Republic of Mining

Global investors shun India as steep taxes make mining unviable – by Jayajit Dash (Business Standard – June 21, 2017)

June 22, 2017

A higher tax burden on the mining industry in India compared to other resource-rich countries is making mining an unviable activity and driving away investments from the sector.

A huge gap has been found between the effective tax rate (ETR) on mining in India vis-a-vis other mineral-rich nations such as Australia, Canada, South Africa, the US and Mongolia. Data by the Federation of Indian Mineral Industries (Fimi) shows that the ETR on an iron ore mine in the country, after including a cocktail of levies, comes to 64 per cent in the case of new mines allocated after the amended Mines and Minerals- Development & Regulation (MMDR) Act, 2015.

For the older mines, it is still higher at 69 per cent. The ETR excludes service tax at 15 per cent of the royalty, 10 per cent tax levied by the Supreme Court in Goa and Karnataka and the Forest Development Tax (FDT) levied by the Karnataka government. That apart, Odisha, the largest iron ore producer, levies the highest royalty rate on even the lowest grades of iron ore fines.

“This transaction will … [create] one of the largest cobalt exploration companies in the world” – by Staff (Mining Journal – June 22, 2017)

June 22, 2017

http://www.mining-journal.com/

Australian-based Cobalt One has entered a trading halt pending an announcement on the merger proposal. The two companies signed an option agreement earlier this month whereby First Cobalt was granted an option to acquire 50% of Cobalt One’s cobalt assets in the Cobalt region of Ontario.

Cobalt One’s assets include a cobalt refinery while First Cobalt’s assets include the former producing Keeley-Frontier silver-cobalt mine in Ontario and cobalt exploration ground in the Democratic Republic of Congo.

Under the “friendly merger” proposed by First Cobalt, Cobalt One would hold 60% of the enlarged company, with its chairman Paul Matysek, CEO Jason Bontempo and director Bob Cross to go onto the First Cobalt board.

After Rainforest Victory for Brazil’s Environmentalists, a Mining Battle Looms – by R.T. Watson (Bloomberg News – June 21, 2017)

June 22, 2017

https://www.bloomberg.com/

Opponents of unbridled development of Brazil’s Amazon region scored a victory this week when environmentalists fronted by supermodel Gisele Bundchen persuaded President Michel Temer to veto legislation that would have removed protections on more than 1 million acres. A battle over Amazon land about 300 times that size may be looming.

The mining ministry has proposed legislation that would end a nearly 40-year ban on foreign-owned mining companies operating on land near the roughly 16,000-kilometer (10,000-mile) border. The zone, which extends about 150 kilometers inland, accounts for 27 percent of Brazil’s national territory, according to the mining ministry.

Because most of Brazil’s western border also incorporates parts of the world’s largest rainforest, the amount of Amazon biome in the border zone would total more than 1.7 million square kilometers, an area about the size of Alaska, or more than twice the size of Texas.

The world prefers Canadian oil and gas over other exporters, so let’s start getting it to them – by Germain Belzile (Financial Post – June 15, 2017)

June 22, 2017

http://business.financialpost.com/

Germain Belzile is senior associate researcher at the MEI (www.iedm.org)

Global energy demand will rise by 30 per cent between 2015 and 2040, according to the World Energy Outlook 2016 published in November by the International Energy Agency (IEA). And although renewable energy will play an increasingly important role, the IEA predicts that demand for natural gas will increase by 50 per cent over this period, largely at the expense of coal, which is much more polluting, while oil consumption will increase by 12 per cent.

Canada, of course, is a significant producer of oil and natural gas. We have the third-largest global reserves of crude, and we are the fifth-largest producers of natural gas. Given the difficulties encountered by our oil and gas industry in getting its products to market, however, we might well wonder if consumers even want Canadian oil and gas products.

Two recent polls shine a light on the opinions of Canadians and of the citizens of 31 other countries when it comes to Canadian petroleum products. The results may be surprising to some. Canada was the most preferred supplier of oil and natural gas in a global poll.

Australian miners lag on innovation and technology – report – by Esmarie Swanepoel (MiningWeekly.com – June 20, 2017)

June 21, 2017

http://www.miningweekly.com/

PERTH (miningweekly.com) – A report by global consulting firm VCI has warned that the Australian resources sector is falling short on innovation and technology strategy.

VCI’s ‘State of Play’ report surveyed over 800 leaders from 321 companies in the global mining industry and uncovered that, while 66% of Australian mining executives say their companies are prepared for digitalisation, only 26% are focusing on innovation plans that extend beyond just three years.

