Republic of Mining

Corruption, Death and Tin Mining – by Yoga Rusmana (Bloomberg News – August 25, 2015)

August 26, 2015

http://www.bloomberg.com/

At the end of a muddy track through plantations of oil-palm and cocoa on the Indonesian island of Bangka, three dozen men on wooden rafts off the beach are dredging black sand from the shallow bay.

The workers, near the village of Sungai Liat, are among hundreds of illegal tin miners on the island, the first link in a chain of trucks, smelters and fishing boats that smuggles the metal out of the country. Backed by a complex web of corruption and international payments, the dark sediment is transformed into the solder that ultimately ends up binding the electronics in everything from smartphones to cars.

The trail begins on two islands off the coast of Sumatra in a sea channel that connects Indonesia’s capital, Jakarta, to Singapore and Malaysia. These islands, called Bangka and Belitung, produce more than 90 percent of the tin in Indonesia, which is the world’s biggest exporter of the metal.

Most of that production comes from mining companies such as PT Timah, the world’s third-largest producer. Pits those operators abandoned and more marginal deposits are worked illegally by men and children using diesel-powered equipment on floating platforms off remote stretches of coast, or with high-pressure hoses on land.

Vale green-lights underground mine at Voisey’s Bay – by John Cumming (August 19, 2015)

August 26, 2015

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists. jcumming@northernminer.com

The natural resources industry of Newfoundland and Labrador — beaten down as it is by the steep decline in iron ore and oil prices — has received a most welcome board-level confirmation from Vale that it will indeed pursue underground mining at its Voisey’s Bay nickel-copper-cobalt mine in northern Labrador, once the open pit is exhausted in 2020.

Based on current resources, that would add at least another 15 years of life to the mine, which started operations in 2005.

The Voisey’s Bay site consists of a 6,000-tonne-per-day open pit and a concentrator that produces nickel-copper-cobalt concentrate, plus a copper concentrate, at a rate of 40,000 tonnes of nickel in concentrate per year. The remote, coastal site is accessible by air and sea, with concentrate stored and shipped out on a seasonal basis before the site is locked in by ice.

The decision to go underground at Voisey’s ensures a steady feed of nickel concentrate to Vale’s new US$4.3-billion Long Harbour Processing Plant (LHPP) in the town of Long Harbour on southeastern Newfoundland’s Avalon Peninsula.

Silver Prices Fall to Six-Year Lows; Market Looks ‘Horrible’ – Analysts – by Neils Christensen (Kitco News – August 26, 2015)

August 26, 2015

http://www.kitco.com/news/

(Kitco News) – The adjective analysts and traders are using to describe the price action in silver Wednesday morning is “horrible,” as the market hit new six-year lows.

The selloff in silver picked up steam late Wednesday morning with September silver futures dropping below $14 an ounce, hitting an intra-day low at $13.910 an ounce.

Silver is the worst performing commodity among the entire metals complex, down more than 3.7% on the day, compared with a 1.4% decline in gold prices, a 2.7% drop in copper prices and platinum prices, which are up 0.4% on the day.

September silver futures last traded at $14.070, down 54 cents on the day.

“The chart is really ugly. While prices don’t move in a straight line, I don’t think we have seen an end to lower silver prices,” said Chris Beauchamp, senior market strategist at IG Markets.

NEWS RELEASE: Behre Dolbear Group’s Annual Where To Invest in Mining in 2015 (August 6, 2015)

August 26, 2015

http://www.dolbear.com/

TODAY it takes 10 years to discover, define, and determine the feasibility of a project and an additional 6 years or more until investors can expect returns from a greenfield mining construction project.

Markets have taken a volatile downward trend in recent months creating concern for host country governments and miners alike. Mineral prices have dropped over the last year. For example, iron ore and coal prices have fallen by half. The market correction has led to a sharp decline in foreign direct investment, forcing the governments of countries hosting new production to reassess their recent goals of extracting more benefit from the industry.

There is now a realization that governments must be more accommodating to remain competitive internationally. Lower export-related tax receipts are putting pressure on governments to adapt more austere budgetary measures.

Today, it takes six years or more until investors can expect returns from a greenfield mining construction project. It typically takes ten years to discover, define, and determine the feasibility of a project.

Family of former Centerra Gold CEO fears he will be ‘kidnapped’ to Kyrgyzstan – by Drew Hasselback (National Post – August 26, 2015)

August 26, 2015

The National Post is Canada’s second largest national paper.

The family of former Centerra Gold chief executive Len Homeniuk says he has been re-arrested in Bulgaria and fears he may be spirited away to Kyrgyzstan.

Homeniuk, who last week spoke with the Financial Post, spent 11 days in prison after he was arrested on July 27 in the Bulgarian town of Vidin, near the border of Romania. He was later transferred to house detention in a small apartment in the capital, Sofia.

Family members now say Homeniuk was re-arrested at that apartment at 9:30 local time Monday night, then whisked back to Vidin on Tuesday.

It’s the latest twist in a saga in which the former mining executive, who holds dual U.S.-Canadian citizenship, seems to be a pawn in on-going talks over the fate of a gold mine in Kyrgyzstan, a rugged Central Asian republic located along the Silk Road.

