews from Russia’s Nikel mine – by Alex Boyd (Nunatsiaq on line.ca -June 11, 2013)

http://www.nunatsiaqonline.ca/

“More profitable to keep polluting the region than modernize the production”

The nickel mine in the aptly named town of Nikel in northwestern Russia is usually notable for three things: it’s big, it’s a massive source of pollution, and, for more than 20 years, it’s defied all attempts to change.

Controversy is as constant in Nikel as the clouds of sulphur dioxide; the mine here is equal parts economic powerhouse and environmental scourge. Yet, criticism has kicked up a notch in recent weeks after European leaders met to discuss issues in the region — and failed to mention Nikel.

Last week’s Barents Summit in Kirkenes, Norway brought together leaders from all over northern Europe, but despite old promises to deal with the mine’s pollution and new commitments to environmental sustainability, the mine located just 50 kilometres away went unmentioned.

Amid the international hoopla over the Arctic, it’s easy to forget that the region is a relatively small place, with a small population. The presence of organizations such as the Arctic Council and the Barents Council means countries are increasingly trying to tackle Arctic issues as a group, but disagreements still arise.

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Civil War Pretty Much Declared in Ely over [Minnesota Twin Metals] Sulfide Mining – by Bill Hanna Executive Editor (Mesabi Daily News – June 8, 2013)

http://www.virginiamn.com/

ELY — A well-known self-described “612-er” pretty much issued a declaration of civil war in Ely over copper/nickel/precious metals mining on a cloudy and misty Saturday afternoon a week ago.

In combative remarks during an event to officially open the “Sustainable Ely” storefront in a house on the city’s main drag of Sheridan Street, former WCCO Twin Cities TV reporter/personality Don Shelby issued some marching orders directed against the proposed Twin Metals Minnesota nonferrous project near Ely and Babbitt.

Meanwhile, Twin Metals continues its work and involvement in the community, with one of its headquarters in Ely, while planning and setting the stage for a major project that will create more than 1,000 long-term jobs.

A group of more than 100 anti-sulfide mining supporters packed inside the house’s lower level were more than receptive to his comments, nodding in agreement and clapping in support. They embraced the hard-line message, many of them with stern facial expressions.

Shelby, who is also a board member of the Minnesota Center for Environmental Advocacy, which is headquartered in St. Paul, told the faithful that they won’t have to just fight the mining companies over proposed nonferrous projects in the area.

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Rio Tinto reports at [Eagle] mine forum – by Stephen Anderson ([Michigan] Daily Mining Gazette – May 16, 2013)

http://www.mininggazette.com/

L’ANSE – Rio Tinto representatives provided an update on the Eagle Mine, collected live electronic survey results through a community scorecard and fielded an array of questions and comments during a mining forum Wednesday night at the L’Anse American Legion Post 144.

Mine update

Matt Johnson, manager of external relations at Rio Tinto Eagle, gave a brief historical recap of the mine, starting with explorations dating back to the 1950s, the discovery of the ore body in 2002, the permit application and finalization in 2008 and 2010, respectively, and the start of underground drilling in 2011.

“We do have a goal of being in production in 2014,” he said. “A few months ago we announced a moderated schedule, so we pushed our schedule back. (Work on the Humboldt Mill) has been postponed for the time being.”

Production was originally slated to start in early 2014; now it’ll likely be toward the end of that year, but that’s not the only reason the life of the mine will extend farther.

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Sherritt facing demands from activist as chairman Ian Delaney retires – by Peter Koven (National Post – May 8, 2013)

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

A turbulent period could be looming for Sherritt International Corp., as an activist investor is challenging the company just as its long-time chairman and figurehead retires.

Scott Leckie of Takota Asset Management is calling on Toronto-based Sherritt to buy back more stock and study a potential lawsuit against SNC-Lavalin Inc., which he believes is responsible for cost overruns and delays at the company’s Ambatovy nickel project. He said he took his complaints public after Sherritt ignored three private letters.

