Republic of Mining

Goldman turns bullish on iron ore – for the moment – by Jasmine Ng (Australian Financial Review/Bloomberg – July 28, 2017)

July 28, 2017

http://www.afr.com/

Goldman Sachs boosted its iron ore forecasts after better-than-expected demand in China raised prices, but warned that it remains bearish on next year amid prospects for plentiful mine supplies and a worldwide glut.

The three-month forecast was raised to $US70 a tonne from $US55, and the year-end target increased by $US5 to $US60, according to a report from analysts including Yubin Fu and Max Layton received on Thursday. Next year, prices are still expected to drop, it said.

Iron ore has surged in recent weeks to top $US70 a tonne on sustained demand from China, the largest user. Steel mills in the country have benefited from rising product prices and strong profit margins after the government shuttered some capacity, and remaining producers are making record volumes.

New Gold making “solid progress” on mine opening: Rainy River open-pit project tracks toward November commercial production – Staff (Northern Ontario Business – July 28, 2017)

July 28, 2017

https://www.northernontariobusiness.com/

New Gold reports everything’s on schedule to begin commercial production at its Rainy River open-pit mine development in November. The company reported in its third quarter statement that capital costs are in line with the new development plan the company announced last January.

That was all pleasing to New Gold president-CEO Hannes Portmann, who is pleased with the “solid progress” being made during the second quarter. “Our Rainy River project schedule and capital cost estimate remain in line with New Gold’s updated plan announced on January 30, 2017, and the project is scheduled to transition from construction to operation in the third quarter of 2017,” he said in a July 26 news release.

The project is 65 kilometres northwest of Fort Frances in northwestern Ontario. Last winter, cost over-runs and delays in digging out the open-pit gold mine northwest of Fort Frances forced the company to make sweeping changes on the management steering the project.

A rare earth cooperative for critical minerals could be just what America needs – by Ned Mamula and John Adams (The Hill – July 27, 2017)

July 28, 2017

http://thehill.com/

Dr. Ned Mamula is a geoscientist and associate fellow at the nonprofit R Street Institute in Washington, D.C. Brig. Gen. John Adams (U.S. Army, retired) is the president of Guardian Six Consulting, based in Gulf Breeze, Florida and Washington, D.C.

China is by far the world’s leading producer and exporter of minerals and metals. The nation also is proving increasingly expert at using its mineral resources to influence geopolitics. Even those minerals and metals that are mined outside China find their way there via the world’s most sophisticated supply-chain networks – all according to the design of Beijing’s leaders.

By contrast, the United States is 100 percent import-reliant on more than 20 key minerals and metals essential both to a healthy economy and our national security. Most of these are partially, if not totally supplied by China, which enjoys near complete market power over the all-important rare earth parts industry.

Fertilizer maker Potash Corp beats revenue expectations – by Ahmed Farhatha and Rod Nickel (Reuters Canada – July 27, 2017)

July 28, 2017

https://ca.reuters.com/

(Reuters) – Canada’s Potash Corp of Saskatchewan reported bigger-than-expected revenue on Thursday as it sold more potash at higher prices compared with a year earlier, marking a slow recovery in the oversupplied market.

Potash prices have rebounded modestly since last year but remain low, under pressure from bloated global capacity and soft crop prices. The Saskatoon, Saskatchewan-based fertilizer producer’s revenue rose 6.4 percent to $1.11 billion, beating the average estimate of $1.09 billion.

Potash Corp’s results were mostly in line with expectations, but the company’s second-half prospects may not be bolstered by improving potash market conditions, disappointing some investors, Citi analyst P.J. Juvekar said.

[Anglo American] A Mining Giant Returns From the Dead – by Chris Bryant (Bloomberg News – July 27, 2017)

July 28, 2017

https://www.bloomberg.com/

To those unfamiliar with Anglo American Plc’s share price collapse in 2015, it might seem strange that a company in control of one-third of global rough diamond production couldn’t spare a dime for shareholders.

On Thursday, chief executive Mark Cutifani tried to turn a page on that dark period of routed commodity markets by reinstating Anglo’s dividend. That’s six months earlier than expected. No question, the payout — 40 percent of underlying earnings — is positive, but it may not be enough to close a large valuation gap with peers.

Management had rightly prioritized cutting debt over dividends in recent months, even after rival Glencore Plc began talking up the potential for a bumper payout. But Anglo’s efforts to trim operating expenses and capital expenditure, together with improved cash flow from rebounding commodities, have put its balance sheet on a much firmer footing.

PRESS RELEASE: Clean Energy Transition Will Increase Demand for Minerals, says new World Bank report (The World Bank – July 18, 2017)

July 28, 2017

For the report: http://bit.ly/2uFGrnD

WASHINGTON, July 18, 2017 – A new report released today by the World Bank highlights the potential impacts that the expected continuing boom in low-carbon energy technologies will have on demand for many minerals and metals.