Marina Stephens, Homeniuk’s wife, was with him when the police came Monday night, and was able to visit him at the police station a short while later.

Noront files updated Ring of Fire technical report – by Staff (Northern Ontario Business – August 25, 2015)

August 26, 2015

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

Noront Resources has filed an updated technical report for its Black Thor, Black Label and Big Daddy chromite deposits located in the Ring of Fire.

The company filed an NI 43-101 resource report for the properties, which were acquired for $27.5 million from Cliffs Natural Resources in April, on August 21.

Black Thor and Black Label are 100 per cent owned by Noront, while Big Daddy is a joint venture between Noront (70 per cent) and Canada Chrome Mining Corporation (30 per cent), a subsidiary of KWG Resources.

According to the report, Black Thor has 107.6 million tonnes in the measured category, grading at 32.2 per cent chromium; an additional 30.2 million tonnes in the indicated category, grading at 28.9 per cent chromium; as well as 26.8 million tonnes in the inferred category, grading at 29.3 per cent chromium.

U.S. Stocks Rise as Investors Look for Floor After 6-Day Selloff – by Joseph Ciolli and Roxana Zega (Bloomberg News – August 26, 2015)

August 26, 2015

http://www.bloomberg.com/

U.S. stocks advanced, amid their steepest losing streak in four years, as investors made another go at finding a floor after yesterday’s early rally evaporated.

New York Fed Bank President William Dudley said today that the case for raising interest rates in September is less compelling because of international financial and market developments.

The Standard & Poor’s 500 Index climbed 1.6 percent to 1,898.02 at 10:59 a.m. in New York, trimming an earlier 2.5 percent rise. The Dow Jones Industrial Average added 256.62 points, or 1.6 percent, to 15,923.06. The Nasdaq Composite Index gained 1.6 percent.

“This type of short-term rally shouldn’t be much surprise given recent weakness,” said Chad Morganlander, a money manager at Stifel, Nicolaus & Co. in Florham Park, New Jersey, which oversees about $170 billion. “But nonetheless, investors are resetting their global growth expectations, and that’s having a deleterious effect in the longer term. The acceleration of the situation has investors on edge.”

COLUMN-BHP downgrades China steel forecast but keeps iron ore strategy – by Clyde Russell (Reuters U.S. – August 25, 2015)

August 26, 2015

http://www.reuters.com/

LAUNCESTON, Australia, Aug 26 (Reuters) – One of the first steps in recovering from a debilitating condition like alcoholism is admitting you have a problem. It seems BHP Billiton has finally started down this path with iron ore.

In announcing a 52-percent plunge in annual profit on Tuesday, Chief Executive Andrew Mackenzie also lowered BHP’s forecast for the peak in Chinese steel output to between 935 and 985 million tonnes by the mid-2020s.

This was down from the previously long held target of 1 to 1.1 billion tonnes that had underpinned BHP’s massive expansion of its iron ore mines, which has more than doubled output in the past five years to a total of 254 million tonnes in the 2014-15 financial year.

The scaling back of BHP’s China steel forecast leaves Sam Walsh, the chief executive of rival Rio Tinto, as one of the last holdouts for a peak above 1 billion tonnes.

Walsh said after releasing Rio’s results, which saw a 43-percent drop in underlying earnings, that his company was “holding the line” on the 1 billion tonne by 2030 forecast, saying this represented growth of just 1 percent per year over the period.

Can You Read China? Top Mining CEOs Disagree on Biggest Customer – by Thomas Biesheuvel (Bloomberg News – August 25, 2015)

August 25, 2015

http://www.bloomberg.com/

What on earth is going on in China?

Two of the biggest mining companies feeding the country’s appetite for raw materials can’t even agree on whether there’s an answer to the question.

Andrew Mackenzie, head of BHP Billiton Ltd., is bullish on his ability to comprehend a country that consumes more commodities than any other — and whose economic woes have shaken markets around the globe this week.

“We don’t find China impossible to read,” Mackenzie, chief executive officer of the world’s biggest mining company, said Tuesday.“We’ve been at this game for decades.”

His certainty conflicts with billionaire mining rival Ivan Glasenberg’s admission last week that he couldn’t read the world’s second-largest economy right now and neither could anyone else.

The 21 commodities that say China isn’t the problem – by Clyde Russell (Reuters U.S. – August 25, 2015)

August 25, 2015

http://www.reuters.com/

LAUNCESTON, AUSTRALIA – Aug 25, 2015 – One of the reasons advanced for the plunge in commodity prices is concern over the outlook for Chinese demand for raw materials as growth slows in the world’s second-largest economy.

But these are fears not necessarily in evidence, as can be seen by trawling through the detailed customs data for July.

There were at least 21 commodities that showed increases in imports greater than 20 percent in July this year, compared to the same month in 2014.

While it’s true that many of these commodities are minor, there are some fairly major ones showing strong growth as well, led by crude oil, which saw imports jump 29.3 percent in July from the same month a year earlier.