“[Sherritt CEO] David Pathe has said they’re in a position to respond to opportunities. To me that means they have excess capital above and beyond anything they’re going to need for the last bits and pieces of Ambatovy,” Mr. Leckie said in an interview.

Sherritt also quietly revealed in a filing that chairman Ian Delaney, 69, is retiring from the company and is not standing for re-election at the annual meeting later this month.

He has been Sherritt’s dominant personality since he seized control of it in a proxy fight in 1990, and his departure leaves a major gap. But it does not come as a shock; in late 2011, he passed the CEO job on to Mr. Pathe and said he was content with the state of the company.

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NEWS RELEASE: Royal Nickel Announces $15 Million Royalty Financing from Leading Global Mining Investor

(All amounts expressed in U.S. dollars unless otherwise indicated)

TORONTO, May 9, 2013 /CNW/ – Royal Nickel Corporation (“RNC”) (TSX: RNX) is pleased to announce that it has signed a royalty purchase agreement with RK Mine Finance (“Red Kite”). Under the terms of the agreement, Red Kite will acquire a 1% Net Smelter Return (“NSR”) Royalty in the Dumont Nickel Project for a purchase price of $15 million.

“This commitment by Red Kite is a significant endorsement of the Dumont project by a recognized global mine finance firm. This royalty sale provides an attractive form of financing, particularly in current capital market conditions. The additional capital will allow us to continue to aggressively advance the project once the feasibility study is completed by mid-year. We look forward to working further with Red Kite as we advance the project,” said Tyler Mitchelson, President and CEO of RNC.

Pursuant to the agreement between RNC and Red Kite, on closing RNC will receive $15 million and Red Kite will be entitled to receive 1% of the net smelter return from the sale of minerals produced from the Dumont Nickel Project. Closing is expected to occur on May 10, 2013.

RNC’s Dumont project contains the third largest nickel reserve in the world1 and is expected to be among the largest 5 nickel sulphide operations in the world. RNC is on track to release the results of a feasibility study for the Dumont project by mid-2013 and the permitting process is well underway with necessary permits expected to be received by the second quarter of 2014.

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Australia billionaire spends big on nickel even as glut worries persist – by James Regan (Reuters U.S. – May 3, 2013)

http://www.reuters.com/

Billionaire Clive Palmer earmarks $1 bln to upgrade nickel refinery

SYDNEY, May 3 (Reuters) – Australian mining magnate Clive Palmer is joining Vale, Xstrata and other sector heavyweights pouring money into nickel despite a dire near-term outlook for demand, as they plough on with projects bought on the cheap or as part of corporate takeovers.

Hopeful that appetite will pick up as the global economy improves, they are reluctant to shed assets after investing billions. But that risks deepening a supply glut in the short term and piling more pressure on nickel prices, which have fallen around 13 percent so far this year and were the worst performer on the London Metal Exchange in 2012.

Palmer, a self-described eccentric who is building a replica of the Titanic, plans to spend a hefty $1 billion this year upgrading an ageing nickel refinery in Australia, battling to reduce production costs through steps such as revamping equipment and waste disposal operations.

“The $1 billion … will help make the refinery more efficient in a time of low nickel prices,” said Andrew Crook, a business adviser to Palmer. He declined to give details on operating costs as the Yabulu plant is privately owned. Xstrata Plc, Vale SA, First Quantum Minerals Ltd, China Metallurgical Corp, Sherritt International and Sumitomo Corp are among companies spending heavily to build new nickel mines and processing plants.

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Anorthosite: What It Is and Why You Should Care [Global Nickel/Copper Uses] – by Sally Lowder (The Metals Report – April 23, 2012)

http://www.streetwisereports.com/

Copper and nickel are two metals modern society cannot get enough of, but there is not enough to go around, says Rick Mills, publisher of Ahead of the Herd. Add in mounting production costs and you have a supply-and-demand disaster in the making. But when it comes to making fiberglass and aluminum, Mills says in this interview with The Metals Report that he sees a revolution in the making, and its name is anorthosite.

