Republic of Mining

Miners Tumble as South Africa Escalates Black Ownership Rules – by Paul Burkhardt and Kevin Crowley (Bloomberg News – June 15, 2017)

June 15, 2017

https://www.bloomberg.com/

Companies including Anglo American Plc and Sibanye Gold Ltd. dropped after South Africa increased the minimum black ownership requirement for local mines and set a 12-month deadline for compliance with the new rules.

The Department of Mineral Resources will raise the requirement from the current 26 percent to ensure more proceeds from the country’s natural resources flow to the black majority, Mining Minister Mosebenzi Zwane said on Thursday in Pretoria, the capital. The new minimum applies regardless of whether they have previously sold shares or assets to black investors that later divested.

Sibanye dropped 7.4 percent at 12:58 p.m. in Johannesburg, while Kumba was 6.2 percent lower. Anglo American declined 6 percent in London.

Demand, not supply, is the great unknown for lithium and cobalt – by Andy Home (Reuters U.S. – June 15, 2017)

June 15, 2017

http://www.reuters.com/

The number of electric vehicles on roads worldwide rose to a record high of 2 million last year, according to the International Energy Agency (IEA). That represented a doubling from the 2015 tally but electric cars still only accounted for 0.2 percent of the global count.

How many will there be in five years’ time? Or in 10 years’ time? The answer to that question will determine the fortunes of multiple metals over the coming years.

Battery materials such as lithium and cobalt are already bubbling as supply chains which have historically evolved to meet niche applications adapt to the much bigger demands of the green technology revolution.

[Vale Canadian CEO Jennifer Maki] The mindful miner – by Peter Carter (CPA Magazine – June 1, 2017)

June 14, 2017

https://www.cpacanada.ca/

Vale’s base metal boss and Canadian CEO Jennifer Maki believes in building bridges, staying connected and delivering results. And she does it her way.

It was a February Friday in 2007. Jennifer Maki was given a choice. At the time, Maki was assistant treasurer at Vale Canada, a subsidiary of the biggest iron-ore mining company in the world, Rio de Janeiro-based Vale. Like lots of Vale’s senior positions, Maki’s duties were moving to head office in Brazil. The question was: would she rather take an 18-month buyout package or stay with Vale in Toronto in a yet-to-be-determined position?

The buyout looked appealing. In the months leading up to Vale’s offer, Maki’s world had gone through seismic shifts, and in the process, friends, colleagues and fellow executives either left or were asked to leave the company. There was little doubt she would find other work.

Her rise to the senior ranks of the company had been meteoric, beginning in 2003. After 10 years as a CA with PricewaterhouseCoopers in Toronto, Maki had accepted an offer from the client whose file she had been auditing for nine of those years, giant nickel miner Inco.

Four BRICs don’t quite make a wall: Brazil, Russia, India and China have done even better than forecast—thanks mainly to China (The Econmist – June 8, 2017)

June 14, 2017

http://www.economist.com/

EMERGING markets have been through a lot over the past four years. The “taper tantrum” in 2013 (prompted by fears of a change in American monetary policy); the oil-price drop in 2014; China’s botched devaluation of its currency in 2015; and India’s botched “demonetisation” of much of its own currency in late 2016 (removing high-value banknotes from circulation).

But 2017 has started more brightly. Indeed, for the first time in two and a half years, the world’s four biggest emerging economies (Brazil, Russia, India and China, known as the BRICs) are all growing at the same time.

Russia’s GDP bottomed out at the end of 2015 (using seasonally adjusted figures) after the longest recession since the 1990s. It has expanded at a gathering pace for the past three quarters. Higher oil prices have helped, though Russia cannot profit fully from the improved market by ramping up sales without violating the production limits that caused the market’s recovery.

From Tesla Cars to Underwear, Metal Makers Seek New Markets – by Susanne Barton, Mark Burton and Laura Millan Lombrana (Bloomberg News – June 13, 2017)

June 14, 2017

https://www.bloomberg.com/

The world’s biggest mining companies would like you to put more zinc in your zucchini and copper in your socks and dental floss.

While builders and manufacturers remain the biggest metals users, producers are confronting the end of a Chinese industrial boom that fueled surging global demand and prices. For more than a decade, the country dominated markets as it sucked up raw materials to build factories, homes and power lines. Now, with the industrial engine cooling, mine owners are looking for new uses to spur sales like in fertilizer, electric-car batteries and salmon cages.

“Traditional demand isn’t going to fall off a cliff,” said Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London. “But it’s true that no one wants to hear about industrial production growth or Chinese cement demand anymore.”

