Still to file

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

CHINA is building up its iron ore stockpiles to take advantage of the commodity’s weak prices despite deliberately slowing steel production over the past month.

New figures released by Xinhua-China Iron Ore Price Index showed stockpiles of imported iron ore at 33 major Chinese ports surged 1.44 per cent last week compared with a week earlier due to weak demand.

Iron ore inventories at the 33 ports across China rose by 1.47 million tonnes to 103.44 million tonnes, one of the highest levels in the past year. Most Australian imported iron ore is stored at the Tianjin port, south of Beijing, the largest in China.

The Xinhua report said a slowing economy and mounting environmental pressure was hurting the profit margin of the steel industry, softening demand for iron ore.

China has slowed production and output in the Hebei region, the steel capital of China, in a bid to reduce pollution during the Asia-Pacific Economic Co-operation leaders’ meeting, which begins today in Beijing.

Read more

http://www.northernlife.ca/

CEO Scott McLean calls the company a ‘project generator’

The last year was difficult for mining exploration companies, but it was an improvement over 2013, says Scott McLean, president and CEO of Sudbury-based Transition Metals.

“2015, I expect, is going to be better than 2014,” McLean said at the 2014 Ontario Prospectors Association Exploration and Geoscience Symposium. “But realistically speaking, I think we’re a ways out from the good traction in the mining equity markets.”

McLean went on to say the mining sector’s current down-cycle is the worst he has experienced since he started his career in 1985. But with every bust comes a boom, he said, and he expects the rebound to also be the biggest in his career.

To prepare for that rebound, Transition Metals has taken on a more ambitious portfolio of properties than most junior miners. McLean calls the company a “project generator,” because instead of exploring just a few properties, it has 24 across Canada, and one in the United States.

“Generally speaking, it is a pretty niche part of the market,” he said. “Right now is a time when companies are desperate for cash and are forced into raising money at very poor valuations. We don’t have to do that.”

Read more

Access to water and energy new to mining business risks list this year

(Vancouver, September 10, 2014) EY’s annual Business risks facing mining and metals report reveals productivity, capital decisions and social license to operate as the top three risks facing the sector this year.

“Productivity claimed the top spot on this year’s mining risks list as boards and CEOs begin to realize that regaining lost productivity will be critical for long-term profitability,” says Bruce Sprague, EY’s Canadian Mining & Metals Leader. “Capital decisions and social license to operate challenges also continue to weigh heavily on the minds of mining and metals executives here and around the world.”

The complete 2014 top 10 strategic business risks list includes:

1 Productivity (2 in 2013)
2 Capital dilemmas – allocation and access (1)
3 Social license to operate (4)
4 Resource nationalism (3)
5 Capital projects (7)
6 Price and currency volatility (6)
7 Infrastructure access (9)
8 Sharing the benefits (8)
9 Balancing talent needs (5)
10 Access to water and energy (new)

Read more

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North. Ian Ross is the editor of Northern Ontario Business ianross@nob.on.ca.

Sudbury native Gary Halverson has been ousted as president and CEO of Cliffs Natural Resources. As expected, Lourence Goncalves was appointed Aug. 7 to the top job at the Ohio mining giant and was also named chairman of the board.

He replaces Jim Kirsch who served as chairman since July 2013, and Halverson who served as CEO since February. Halverson first appeared on the scene last fall when he was named president and chief operating officer (COO), replacing Joseph Carrabba who retired in November.

Halverson was serving as interim COO of Barrick Gold and had previously worked with Kinross Gold from 2000 to 2004 where he held the general manager role at the Hoyle Pond and Placer Dome Mines in Timmins.

Goncalves is the choice of Casablanca Capital, a New York hedge fund, which won a proxy battle with Cliffs at the company’s annual shareholders’ meeting in Cleveland, July 29.

Read more

Click here for Mine 2014 Realigning Expectations: http://www.pwc.com.au/industry/energy-utilities-mining/assets/Mine-Jun14.pdf

Highlights:

•  Decade-low profits, down 72 per cent
• Record $57 billion in impairments, gold worst
• Costs up, revenues stagnate

The global mining industry’s confidence crisis continued throughout 2013 despite embracing radical measures to improve shareholder returns and enacting new strategies to place the industry on a firmer long-term footing. According to PwC’s 11th annual global report, Mine 2014: Realigning Expectations, a record $57 billion in impairment charges saw profits at the world’s biggest 40 mining companies plunge 72 per cent to $20 billion – the lowest in a decade.

Read more

http://in.reuters.com/

Clyde Russell is a Reuters columnist. The views expressed are his own.

LAUNCESTON, Australia, April 28 (Reuters) – Coal producers in Asia are currently their own worst enemies, raising output in a bid to boost revenue in order to compensate for lower prices.

Economic logic would suggest that when the product you make is in oversupply, eventually prices will fall to the point where output becomes loss-making and is shut down. However, this logic isn’t applying to Asian coal markets, with miners ramping up output by more than demand is increasing.

