Republic of Mining

BHP Billiton says reviewing two other mining ventures after Brazil dam disaster – by Eric Onstad (Reuters U.S. – November 16, 2015)

November 17, 2015

http://www.reuters.com/

LONDON – Nov 16 BHP Billiton said on Monday it is reviewing two other mining joint ventures, in Peru and Colombia, following a dam disaster at an iron ore mine in Brazil, which it jointly owns with Vale SA.

BHP told analysts and investors it was examining the structures of its Cerrejón coal joint venture in Colombia and its Antamina copper/zinc JV in Peru after the Brazil disaster.

Two dams collapsed on Nov. 5 in southeast Brazil, killing nine people and coating a two-state area with mud and mine waste. The Brazilian mine is owned and operated by Samarco Mineração SA, a joint venture of Anglo-Australian BHP and Brazil’s Vale.

“We will look into, for our own benefit … the arrangements that we have at Samarco which mirror similar arrangements we have at Antamina and Cerrejón,” BHP Chief Executive Andrew Mackenzie told a conference call.

Forget tankers and pipelines, David Black has a plan for a ‘West Coast exit’ for Canada’s oil – by Geoffrey Morgan (National Post – November 17, 2015)

November 17, 2015

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

CALGARY – David Black’s plan to build a $22-billion refinery on the coast of British Columbia has long been derided as a pipe dream. But Black believes that given the recent government moves affecting the Keystone XL and Northern Gateway pipelines his proposed refinery is the best option for Albertan oil exports.

Moreover, Black said in an interview he won’t need a pipeline to build and operate his proposed 550,000 barrel-per-day Kitimat Clean refinery on the north coast of B.C., for which he expects to file applications for federal and provincial regulatory approvals by Christmas.

“You’re going to have to focus on what it takes to get a West Coast exit for your oil, and God knows a West Coast exit is far more lucrative than a southern or an eastern exit,” said Black, the owner of Kitimat Clean Ltd. and the Black Press Group Ltd. newspaper chain.

Major oilsands producers have been unwilling to sign contracts with Kitimat Clean because, Black said, their executives didn’t know if the project would ever be built.

General Magnesium signs deal to process ore – by Ron Grech (Timmins Daily Press – November 16, 2015)

November 17, 2015

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – William Quesnel says it has been a slow 15-year process completing the geological work and getting government approvals in order for him to start up a talc magnesium mine in Whitney Township.

And now like tumbling dominoes, everything seems to be quickly coming into place for the company to begin production next year.

Two weeks ago, Quesnel, chairman and chief executive officer of General Magnesium, announced the signing of a $4.9 billion deal with Hunter Douglas Metals, providing the mine with a buyer for 100% of the magnesium the mine produces over the next 15 years.

This week, Quesnel announced the signing of two more agreements — one with Abbey Gold to process the ore from the Whitney talc magnesite deposit; the other with Haywood Securities, a financing house that will be taking General Magnesium from a privately financed company to one that is publicly sold on the stock market.

Diamonds Are Abundant – by Peter Diamandis (Huffington Post – November 16, 2015)

November 17, 2015

http://www.huffingtonpost.com/

Peter Diamandis is the Chairman/CEO of XPRIZE.

What’s more scarce than perfect diamonds, right? Wrong.

This week, a new company called Diamond Foundry announced that it is able to “grow” hundreds of perfect, “real” diamonds (up to nine carats) in just two weeks in a lab.

Announced “above the line of supercredibility,” with the backing of Leonardo DiCaprio and 10 billionaires, my friend Martin Roscheisen is about to disrupt an industry that has been built on scarcity for centuries.

More details on Diamond Foundry in a second… but in the meantime, this audacious company really begs the question: What is truly scarce?

Steel Is the Poster Child For Oversupplied Commodity Markets, and It’s in Shambles – by Luke Kawa (Bloomberg News – November 16, 2015)

November 17, 2015

http://www.bloomberg.com/

Output has far exceeded demand.

The collapse in oil prices following the shale revolution has stolen the limelight for investors mulling the end of the commodities supercycle.

But the real “poster child for problems in commodities markets is perhaps the global steel industry,” according to Macquarie analysts led by Colin Hamilton, the firm’s global head of commodities research.

The front-month contract for U.S. hot-rolled coil steel futures traded on the New York Mercantile Exchange is down nearly 40 percent year-over-year.

Forecasts for a boom in Chinese consumption helped spur a rise in production that left the segment with a massive glut. The successful realization of economic rebalancing in China, meanwhile, necessarily entails a material slowdown in that nation’s demand for steel.

Elk Valley Coal pumps $1 billion into economy: report – by Gordon Hoekstra (Vancouver Sun – November 15, 2015)

January 14, 2016November 16, 2015

http://www.vancouversun.com/

Nearly 60 per cent goes into Metro Vancouver and Fraser Valley businesses

Teck’s Elk Valley coal operations in the southeastern B.C. spent more than $1 billion on goods and services in the province in 2013, a new report by Resource Works says.

