Republic of Mining

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

June 13, 2017

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.

Ring of Fire: burning down a rare economic opportunity – by Joseph Quesnel and Kenneth Green (Troy Media – June 12, 2017)

June 12, 2017

http://www.troymedia.com/

First Nations can’t veto development in northern Ontario. They must engage in good faith, just like business and governments, and not squander this opportunity

Joseph Quesnel is a senior fellow at the Fraser Institute. Kenneth Green is Senior Director, Natural Resource Studies at the Fraser Institute.

ANTIGONISH, N.S. /Troy Media/ – It’s often said that successful First Nations must operate at the speed of business, not the speed of government. That certainly applies to First Nations affected by the Ring of Fire mining proposal.

Long delays and lack of communication between governments and the nine First Nation communities involved have plagued efforts to establish mining of largely chromite deposits in the region 500 km north of Thunder Bay.

A central bone of contention is the construction of an all-season transportation corridor to get the mined ore to plants in northern Ontario where it can be refined. In late May, Ontario Premier Kathleen Wynne told a Chamber of Commerce meeting in northeastern Ontario that movement on an infrastructure plan should come in “weeks, not months.”

Would-be miner of rare earths bets on electric cars – by Henry Sanderson (Financial Times – June 11, 2017)

June 12, 2017

https://www.ft.com/

Sale of largest US deposit of elements used in zero-emission vehicles due Wednesday

When Tom Clarke first heard about rare earths a year ago he had to look up what they were on Wikipedia. Now the coal miner is leading a bid by a consortium to reopen a California mine that is the only major US deposit of rare earths — elements that are poised to benefit from increasing demand due to their use in magnets that go into electric car motors.

“The more I got involved in rare earths, the more I realised these elements are going to be in increasing demand [in electric vehicles],” says Mr Clarke. “So our hope here is to help facilitate the re-opening of the mine. We think there is a reliable market for it.” The Mountain Pass rare earths mine, located about 50 miles south of Las Vegas, was owned by Molycorp, a US natural resources group that filed for bankruptcy in 2015.

The mine is now due to be sold at auction on Wednesday, and Mr Clarke’s ERP Strategic Minerals has teamed up with Swiss private equity firm Pala Investments and Australian rare earths exploration group Peak Resources to offer $1.2m.

NDP-Green alliance seems not to care about any Canadians living east of the Rockies – by Kelly McParland (National Post – June 6, 2017)

June 12, 2017

http://news.nationalpost.com/

Hostage-takers rarely endear themselves to their targets. During its reign as a danger to Confederation, Quebec won many concessions by regularly brandishing the threat of separation, but succeeded also in isolating itself while earning the enmity and resentment of much of the country.

Fortunately, those ugly years are fading with the decline of the Parti Québécois and its aging adherents. In its place we have British Columbia’s new hardline Green-NDP alliance with its intense focus on its narrow agenda, and dismissive approach to the interests of its neighbours and fellow Canadians.

The recent B.C. election left the Greens and New Democrats able to cobble together a wobbly alliance with a single-seat advantage over the Liberal government. NDP leader John Horgan and Green leader Andrew Weaver — the latter boasting just three of the 87 seats in the legislature — quickly reached a deal predicated on a radical reworking of the economy, with particular emphasis on opposition to energy projects of national importance.

Zimbabwe: The Sad Case of Leaving Minerals in the Ground – by Farai Maguwu (All Africa.com – June 9, 2017)

June 12, 2017

http://allafrica.com/

Zimbabwe is now a fully fledged resource cursed country where abundance of natural resources is not contributing to economic growth but rather to recession, depressed liquidity, human rights abuses and unmitigated land and water pollution.

Fresh from the farm invasions of the early 2000s, Zimbabwe shifted to extractivism not by design, but rather in response to China’s construction boom which heavily relied on raw materials from Africa, of which Zimbabwe became a major source.

The discovery of Marange diamonds in 2006 and the subsequent entry of obnoxious companies with strong links to the military in 2009 sealed the fate of Zimbabwe as a resource cursed company. Once the military tasted the quick returns of diamonds, they spread their tentacles to every extractable mineral and began negotiating several mineral deals with Asian syndicates who bring the much-needed capital to open new mines and further develop existing ones.

WATERS OF BLACK GOLD: THE STRAIT OF HORMUZ PT. 2 – by Imran Shamsunahar (Centre for International Maritime Security – June 12, 2017)

June 12, 2017

http://cimsec.org/

The first part of this two-part series on the Strait of Hormuz analyzed the strategic importance of the Strait for global energy shipping and political stability in the Arabian Gulf, and provided an overview of Iran’s overall strategy of using its asymmetric doctrine to disrupt commercial shipping within the vital waterways to both deter enemies and fight a protracted war if necessary. This second part will focus on Iran’s actual maritime capabilities and discusses whether their threats to close down oil shipment in the Strait of Hormuz are credible or not.