Using wind, solar, and energy storage batteries as key examples of low-carbon or “green” energy technologies, the report, “The Growing Role of Minerals and Metals for a Low-Carbon Future” examines the types of minerals and metals that will likely increase in demand as the world works towards commitments to keep the global average temperature rise at or below 2°C.

According to the report, minerals and metals expected to see heightened demand include: aluminum, copper, lead, lithium, manganese, nickel, silver, steel, and zinc and rare earth minerals such as indium, molybdenum, and neodymium. The most significant example is electric storage batteries, where the rise in relevant metals: aluminum, cobalt, iron, lead, lithium, manganese, and nickel—grow in demand from a relatively modest level under 4°C to more than 1000 percent under 2°C.

Mining warfare in WWI – by Cecilia Keating (CIM Magazine – November 04, 2016)

July 28, 2017

http://magazine.cim.org/en/

During the critical battles of World War One, skilled miners – many of them Canadian – made Allied victories possible

In the First World War trenches cleaved Europe from the North Sea to Switzerland. While the battlefield above ground was static, a secret subterranean war raged underground.

The British Army began to form specialist army units of trained tunnellers in 1915, initially recruiting men from poor coal mining communities in Britain. Their job was to create a labyrinth of long underground tunnels that extended under enemy lines and could be packed with explosives, and to dig ‘camouflets’, smaller mines used to collapse enemy tunnels. They were also tasked with building extensive networks of tunnels behind Allied lines, allowing for undetected movement of men and supplies.

Faced with growing demand for skilled miners, the British government appealed to Canada to raise tunnelling units, or ‘companies’, in September 1915. The first was mobilised in Pembroke, Ontario and recruited men from mining centres in Ontario, Quebec, Nova Scotia, and New Brunswick.

UN Singles Out Tycoon German Larrea’s Grupo Mexico For Unfulfilled Pledge In Ecological Disaster – by Dolia Estevez (Forbes Magazine – July 28, 2017)

July 28, 2017

https://www.forbes.com/

Three years after a mine belonging to Grupo México caused the worst ecological disaster in Mexican history, the mining giant owned by Mexico’s second richest person, German Larrea Mota Velasco, has failed to fulfill its obligations with the victims, a new UN report said.

“Business enterprises have a responsibility to respect human rights independent of States’ abilities and/or willingness to fulfill their own human rights obligations,” the UN said after a special Working Group visited Mexico to review how business practices affect human rights.

In August 2014, Buenavista del Cobre, a subsidiary of Grupo Mexico, spilled 10 million gallons (40,000 cubic meters) of copper sulphate and heavy metals into the Sonora and Bacanuchi rivers. This environmental disaster affected approximately 24,000 people directly and 250,000 people indirectly in seven municipalities on the banks of the Sonora River, 25 miles south of the Arizona border.

UPDATE 1-Eramet plans more nickel cost cuts, to target lower grades – by Gus Trompiz (Reuters U.S. – July 27, 2017)

July 28, 2017

http://www.reuters.com/

PARIS, July 27 (Reuters) – Eramet pledged further cost cuts after its nickel division suffered more losses in the first half of the year and said it would shift strategy by entering the lower-grade nickel pig iron market via a mining project in Indonesia.

Like other nickel miners, Eramet has been grappling with persistent weakness in market prices, partly due to moves by Indonesia and the Philippines to go back on restrictions targetting the mining sector.

In an interim results statement on Thursday, Eramet reported an operating loss of 104 million euros for its nickel branch, against an 89 million euro loss a year earlier, although a strong performance at its manganese unit helped it post group current operating profit of 256 million euros.

Trump’s Already Spooking Buyers of Foreign Steel, Cliffs Says – by Joe Deaux (Bloomberg News – July 27, 2017)

July 28, 2017

https://www.bloomberg.com/

President Donald Trump’s pledge to safeguard U.S. steelmakers from cheap overseas shipments is already working even as hopes fade of an imminent announcement of measures.

At least that’s what Cliffs Natural Resources Inc. Chief Executive Officer Lourenco Goncalves says is happening as buyers shy away from imported steel in case the White House hands down restrictions that would invoke retroactive penalties. The ensuing increase in demand for domestic metal is allowing U.S. producers to push up prices, he said in a telephone interview.

“We are seeing that happening right now,” said Goncalves, whose company sells iron ore to U.S. mills. “Right now there’s a lot of people who are scared.”