While about one quarter of that spending took place in the southern Interior region the coal operations are located, nearly 60 per cent of the money was pumped into businesses in the Lower Mainland, which includes Metro Vancouver and the Fraser Valley.

“We are trying to shine a light on a part of the economy that most people don’t see in their day-to-day lives if they live in larger cities, yet has a very significant impact on the employment prospects they enjoy and also the funding for services that governments deliver because of taxes and royalties,” Resource Works executive director Stewart Muir said Sunday.

Caterpillar warns lower Chinese demand will limit sales – by Lindsay Whipp (Financial Times – November 15, 2015)

November 16, 2015

http://www.ft.com/

Chicago – Caterpillar, the world’s largest mining and construction equipment manufacturer by sales, has warned that it does not expect Chinese demand for excavators to recover to the peaks of 2010-12.

Tom Pellette, group president for construction industry equipment, made the remarks as the Chinese economy recorded its slowest growth rate since 2009 in the third quarter, due to declining construction and factory activity, which many economists do not believe has bottomed out yet.

The forecasts also highlight Beijing’s efforts to rebalance the economy away from its traditional drivers such as manufacturing and investment and towards consumer spending. It also demonstrates the impact of the stimulus programme, which the government unleashed during the global financial crisis, had on demand.

Mr Pellette said industry-wide sales of hydraulic excavators between 10-90 tonnes, will reach the “23,000 range” in China this year. That compares with a total of more than 27,000 sold in March alone in 2011 and more than 112,000 for the whole of 2010, which was the peak year for the market. The company does not disclose figures for sales of its own products by country.

COLUMN-Commodity producers may be better bet in any demand recovery – by Clyde Russell (Reuters U.S. – November 16, 2015)

November 16, 2015

http://www.reuters.com/

Nov 16 – Let’s assume that you are a somewhat contrarian investor and take the view that the recent slump to fresh lows in commodity prices, and the share prices of producers, is a sign that a turnaround is coming in 2016.

If you do take this view, is it better to buy the actual commodities or the shares of the companies that extract them?

Unfortunately there is no clear precedent from recent history to suggest that one will significantly outpace the other, but that doesn’t mean there’s no value in looking in what has happened in prior commodity routs.

BHP Billiton, the world’s largest diversified miner, reached its lowest since the 2008 financial crisis in Sydney trading on Nov. 11, hitting an intraday low of A$19.81 ($14.06) a share, before closing at A$20.23.

Converting to U.S. dollars, which is more relevant for internationals investors and because the commodities BHP sells are priced in the greenback, and BHP is still some way above the 2008 low at a Nov. 13 close of $14.42.

Muddy waters: After Mount Polley, miners and engineers grapple with the risk of maintaining the status quo -by Eavan Moore (CIM Magazine – November 2015)

November 16, 2015

https://www.cim.org/en/

Six months before the Mount Polley tailings dam failure in August 2014, a tailings facility in North Carolina released toxic coal ash into the Eden River. One month after Mount Polley, three workers died in a tailings facility failure at the Herculano mine in Brazil. An unusually bad year? Not necessarily.

According to a July 2015 report by David M. Chambers, president of the Center for Science in Public Participation, and Lindsay Bowker, a Maine-based activist with a background in civil construction projects, between 1990 and 2010 there were 33 dam failures that released more than 100,000 cubic metres of “semi-solid discharge” and/or caused loss of life. Based on historical trends, the report predicts 11 more will have occurred by 2020.

In January 2015, a three-person panel appointed to investigate the origins of the Mount Polley tailings spill came to similar, albeit less drastic, conclusions. “If the inventory of active tailings dams in [British Columbia] remains unchanged, and performance in the future reflects that in the past, then on average there will be two failures every 10 years and six every 30,” the panel wrote. “In the face of these prospects, the Panel firmly rejects any notion that business as usual can continue.

Ministerial mandate letters point to greener Canadian economic priorities – by Henry Lazenby (November 14, 2015)

November 16, 2015

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – Canadian Prime Minister (PM) Justin Trudeau on Friday took the unprecedented step of publicly releasing all ministerial mandate letters, as part of his plan for open and transparent government for Canadians, giving citizens a first glimpse of the new Liberal administration’s policy priorities.

“Real, positive change means new leadership and transparent government for Canadians. Our Ministers are being encouraged in their mandate letters to consult closely as a team, to listen and to carefully consider the expert advice of public servants. I am confident such measures will lead to better decision-making and results for Canadians,” he stated.

The ministerial mandate letters highlighted the government’s commitment to invest in jobs and growth for the middle class and those working hard to join it. They outlined the government’s progressive vision and provided a framework for what ministers were expected to accomplish, including specific policy objectives and challenges to be addressed.

