Republic of Mining

BHP’s $6bn potash play a misstep, warns Elliott Management – by Matt Chambers (The Australian – July 20, 2017)

July 20, 2017

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

New York hedge fund Elliott Management says BHP Billiton’s plans to approve a $US4.7 billion ($6bn) potash project in Saskatchewan are alarming, with the activist fund querying whether potash could be “the next shale”.

“This sounds alarmingly familiar and comes as the company proclaims the dubious strategy of ‘Thinking Big’ — a concept that has been disastrous for BHP shareholders,” an Elliott spokesman said. “We share the deep concerns raised by analysts and shareholders that expanding into potash could be a severe strategic misstep,” Elliott said, without naming the analysts or shareholders.

“Think Big” is the slogan BHP has used in a $10 million ad campaign in recent months that has dropped the Billiton name for marketing purposes.

[Ring of Fire Ferrochome Facility] Thunder Bay in the mix – by Brigitte Petersen (Thunder Bay Chronicle-Journal – July 20, 2017)

July 20, 2017

http://www.chroniclejournal.com/

Toronto-based mining company Noront Resources revealed its plan to build a ferrochrome processing facility (FPF) in Northern Ontario Wednesday at the Valhalla Inn to a crowd of about 130 people. The company is considering locating the plant, which could initially create up to 350 jobs, in either Thunder Bay, Sault Ste. Marie, Timmins or Sudbury.

The Thunder Bay Community Economic Development Commission (CEDC) and Fort William First Nation Economic Development Corporation invited Noront to deliver a preliminary presentation about plans for the FPF, and to discuss any advancements with the Ring of Fire, a mineral-rich zone located 400 kilometres northeast of Thunder Bay.

Chromite is used to make stainless steel. Noront wants to process ferrochrome, an alloy of chromium and iron, to sell to stainless steel producers. “The demand for stainless steel continues to rise,” said Alan Coutts, Noront’s president and CEO, adding that Noront’s ferrochrome product would be shipped to U.S.-based stainless steel plants.

Ivanhoe’s Congo Success Follows Deals With Kabila’s Brother – by Thomas Wilson (Bloomberg News – July 18, 2017)

July 20, 2017

https://www.bloomberg.com/

In the two decades since billionaire mining investor Robert Friedland founded Ivanhoe Mines Ltd., his small team has made some of the biggest mineral discoveries in the world.

In the Democratic Republic of Congo, it has done so while trading and contracting with companies controlled by one of President Joseph Kabila’s brothers, searches of thousands of pages of Congolese corporate records obtained by Bloomberg show.

Ivanhoe’s unearthing of Africa’s largest copper deposit in Congo last year after more than a decade of exploration work has helped quintuple the company’s stock price, making it the best performing share on the main Canadian index over the past 12 months. The discovery adds to other successes by Friedland, which include building the Oyu Tolgoi copper-and-gold mine in Mongolia’s Gobi Desert and discovering the Voisey’s Bay nickel deposit in Canada, which he sold in 1996 for more than $3 billion. He also plans a platinum mine in South Africa.

Game changer: NIRB now says yes to Nunavut’s Back River mine – by Lisa Gregoire (Nunatsiaq News – July 19, 2017)

July 19, 2017

http://www.nunatsiaqonline.ca/

“Sabina’s revised plans now constitute some of the most protective caribou protection measures ever developed for the Arctic”

It turns out that now is a good time to go ahead with Sabina’s Back River gold mine project. After saying “no” to the multi-million dollar Kitikmeot project in June 2016, and being told by a federal minister that “no” was the wrong answer, the Nunavut Impact Review Board “has concluded that the Back River Gold Mine Project Proposal may proceed at this time.”

However, the NIRB says this was not a foregone conclusion.

“For those who may have expressed concern that the Board’s further consideration of the Project would be a ’rubber stamp’ only, and would not lead to any substantive improvements to the Project, the Board notes that the further consideration was conducted with the same care and thoroughness as the original assessment,” the NIRB said in a July 18 news release.

Romano pressing for mid-August Ring of Fire tour – by Elaine Della-Mattia (Sault Star – July 19, 2017)

July 19, 2017

http://www.saultstar.com/

“There’s a few challenges that we’re addressing now,” Romano said during a Northern Ontario media conference call led by PC leader Patrick Brown. Romano, elected in a provincial byelection just more than a month ago, has been named Northern Ontario’s critic of jobs and the Ring of Fire.

He said that since starting his role about 40 days ago, he’s met with executives from NorOnt on three occasions and has established a good line of communications with them. “I’m running a lot of laps on this one,” he told The Sault Star. “There is an issue that needs to be resolved and I am trying to assist the Economic Development Corp., who is lead on this one, for their bid submission to NorOnt.”

