Republic of Mining

COLUMN-Lead gets unforeseen boost from North Korean sanctions – by Andy Home (Reuters U.K. – August 17, 2017)

August 17, 2017

http://uk.reuters.com/

LONDON, Aug 17 (Reuters) – Lead has been an unlikely and unforeseen beneficiary of the North Korea missile crisis. A new round of U.N. sanctions includes North Korean exports of lead concentrate. China, which signed up to the U.S.-drafted resolution, will lose an increasingly significant flow of raw materials to its lead smelters.

The news has reinvigorated a market that had lost its bull narrative thread. London Metal Exchange (LME) lead for three-months delivery hit a nine-month high of $2,537 per tonne on Thursday morning.

Not as exciting as zinc, which has just surged to its highest level in over a decade. But being overshadowed by its more glamorous sister metal is nothing new for lead. Characterised by a lack of statistical clarity and only sporadic news flow, lead tends to get regularly punished on the London market in the form of the popular relative value trade against zinc.

Cameco wins procedural victory in offshore ‘transfer pricing’ tax battle – by Drew Hasselback (Financial Post – August 15, 2017)

August 16, 2017

http://business.financialpost.com/

Cameco Corp. has defeated the Canadian government’s attempt to force about 25 of the company’s senior executives to submit to questioning on how the company uses offshore entities to reduce its tax bill.

The Minister of National Revenue sought a federal court order that would have compelled a long list of the company executives, including current chief executive Tim Gitzel and former CEO Gerry Grandey, to be interviewed by Canada Revenue Agency staff.

The Minister’s request relates to audits of Cameco’s 2010, 2011 and 2012 tax returns. In particular, the CRA says it wants more information on how Cameco uses foreign subsidiaries to reduce its tax bills. The process is called “transfer pricing,” and Canada has rules on when and how it can be done.

USW on expected Vale layoffs: ‘They’re looking for efficiencies. Manpower is one.’ (CBC News Sudbury – August 16, 2017)

August 16, 2017

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

Union representative Myles Sullivan hoping members stay focused at work

Click here for interview: http://www.cbc.ca/player/play/1025770563541

Myles Sullivan, the area coordinator for the USW in northeastern Ontario, is cautioning members of the union to stay focused on safety while at work. Not an easy task, when many of Vale’s workers have questions after the mining giant released a company-only video that suggested impending layoffs for staff.

“It’s a very concerning video, outlining the financial situation of the company,” Sullivan said. “There’s a good future [in Sudbury,] a lot of reserves, but the mines need to produce profits.”

Sullivan said the company hasn’t made any final decisions on layoffs, but with new CEO Fabio Schvartsman at the helm of the company since May, all cards are on the table. “They didn’t say a number, but a global company like Vale they’ll invest where they have the best returns,” Sullivan said. “They’re looking at efficiencies. Of course manpower is one.”

As Good as It Gets: Iron Ore Risks a Reversal as China Cools – by Jasmine Ng (Bloomberg News – August 15, 2017)

August 16, 2017

https://www.bloomberg.com/

Iron ore in the $70s a ton may be as good as it gets for some time. After rallying hard in June and July, the commodity may see its gains unravel over the second half as steel production in China eases back from a record pace just as global miners pump up volumes.

The robust demand that’s supported gains may fade as steelmakers start to dial back output, according to Capital Economics Ltd., which came out first among forecasters in the second quarter, according to data compiled by Bloomberg. Others expecting a drop include Citigroup Inc., Sucden Financial Ltd., Axiom Capital Management Inc. and hedge fund Academia Capital.

“There was some fundamental support for iron ore’s rally, namely strong growth in China’s steel output,” Caroline Bain, chief commodities economist at Capital Economics, said by email. “Stocks at China’s ports are now stubbornly high and if, as seems likely, steel production and demand eases back later in the year, then we see iron ore prices coming under renewed pressure.”

Copper price surges to 32-month high as hedge funds place $20 billion bet – by Frik Els (Mining.com – August 16, 2017)

August 16, 2017

http://www.mining.com/

Copper futures trading on the Comex market in New York raced ahead on Wednesday as global supply disruptions came back into view and large-scale speculators place huge bets on rising prices.

In massive volumes of more than 3 billion pounds by lunchtime copper for delivery in September jumped to a high of 2.9795 a pound ($6,569 per tonne), up more than 3% from Tuesday’s close to the highest since end-November 2014.

Copper’s 2017 year to date gains in percentage terms now top 18% and the red metal has recovered 54% in value after falling to six-year lows below $2.00 a pound in January last year.

