Republic of Mining

Mine Disasters Seen Showing Cost of Cheap Waste Solutions – by Danielle Bochove (Bloomberg News – November 18, 2015)

November 18, 2015

http://www.bloomberg.com/

As miners globally review the way they store waste in the wake of another horrific dam spill, the solution may be as simple as it is dramatic: spend a lot more.

Images of sludge spewing into towns and rivers could be a thing of the past if mines used different types of storage such as removing water or building on more stable ground. While that can be as much as 10 times costlier for companies already squeezed by slumping prices, the cost is much higher when things go wrong.

The cleanup bill for the Nov. 5 spill at the Samarco iron-ore venture in Brazil, owned by BHP Billiton Ltd. and Vale SA, probably will exceed $1 billion, Deutsche Bank AG said. Then there’s lost output and potential lawsuits.

Copper price recovery at least three years off, says BHP Billiton – by Amanda Saunders (Australian Financial Review – November 18, 2015)

November 18, 2015

http://www.afr.com/

BHP Billiton does not expect depressed copper prices to lift for at least the next three years, but is confident in a comeback around 2019, when the market should start to shift into a “total under-supply situation”.

Copper prices have been languishing around six-year lows for much of this year, smashing Glencore’s share price and also putting pressure on copper majors BHP and Rio Tinto. Overnight on Tuesday, the price of copper – which is seen as a proxy for global economic activity – sank to a fresh six-year low of $US4590 a tonne.

Prices for BHP’s four key “pillar” commodities – copper, oil, iron ore and metallurgical coal – have taken a beating in 2015.

The Early Years of Bushflying [Strong Northern Ontario Mining Link]

November 18, 2015

With the advent of war in 1914, there were few registered pilots in Canada, and even fewer aircraft. Flying was a novelty of the well-to-do, and certainly, the daring.

But over the next five years, young Canadian men would come to comprise almost one-third of the British air services. For many, it was an opportunity to escape the horrors of the trenches – the mud, cold, rats, lice and the ever-ominous threat of a horrible death. It was a chance to take to the pristine blue skies, with the wind in your face and a silk scarf round your neck trailing in the breeze.

But there is little glamour in warfare of any kind. And many paid an exacting price. While the airplanes kept them out of the trenches, it posed its own threats.

Ex-Rio economist David Humphreys says iron will sink further in 2016 as glut persists – by Jasmine Ng (Bloomberg/Sydney Morning Herald – November 18, 2015)

November 18, 2015

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

Iron ore will extend declines into 2016 as weakening steel output hurts demand while the world’s biggest suppliers raise production further, according to a former chief economist at Rio Tinto, who said China would do well to demolish unneeded mills.

“There’s about 300 million tons of surplus capacity in China – that needs to be not just shut down, it needs to be eradicated, it needs to be bulldozed,” David Humphreys, who held the title at Rio for eight years to 2004, said in a phone interview. Steel “production needs to fall,” said Humphreys, 63, who is now an independent consultant.

Teck cuts 1,000 jobs, dividend to reduce costs (Canadian Press/Toronto Star – November 18, 2015)

November 18, 2015November 18, 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.

The reduction in spending will include $350 million of capital spending cuts and deferrals and $300 million of operating cost savings.

VANCOUVER — Mining company Teck Resources Ltd. is cutting 1,000 jobs around the world through a combination of layoffs and attrition as part of a plan to reduce spending next year by $650 million.

The Vancouver-based company said the layoffs will include senior management and brings its total job cuts over the past 18 months to roughly 2,000 positions.

Precious metal streaming companies looking to team up to tackle bigger deals – by Peter Koven (National Post – November 18, 2015)

November 18, 2015

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

Overwhelmed by the sheer volume of opportunities available in volatile commodity markets, precious-metal “streaming” companies are looking to team up to take on large acquisitions that they might not be able to readily afford on their own.

Randy Smallwood, chief executive of Silver Wheaton Corp., said he thinks the streaming firms will be doing syndicated deals within the next year.

“It is something we’ll have to consider more as our capital capacity has been reduced by some of the acquisitions we’ve made recently,” he said.

De Beers seeks First Nation exploration support – by Tanya Talaga (Toronto Star – November 18, 2015)

November 18, 2015November 18, 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.

A De Beers Canada team from is visiting Ontario’s remote Weenusk First Nation, seeking community support to conduct diamond exploration work.

An exploration team from De Beers Canada was expected to be in northern Ontario’s remote Weenusk First Nation on Tuesday, to seek community support to conduct diamond exploration work.

Weenusk First Nation, or Peawanuck, is a small community of nearly 400 people, 1,400 km north of Toronto, on the shores of the Winisk River.

CP’s $28.4-billion bid a ‘substantial’ premium for Norfolk investors: CEO – by Eric Atkins (Globe and Mail – November 18, 2015)

November 18, 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.

Canadian Pacific Railway Ltd. has released the letter it sent to Norfolk Southern Corp.’s chief executive officer outlining the proposed $28.4-billion (U.S.) takeover of the Virginia-based railroad.

In the letter dated Nov. 9, CP says the cash-and-stock offer of $46.72 a share and 0.348 in stock is a “substantial” premium to form a combined company that will be able to achieve more than $1.8-billion in cost savings “over the next several years.”

PRECIOUS-Gold ekes out gains, but languishes just above 2010 low – by Clara Denina (Reuters U.S. – November 18, 2015)

November 18, 2015

http://www.reuters.com/

LONDON, Nov 18 Gold inched up on Wednesday as the dollar fell and a gunfight in Paris hurt risk appetite, but the market awaited minutes of a recent Federal Reserve meeting which could reinforce bets of a rate hike next month, keeping the metal close to an earlier near six-year low.