Among the notable increases were a massive 236,594 percent jump in ethanol imports in July, with that single month accounting for more than half of total imports of the fuel so far this year.

Western Nunavut gold project heads into technical review (Nunatsiaq News – August 25, 2015)

August 25, 2015

http://www.nunatsiaqonline.ca/

Nunavut regulators seek comment on TMAC’s revamped project

The price of gold is down, but TMAC Resources Inc. continues to move ahead with its Hope Bay-Doris North gold mine project in western Nunavut, about 125 kilometres south of Cambridge Bay, with a view to getting its mill in operation by the end of 2016.

By then the price of gold — now languishing at US $1,164 per ounce — may rise again to US $1,250 per ounce which TMAC said, in its pre-feasibility study, is required for the mine to make money.

Meanwhile, the Nunavut Impact Review Board and the Nunavut Water Board have opened the project for technical review and asked for comments on TMAC’s new plans for the gold-rich Doris North deposit.

The project, originally reviewed and approved, when it was still owned by Newmont Mining Corp., involved the development of an underground mine at Doris North.

BHP Billiton posts worst profit in 11 years, maintains dividend – by Peter Ker (Sydney Morning Herald – August 25, 2015)

August 25, 2015

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

Analysts say BHP Billiton is offering shareholders “the dividend yield of a lifetime”, after it grew dividends by 2 per cent during a year that its profits slumped by 52 per cent to their lowest level in more than a decade.

The $US0.62 dividend announced by BHP on Tuesday confirmed the miner’s pledge to maintain a “progressive” dividend despite the deliberate shrinking of the company through the spin-out of South32 earlier this year.

The pay out came as the resources giant posted a $US6.4 billion underlying profit, which was well below the $US7.5 billion that analysts had expected.

BHP has not posted a profit this low since the earliest days of the mining boom in 2004. The statutory profit was 86 per cent lower at $US1.9 billion. But despite the result, BHP’s London shares have surged by more than 8 per cent in early trading.

The company’s earnings were always going to struggle amid a broader collapse in commodity prices during the 2015 financial year.

Dollar Rallies as Global Stocks Advance While China Cuts Rates – by Eshe Nelson (Bloomberg News – August 25, 2015)

August 25, 2015

http://www.bloomberg.com/

The dollar climbed for the first time in five days against the yen as stock markets rallied following Monday’s $2.7 trillion global equity wipeout and China cut interest rates.

The U.S. currency’s biggest gains came against the Swiss franc and euro, as well as the yen — all currencies that investors consider to be havens in times of market turmoil. The yen weakened after a Japan Ministry of Finance official said its rally to a seven-month high as China’s economy slows had been “abrupt.”

“The better tone in markets, and a rebound from yesterday’s collapse, is helping lift dollar-yen,” said Keng Goh, a foreign-exchange strategist at Royal Bank of Canada in London. If equity markets stay calm, expectations for the Federal Reserve to raise interest rates will build again, further supporting the U.S. currency, he said.

The dollar jumped 1.5 percent to 120.13 yen as of 7:10 a.m. in New York, after slumping to 116.18 on Monday, the weakest since Jan. 16. It climbed 1 percent to $1.1498 per euro. Europe’s single currency gained 5.4 percent in the previous four days, the most since March 2009.

Metals feel China pain as rout spreads to other commodities – by Rachelle Younglai (Globe and Mail – August 25, 2015)

August 25, 2015

The Globe and Mail is Canada’s national newspaper with the second largest broadsheet circulation in the country. It has enormous influence on Canada’s political and business elite.

Copper, aluminum, nickel and other commodities plunged to new lows on fears that China’s faltering economy will exacerbate a market awash in metal.

The latest event to spook investors was the steep decline in Chinese stocks earlier on Monday. Copper and aluminum hit six-year lows. Nickel plunged 10 per cent. Zinc and lead dropped to five-year lows. Gold, usually a safe haven in times of turmoil, barely rose.

“All bad news is bad news and good news is no news. That’s the environment we are in,” said Jessica Fung, commodity strategist with BMO Nesbitt Burns. Once the engine behind the bull market in commodities, China’s slowdown is wreaking havoc across the mining complex.

There is less and less confidence that the world’s second-largest economy will reach its 7.5-per-cent growth rate target. Recent data showed a decline in China’s manufacturing sector, a top consumer of metals such as aluminum and steel.

Global commodity slump could hit parts of Canada hard – by Ian Bickis (Canadian Press/Toronto Star – August 25, 2015)

August 25, 2015

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Petro-provinces like Alberta, Saskatchewan and Newfoundland will be especially hard hit as oil prices keep sliding amid fears about China’s economy.

Global commodity prices are tanking and they’re bringing Canadian markets down with them, though experts say certain provinces are going to feel the pinch more than others.

“It’ll feel like a recession, depending on where you live in the country,” said John Stephenson, chief executive of Toronto hedge fund Stephenson & Co. Capital Management.

He said everything from oil to metals to lean hog prices are dropping as weaker growth globally weighs on demand — a downward trend that took its toll on the world’s stock markets Monday.

“Virtually everything is down in price — and significantly down, not just a little bit,” said Stephenson.