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Zinc Deficiency Gives Investors a Jolt – by Tatyana Shumsky (Wall Street Journal – September 8, 2014)

http://online.wsj.com/home-page

Prices for the Metal Have Soared to 3-Year Highs

The world is running low on zinc, sending some investors scurrying to buy mining-company shares and forcing the U.S. Mint to redouble cost-cutting efforts in search of a cheaper penny.

Prices for the metal have soared to three-year highs. Investors are betting prices will continue to climb as some of the world’s largest zinc mines run dry just as demand is ramping up.

Zinc is used in everything from steel coatings to car tires to sunscreen, and the metal has few substitutes. The U.S. Mint reduced manufacturing costs to offset higher prices for zinc, which makes up 97.5% of every penny. However, steelmakers, which buy about half the world’s zinc, are in a tougher bind. Zinc is one of several rust-resistant metals vital to the steelmaking process where costs have soared this year.

Zinc production is expected to fall short of demand this year for the first time since 2007, according to Goldman Sachs. Several large, aging mines are scheduled to close next year, and miners need higher prices to justify the cost of finding and developing new sources of metal. Miners may not produce enough zinc to meet the needs of steel companies and coin makers until 2018, analysts say. Meantime, a rebound in the U.S. property market and soaring global auto sales are creating new demand for galvanized steel.

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Why the Vale-Glencore merger failed – by Carol Mulligan (Sudbury Star – September 4, 2014)

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

He can only speculate, but a Laurentian University economist offers several reasons why talks between mining giants Vale SA and Glencore to merge the companies’ Sudbury operations may have broken off.

Jean-Charles Cachon, an economist and a professor in Laurentian’s Faculty of Management, said internal restructuring at both firms, the rising price of nickel and copper, and the complexity of harmonizing the Sudbury operations might have put the brakes on merger talks.

Reuters news agency reported this week the companies had stopped talking about forming a partnership in Sudbury, although neither Vale nor Glencore would confirm that. Vale’s head of base metals, Peter Poppinga, did say in July there had been a “strategic break in bigger discussions” between the two companies.

Cachon, who has taught at Laurentian for decades, has followed the two mining companies in Sudbury through several ownerships.

He recalls the former Inco and Falconbridge, now Vale and Glencore, having a plan to merge in 2005. That plan had to be revised and amended when new harmonization talks began between the rebranded companies last year because some operations had closed and new ones had opened since that plan was developed.

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Smart governments encourage foreign investment – Glasenberg – by Martin Creamer (MiningWeekly.com – September 3, 2014)

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

JOHANNESBURG (miningweekly.com) – Smart governments encouraged foreign investment and ensured that they did not make it too difficult or impossible for companies to invest, Glencore CEO Ivan Glasenberg said on Wednesday.

Glencore – which employs 42 500 people at its South African operations, 20 300 of them in coal and 22 200 in alloys, and which last year paid $126-million in taxes and royalties and $490-million in wages – is one of the few mining majors that are continuing to invest in South Africa.

Replying to questions at a media briefing on the prospect of coal being declared strategic in South Africa, Glasenberg said that taking into consideration future growth requirements of Eskom, it was questionable whether the State power utility and South Africa would have sufficient funding to develop the number of coal mines required.

“It would be difficult. You need foreign investment coming in. So whether Eskom is going to make coal a strategic mineral or not, we will invest in this country if we believe that we can get the right returns for our shareholders.

“And what do we bring? We bring a load of money. We invest it in new mines, we employ a lot of people, we pay royalties and taxes and the government gets an ongoing, long-term benefit from us.

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Glencore CEO Rebuffs Anglo American Bid Speculation – by Paul Burkhardt and Jesse Riseborough (Bloomberg News – September 3, 2014)

http://www.bloomberg.com/

Glencore Plc (GLEN) Chief Executive Officer Ivan Glasenberg rebuffed speculation about a possible takeover of Anglo American Plc (AAL), saying the world’s third-biggest miner is only interested in assets it already trades.

“With Anglo, we don’t trade diamonds, if that gives you a good idea, and we don’t trade platinum,” Glasenberg told reporters in Johannesburg today. “We will only look at assets which we trade, which we market,” he said in response to a separate question.

Glencore, the world’s biggest exporter of power-station coal, completed the $29 billion all-share takeover of Xstrata last year to add coal, copper and nickel mines. Anglo American, the largest platinum producer, also controls copper, coal, iron ore, nickel and diamond mines and has a market value of about $36 billion. CEO Mark Cutifani is open to takeover offers, the Wall Street Journal reported yesterday, citing an interview with the Australian.