Environment v. economy: Canada’s brewing political battle – by Gary Mason (Globe and Mail – August 16, 2017)

August 16, 2017

https://beta.theglobeandmail.com/

There’s a reason the federal Liberals want to include a clause in any rewrite of NAFTA preventing member countries from diminishing environmental safeguards in the name of fuelling investment: It’s an area in which they suddenly find themselves politically vulnerable.

The North America free-trade agreement negotiations are beginning at the same time as the federal government is preparing to bring in new rules that would put more restrictions on companies looking to establish resource development opportunities in Canada.

Provinces are now bracing for the impact of a national carbon tax that is scheduled to be introduced next year in those jurisdictions currently without one, or the equivalent of. (In Ontario and Quebec, that would be cap-and-trade.) The stultifying impact these initiatives could have on resource investment has become a conservative rallying cry in the west, with outgoing Saskatchewan Premier Brad Wall leading the charge.

11 Opportunities in Gold, Uranium and Diamonds (Streetwise Reports – August 14, 2017)

August 16, 2017

https://www.streetwisereports.com/

Former journalist James Kwantes, editor of Resource Opportunities, provides a tour of promising junior mining opportunities, from the extremes of northern Canada to the tropics of French Guiana.

The Gold Report: The U.S. stock market has been in a bull run for a number of years. What are your thoughts on the market and what it means for precious metals?

James Kwantes: Since Donald Trump was elected president, but also for years before that, large-cap U.S. stocks have been a “can’t miss” for investors, who have been rewarded for chasing returns. It seems very toppy to me, but that doesn’t mean it couldn’t go on for a while still. In 2000, in the big tech boom, the market caps of the two or three largest technology companies equaled the market cap of something like every mining company in the world.

We’re at that level again. We’re starting to see weakness in the U.S. dollar, and that’s positive for gold. These things are cyclical. Gold looks like it’s ready for the next longer-term breakout and we’re heading into a period of seasonal strength. We’re starting to see signs of strength in the junior market as well.

TGR: Would you talk about a couple of companies that you like in the precious metals area?

Paulson and other hedge funds rewarded as angst fuels gold – by Luzi Ann Javier(Australian Financial Review – August 15, 2017)

August 16, 2017

http://www.afr.com/

Hedge-fund managers including billionaire John Paulson are being rewarded as investor worries over everything from uneven economic data to US-North Korean tensions fuel a rally in bullion.

At the end of June, Paulson & Co owned 4.36 million shares of SPDR Gold Shares, a US government filing showed on Monday night. That’s unchanged from the three months through March. Bridgewater Associates, the world’s largest hedge fund, added the ETF to its portfolio in the quarter, with the purchase of 577,264 shares valued at $US68.1 million ($86.7 million), a regulatory filing showed on August 10. Templeton Global Advisors boosted its stake in Barrick Gold.

Investors poured $US870 million into SPDR Gold in the second quarter, taking the fund’s total assets to $US34 billion as US inflation continued to undershoot the Federal Reserve’s target, putting at risk policymakers’ projection for rising interest rates. While the prospect of monetary policy tightening remains, investors recently turned their focus on geopolitical strains as North Korea’s Kim Jong-un threatened the US territory of Guam, boosting demand for bullion as a haven.

Vedanta explores ways to produce cobalt for batteries – by Barbara Lewis (Reuters U.S. – August 15, 2017)

August 16, 2017

https://www.reuters.com/

LONDON (Reuters) – Vedanta Resources (VED.L) is studying how to produce cobalt for use in batteries as the diversified miner becomes the latest company to seek exposure to an anticipated electric vehicle boom.

Tom Albanese, who steps down as CEO of Vedanta at the end of August, said the excitement around electric vehicles had prompted the company to looking at producing cobalt suitable for batteries from its Zambian copper mines, rather than just treating it as a copper by-product.

Vedanta is also betting on continued use of conventional fuel and in April completed the merger of its Indian metals and mining group Vedanta Limited (VDAN.NS) with oil and gas company Cairn India Ltd (CAIL.NS).

Activist Shareholder Elliott Raises Stake in World’s Biggest Miner – by David Stringer (Bloomberg News – August 16, 2017)

August 16, 2017

https://www.bloomberg.com/

BHP Billiton Ltd. appears to be heeding investors’ calls for change, activist shareholder Elliott Management Corp. said, disclosing it has boosted its holding in the world’s biggest mining company.