Despite nearly 98% of Australian mining company leaders indicating innovation is ‘important’ or ‘critical’ to their long-term business strategy, when it came to their company’s focus on a long-term strategy, Australia ranked last in the globe, trailing other major mining regions including South Africa, India and North America.

‘Something forward-thinking, with the promise of innovation’: PotashCorp, Agrium to merge as Nutrien – by Alex MacPherson (Saskatoon StarPhoenix – June 21, 2017)

June 21, 2017

http://thestarphoenix.com/

A process engineer from Ohio and business manager from Texas came up with the ideas that inspired Nutrien Inc., the name of the new company that will be formed in the planned merge of Potash Corp. of Saskatchewan Inc. and Agrium Inc. later this year.

Announced Wednesday, almost 10 months after the companies confirmed that a US$26-billion deal was in the works, the name emerged from a massive contest that resulted in employees from the two companies submitting more than 4,000 ideas.

“Quite literally, the list of names went from ‘Abundantly’ to ‘Zon Terra,’” PotashCorp spokesman Randy Burton said, adding that most of the suggestions — from the Latin “Fertilis” to the Greek “Auxesia” — reflected the combined companies’ businesses.

Cheaper Solar in India Prompts Rethink for Coal Projects – by Anindya Upadhyay and Rajesh Kumar Singh (Bloomberg News – June 1, 2017)

June 21, 2017

https://www.bloomberg.com/

After a string of federal auctions, solar is suddenly the cheapest source of electricity in India. That’s darkening the outlook for the coal-fired power industry as projects struggle to find customers or face cancellation amid a glut of capacity.

“The crashing solar tariffs are creating a mental block for distribution companies and holding them back from signing long-term purchase agreements with conventional power producers,” said T. Adi Babu, chief operating officer for finance at Lanco Infratech Ltd., an Indian power producer. “A couple of years back, when people talked of solar reaching grid parity, people were skeptical. Now the solar tariffs have gone well below that. It is definitely making conventional players sit up and take notice.”

In May, the Business Standard reported that the state of Gujarat scrapped a so-called ultra-mega power project. Sujit Gulati, Gujarat’s additional chief secretary for energy and petrochemicals, didn’t respond to an email seeking comment. Uttar Pradesh ditched plans to buy long-term power supplies in favor of short-term purchases through the oversupplied spot power markets.

Memorial marks 1984 Falconbridge tragedy and all workplace deaths – by Heidi Ulrichsen (Sudbury Northern Life – June 20, 2017)

June 21, 2017

https://www.sudbury.com/

2015 death of Richard Pigeau at Nickel Rim South especially raw for speakers

On June 20, 1984, a seismic event measuring 3.5 on the Richter scale struck Falconbridge Mine, leading to the deaths of four miners — Sulo Korpela, Richard Chenier, Daniel Lavallee and Wayne St. Michel. Every year since the tragedy, Mine Mill Local 598/Unifor has held a Workers’ Memorial Day gathering on June 20.

This year’s service was held at the union’s campground on Richard Lake, and featured a long list of guest speakers, including politicians, union and company officials and labour community representatives.

Although specifically commemorating the 1984 Falconbridge mining disaster, the event also remembers other workers who have died at the company, which, as a result of several buyouts, now goes by the name Glencore. It also honours the lives of all those who have lost their lives due to on-the-job accidents or industrial disease in Sudbury and around the world.

COLUMN-China’s plan to boost commodity trading needs reality check – by Clyde Russell (Reuters U.S. – June 20, 2017)

June 21, 2017

http://www.reuters.com/

The call by China’s securities regulator for the country’s wealth managers to invest in domestic commodity futures is both encouraging and somewhat bizarre.

The China Securities Regulatory Commission (CSRC) aims to promote the domestic derivatives industry by loosening regulations that restrict how commercial banks, insurance companies and pension funds invest in commodity futures, Fang Xinghai, the commission’s vice chairman, said on June 17.

Fang, who was speaking at a financial forum in Qingdao, didn’t give further details of the proposal, but it seems to fit into recent moves by the authorities in Beijing to promote commodity trading and become more of a player in global markets.

Iron Seen in Low-$40s by Citi as Supply Grows, Demand Peaks – by Jasmine Ng (Bloomberg News – June 19, 2017)

June 21, 2017

https://www.bloomberg.com/

Iron ore may extend a slump into the low-$40s as supplies swell and demand reaches a short-term peak amid steel mill restarts and ramp-ups in China, according to Citigroup Inc., which cut its forecasts by as much as 20 percent over the next year.

The nadir in prices may occur in six to eight months, analysts including Tracy Liao wrote in a report received Monday. Iron ore is seen at $51 a metric ton in the third quarter compared with a previous estimate of $64, and at $48 in the final three months of the year, down from $60.