Update: Judge approves Essar bankruptcy settlement – by John Myers (Duluth News Tribune – June 13, 2017)

June 14, 2017

http://www.duluthnewstribune.com/

Chippewa Capital Partners has reached an agreement with Gov. Mark Dayton over mineral leases at the former Essar Steel Minnesota project in Nashwauk, removing one of the last obstacles to a bankruptcy settlement approved this morning in Delaware.

The agreement allows Chippewa — a joint venture of London steel and energy conglomerate GFG Alliance and Roanoke, Va., billionaire Tom Clarke — to take over the bankrupt, half-built taconite iron ore mine and processing center, restart construction and start mining and processing ore by 2020.

India-based Essar pumped $1.8 billion into the Nashwauk project over seven years but then walked away in late 2015, out of cash and more than $1 billion in debt, filing for bankruptcy last July.

U.S. company signs collective agreement to restart Wabush Mines – by Andrew Topf (Mining.com – June 13, 2017)

June 14, 2017

http://www.mining.com/

Miners at the closed-down Wabush Mines in Labrador could be back on the job thanks to the recent signing of a collective agreement with the union. Five hundred people were thrown out of work in 2014 when Cliffs Natural Resources (NYSE:CLF) shut the gates on the operation in Western Labrador.

Last week however the United Steelworkers Union had good news to share, telling its members it signed a five-year collective agreement with Tacora Resources, an American company without a functioning website, for the Scully Mine operation.

Part of Wabush Mines, Scully Mine began operating in 1965, with iron concentrate railed to a pelletizing facility in Pointe Noire, Quebec, for shipment to Europe and throughout North America. Before it closed in 2014, a victim of low iron ore prices, Wabush Mines was Canada’s third largest iron ore operation, with an annual capacity of 6 million tonnes. The site since then has been tied up in regulatory proceedings.

Argentina signs mining deal to unify regulations, attract investment – by Juliana Castilla (Reuters U.S. – June 13, 2017)

June 14, 2017

https://www.reuters.com/

BUENOS AIRES – Argentina’s national government and the governors of 20 provinces signed a mining deal on Tuesday to harmonize taxes and regulations in hopes of attracting investment, but the action was criticized by industry sources and environmentalists alike.

The agreement, which needs approval from Congress and the 20 provincial legislatures, sets a 3 percent ceiling on royalties mining companies pay to provinces.

“It’s an activity that could be one of the pillars of job creation,” President Mauricio Macri said of mining at the signing ceremony. “We can develop it with perfect care of the environment.”

Tanzania’s Acacia Spat Shows Deepening Battle With Business – by Omar Mohammed (Bloomberg News – June 13, 2017)

June 14, 2017

https://www.bloomberg.com/

Tanzanian President John Magufuli’s escalating battles with business risk alienating the very investors he needs to drive his multi-billion dollar industrialization policy.

On Monday, the 57-year-old leader ratcheted up his dispute with miners by accusing Acacia Mining Plc of operating illegally in Tanzania and insisting the government is owed billions of shillings of unpaid taxes. It’s the latest in a series of broadsides against private investors who are being unnerved by his administration’s stance and its lack of consultation on policy. Shares in Acacia, which denies any wrongdoing, slumped as much as 16 percent.

“It’s negative that you have these uncertainties playing out in the market, especially at a time when you’re relying on growth and infrastructure development to be supported by private sector activity,” said Lisa Brown, a risk analyst at Rand Merchant Bank in South Africa.

Accountability boosted by first-time publication of payments to govts by Canadian miners – by Henry Lazenby (MiningWeekly.com – June 13, 2017)

June 14, 2017

http://www.miningweekly.com/

VANCOUVER (miningweekly.com) – The public disclosure of hundreds of reports detailing payments to governments by Canadian extractive companies heralds a new era of transparency for the mining sector, nongovernmental organisations (NGOs) working closely with the country’s Extractive Sector Transparency Measures Act (ESTMA) say.

The reports, filed with Natural Resources Canada (NRCan) and posted on its website, have been made available owing to the implementation of the ESTMA, which requires all Canadian registered and listed extractive companies to disclose payments in excess of C$100 000 made to governments, creating greater transparency over the taxes, royalties and other forms of disbursement that companies pay.

The act was championed through an innovative collaboration with Canadian mining industry associations, NGOs and the Natural Resource Governance Institute (NRGI). Publish What You Pay (PWYP) Canada welcomed the first reports being made public following the May 27 deadline for filing reports for the 2016 financial year.