“Cutifani said someone’s going to take him over, he’s happy,” Glasenberg quipped. A Glencore bid for Anglo American is increasingly possible next year as the stock widens its outperformance over its smaller rival, Jefferies LLC analyst Chris LaFemina wrote in a report today.

“This outperformance, combined with Glencore’s completion of the full integration of the Xstrata acquisition and a strong strategic rationale for Glencore to acquire Anglo, should make Anglo a compelling target for Glencore some time next year,” LaFemina said.

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Vale, Glencore break off talks over Canada nickel deal: sources – by Silvia Antonioli (Reuters U.S. – September 2, 2014)

http://www.reuters.com/

LONDON – (Reuters) – Vale (VALE5.SA) and Glencore (GLEN.L) have broken off talks over combining their nickel assets in Canada in a deal that could have produced over $1 billion in annual cost savings, sources close to the matter said.

The discussions over linking the two companies’ neighboring nickel mining and processing facilities in the Sudbury basin in southeast Canada broke down partly due to disagreement over how to share the costs and savings and to worries about government and labor union reaction to potential job cuts and shutdowns, the sources said.

At the same time, a recovery in nickel prices has made cost rationalization less urgent, they added.

“Both sides more or less agreed on what the optimum structure of a combined Sudbury business would look like, but to enable that to be created, very difficult decisions needed to be taken, and the appetite or the ability to take those decisions was not there,” a source with knowledge of the situation said.

Glencore and Vale declined to comment. One of the sources said differences in corporate culture — with Swiss-based trader and mine operator Glencore more willing to take risk and Brazilian miner Vale more conservative — also played a role.

A combination of the nickel assets in Canada had already been attempted by their previous owners, Inco and Falconbridge, which in the mid-2000s came close to an agreement before they were acquired by Vale and Xstrata.

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Glencore Mine in Doubt After Dominican Park Bill Passes – by Bill Faries (Bloomberg News – August 28, 2014)

http://www.bloomberg.com/

The future of Glencore Plc’s (GLEN) shuttered ferro-nickel mine in the Dominican Republic was cast into doubt after passage of legislation declaring the region surrounding the mine a national park.

The Senate approved a measure yesterday creating a protected area at Loma Miranda, home to the Falcondo mine. Glencore, led by billionaire Chief Executive Officer Ivan Glasenberg, called for “rationality” in decision-making on the mine’s future, the Baar, Switzerland-based company’s local unit said in a statement today.

The cost of permits to operate the mine will rise if the national park legislation is signed into law by President Danilo Medina. Affected landowners will be compensated, according to the bill. The mine, which Glencore acquired in 1956, contains 19.3 million tons of minerals.

“With operations at Loma Miranda, the Dominican economy would receive some $5.7 billion during the next 20 years,” according to the statement. “Where will those resources come from now?”

The Caribbean nation’s government has clashed with mining companies in recent years over royalties and environmental regulations. Dominican customs agents held up shipments from Barrick Gold Corp. (ABX)’s $4 billion Pueblo Viejo mine last year after Medina called the company’s concession “unacceptable.” Glencore temporarily shuttered the Falcondo mine last year due to low global nickel prices.

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Glencore, Jinchuan frontrunners to buy BHP’s Nickel West – by Sivia Antonioli and Polly Yam (Reuters U.S. – August 27, 2014)

http://www.reuters.com/

LONDON/HONG KONG – (Reuters) – Commodities trader and miner Glencore (GLEN.L) and Chinese nickel producer Jinchuan Group are the frontrunners to buy BHP Billiton’s (BHP.AX)(BLT.L) Australian Nickel West division, two sources close to the situation said.

BHP, the world’s largest mining company, announced plans last week to spin off businesses worth an estimated $16 billion but said that Nickel West in western Australia would not be part of the demerged group.

Chief Executive Andrew Mackenzie has said the company was in talks with potential buyers for all or part of Nickel West.

Estimates of the value of Nickel West vary greatly, with some analysts and industry sources putting it at anything up to $1 billion and others tagging negative figures to an asset they say is burning cash. “It’s a race between Glencore and Jinchuan now,” the first source said.

Jinchuan is “very interested” in Nickel West and plans to ship about 30,000 tonnes of nickel concentrate to China if it takes over the business, said the China-based second industry source, who had been briefed about the plan but declined to be named because of the sensitive nature of the matter.

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Raglan mine: Canada’s first industrial-scale wind and energy storage facility – by Henry Lazenby (MiningWeekly.com – August 22, 2014)

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

WASHINGTON – The decision to install a 3 MW wind turbine at Glencore’s Raglan mine came after nearly five years of careful investigation, assessment, and analysis, says Jean-Francois Verret, director of strategy, projects, and public affairs.