Paul Singer’s Elliott raised its stake in BHP’s London-traded shares to 5 percent, the fund said Wednesday in a statement, from a 4.1 percent interest in April. The fund has an economic interest in 0.5 percent in BHP’s Sydney-listed shares, according to its website.

Under U.K. law, investors holding 5 percent or more have power to call a company meeting. BHP declined to comment on Elliott’s change in holdings.

[Canada Mining] The Top 40 can begin to breathe – by Marilyn Scales (Canadian Mining Journal – August 15, 2017)

August 16, 2017

http://www.canadianminingjournal.com/

Although the economic outlook for Canadian miners brightened somewhat over the last year, this is still a difficult time to be profitable. A look at the current Top 40 ranking by gross revenue (all tables follow text) indicates that the biggest companies remain big, and there was little change from a year earlier.

Agrium again heads the list with gross revenue of $18.1 billion. The fertilizer producer rose to the top of the 2010 list – to the surprise of CMJ editors – and has pretty much stayed there. We shouldn’t be surprised though. A look through the previous 10 years shows Agrium climbing steadily through the ranks and always in the top 10.

With the merger of Agrium and Potash Corporation of Saskatchewan under the Nutrien name, Canada’s potash and fertilizer behemoth can be expected to top next year’s list, too. This year, PotashCorp had revenue of a $5.9 billion and ranked No. 5 in the Top 40 for the third year in a row.

Vale video describes financial status, hints at layoffs: USW – by Samantha Samson (CBC News Sudbury – August 15, 2017)

August 16, 2017

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

Mining giant says video is internally-used communication tool used to describe financial situation

Vale is hinting at future layoffs at their Sudbury operations, according to a United Steel Workers representative. Myles Sullivan, area coordinator for northeastern Ontario, told CBC News that he and representatives from Local 6500 and Local 2020 met with Vale to watch a video describing the company’s current situation.

Sullivan says Vale management wanted union reps to see the video before showing it to workers. “There’s a lot of pressure on the business locally,” says Sullivan. “They’re reviewing their operations, looking at where they can save and contain costs, and they’re very clear in the video that this could mean layoffs.”

Sullivan says the company’s bottom line has been affected by low nickel prices. Meanwhile, management is looking to make Sudbury operations self sustaining. “They have to make enough money not just to profit from their mines, but enough to re-invest and develop new mines and new ore bodies,” says Sullivan.

Canadian bishops call out their country’s mining companies for destructive practices abroad – by Dean Dettloff (America: The Jesuit Review – August 15, 2017)

August 16, 2017

https://www.americamagazine.org/

Canadian mining companies with operations abroad need to be more heavily regulated at home, says a recent letter from the Canadian Conference of Catholic Bishops (C.C.C.B.) addressed to Prime Minister Justin Trudeau.

“We, as Canadians, are among the privileged,” the letter says. “We cannot remain indifferent to the cry of the poor or to the repercussions of environmental degradation on our common home. We cannot accept the unethical way Canadian mining companies have been operating in Latin America or other regions of the world, taking the absence of effective regulatory schemes as a reason to shirk their ethical responsibilities.”

Written by Most Rev. Douglas Crosby, O.M.I., the bishop of Hamilton and president of the C.C.C.B., the letter was also sent to Canadian officials Chrystia Freeland, the minister of foreign affairs; James Gordon Carr, the minister of natural resources; and Carolyn Bennett, the minister of indigenous and Northern affairs.

[Joe Boyle] King of the gold diggers – by Pierre Berton (Globe and Mail – September 25, 2004)

August 16, 2017

https://www.theglobeandmail.com/

“Placer gold is known as Poor Man’s Gold because a lone prospector can
wrest it from the ground with little more than a spade and a sluice box.”

Joseph Whiteside Boyle was a force of nature, albeit a flawed one. In the early days of the 20th century, he was famous, even notorious, on two continents. A man who craved action for its own sake, he had an uncanny instinct for finding where the action was. When the first news of the Klondike strike was making headlines in Seattle and San Francisco, Boyle was already in the vanguard of the ragtag army of gold seekers stampeding north.

Old-time mining methods were not for him. Though he began with virtually nothing, he went on to build, under almost impossible conditions, the largest gold dredges in the world — monstrous floating machines that churned up the storied creek beds and helped revolutionize the placer mining industry in the Yukon.

He came from a middle-class family of four siblings, and there is no suggestion that his upbringing in the quiet ambiance of Woodstock, Ont., was anything but happy. He feared no man but held no grudges. He got along with his opponents, both legal and financial, and they got along with him.