Republic of Mining

The ‘Weird’ Commodity Hurting the Bears as Prices Double – by Ranjeetha Pakiam (Bloomberg News – December 7, 2016)

December 8, 2016

https://www.bloomberg.com/

Iron ore’s probably heading for a retreat in 2017 as new mine supply comes online and a surplus builds, according to UBS Group AG, which acknowledged that the commodity’s recent surge was unexpected and had torpedoed an earlier forecast for a slump this quarter.

“It’s just surprised me,” Wayne Gordon, executive director for commodities and foreign exchange at the bank’s wealth-management unit, said in an interview in Singapore on Wednesday.

In early October, Gordon told Bloomberg Television the final two months of the year may mark a “death knell” for the raw material as stockpiles climb. “Iron ore is weird because the inventories are very high in China and it’s got to be pure spec flows,” he said.

Exclusive: Chile copper firms try to rejig contracts to tap renewable energy – by Gram Slattery (Reuters U.S. – December 7, 2016)

December 8, 2016

http://www.reuters.com/

SANTIAGO – Mining companies in Chile, by far the world’s largest copper producer, are examining their energy contracts to see if they can renegotiate terms to incorporate now-cheaper renewable power, company sources say.

The mines, long reliant on coal and gas to power everything from milling to drilling, are also inviting a broad range of wind and solar producers to major energy tenders for the first time.

The shift away from dirty energy in some ways reflects the unique situation of Chile, which has virtually no local gas or coal reserves, but a long, arid coastline amenable to wind and solar power.

Stars may align for giant Papua New Guinea copper mine – by James Regan (Reuters U.S. – December 7, 2016)

December 8, 2016

http://www.reuters.com/

SYDNEY – After nearly 50 years on the drawing board, the latest backers of Papua New Guinea’s $3.6 billion Frieda River copper project say the time may finally be right for the giant mine – even if some hurdles remain.

Regarded as one of world’s largest untapped copper-gold resources, the deposit has sat dormant as successive owners, including some of the world’s biggest mining houses, proved unwilling or unable to spend the billions of dollars needed to construct a mine in remote jungle far from the country’s coast.

Current owner PanAust Ltd, a former listed Australian miner now a unit of China’s Guangdong Rising Assets Management (GRAM) [GDRAM.UL], has submitted an application for a special mining license to the PNG government for an initial $3.6 billion project.

IF NOT NOW, WHEN?: The failed battle to stop Australia’s vast new mine shows why the world isn’t ready to move on from coal – by Cassie Werber (Quartz.com – December 8, 2016)

December 8, 2016

http://qz.com/

Following years of protest, Australia this week granted approval for a vast new coal mine to be built in Queensland. The decision to allow Indian company Adani to go ahead with its $16 billion mine—despite the environmental impacts and the protests of indigenous peoples—shows that coal, a waning industry that many consider unsalvageable, is still a powerful force.

When built, the Carmichael mine will become the biggest thermal coal project in Australia. The battle to get here was fraught, and three dynamics at the heart of it mirror energy conflicts worldwide—from the US coal country Donald Trump has promised to resurrect, to the millions of Indian households still living without power, to those people dedicated to making leaders take seriously the long-term impacts of our short-term decisions.

First, there’s the local perspective. Queensland’s mining sector has been hit so hard by falling commodity prices worldwide that its precipitous drop is known as the “mining cliff.” At least 22,000 mining jobs were lost in two years starting in November 2013; that number is projected to hit 50,000 in the next two years.

Anglo Confronts Divorce in Miner’s South Africa Birthplace – by Thomas Biesheuvel and Kevin Crowley (Bloomberg News – December 8, 2016)

December 8, 2016

https://www.bloomberg.com/

In 1917, Ernest Oppenheimer met with South African general and soon-to-be prime minister Jan Smuts to seek his blessing for a new mining company called Anglo American. Smuts wanted one assurance — the company was there for the long haul.

Anglo, along with its sister company De Beers, made Oppenheimer a billionaire and his descendants one of Africa’s richest families. The company became South Africa’s biggest, a conglomerate once spanning brewing, publishing and gold mining. Now a century later, Anglo is trying to cut many of the ties with the country where it all began.

While South African mines were cash cows for decades, Anglo now wants to sell them next year to cut debt accumulated during the commodity boom, when it spent $14 billion on Brazil’s Minas-Rio. How to package the assets and which to include will be major choices for Anglo, and it faces opposition from a government pension fund that is also the biggest investor. With so much history and national identity wrapped up in the company, it will be a complicated divorce.