Because of the Arctic conditions at the mining site, which sits on the Ungava Peninsula, in Nunavik, roughly 1 800 km north of Montreal, gathering in-depth data was an essential first step.

This summer, the Raglan mine began installing its first wind turbine, manufactured by Enercon, in Germany. If all goes as planned, Verret predicts that this wind turbine would replace about 5% of the mine’s diesel consumption – or 2.4-million litres of diesel.

A project like this also holds out the promise of significant cost savings. At the Raglan mine, energy typically accounts for 18% to 23% of operating costs. If the wind pilot goes well, Raglan was considering installing additional wind turbines that could generate a total of 9 MW to 12 MW of energy, slashing the mine’s overall diesel consumption by 40%.

In 2009, Raglan launched a study to investigate options for the mine and its fully diesel-powered operations. The nickel/copper mine’s remote locale meant that it would be impossible to connect to the hydroelectric grid or to the natural gas network.

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Glencore to Buy Back $1 Billion of Stock as Profit Gains – by Jesse Riseborough (Bloomberg News – August 20, 2014)

http://www.bloomberg.com/

Glencore Plc (GLEN)’s billionaire Chief Executive Officer Ivan Glasenberg underscored his belief in the longevity of the global commodities boom by beating his biggest rivals in handing out surplus cash to investors.

Glencore, the third-largest miner by market value, today announced a $1 billion share buyback after first-half profit gained 8 percent on higher production. Investors in BHP Billiton Ltd. (BHP) sent the stock down the most in more than three years in London yesterday after the world’s biggest mining company chose to retain cash because of weaker commodity prices.

Global mining investors have been demanding greater returns following a period marked by failed acquisitions and spending on mine expansions that flooded metals markets. After a decade of explosive price gains fueled by Chinese demand, often defined as the commodities supercycle, mining companies are contending with slower growth by spurning mergers and cutting costs.

“The supercycle ain’t over, China is still buying, demand for commodities hasn’t tapered off, it’s even higher than it’s ever been,” Glasenberg said today in an interview. “The demand is pretty good. We’ll grow. We may do acquisitions where you’re not creating more supply in the market.”

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Mining giant Glencore makes good on pledge with $1 billion buyback – by Sivia Antonioli (Globe and Mail – August 20, 2014)

http://uk.reuters.com/

LONDON – (Reuters) – Commodities group Glencore (GLEN.L) became the first of the large miners to honor promises to return cash to shareholders, announcing a share buyback program of up to $1 billion as it reported forecast-beating first-half profit.

Diversified mining companies have vowed to control their spending and reward shareholders more after being criticized for years of squandering money on risky projects that resulted in multibillion-dollar writedowns as metals prices started to fall.

However, rival BHP Billiton (BHP.AX)(BLT.L) failed to deliver when it held fire on an expected buyback announcement on Tuesday, while Rio Tinto (RIO.L)(RIO.AX) signaled a share buyback could come when it reports full-year results in February.

Expectation of Glencore making good on its promise was heightened with this month’s completion of the sale of Glencore’s Peruvian copper project Las Bambas to a Chinese consortium for $6.5 billion after tax, either through a buyback or special dividend.

Glencore, which completed a record-breaking acquisition of rival Xstrata a little more than a year ago, is the world’s largest producer of zinc, used to galvanize steel, and one of the top miners and traders of copper and nickel.

However, while it has noted cost overruns at its Koniambo project in New Caledonia, it was the balance-sheet improvement from the Las Bambas sale that allowed it to accelerate the return of capital to shareholders.

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Tailings ponds in northern Ontario considered safe, scientist says (CBC News Sudbury – August 07, 2014)

http://www.cbc.ca/news/canada/sudbury

David Pearson says what happened in B.C. is unlikely to happen here

A tailings pond breach in central British Columbia this week is raising questions about how mine waste is being taken care of in northern Ontario.

The recent disaster at the Mount Polley Mine released billions of litres of wastewater into river systems. But, according to Laurentian University professor David Pearson, the tailings ponds here in the North often aren’t built at all.

They’re existing lakes or wetland — and that’s what makes them safer. “It’s not like a pond on a parking lot where a break would cause a massive flood,” Pearson said.

Even so, companies that want to mine in Ontario must prove they can rehabilitate a site or pay for a cleanup before they begin production. And the Ministry of Northern Development and Mines makes inspections every few years.

Former Glencore scientist Lisa Leger said Ontario has strict protocols to prevent what happened in B.C. “I was heavily involved in risk management and know that the companies will definitely listen to all the concerns.” But environmental groups like Mining Watch Canada remain skeptical that full-site rehabilitation after such a disaster is ever possible.

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Rodriguez would renew fight for resource revenues – by Ben Leeson (Sudbury Star – August 7, 2014)

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

Some may call it an old idea. John Rodriguez calls it unfinished business.