Although Tehran has frequently made clear their intentions to close the Strait of Hormuz in times of war or heightened tensions, do they actually have the military capability to do so? Both the Islamic Republic of Iran Navy (IRIN) and the Revolutionary Guards’ Navy (IRGCN) have invested in a multitude of asymmetrical weaponry which would be used to harass and disrupt shipping coming through the Strait.

One potent tool in the Iranian naval inventory is its extensive range of ASCMs, a capability the Iranians have sought to invest in since the Iran-Iraq War, either through direct purchase or by depending heavily on Chinese designs for indigenous production.

WATERS OF BLACK GOLD: THE STRAIT OF HORMUZ PT. 1 – by Imran Shamsunahar (Centre for International Maritime Security – May 3, 2017)

June 12, 2017

http://cimsec.org/

What distinguishes navies from that of other branches of the military is that their raison d’etre is often inherently economical in nature. Navies primarily exist to protects one’s sea lines of communications (SLOCs) in trade and natural resources, while threatening those of your enemy’s in times of war. As the classical seapower theorist Mahan would memorably argue, “the necessity of a navy springs from the existence of peaceful shipping and disappears with it.”1

In today’s globalized world, where 90 percent of global trade is still transported through merchant shipping, ensuring that freedom of navigation is protected on the world’s waters has become more vital than ever for ensuring global economic growth and regional stability.

This is especially relevant when discussing the stability of global energy markets. A 2014 report by the U.S. Energy Information Administration (EIA) entitled “World Oil Transit Chokepoints” noted that in 2013 total petroleum and other liquids production was 90.1 million barrels per day (bb/d), with over 63 percent of that amount transported through seaborne trade.

Tanzanian Government Accuses Acacia of Mining Gold Illegally – by Omar Mohammed, Helen Nyambura-Mwaura and Thomas Biesheuvel (Bloomberg News – June 12, 2017)

June 12, 2017

https://www.bloomberg.com/

Tanzania’s government accused Acacia Mining Plc of operating illegally in the East African country and said mining companies have been evading taxes. Acacia’s shares slumped.

An audit ordered by President John Magufuli in March found that Acacia had been conducting business in Tanzania “contrary to the law,” Nehemiah Osoro, chairman of a committee of academics, lawyers and economists that conducted the probe, said at a briefing Tuesday in the commercial capital, Dar es Salaam. The audit covered mineral exports over the past 19 years.

“We should summon them and demand that they pay us back our money,” Magufuli said after receiving the committee’s report. “If they accept that they stole from us and seek forgiveness in front of God and the angels and all Tanzanians and enter into negotiations, we are ready to do business.”

The open veins of Bolivia’s lithium powering the world – by Bostjan Videmsek (Sydney Morning Herald – June 11, 2017)

June 12, 2017

http://www.smh.com.au/

Salar de Uyuni, Bolivia: Late in the morning the colours are at their prettiest, at their most intense. As far as the eye can see, the luminous white of the world’s greatest salt flats blends with the tender blue of the clear skies above the alpine desert of the Bolivian Andes.

The charismatic silence, very good at relieving the burden of one’s thoughts, is occasionally broken by the whistle of a mild though decidedly chilly breeze. The surrounding hills, some of them straining up 5000 metres, are sharply reflected in the thin film of rainwater not yet evaporated into the atmosphere. On a clear day and from afar, Salar de Uyuni looks like a colossal mirage. From up close, it looks nothing less than a miracle. But it may not remain that way for long.

Along the salt lake’s southern rim, industrial machines roar. Hundreds of heavy trucks are coming and going over the salty crust, wheezing like exhausted beasts, some 40 years old. Diesel fumes permeate the crisp mountain air. In their wake, the trucks leave perfect brown lines in the virginal whiteness, making the lake’s scores of square kilometres look like a giant bowl of cafe latte.

THE STRANGE SECRET HISTORY OF OPERATION GOLDFINGER – by James Ledbetter (New Yorker Magazine – June 10, 2017)

June 12, 2017

http://www.newyorker.com/

In September of 1965, Joe Barr, a Treasury Department official with a long history in government, agreed to meet with a group of members of Congress from Western states. He knew what to expect. Earlier that year, he had met with the same group, and endured its ire over the Treasury’s reluctance to help the American gold industry.

After the Second World War, world leaders had met at Bretton Woods, in New Hampshire, and, as part of an agreement on an international monetary system, had fixed the price of gold at thirty-five dollars an ounce. This had, predictably, depressed the U.S. mining industry, even as the demand for private gold shot up. The more easily obtained sources of gold had been depleted over the years, while harder-to-reach sources became more difficult to mine profitably, given the static price.

Foreign competition—chiefly from Canada and South Africa, where mines were less depleted and labor costs were lower—was far more intense by 1960 than it had been after the war, when the price of gold was set. The United States was a distant third in gold production. Rather than attempt to compete, many mines simply shut down.