Miners emerge from downturn bruised but determined to be better – by Neil Hume (Financial Times – December 8, 2016)

December 8, 2016

https://www.ft.com/

When Mark Cutifani, the boss of Anglo American, addressed analysts and investors on a recent trip to South Africa he had a simple message: the FTSE 100 miner was prepared to hold on to assets previously deemed noncore and run them for cash — unless it received the “right” price from buyers.

Those comments marked a sharp shift from January when Anglo, under attack from hedge funds, put a bundle of assets up for sale as part of a radical “shrink to survive” strategy.

Since then the mining sector has enjoyed a dramatic change in fortunes as a sharp and unexpected rebound in commodity prices, such as iron ore and coal, has boosted profits to the extent that large, diversified miners, such as Anglo and Glencore, will comfortably achieve their debt reduction targets.

Russia Sells $11 Billion Stake in Rosneft to Glencore, Qatar – by Elena Mazneva and Ilya Arkhipov (Bloomberg News – December 8, 2016)

December 8, 2016

https://www.bloomberg.com/

Commodity trader Glencore Plc and Qatar’s sovereign wealth fund agreed to buy a 10.2-billion euro ($11 billion) stake in Russia’s largest oil producer from the state in a triumph for President Vladimir Putin over sanctions imposed by the West.

The surprise deal gives the buyers a 19.5 percent stake in Rosneft PJSC, which the U.S. and European Union have targeted with punitive measures, and is the biggest foreign investment in Russia since the crisis in Ukraine. It also marks a stunning return to deal-making for Glencore Chief Executive Officer Ivan Glasenberg a little more than a year after his company was forced to raise cash from shareholders.

Glencore said in a statement Wednesday it would commit 300 million euros in equity, with the rest coming from the Qatar Investment Authority — itself Glencore’s largest shareholder — and bank financing.

Energy illiteracy alive and well in Canada – by Deborah Yedlin (Calgary Herald – December 8, 2016)

December 8, 2016

http://calgaryherald.com/

The response to last week’s approval of two pipeline projects — Kinder Morgan’s Trans Mountain expansion and Enbridge’s Line 3 replacement — has exposed the lack of energy literacy in Canada that’s exacerbated by a fragmented media and convenient ignorance of Alberta’s climate plan.

The task of bridging the gap has fallen to Premier Rachel Notley, who’s in British Columbia this week to explain the importance of pipelines to Canada’s economy.

The Trans Mountain project is expected to generate $46.7 billion in federal and provincial taxes and royalties during construction and its first 20 years of operation. An additional $530 million in property taxes will be accrued by municipalities along the route and more than 800,000 person-years of employment created over the life of the project.

NEWS RELEASE: STATEMENTS FROM ATTAWAPISKAT FIRST NATION, NAN ON ENVIRONMENTAL LAWSUIT

December 8, 2016

GATINEAU, QC (December 7, 2016): Attawapiskat First Nation Chief Ignace Gull and Nishnawbe Aski Nation (NAN) Grand Chief Alvin Fiddler have issued the following statements following legal action by an environmental group over monitoring at the De Beers diamond mine near the remote First Nation community.

“The issues facing our community with respect to our relationship with De Beers, the operation of the Victor Diamond Mine and its impacts in our territory are complex and challenging. I was surprised to learn that this legal action has been taken, and I am concerned that issues of great importance to our community are being addressed in the courts and media without our knowledge, consent or participation.

I must clarify that the Wildlands League, their lawyers and spokespeople, do not speak or act on behalf of Attawapiskat First Nation. The protection and stewardship of our traditional territory is our sacred responsibility.

Rio CEO Wants to Expand in Diamond Mines Rather Than Divest – by Jesse Riseborough and Jonathan Ferro (Bloomberg News – December 6, 2016)

December 7, 2016

https://www.bloomberg.com/

When Rio Tinto Group chief Jean-Sebastien Jacques took the reins of the world’s second-biggest mining company in July, there was speculation he’d sell a host of less desirable mines and smelters.

The firm’s diamond business, underpinned by two underground mines, was considered by some analysts as a candidate to be divested or spun out, particularly after it was combined with the copper unit. In a Bloomberg Television interview Tuesday, Chief Executive Officer Jacques earmarked the division as a focus for expansion rather than disposal.