COMMENT: Two committees, twice the bad news for Acacia – by Marilyn Scales (Canadian Mining Journal – June 13, 2017)

June 14, 2017

http://www.canadianminingjournal.com/

Followers of international mining news have read about the Tanzanian government’s beef with Acacia Mining which is headquartered in London, U.K.

Last month we learned that the report of a government committee says Acacia owes tens of billions in unpaid taxes. The committee estimated output from the Bulyanhulu and Buzwagi gold-copper mines is 10 times what the company reported and on which it paid royalties and taxes. The committee checked 277 containers of concentrate ready to ship from the mines, and it said there must be 250,000 oz. of gold in them. Acacia’s number is 26,000 oz.

All told, Tanzania says it has lost US$49 billion in royalties and taxes on gold-bearing concentrate exports from 1998 to 2017. The result is that Tanzania has blocked all exports of concentrate. Acacia has been exporting concentrate from Bulyanhulu since 2001 and from Buzwagi since 2010, and the company insists it has declared all the associated gold, copper and silver revenue.

Rio Tinto CEO sees Canada as less business-friendly than in past – by Allison Lampert and Nicole Mordant (Reuters U.S. – June 13, 2017)

June 14, 2017

http://www.reuters.com/

The chief executive of Anglo-Australian miner Rio Tinto , which owns iron ore, diamond and aluminum mines and processing facilities in Canada, said on Tuesday that it was becoming tougher to do business in the resource-rich country.

“You know mining well and you understand its value, but to be very frank it has been getting harder to do business here over the years – from employee relations to tax to managing land access,” Rio Tinto CEO Jean-Sebastien Jacques said in prepared remarks to be delivered at the International Economic Forum of the Americas in Montreal. Jacques did not elaborate on his comments.

Calling it the “biggest mining and metals company in Canada,” Jacques said Rio Tinto had paid C$3.9 billion ($2.93 billion) in Canadian taxes since 2011 while investing more than C$8 billion.

Platinum Drop Fires Social Unrest as Villagers Turn on Mines – by Kevin Crowley (Bloomberg News – June 12, 2017)

June 13, 2017

https://www.bloomberg.com/

More platinum wealth lies beneath South African soil than anywhere else on Earth, and for decades the companies that extracted the precious metal promised to help improve the lives of the impoverished people who live above their mines. Those communities are getting tired of waiting.

Demonstrations by residents around mines — many living in improvised shacks without running water — have disrupted operations run by producers including Impala Platinum Holdings Ltd., Lonmin Plc and African Rainbow Minerals Ltd.

The protesters demanded jobs and money, saying that investments outside of the mines haven’t been enough. Last month, a bus that ferries Lonmin workers was torched, forcing the company to halt operations at two shafts.

Mining a delicate balance of enviro vs. economics – Editorial (The Daily Mining Gazzette – June 12, 2017)

June 13, 2017

http://www.mininggazette.com/

Mining has, for some time now, been considered by many a contentious issue, and a delicate balancing act between a means of providing desirable economic benefits and a process that potentially leads to avoidable long-lasting environmental concerns.

Precisely that situation, where opposing viewpoints and contrary opinions are voiced, played out at a recent public forum held by the Michigan Department of Environmental Quality. The DEQ meeting was about a permit request made earlier this year by Eagle Mine, which has its nickel and copper operation in northern Michigamme Township and its processing unit at the Humboldt Mill in Humboldt Township.

Eagle Mine, a subsidiary of Toronto-based Lundin Mining Corp., wants to expand its operation by extracting a high-grade nickel and copper deposit known as Eagle East. The ore body is a bit deeper than the company’s current mining operation, and is situated about 1.5 miles eastward.

Natural gas built Qatar, now may protect it in Gulf dispute – by Jon Gambrell (Colorado Springs Gazette – June 12, 2017)

June 13, 2017

http://gazette.com/

Associated Press – DUBAI, United Arab Emirates (AP) — Natural gas built the high-rises of Qatar’s capital, put the Al-Jazeera satellite news network on the air and a fleet of passengers jets for its state carrier in the sky. Now, it may be what protects Qatar as it is in the center of the worst diplomatic crisis to strike the Gulf in decades.

As the world’s biggest exporter of liquid natural gas, Qatar’s supplies keep homes warm in the British winter, fuel Asian markets and even power the electrical grid of the United Arab Emirates, one of the main countries that has cut ties to the energy-rich nation.

So far, its supplies have continued uninterrupted since the diplomatic dispute began last week. Natural gas markets have yet to respond to the rift and prices have remained stable. But Qatar wields a potential economic weapon if the crisis escalates and countries around the world that depend on its supply may find themselves needing to side with the tiny nation that is home to a major U.S. military installation.