The former Greater Sudbury mayor, who’s running again in the municipal election in October, said he’ll take up the fight once more to tackle the municipality’s $700-million infrastructure deficit by seeking “a fair share” of resource revenues.

Rodriguez made the announcement in front of the Ministry of Northern Development and Mines in Sudbury on Wednesday.

“It’s a question of justice, of fairness,” Rodriguez said. While the province receives royalties from the ores mined in Greater Sudbury – to the tune of $50 million in 2007, based on figures supplied by Rodriguez – the city does not.

Greater Sudbury does get 7.5 cents per tonne for gravel under the Aggregate Resources Act, while the province gets 13 cents.

“But for ores, we don’t get a penny,” Rodriguez said. “We have these major roads in the city – Lasalle Boulevard, Falconbridge Road, Cote Boulevard, (Municipal) Road 15, (Highway) 69 North — that are used as major routes for transporting ores from the mines to the smelters and refineries, yet we bear the cost of repairing these roads. You can set your clock by it, or your calendar. Every four or five years, we have to resurface the roads, but we don’t receive any royalties to help us offset the cost of repairing these roads.

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UPDATE 2-Glencore courts Guinea’s iron ore treasures- document – by Silvia Antonioli and Alexandra Reza (Reuters India – July 6, 2014)

http://in.reuters.com/

LONDON, Aug 5 (Reuters) – Miner and commodity trader Glencore has expressed interest in iron deposits in Guinea, a presentation obtained by Reuters shows, although the company said it had not pitched for a stake in Simandou, the country’s largest deposit.

Glencore is the latest mining major looking to invest in iron ore assets in Guinea. Most interest is focused on Simandou, one of the world’s biggest deposits.

Any potential investors in Simandou are treading carefully, however. Israeli-owned BSG Resources, which was stripped of its license to develop part of Simandou following a Guinean corruption investigation, is seeking arbitration and has threatened to sue companies that invest in its former license area.

Three sources close to the government said London-listed Glencore had indicated its interest in investing in Simandou, in a meeting with government officials in Conakry in June.

A copy of a power point presentation, which the sources said a Glencore representative delivered at the meeting, includes a reference to Glencore having the financial and technical ability to develop big projects in the region and “the willingness to proceed very quickly together with the government to the exploitation phase of iron ore projects”.

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Timmins’s Kidd Operations earn reclamation award – by Ron Grech (Timmins Daily Press – July 30, 2014)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – As David Yaschyshyn leads the way towards the former jarosite pond site, a cool mild breeze carries a waft of clover from the field up ahead.

Yaschyshyn, the environmental manager at Kidd Operations (Glencore), points to the ground, noting the fresh moose tracks along the trail.

“Since the jarosite pond has been reclaimed and re-vegetated, we have seen hundreds of geese. We’ve seen bears and their cubs and even moose wandering across. So it really has been returned to nature. It’s now an open meadow ecosystem.”

Yaschyshyn isn’t exaggerating. The 50-hectare area that was once a dumping pond for a liquid byproduct of the zinc refinery process is now covered waist-high in wildflowers and native grasses.

The jarosite (iron sulphate mud) pond was built in 1971 and was used as part of the smelting process from 1972 until the refinery at the metallurgical site closed in 2010.

After that there was no use for the storage pond, so it was dewatered, dried, covered with layers of stones, gravel and dirt, before being sealed with a specially designed 60-millimetre thick plastic liner.

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Glencore’s Female Director Marks Mining Industry Progress – by Jesse Riseborough (Bloomberg News – July 17, 2014)

http://www.bloomberg.com/

Mining companies, long laggards in appointing women to their boards, are starting to catch up under pressure from corporate governance groups and activist shareholders.

The latest is Glencore Plc, the Swiss commodity trader, which on June 26 appointed mining executive Patrice Merrin. Prior to her arrival, Glencore was the last company left on the U.K.’s FTSE 100 Index with an all-male board. At the start of last year, five of the seven corporations on the U.K.’s FTSE-100 Index without women board members were mining companies. Now all five have at least one woman director.

“If a board has open spots and open-minded men, finding outstanding women is the easy part,” said Beth Stewart, a former Goldman Sachs Group Inc. investment banker and founder of executive search company Trewstar Corporate Board Services, which focuses on placing women directors.

Merrin’s appointment to the board of Glencore and her public endorsement of a goal of appointing women to a third of all board seats is a milestone for the $80 billion company run by billionaire Ivan Glasenberg and may open opportunities for more women directors.

Glasenberg’s company had been a lightening rod for criticism from activists, shareholders and U.K. business secretary Vince Cable for its all-male board.

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