“What we want is to improve the quality of our portfolio,” said the Frenchman, who’s known as JS. “I would love to have more diamonds to be very explicit. That’s a priority area.”

Roy Hill to recruit up to 600 workers – by Nick Evan (The West Australian – December 7, 2016)

December 7, 2016

https://au.news.yahoo.com/

Roy Hill boss Barry Fitzgerald says the iron ore producer will be looking to recruit another 500-600 mineworkers over the next 18 months as the company ramps up its Pilbara operations.

Roy Hill currently employs about 1300 workers across its Pilbara port, rail and mine operations, and at its Perth Airport Headquarters. As its Pilbara peers again look to slice their own workforces, with Rio currently running a process to axe 500, Mr Fitzgerald said Roy Hill was still recruiting.

“The state of play for us is that we commenced in the north of our deposit, where the ore is closer to the surface,” he said. “As we ramp up production to 55 million tonnes a year we will move further into the ore body and the strip ratio will increase and we will need to move more tonnes.

Vale-BHP’s Samarco expects preliminary license in first quarter – by Marta Nogueira and Stephen Eisenhammer (Reuters U.S. – December 7, 2016)

December 7, 2016

http://www.reuters.com/

RIO DE JANEIRO/BRASILIA – Brazilian iron ore miner Samarco Mineracao expects to receive a preliminary environmental license in the first quarter, an important step in its effort to resume operations by mid-2017, Chief Executive Officer Roberto Carvalho said in an interview on Tuesday.

This would be the first of three environmental licenses needed by the company, which is jointly owned by Vale SA and BHP Billiton. Samarco’s operations were suspended in November 2015 after the collapse of a dam holding mining waste, or tailings, killed 19 people and caused Brazil’s worst environmental disaster.

“They are deep discussions, slow discussions, but they are advancing,” Carvalho said, referring to the process of getting the licenses approved by Semad, the environmental body for the state of Minas Gerais, where Samarco’s mine is located.

NEWS RELEASE: Canadian Mining Companies Invest in Building a Sustainable Future

December 7, 2016

Top priorities for Canadian Mining companies include sustainability, capital allocation, and deals

Click here for video presentations: https://www.pwc.com/ca/en/industries/mining/canadian-mine/beyond-the-downturn.html

TORONTO, Dec. 7, 2016 /CNW/ – Mining companies are in a stronger position now than they were at the beginning of the year, according to PwC Canada’s new mining report Beyond the downturn: A focus on financial discipline and innovation in Canadian mining.

With fluctuating commodity prices, the top priorities for Canadian mining companies in 2017 are capital allocation, strategic deal making, and employing new technology and innovations in support of creating a more sustainable future.

According to the report, a growing commitment to sustainability and engaging in strong and meaningful community relations is key to redefining the identity of an industry in the midst of transformation as it strives towards a more certain future.

Trump Could Fuel A Nuclear Energy Boom In 2017 – by James Stafford (Oil Price.com – December 06, 2016)

December 7, 2016

http://oilprice.com/

With Trump at the helm, sentiment gives way to practicality in the energy industry. For the vast untapped potential of the nuclear energy industry and the uranium that feeds it, this could contribute to a market-disrupting revival that no longer bows to fear and the politics of economy.

While there have been some oversupply issues keeping uranium prices down, the bigger problem has been negative sentiment rather than real fundamentals, but the Trump presidency will see through that.

Trump’s take on nuclear energy is quite simple. As he noted after the 2011 Fukushima disaster in Japan: “If a plane goes down, people keep flying. If you get into an auto crash, people keep driving.” Now more than ever, demand for uranium appears to be assured. But more than that, it’s about to truly explode as a number of situations combine to form the new era of nuclear power.

RPT-COLUMN-China’s commodity trading crackdown has long-term consequences – by Clyde Russell (Reuters U.S. – December 7, 2016)

December 7, 2016

http://www.reuters.com/

Dec 7 Is there a longer-term cost to be paid by China for its ongoing efforts to curb what the authorities in Beijing see as unjustified price spikes in commodity prices on the country’s futures exchanges?

Certainly it is becoming clear that the authorities are continuing to ramp up their campaign against the so-called hot money pumping up commodity prices, with new measures designed to cool price action in iron ore, steel and coal among others.

In recent weeks the Dalian and Zhengzhou commodity exchanges and the Shanghai Futures Exchange have all toughened trading requirements several times. The measures imposed include raising trading margins, hiking transaction fees and imposing trading limits.