End head-butting over resource projects – by Carol Goar (Toronto Star – November 16, 2015)

November 16, 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 think-tank has released a timely plan to make First Nations full partners in deciding how — and whether — to exploit non-renewable resources. One of the litmus tests of Justin Trudeau’s pledge to renew Canada’s relationship with First Nations will be his handling of resource development.

The current flashpoints are pipelines and petroleum. But the issue is bigger than that. It encompasses minerals, forestry, commercial fishing, electricity generation and waste management. These industries account for 20 per cent of Canada’s gross domestic product. They all impinge on the rights, territories and way of life of life of aboriginal communities.

The only tool the federal government now has to reconcile these competing interests is a 40-year-old environmental assessment process, which is not meant for this. It was designed to identify and mitigate potential sources of pollution.

[Gina Rinehart] Iron dynasty – by John McIlwraith (Australia’s Mining Monthly – November 16, 2015)

November 16, 2015

http://miningmonthly.com/

Their story, now spanning two generations, could be a history of the modern Australian mining industry, beginning in the years when there was a bizarre ban on iron ore exports – there was little of the mineral in Australia, apparently – to the current position in which it is one of the two giants in international trade, so important that when its price fell sharply in recent times, it shook the budgets of federal and state governments, and damaged the economy.

The Pilbara iron ore industry has been a major contributor to the emergence of China as one of the two dominant economies.

Lang Hancock and now his daughter Georgina, more usually known as Gina, Rinehart have played major roles in this transformation.

When Lang assumed the role of prophet, declaring to an incredulous Australia that the Pilbara would become a major force in world resources, it was his tireless proselyting, his badgering of ministers and company chairmen, which led to the early breakthrough.

Clinton’s coal aid plan leaves critics cold – by Darren Goode (Politico.com – November 12, 2015)

November 16, 2015

http://www.politico.com/story

Hillary Clinton’s proposal for $30 billion in aid for people suffering from the decline of the coal industry drew a mixed-to-hostile response Thursday from critics of President Barack Obama’s environmental policies — raising doubts about whether she can arrest the Democratic Party’s electoral slide in coal country.

The package her campaign outlined includes billions of dollars to shore up coal workers’ pension benefits and retrain out-of-work miners or power plant employees to find jobs in other industries. It also includes spending on the so-far-elusive goal of developing “clean coal” technology that would capture and store coal-burning plants’ greenhouse gas pollution.

The plan, which is similar to proposals from Obama, is meant to help coal-dependent communities navigate the transition toward economies based on cleaner energy sources — something that could have an impact in key 2016 states like Pennsylvania, Ohio, Virginia and Colorado.

[Sudbury] Health unit wants forum to ‘air concerns’ about Vale spill – by Carol Mulligan (Sudbury Star – November 14, 2015)

November 16, 2015

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

The Sudbury and District Health Unit is looking to coordinate a meeting at which representatives of three levels of government, an environmental group and others would discuss a situation that prompted an Environment Canada investigation at Vale Ltd.

The first Burgess Hawkins heard about Environment Canada seizing computers and materials from the mining giant, in relation to an alleged 2012 violation of the Fisheries Act, was when he read a news story about the raid, first reported by The Sudbury Star.

Since early last month, when Environment Canada produced a warrant and was accompanied by the RCMP to Vale’s engineering offices in Copper Cliff, Burgess has been keeping an eye on the unfolding investigation.

A manager in the SDHU’s Environmental Health division, Burgess said Friday he has had conversations with officials with the Ontario Ministry of the Environment and Climate Change, and talked with a co-chair of the Coalition for a Liveable Sudbury.

World’s Second-Biggest Miner Unfazed by China Growth Pessimists – by Jesse Riseborough and Ryan Chilcote (Bloomberg News – November 15, 2015)

November 16, 2015

http://www.bloomberg.com/

The head of the world’s second-biggest mining company says he’s unfazed by pessimism around China’s ability to meet official economic growth forecasts that are critical to the fortunes of the embattled industry.

“There are lot of pundits saying that growth will be slower than the government will be expecting,” Sam Walsh, chief executive officer of Rio Tinto Group, said in an interview with Bloomberg Television in Antalya, Turkey on Sunday referring to China’s 7 percent growth target this year. “Quite frankly we have conducted our own independent research and analysis and it’s indicating that it’s pretty close to 7 percent.”

A retreat in prices for industrial metals deepened last week on concerns over demand in China, the world’s biggest consumer, after data showed the country’s industrial output matching the weakest reading since 2008.

Monetary and fiscal easing have yet to spur a rebound with the economy expanding at the slowest pace in a quarter of a century. Bloomberg’s monthly gross domestic product tracker remained below the Chinese government’s 7 percent goal in October with a reading of 6.57 percent.