The Metals Report: Rick, you have concerns about supply problems for many industrial metals. Let’s start with the importance of copper and nickel to global growth.

Rick Mills: Modern society would grind to a halt without copper and nickel. Nickel has more than 100,000 applications. Copper is everywhere as well. But growing structural imbalances in the supply-and-demand equation do not bode well for future resource extraction. Mining is extremely capital intensive. The initial capital expense (capex) of building and developing a mine is high.

Company-built infrastructure assets—roads, railways, bridges, power generating stations, seaports—are often needed to extract and transport the ore and concentrate. Second, the operating expenses (opex)—rubber tires, wages, fuel, camp costs—are not stable; they keep going up.

TMR: Production costs have been high for a while. Why are you so concerned now?

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Nickel prices a huge challenge: Vale VP – Staff (Sudbury Northern Life – April 16, 2013)

http://www.northernlife.ca/

Strong says $7 nickel today equals $2.50 a decade ago

Current nickel prices of a little more than $7 a pound are comparable to $2.50 a pound a decade ago, creating huge challenges for Sudbury’s largest nickel miner.

Kelly Strong, Vale’s vice-president of Ontario and UK operations, made the comparison Tuesday at a packed luncheon at the Howard Johnson in Sudbury, hosted by the Greater Sudbury Chamber of Commerce.

Strong said several factors have substantially increased mining costs, including oil prices that have increased by 350 per cent, and the Canadian dollar, which has increased in value by 60 per cent compared to the U.S. dollar.

“Today’s prices are actually as low as historical recessionary prices,” Strong said. “And those of us who lived through those price cycles know how challenging they were.”

He also paid tribute to three miners who were killed on the job at Vale – Jordan Fram, Jason Chenier and Stephen Perry. Strong said the company has gone through a dark period and has put a renewed emphasis on safety.

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Norilsk takes another hit in WA – by Nick Evans (The West Australian – April 15, 2013)

http://au.news.yahoo.com/thewest/business/

Russian mining giant Norilsk Nickel has taken another hit to its Australian assets, announcing further writedowns as it prepares to close its remaining WA mine.

According to an abbreviated set of 2012 financial accounts released by Norilsk late on Friday, the world’s biggest nickel producer has written down the value of its Australian and Botswana mining assets by $US278 million ($264.7 million). The company did not apportion the writedowns.

It spent $7 billion expanding in WA nickel at the height of the mining boom in 2007 and is understood to have now written off the vast bulk of the assets it acquired.

The carrying value of its non-current assets in Australia was put at $US511 million at the end of 2011. That figure is understood to have fallen to about $US350 million by the end of last year.

Media reports in Botswana indicate Norilsk may also be preparing to close its nickel mines there, after senior management decided to mothball its Lake Johnston project, north-east of Kalgoorlie, late last month.

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Vale faces ‘new world’ – by Carol Mulligan (Sudbury Star – April 15, 2013)

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Vale is no longer aiming to be the largest mining company in the world, says the man in charge of its Sudbury operations.

It’s looking instead to generate more value from the business it has, focusing on its core assets and ensuring they generate the capital necessary to rein-vest in operations.

Kelly Strong, a mining engineer who has worked at Vale operations in Ontario since 2001 except for a three-year stint in Indonesia, was named the company’s vice-president of Ontario and U.K. operations last November.

Strong hasn’t spoken much publicly since then, but spoke of some of his priorities in an editorial board meeting with The Sudbury Star last week. That meeting was conducted underground at the 7,400-foot refuge station at Creighton Mine, where a $247- million expansion program is underway.

The timing of Brazil-based Vale purchasing the former Inco in 2006 was good, said Strong, given Inco didn’t have the “kind of money” to invest in aging infrastructure. The operations were at the “critical stage where we had to start investing back in the business” or it would have had significant challenges.

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