The raw material has sunk by more than a third since rising to almost $95 in February as global output increases, with miners such as Vale SA in Brazil and Australia’s Roy Hill Holdings Pty boosting capacity, and China’s efforts to curb financial leverage hurt demand.

Australian miners worry fossil fuels are contributing to a bad reputation – by Tess Ingram (Australian Financial Review – June 20, 2017)

June 21, 2017

http://www.afr.com/

Australia’s mining professionals blame the sector’s association with the fossil fuels industry for contributing to negative public perceptions more than their counterparts in India, South Africa or North America.

According to the Innovation: State of Play report, released on Tuesday by consulting firm VCI, 16 per cent of the Australian mining professionals surveyed ranked mining’s association with the “fossil fuels industry” as the reason the industry was perceived negatively in society.

It was the highest result for the link to fossil fuels in any region and ranked second among issues facing the Australian mining industry behind “environmental impact”, which scored highest in every region. VCI surveyed more than 800 global mining professionals, about 70 per cent of which work at an executive level, from 321 companies.

Urbanisation and sustainability: Can sand mining ever be green? – by Molly Lempriere (Verkict – June 20, 2017)

June 21, 2017

https://www.verdict.co.uk/

As urbanisation increases so does the demand for sand in construction, making it the most mined resource on earth. The result has been widespread ecological devastation, as riverbanks and waterways are stripped of their foundations.

With no population decline in sight, can sand mining be made sustainable? Demand for sand is high as rapid urbanisation in China and India has created a boom for the mining industry. Fuelled by this, illegal mining has grown, unnoticed and unchecked around the world, destroying ecosystems, waterways and beaches.

Though a seemingly plentiful resource, only certain kinds of sands are actually useful for construction purposes. Desert sand, for example, isn’t suitable for either construction or use as silicon due to its worn, rounded edges, so instead it is river banks and beaches that are being plundered.

Noront looks for smelter landing spots in Sudbury, Timmins – by Ian Ross (Northern Ontario Business – June 20, 2017)

June 21, 2017

https://www.northernontariobusiness.com/

Nickel City puts “best foot forward” to host Ring of Fire chromite processor

Noront Resources’ search for a home for a potential ferrochrome smelter took them to Sudbury and Timmins in mid-June. The largest claim holder in the Ring of Fire recently tweeted photos of visits to the northeastern Ontario cities as part of a pan-Northern Ontario scan to find a suitable landing spot for a $600-million to $800-million processing plant.

Sudbury, Timmins, Sault Ste. Marie and Thunder Bay-Fort William First Nation are in the mix to host the facility which could be years away from construction given the slow pace of development talks between the Ontario government and First Nation communities in the James Bay region.

Greater Sudbury Development Corporation (GSDC) director Ian Wood said the plant could create “several hundred” construction and permanent jobs, but he remained cautious about heightening local expectations.

Miners hail uranium call as activists rail against green light – by Paul Garvey (The Australian – June 21, 2017)

June 21, 2017

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

Western Australia’s most advanced uranium players are breathing a sigh of relief and environment groups are outraged after the state Labor government confirmed it would allow for the development of up to four uranium mines in the state.

WA Mines Minister Bill Johnston yesterday said the government would not stand in the way of the four uranium developments approved during the final months of Colin Barnett’s government although the new administration confirmed a ban on future uranium mining leases in the state.

While Labor had been under pressure to extend its uranium ban to the most advanced of the projects, Mr Johnston said the government had received legal advice that doing so could leave the state exposed to court action.

China’s Biggest Aluminum Producer to Cut Outdated Capacity (Bloomberg News – June 20, 2017)

June 21, 2017

https://www.bloomberg.com/

China Hongqiao Group Ltd., the nation’s biggest aluminum smelter, is curtailing outdated capacity amid a broader crackdown by the government on illegal production. Shares of aluminum makers gained in China.

The company, the main aluminum arm of Shandong Weiqiao Pioneering Group Co., declined to give the scale or timing of the reduction in an emailed statement. Two people with knowledge of the situation said Weiqiao’s aluminum business started cutting 250,000 metric tons of annual capacity from Tuesday, declining to be identified as the information is private. A Weiqiao spokesman couldn’t be reached for comment.

China, the world’s top producer of the lightweight metal, has stepped up efforts this year to prune capacity to reduce excess supply. Its top economic planning agency issued an order in April for local governments to halt smelters that violate environmental guidelines, while a plan earlier in the year called for capacity to be shuttered during the peak pollution season over the winter. China’s total smelting capacity last year was about 40 million tons.