Republic of Mining

The nickel mine that ensnared two tycoons – by Tony Koch (The Australian – December 12, 2015)

December 11, 2015

http://www.theaustralian.com.au/

Several decades ago, a footballer came from the field at the end of the game and said to his coach, “How did I go?’’ The coach famously replied: “Obviously you went crap. If you had done good, you wouldn’t have to ask.’’

The same could apply to certain nouveau riche self-proclaimed “billionaire entrepreneurs’’ who, on close inspection, often possess little more than massive risky bank loans and the private jet status symbol.

It is intriguing in that context to look at the parallel lives of “billionaires’’ Clive Palmer and the late, disgraced Alan Bond, and how the fragility of their bluster was exposed by a relatively insignificant nickel mine and processing plant at Greenvale, 25km north of Townsville in north Queensland.

Could private equity fill the mining M&A vacuum? – by Clara Denina (Reuters U.S. – December 8, 2015)

December 11, 2015

http://www.reuters.com/

LONDON – Expectations of a takeover frenzy in global mining have been dashed by falling commodity prices, leaving the field open for private equity funds looking to deploy billions of dollars.

Consolidation in previous times has been driven by major mining companies seeking extra capacity due to strong demand and rising prices.

The delay in their acquisition plans, of possibly two to three years, leaves a vacuum that some in the private equity business see as an opportunity.

2016 PDAC Award Recipients

March 15, 2018December 11, 2015

Award recipients will be honored at the 2016 PDAC Awards Evening on Monday, March 7, 2016, at the Fairmont Royal York Hotel, Toronto, during the PDAC’s annual convention.

Awards recipients are selected by the association’s Board of Directors, based on the recommendations of the PDAC’s awards committee.

Bill Dennis Award

This award, named for a former president of the association, honours individuals who have accomplished one or both of the following: made a significant mineral discovery; made an important contribution to the prospecting and/or exploration industry.

Commodities slump has Glencore exploring its options – by Ian McGugan (Globe and Mail – December 11, 2015)

December 11, 2015

http://www.theglobeandmail.com/

For sale: One multibillion-dollar agricultural trader. Slightly used. All reasonable offers considered.

Okay, that’s not exactly how Ivan Glasenberg, chief executive officer of embattled Glencore PLC, put things during his conference call with investors on Thursday. But it does capture the flavour of some of his remarks.

Like every other miner, Glencore is taking it on the chin as the great global commodity collapse continues to send prices spiralling lower. Shares in the Anglo-Swiss company are down 68 per cent this year.

Glencore may shut Murrin Murrin nickel mine in WA – by Peter Ker (Sydney Morning Herald – December 11, 2015)

December 11, 2015

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

Swiss miner Glencore says it might close more Australian mines if weak commodity prices persist, with the Murrin Murrin nickel mine in Western Australia the next probable candidate.

Glencore has already shuttered 15 per cent of its Australian coal production and reduced production at its Queensland zinc mines, and the company’s chief executive Ivan Glasenberg has said he was committed to shutting more mines if they were not making money.

Mr Glasenberg said only two mines in Glencore’s global portfolio were not profitable at current prices and Murrin Murrin, which is held in Glencore subsidiary Minara Resources, was one of those.

Diamonds are forever; is Anglo American? – by OLIVIA KUMWENDA-MTAMBO AND FREYA BERRY (Reuters U.S. – December 10, 2015)

December 11, 2015

http://www.reuters.com/

JOHANNESBURG/LONDON – Anglo American’s plans to shut or sell dozens of loss-making mines have failed to halt a dramatic slide in its share price and it may need to sacrifice stronger parts of the business or raise cash from shareholders to pay down its debt.

The company, which grew from gold fields near Johannesburg to dominate diamond, platinum and, to some extent, iron ore markets, is one of many miners struggling with a fall in commodities’ prices driven by lower demand from China.

That makes selling assets that much harder. Anglo’s shares have slumped 11 percent since it announced the biggest restructuring in its nearly 100-year history on Tuesday, leaving it with a market value of $6.7 billion, down from $27 billion a year ago.

Glencore to accelerate debt cuts, capital expenditure – by David Stringer and Jesse Riseborough (Bloomberg News/Mineweb.com – December 10, 2015)

December 10, 2015

http://www.mineweb.com/

Glencore expanded its debt-reduction plan by pledging more asset sales and wider spending cuts as the Swiss miner and trader reacts to the deepening rout in commodities prices.

The company is seeking to trim its net debt to between $18 billion and $19 billion by the end of 2016, it said on Thursday in a statement. That’s less than the company said in September, when it promised to cut debt by about a third to about $20 billion. The shares rose the most in more than a month.

The world’s biggest miners are reeling from a slump in commodities prices that have cut profits and stretched balance sheets loaded with debt during a decade-long bull run.

Two thirds of world’s coal output is loss-making, Wood Mackenzie estimates – by Peter Ker (Sydney Morning Herald – December 10, 2015)

December 10, 2015

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

More than 65 per cent of the world’s coal production is estimated to be unprofitable as prices for both thermal and coking coal head for their fifth consecutive year of declines.

The estimate, which was provided by commercial intelligence company Wood Mackenzie, applies to both types of coal. It would be even higher if sustaining capital spent by miners on things like engine maintenance was taken into account.

The extraordinary estimate illustrates the parlous state of the coal industry, which has been battling slowing demand in Asia and structural challenges surrounding coal’s place in an increasingly carbon-conscious world.