Brown said if the PC’s form the next provincial government, he vows to build the Ring of Fire transportation corridor and dedicate the funds needed to do so in order to create opportunities in the North.

COLUMN-Lithium supply pipeline is filling but will it be enough? – by Andy Home (Reuters U.K. – July 19, 2017)

July 19, 2017

http://uk.reuters.com/

LONDON, July 19 (Reuters) – The electric vehicle revolution is gathering momentum. Barely a week goes by without a fresh, starting revelation, whether it be Sweden’s Volvo promising to phase out traditional internal combustion engines from 2019 or France aiming to end the sale of gasoline and diesel vehicles by 2040.

And, of course, leading the electric charge is the poster child of the green technology revolution, Tesla, which is gearing up to roll out its Model 3, the long-awaited break-out from niche to mass market.

The ambition is to be producing 20,000 per month by the end of the year. Whether reality matches such lofty goals remains to be seen. Tesla delivered around 47,000 vehicles in the first half of the year, at the lower end of its own forecasts, due to a “severe shortfall” of battery packs.

This CEO Wants Trump to Nationalize the Only Rare-Earth Mine in America – by Sally Bakewell and Steven Church (Bloomberg News – July 18, 2017)

July 19, 2017

https://www.bloomberg.com/

The head of an advanced-materials manufacturer said he met with President Donald Trump’s chief strategist, Steve Bannon, on Monday to persuade him that the U.S. should nationalize the country’s only mine of rare earth minerals, which are used in military applications.

“The staff understood the urgency of the matter,” Michael Silver, chief executive officer of closely held American Elements Corp., said in a phone interview after his White House meeting, which he said was also attended by presidential deputy assistant Sebastian Gorka and White House Chief of Staff Reince Priebus.

The rare-earth mining operations in Mountain Pass, California, the last remaining assets of bankrupt Molycorp Inc., were bought in June by a group that drew objections from rival bidders, who said the winner has ties to the Chinese government.

[Yukon Mining] S-6 failed to offer perfect solutions: Cathers – by Sidney Cohen (Whitehorse Star – May 18, 2017)

July 19, 2017

http://www.whitehorsestar.com/

In a rare turnabout, the Yukon Party is throwing its support behind Bill C-17, federal legislation that repeals four contentious amendments made to the Yukon Environmental and Socio-economic Assessment Act (YESAA) by the previous Conservative government through Bill S-6.

“Moving forward with the amendments contained in Bill C 17 is probably the best course of action at this point in time because of the concerns by CYFN (Council of Yukon First Nations) and individual First Nations,” Yukon Party MLA Brad Cathers told the House on Wednesday.

The legislative assembly unanimously voted Wednesday in favour of a motion to support the federal Liberals’ efforts to pass Bill C-17, which is currently before Parliament. YESSA spells out the process for assessing all Yukon lands for development, and is part of the Umbrella Final Agreement between Yukon First Nations, the territory and Canada.

Environment at risk from clean energy switch, says World Bank – by Henry Sanderson (Financial Times – July 18, 2017)

July 19, 2017

https://www.ft.com/

A transition from fossil fuels to mitigate the impacts of climate change will require large amounts of metals and rare earth elements that could create environmental challenges, the World Bank has warned.

Technologies needed to meet the Paris climate agreement from wind, solar, and electricity systems are “more material-intensive” than our current fossil-fuel supply systems, a report by the bank said.

The mining or extraction of metals and rare earth elements could create environmental problems in terms of energy, water and land use, the report said.

Investors Are Pouring Money Into Silver ETFs – by Eddie Van Der Walt (Bloomberg News – July 18, 2017)

July 19, 2017

https://www.bloomberg.com/

Silver, known for being a market of extremes, is living up to its reputation this year. Prices rallied 17 percent in the first four months of the year, only to reverse and wipe out those gains.

Despite the selloff, investors are pouring money into exchange-traded funds, and assets have reached a record 21,211 metric tons, valuing the holdings at $11 billion. At the same time, the picture is bearish in the futures market, where hedge funds now hold the first net-short position in two years.

Different kinds of investors are driving the opposing trends, according to George Coles, an analyst at research firm Metals Focus Ltd. Large, active hedge funds shorted Comex futures because of the risk of higher U.S. interest rates, driving silver prices lower, he said. ETF buyers tend to be smaller traders that use silver for long-term diversification of their portfolios. They’ll be rewarded for their bullishness as slower U.S. economic growth spurs demand for haven assets, Coles said.

Will Indonesian diamonds shine on the global market? – by Jun Suzuki (Nikkei Asian Review – July 19, 2017)

July 19, 2017

http://asia.nikkei.com/

BANJARMASIN, Indonesia — Cempaka Diamond Mine in southern Kalimantan, the Indonesian portion of the island of Borneo, is seen by some experts as one of the richest diamond fields in the world. A 166-carat stone and a rare blue diamond were discovered there in the past.