Cost-cutting miners shine despite range-bound gold prices – by Sunny Freeman (Financial Post – July 28, 2017)

July 28, 2017

http://business.financialpost.com/

Canadian gold miners posted solid second-quarter profits driven by increasing efficiency at their operations rather than any stellar increase in the price of gold. Toronto-based miners Barrick Gold Corp. and Agnico Eagle Mines Ltd. and Vancouver-based Goldcorp Inc. all surprised analysts with earnings that beat expectations as they continue to drive down their cost of sales.

Historically, the performance of gold companies tends to move in tandem with bullion prices, but the miners better-than-expected year-over-year results came even as the price of gold during the quarter remained virtually flat — up just three per cent over the year before.

Gold companies have been focused on driving down cash costs and paring their portfolios to deal with a years-long decline in the commodities market and those moves during bust times appear to be paying off as the cycle begins to make a more positive shift.

Copper in, nickel out — Vale (Reuters/Sudbury Star – July 28, 2017)

July 28, 2017

http://www.thesudburystar.com/

RIO DE JANEIRO — Brazilian miner Vale SA (VALE5.SA) said on Thursday it would seek out fresh copper mining options and stop expanding nickel production capacity after second-quarter net income plunged on forex losses, rising costs and weaker iron ore prices.

Net income tumbled 99 per cent to $16 million from $1.1 billion a year earlier, far below an average estimate of $421 million.The world’s largest iron ore miner kept making slow progress on cutting net debt, which slipped 3 per cent in the three months through June to $22.12 billion – still a far cry from a target of $15 billion to $17 billion by year-end.

Fabio Schvartsman, who took over as CEO in May, said the company was aiming for $15 billion in net debt in 2018, adding that a company reliant on volatile commodity prices should ideally not be carrying debt at all.

Cathedraltown cow just one of family developer’s personal design cues – by Scott Wheeler (Toronto Star – July 27, 2017)

July 28, 2017

https://www.thestar.com/

Helen Roman-Barber is the daughter of uranium mining magnate Stephen B. Roman, the second most important man in Canadian mining history: http://bit.ly/2gLWkjj

Deli restaurant owner Zane Caplansky has a message for Markham residents upset about the massive cow statue the city installed in their front yards: I’ll take it!

“If you’ve got a beef with that statue, you’ve got a beef with me, because I’m all about beef,” he said Thursday, less than 48 hours after Charity Crescent homeowners met with Councillor Alan Ho to express distaste over the cow their street is named after.

But the donor of the statue, Helen Roman-Barber, who is developing Markham’s Cathedraltown neighbourhood in honour of her family’s deep history in the area, has different plans. “Good luck, guy. Good luck, guy,” she said.

Shocks to Canada’s natural resource sector should be the real cover story – by John Ivison (National Post – July 27, 2017)

July 27, 2017

http://nationalpost.com/

As the prime minister graces the cover of Rolling Stone, the real news this week is how two major natural resources projects have been scuttled by government and the courts

The fawning front cover of the latest Rolling Stone, which features Justin Trudeau and wonders wistfully, “Why can’t he be our President?” also touts a headline promising to explain how the Trump administration is destroying the U.S. Environmental Protection Agency.

Many Canadians will rejoice at the contrast — and, it’s true, few would exchange Trudeau’s golden aura for Trump’s tangerine tincture. But the idea that Trudeau is getting everything right — particularly when it comes to balancing environmental protection and growing the economy — is fallacious. The government is touting the International Monetary Fund’s forecast that Canada will lead the G7 in growth this year. But there is a lag before government action affects the economy.

The warning this week from the Chamber of Commerce that Canada’s climate-change plan and other measures are raising the cost of doing business in this country to breaking point is a canary in the coal mine, gasping from exposure to the toxic gases of too many taxes and too much regulation.

ANC’s Mining Charter response ‘very constructive’ – Anglo – by Martin Creamer (MiningWeekly.com – July 27, 2017)

July 27, 2017

http://www.miningweekly.com/

JOHANNESBURG (miningweekly.com) – The response of South Africa’s ruling African National Congress (ANC) party at its recent policy conference, that further discussion is required on the controversial Mining Charter Three, to ensure that investment and employment levels are not negatively affected, has been described as “very constructive” by Anglo American CEO Mark Cutifani.

Responding to journalists’ questions following Anglo’s posting of strong half-year earnings that hit the $1.5-billion mark and cash flow that soared to $2.7-billion, Cutifani said Anglo was supportive of the legal course of action being followed by the Chamber of Mines, with the ultimate objective being arriving at a solution that was practically implementable and that preserved and enhanced investment in what is a critically important South African industry.

Cutifani cautioned that in the absence of new investment, South Africa would fail to deliver the economic growth required to create greater levels of employment and socioeconomic upliftment for the benefit of all South Africans and reiterated Anglo’s commitment to meeting South Africa’s transformation objectives.