The short-term impact has been that spot prices have tumbled, with benchmark Australian thermal coal at Newcastle Port dropping to $73.12 a tonne in the week to April 25. That is not far from a four-and-a-half-year low of $72.98 hit last month.

The price is also down 15 percent so far this year and has almost halved since the post-2008 recession peak of $136.30 a tonne, reached in January 2011. The response to this collapse in pricing has resulted in some production leaving the market, most notably in China and the United States.

Read more

http://www.businessweek.com/

Nickel from Russia, the world’s second-largest producer of the refined metal, would be shipped to China in the event of U.S. and European Union trade sanctions, according to a survey by Bloomberg News.

Russian companies selling to Europe and the U.S. would switch to buyers in China, the largest consumer of nickel, said eight out of 12 nickel producers, traders and analysts in the Asia-Pacific region. Punitive measures would increase global prices at least in the short-term, said eight respondents.

Russia took over Ukraine’s Crimea Peninsula last month, sparking the worst tensions since the Cold War. The EU and U.S. have warned of tougher sanctions as pro-Kremlin troops gather at Ukraine’s borders. OAO GMK Norilsk Nickel, the world’s biggest producer of the metal, accounts for 17 percent of global refined output, according to Morgan Stanley. About 46 percent of China’s refined nickel imports come from Russia, making it the country’s biggest supplier, according to Chinese customs data.

“Norilsk will be able to sell their metal to China if the U.S and EU impose strong trade sanctions on Russia,” Xu Aidong, an analyst at Beijing Antaike Information Development Co., said in Beijing on April 1. Xu has studied the metals industry for two decades.

Read more

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

The heavy geopolitical overtones to the flash point on the Crimean peninsula in Ukraine has global commodity markets working overtime on the consequences the crisis could serve up to global energy, minerals and agriculture trade flows.

The initial assessment of the escalating tension by commodity markets was that most (price) concern would be shown in oil and gas markets because of Russia’s dominant supply position to Europe, and Ukraine’s strategically important status as a major thoroughfare for the delivery of that energy.

But the resultant spike in prices did not last, with the prospect of a gas revenue-dependent Russia turning off the gas – or its gas being turned back under some yet to eventuate embargo by western Europe, considered a remote possibility. The threat of disruption nevertheless remains in what Deutsche Bank’s commodities desk described as a “new event risk for commodity markets”.

Europe relies on Russia for 30 per cent of its gas supply, of which 50 per cent has to make its way across Ukraine. The reliance is down from the 80 per cent level before the recent start-up of a new pipeline beneath the Baltic Sea, but remains sufficiently high for the potential for a loss of supply to be a cause of major concern in western Europe, most notably Germany.

Read more

http://www.mineweb.com/

Massive impairments suggest the world’s top 10 gold miners are in serious trouble, but this is just a financial accounting mechanism and doesn’t really adversely affect day to day operations and earnings.

LONDON (MINEWEB) – Based on recent headlines, non-financially-aware observer could be forgiven for thinking mining gold is a sure way to lose money, not to make it. Take the following batch from Mineweb over the past couple of weeks: Barrick cuts reserves 26%; reports $10.34 billion loss. Goldcorp reports $2.71 billion loss; cuts reserves 15%. Newmont Mining reports $2.5 billion loss for 2013.

Kinross Gold reports $3B loss: 33% cut in GEO reserves – to name the most recent. Overall, the world’s top 5 gold miners between them made book losses of some $20.8 billion in 2013. The smaller members of the Top 10 gold mining club who have reported to date all also made book losses, but not quite on the same scale, commensurate with their smaller outputs.

What may surprise the unsophisticated observer is that despite these enormous book losses, the companies have mostly still been able to pay dividends to shareholders, and also, in most cases, their stock prices are substantially higher than they were in December last year due to the rise in the gold price over this period.

Read more

http://www.mondaq.com/

Bill 70, An Act to amend the Mining Act (Québec), passed on December 10, 2013. Most of its provisions came into effect immediately upon Royal Assent. While it was rushed through the legislative process, it is not a major overhaul of the current mining regime. Under Québec’s previous Mining Act, a mining company could make a claim, and convert it into a mining lease upon proof of exploitable reserves. This Bill generally adds certain requirements to the application for conversion, most of which codify existing industry best practices. The main changes are:

Before being granted a mining lease, mining companies must perform and submit feasibility studies, including a scoping and marketing study regarding the processing of ore in Québec. The Ministry of Natural Resources may, on reasonable grounds, require agreements to maximize economic spinoffs in Québec. In addition, no mining leases will generally be granted before the receipt of a certificate of authorization from Environnement Québec and the approval of a restoration and rehabilitation plan.

A committee charged with maximizing community involvement and economic spinoffs must be put in place by the lessee within 30 days of obtaining the mining lease. This committee must have at least one representative of a Native community consulted by the government as part of the project and be composed of a majority of persons independent from the lessee.

Read more