The Wood Mackenzie data includes coal mined for export markets and domestic energy supplies around the world.

Rob McEwen, the Investor, Has Some Advice for Mining Executives Everywhere (The Gold Report – December 10, 2015)

December 10, 2015

http://www.theaureport.com/

What does a veteran mining executive look for when investing his money in junior equities?

In this interview with The Gold Report, Rob McEwen, who has been predicting $5,000/oz gold prices since 2011, explains why he still thinks that this is a possibility in the next four years and how companies can take advantage of technology to ensure that a price rise goes to the bottom line—and ultimately shareholders.

And he shares the names of the three companies that meet his litmus test, one of which bears his name.

The Gold Report: For the last five years, you’ve been predicting $5,000/ounce ($5,000/oz) gold. Are you still predicting that and what would drive it there?

Could China be the answer to Ring of Fire infrastructure woes? – by Jax Jacobsen (SNL.com – December 9, 2015)

December 10, 2015

https://www.snl.com/

China is making a grab for chromite in Ontario’s Ring of Fire, with a state-owned enterprise preparing to launch a feasibility study on a railway that would link the remote region with other transport infrastructure and enable the export of resources.

Beijing has been aggressive in securing access to resources worldwide, pursuing deals of this sort from developing nations such as the Democratic Republic of Congo and Peru to construct railways, roads and ports in return for access to minerals the country needs to fuel its continuing growth.

Latin American exports to China increased from US$11 billion in 2003 to nearly US$106 billion in 2013, the bulk of those exports being minerals. In turn, China lent Latin American countries approximately US$98 billion in loans from 2005 to 2018, according to research from BBVA, a multinational Spanish banking conglomerate.

NEWS RELEASE: PDAC Honours Industry Leaders with 2016 Awards

March 15, 2018December 10, 2015

Toronto, December 8, 2015 – Industry leaders in seven categories will be honoured for their outstanding contributions to the mineral exploration and mining sector at the Prospectors & Developers Association of Canada’s (PDAC) 2016 Convention. The annual awards showcase the best domestic and international mineral discovery, mine development, Aboriginal achievement, exceptional environment or social responsibility effort, distinguished service, and special achievement.

Recipients will be celebrated at the Awards Evening at the Fairmont Royal York Hotel in Toronto on March 7, 2016, during the 84th PDAC Convention.

The PDAC’s Board of Directors select recipients based on recommendations of the association’s Awards Committee. A summary of the awards and their recipients are listed below.

Winners and losers as commodities ‘super-cycle’ turns into mirage – by Oliver Kamm (The Times/The Australian – December 11, 2015)

December 10, 2015

http://www.theaustralian.com.au/

These are tough times for commodity investors and resources companies. The price of Brent crude has dipped below $US40 a barrel for the first time since 2009 and is down by 60 per cent since the middle of last year. The share prices of mining companies fell sharply after news broke that Anglo American had cut its dividend.

Commodities are the biggest story of 2015, not only in markets and economics but also in politics and, of course, the environment. Cheaper fossil fuels pose a risk to strategies for mitigating climate change.

The collapse in prices is devastating for countries whose export earnings are dominated by commodities and that have squandered the proceeds of a commodities boom or siphoned them to private interests.

Another blow for Labrador as IOC delays Wabush 3 project – (CBC News Newfoundland and Labrador – December 9, 2015)

December 10, 2015

http://www.cbc.ca/news/canada/newfoundland-labrador

The Iron Ore Company of Canada is blaming a weak outlook in the commodities market for a decision to delay development of the Wabush 3 project in Labrador West.

The project has been described as “critical” to the ongoing viability of the operation, but company officials said in a memo to employees Tuesday that it must limit capital spending in 2016.

With iron ore prices now at a 10-year low, and no signs of a rebound on the horizon, IOC officials said tough decisions have to be made.

The Newfoundland and Labrador government gave its approval for the new open pit mine in September, bringing some much-needed good news to an area hard hit by a prolonged slump in iron ore prices.

Commodity slump claims more dividend victims and there’s more to come – by Ian McGugan (Globe and Mail – December 10, 2015)

December 10, 2015

http://www.theglobeandmail.com/

The commodity rout has claimed a fresh round of victims among some of the world’s leading dividend payers and is stalking even larger prey.

Freeport-McMoRan Inc., the major U.S.-based copper and gold miner, suspended its payout to shareholders on Wednesday, following in the footsteps of Anglo American PLC, another giant metals producer, which halted its dividend on Tuesday.

Kinder Morgan Inc., the largest pipeline operator in North America, also took an axe to payouts on Tuesday. The company that once lured investors with the promise of ever-bigger payments slashed its dividend by 75 per cent.

The common theme in the recent cuts is collapsing commodity prices, which are erasing profits and leaving management with little financial room to manoeuvre.

Glasenberg renews call for lossmakers to shut – by David McKay (MiningMX.com – December 10, 2015)

December 10, 2015

http://www.miningmx.com/

GLENCORE CEO, Ivan Glasenberg, returned to a favourite theme in questions during the firm’s investor update today saying he “… did not understand” why rival miners kept loss-making assets open.

He also raised the prospect that his company would “walk away” from its 49% stake in the Koniambo nickel mine in New Caledonia.

“We inherited the asset [Koniambo] and we have struggled with it since,” said Glasenberg of the nickel operation that was first established by Xstrata, the company with which Glencore merged in 2013.

“But we are not married to it. If the furnace does not work we will walk away from it. We will not burn cash. This is not Glencore’s style and we won’t do it,” he said.