But with the halt of large-scale mining halted due to environmental and other problems, local people now engage in traditional methods of diamond hunting. Recently, however, a local entrepreneur has begun an effort revive industrial mining in the area. Although the hurdles to resuming full-scale operations appear high, expectations are growing that once begun, such work will contribute to the local economy. The hopes are that Indonesia will shine in the global jewelry industry.

Cempaka, a small village roughly 45km from Banjarmasin, the capital of the province of South Kalimantan, is pocked with large man-made holes. At the bottom of one, local men sift earth and sand in basins in a small pond.

Five-year junior mining drought is over – by Nelson Bennett (Business Vancouver – July 18, 2017)

July 19, 2017

https://www.biv.com/

But investment flowing back into junior exploration mining sector might bypass B.C. because of new government

Initial public offerings, mergers and acquisitions, major financing deals – the signs are abundant that a five-year drought for the junior mining sector might be truly over. And while B.C. hosts the majority of Canada’s junior exploration companies – not to mention commodities, like copper and gold, that they are prospecting for – at least one mining consultant fears that little of the investment now flowing will be spent on exploration in B.C.

The turnaround for the mining sector started about a year ago with a rebound in metal prices. Mining majors are typically the first to benefit from higher metal and mineral prices and renewed investor confidence. Investment in the higher-risk early-stage exploration sector always lags.

But money is again flowing to juniors with projects at the late-exploration or early-development stage, according to several reports and indicators.According to PwC, there were five junior mining IPOs on the TSX Venture Exchange in 2017’s first half compared with none in 2016’s first half. PwC estimates that $39.2 million was raised on the venture exchange in the first half of this year.

Potash call marks fork in the road for BHP’s Ken MacKenzie – by Stephen Bartholomeusz (The Australian – July 18, 2017)

July 19, 2017

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

It could be regarded as a deliberate provocation, a statement of defiance and intent. The latest addition to BHP Billiton’s “Prospects” blog will, intentionally or not, irritate the group’s activist stalker, Elliott Management and its supporters. In the blog item, BHP’s principal potash analyst, Dr Paul Burnside, makes the demand-side case for potash, promising an analysis of the supply side in a future entry.

The issue is somewhat controversial in the context of BHP and Elliott’s attempt to force its own agenda on the company. BHP has, of course, already committed $US3.8 billion to its Jansen potash project in Canada and earlier this year foreshadowed a decision as early as next year on whether to proceed with the first phase of a project that could cost a further $US8bn to $US10bn.

Despite the dramatic reductions in its capital investment once the commodity boom ended, BHP and its chief executive Andrew Mackenzie have remained enthusiastic about the long-term prospect of entering the potash market and adding a “fifth pillar” to BHP’s portfolio of iron ore, coal, copper and petroleum.

BHP-Vale JV Excused From Paying $6.3 Billion Legal Guarantee – by R.T. Watson (Bloomberg News – July 19, 2017)

July 19, 2017

https://www.bloombergquint.com/

(Bloomberg) — A Brazilian judge denied a request by prosecutors for companies and individuals facing criminal charges related to a dam spill to pay financial guarantees, according to court documents obtained by Bloomberg.

The stalled Samarco Mineracao SA joint venture and its owners BHP Billiton Ltd. and Vale SA won’t have to pay a 20 billion-real ($6.3 billion) guarantee while the case is being tried and final damages calculated, the documents show. The judge also ruled that the individuals aren’t required to pay any financial guarantees or be subjected to travel restrictions such as passport seizure.

Federal prosecutors filed criminal charges including homicide against 21 people linked to the operators and owners of the iron-ore mine, while also accusing defendants of a series of environmental crimes. A November 2015 tailings dam collapse killed as many as 19 people and polluted waterways in two states. Among the accused individuals are Vale’s head of iron ore, Peter Poppinga, and Samarco chief executive officer at the time of the incident, Ricardo Vescovi. The case could go before a jury.

Canadian Mining: Nothing To Hide – by Ashley Renders (Vice News Canada – July 18, 2017)

July 19, 2017

https://news.vice.com/

Thanks to a new rule, the Canadian mining industry has become a lot more transparent

The amount of money that companies like Barrick Gold and ExxonMobil actually give to governments of countries that they extract resources from is now publicly available online thanks to a Canadian bill that was passed back in 2015.

This is significant because that information cannot be gleaned directly from the annual reports of publicly-listed companies, making it difficult to determine if resource companies were actually paying their fair share in taxes and royalties to governments.

The Extractive Sector Transparency Measures Act (ESTMA) was brought into force on June 1, 2015, and required that all oil, gas and mining companies listed on Canadian stock exchanges disclose payments to governments of $100,000 CAD and over on a project-by-project basis.