Spot gold was up 0.1 percent at $1,070.80 an ounce by 1053 GMT, after falling to $1,064.95 earlier, the lowest since February 2010. U.S. gold futures for December delivery were up $1.60 an ounce at $1,070.30.

Silver tracked gold, returning to positive territory after dropping to a 2-1/2-month low, up 0.5 percent to $14.25 an ounce, while platinum stood close to a seven-year low, unchanged at $850.40 an ounce.

Glencore’s renewed slide pressures Glasenberg debt-cut plans – by Jesse Riseborough (Bloomberg News – November 18, 2015)

November 18, 2015November 18, 2015

http://www.bloomberg.com/

If all else remains unchanged, it’s going to be back to the drawing board – analyst.

For a while it looked like Glencore had turned the tide.

Billionaire chief executive officer Ivan Glasenberg’s $10 billion debt-cutting plan, vivified with asset sales and output cuts, breathed life into a collapsing share price. Now with the stock falling again, pressure is back on to drive those efforts harder and faster.

The Swiss firm has fallen for the past 10 days straight in London, the longest streak on record. That 31% slump, as prices for the copper and zinc that Glencore produces reached six-year lows, wiped about $8 billion off the mining and trading company’s value.

Gold Sinks to 5.5-Year Low Amid Rallying Stock Markets, Strong U.S. Dollar – by Jim Wyckoff (Kitco News – November 17, 2015)

November 18, 2015November 17, 2015

http://www.kitco.com/

(Kitco News) – Gold prices dropped to a 5.5-year low Tuesday, pressured in part by rallying U.S. and world stock markets early this week. Traders and investors have reckoned the terror attacks in Paris are not going to influence their trading decisions–at least not at this time.

The “risk-on” mentality in the market place Tuesday was bearish for the safe-haven gold market, as monies flowed into the competing asset class: equities. The other bearish element working against the precious metals recently is the rally in the U.S. dollar index, which on Tuesday hit a seven-month high.

February Comex gold was last down $14.30 at $1,069.80 an ounce. March Comex silver was last down $0.072 at $14.18 an ounce.

Copper price slump could create headwinds for Glencore’s debt plan – by Olivia Kumwenda-Mtambo and Atul Prakash (Reuters U.S. – November 17, 2015)

November 17, 2015

http://www.reuters.com/

JOHANNESBURG/LONDON – Further falls in copper prices might yet undermine the fightback mounted by mining and trading company Glencore after its shares tumbled to record lows this year, analysts said.

London Metal Exchange benchmark copper plunged to $4,590 a tonne on Tuesday, its lowest in more than six years, as fears about slowing demand growth in top consumer China and a higher dollar fueled negative sentiment.

Glencore saw its shares hit a record low at 66.67 pence in September over concerns it was not doing enough to cut its debt to withstand a prolonged fall in copper – its key metal.

Swiss-based Glencore has pledged to cut its net debt from nearly $30 billion to $20 billion by the end of 2016, a plan the company said would allow it withstand copper prices of $4,000 a tonne, as expected by some market players.

Chinese demand needed to alleviate mining pain unlikely to come – by Cole Latimer (Australian Mining – November 17, 2015)

November 17, 2015

http://www.australianmining.com.au/

Bankers are forecasting a rise in Chinese demand as the only way for mining to grow, but those in the industry are not expecting strong growth in the nation, however this is not fazing miners.

The Goldman Sachs Group has outlined ongoing weakness in copper and aluminium markets, and continued pain in iron ore, unless a rise in seen in Chinese metal demands.

It went on to say cost cutting exercises by miners in an attempt to tighten operations won’t help margins in the long term.

“While recent supply cuts in copper and aluminium may appear to bring the markets closer to balance, the cuts in our view are not sufficient to do so,” analysts explained according to Bloomberg.

“It is our view that the supply cuts confirm the bear case for these metals. “Only a major pickup in Chinese demand is likely to be sufficient to balance metals markets.”

Is mining innovation an oxymoron? – by Nathan Stubina (Northern Miner – November 17, 2015)

November 17, 2015

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Newspapers are replete with articles denouncing the dearth of innovation in the mining sector. While we may argue about the causes – the sector’s capital intensive nature, the people who work in mining, etc. — most people will agree that the mining industry appears to be innovating at a much slower pace than other industries.

I believe that most of us are clear on why we need to innovate. The mining industry is facing many difficult challenges: lower grade ores, smaller deposits, increasing power costs, tighter margins, faltering capital markets, political risks, increased social demands, higher taxes, etc.

An example of the type of complex challenges we face: Mining executives frequently ask their engineers what the “carbon footprint” of a new process will look like – a question unheard of 30 years ago.

Nowadays, questions about water and power requirement don’t start with: ‘how much does it cost?’

Bacanora raises US$13.4 million for Mexican lithium project (Northern Miner – November 16, 2015)

November 17, 2015November 17, 2015

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Just a few months after Bacanora Minerals (TSXV: BCN) and Rare Earth Minerals (LSE: REM) signed a deal with Tesla Motors (NASDAQ: TSLA) to supply the car maker with lithium hydroxide from their Sonora lithium project in Mexico, the companies have raised US$13.4 million in a private placement.

The proceeds will be used for a bankable feasibility study of the project, 180 km northeast of Hermosillo, and towards the upgrading and continuous running of a pilot plant in Hermosillo to produce bulk quantities of lithium products to long-term off-take parties.