Lawmakers urges U.S. Treasury to reject Aleris sale to China aluminum giant – by Diane Bartz and Lesley Wroughton (Reuters U.S. – June 10, 2017)

June 12, 2017

https://www.reuters.com/

More than two dozen U.S. lawmakers have urged U.S. Treasury Secretary Steven Mnuchin to reject the proposed sale of U.S. aluminum products maker Aleris Corp (ALSD.PK) to China Zhongwang Holdings Ltd (1333.HK) to protect U.S. security interests.

In a June 9 letter to Mnuchin shared with Reuters, the 27 lawmakers said it would be a “strategic misstep” to allow the $2.33 billion sale to go ahead.

“It is critical that CFIUS (Committee on Foreign Investment in the United States) exercise extreme caution when a foreign investment transaction includes the transfer of military proficiencies and sensitive technology to China,” the lawmakers wrote.

Glencore’s Coal Future Burns Bright – by David Fickling (Bloomberg News – June 12, 2017)

June 12, 2017

https://www.bloomberg.com/

Is Glencore Plc’s last-minute bid for Rio Tinto Group’s Australian thermal coal assets about quantity, or quality? It’s a bit of both. With a tenement footprint that’s more or less surrounded by Glencore’s own mines, Rio Tinto’s Hunter Valley pits have long been an obvious target for the trader.

In volume terms, the $2.55 billion offer looks like the sort of deal that typically went down a decade ago, when the thermal coal used in power stations was a hot commodity and the likes of Rio Tinto and Anglo American Plc were looking to add assets, rather than exit ones still on their books.

Glencore is by far the biggest coal miner in the Hunter Valley, the region north of Sydney that supplies the world’s biggest coal export harbor at Newcastle. But its mines are rapidly depleting, and will run out in about a decade at current production rates. Add Rio Tinto’s vast resource base and lower output pace, and you could comfortably extend that deadline into the mid-2030s or beyond.

Top 40 miners returned to profit in 2016: PwC – by Andrew Topf (Mining.com – June 9, 2017)

June 12, 2017

http://www.mining.com/

Is the bad and the ugly over and the good returning to the mining industry? PwC seems to think so, according to a new report from the consulting firm.

“The world’s Top 40 miners recovered from a race to the bottom, with bolstered balance sheets and a return to profitability in 2016, giving them much-needed space to pause and draw breath,” reads a press release on PwC’s annual review of global mining trends, this year titled “Mine 2017. Stop. Think. Act.”

The report was released on Wednesday by PwC Africa at the Junior Indaba conference in Johannesburg. It analyzed 40 of the largest listed mining companies by market capitalization, covering the financials between April 1 2015 and December 31 2016.

In-depth interview: Barrick’s Dushnisky and Goldcorp’s Garofalo on gold mining’s future (Northern Miner – June 11, 2017)

June 12, 2017

http://www.northernminer.com/

At the Canadian Mining Symposium hosted by The Northern Miner at Canada House in London in early May, session moderator Greg Huffman, managing director and global head of mining sales at Canaccord Genuity, sat down with Barrick Gold (TSX: ABX; NYSE: ABX) president Kelvin Dushnisky and Goldcorp (TSX: G; NYSE: GG) CEO David Garofalo for an in-depth conversation on the strategies they use to guide both companies, plus a wider look at what the future holds for gold mining globally. The following is an edited transcript of the exchange.

Question: Looking at some of Goldcorp’s latest acquisitions such Gold Eagle, Virginia, Probe and Kaminak, is there now a premium on assets in safer jurisdictions, given the current political turmoil worldwide?

DAVID GAROFALO: It’s always been fundamental to Goldcorp’s strategy to stay in low political-risk jurisdictions — generally, investment-grade countries with the notable exception of taking a bit more risk in investing in Argentina prior to the Macri regime. But that was a generational asset in Cerro Negro, and it’s been born out in the changing regime there and the Macri economic model.

Bringing Gold Back to Germany – by Moa Fromm (Handelsblatt Global – June 12, 2017)

June 12, 2017

https://global.handelsblatt.com/

The German central bank is currently repatriating much of its overseas gold, but part of the reserves is going to stay abroad. It was a scare from Germany’s Federal Audit Office that the public actually paid attention to. In 2012 financial controllers said they were unsure whether the gold reserves of Germany’s Bundesbank actually physically existed.

The Federal Audit Office demanded the central bank make regularly spot checks so that gold reserves abroad should be “physically counted and their authenticity and weight” confirmed. We’re not talking peanuts here. Following the United States, Germany has the world’s largest gold reserve, constituting two-thirds of German currency reserves. And in 2012, around 70 percent of the total of 3,378 tons of the precious metal (total value around €119 billion or $132.98 billion) was in the vaults of foreign central banks.

The Bundesbank took the suggestion to heart and discretely transferred 300 tons of gold stored in the vaults of the US Federal Reserve to Frankfurt over the past years. Over 100 tons were brought home in 2016 alone.