Republic of Mining

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.

Industry crisis testing the mettle of steel makers – by Greg Keenan (Globe and Mail – November 14, 2015)

November 16, 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.

As a 36-year veteran of the steel mill that dominates Sault Ste. Marie, Ont., Steve Johnson didn’t lose any sleep Monday night after Essar Steel Algoma Inc. was granted creditor protection.

“If I look at the horizon, it hasn’t changed,” Mr. Johnson says. “They’re still making steel. They’re still making iron. We can tell by which smokestack is emitting fumes what’s going on.”

It is the third time in a quarter century that Algoma has been granted protection under the Companies’ Creditors Arrangement Act. The steel maker has interest payments of $25-million (U.S.) that it is unable to make amid a collapse in the price of steel and a court battle with an iron ore supplier.

Brazil mining flood could devastate environment for years – by Stephen Eisenhammer (Reuters U.S. – November 15, 2015)

November 16, 2015

http://www.reuters.com/

RIO DOCE, BRAZIL – The collapse of two dams at a Brazilian mine has cut off drinking water for quarter of a million people and saturated waterways downstream with dense orange sediment that could wreck the ecosystem for years to come.

Nine people were killed, 19 are still listed as missing and 500 people were displaced from their homes when the dams burst at an iron ore mine in southeastern Brazil on Nov. 5.

The sheer volume of water disgorged by the dams and laden with mineral waste across nearly 500 km is staggering: 60 million cubic meters, the equivalent of 25,000 Olympic swimming pools or the volume carried by about 187 oil tankers.

President Dilma Rousseff compared the damage to the 2010 oil spill by BP PLC in the Gulf of Mexico and Environment Minister Izabella Teixeira called it an “environmental catastrophe.”

Buying diamonds this festive season? Bigger is better – by Prinesha Naidoo (Mineweb.com – November 12, 2015)

November 13, 2015

http://www.mineweb.com/

Industry’s woes have all but wiped out the value of large diamonds.

JOHANNESBURG – The global diamond industry appears to be in a precarious position with weak consumer demand, a supply overhang and a credit crunch among rough diamond traders weighing on prices.

According to various reports, rough diamond prices have decreased more than 12% this year alone. The RapNet Diamond Index (see table above) reveals prices for polished stones between 0.3 carats (ct.) and 3 ct. and reveal how prices have plummeted between January 1 and November 1 this year.

Similarly, data from PriceScope (see chart below) shows the average price of stones between 0 and 0.5 ct. are now lower than at any point during the financial crisis.

As with industrial commodities, much of the decline in diamond prices has been blamed on slowing economic growth in China, the world’s second largest consumer of diamonds after the United States.

High-energy coal to help Australia miners steam ahead in Asia – by Sonali Paul (Reuters U.S. – November 12, 2015)

November 13, 2015

http://www.reuters.com/

MELBOURNE – As debate swirls around the future of coal, Australian miners are counting on the higher energy content of the coal they dig and proximity to growing Asian markets to give them an edge over rivals and defy a global push towards cleaner energy.

With around $35 billion in projects in the pipeline, the world’s No.2 exporter of thermal coal is relying on Asian markets using the cheapest source of power even as they try to contain soaring emissions and choking pollution.

That growth in coal demand comes despite climate change taking center stage internationally ahead of U.N. environmental talks that kick off in Paris this month, with governments coming under pressure to do more to cut carbon emissions.

“Eighty years from now when the world’s last coal-fired power plant shuts its doors, it’ll be burning Aussie coal,” said Morgan Stanley commodities analyst Joel Crane in Melbourne.

Productivity most critical mining issue – by Douglas Morrison (Northern Ontario Business – November 5, 2015)

November 13, 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.

Douglas Morrison is the President and CEO of the Sudbury-based Centre for Excellence in Mining Innovation (CEMI) and network director, Ultra-Deep Mining Network.

Of the five important issues the mining industry in Canada needs to address (demographics, mine productivity, environmental performance, exploration, and remote mine development) the most critical is productivity.

Nationally, the decline in productivity is common in every sector of the economy. Equipment gets older and needs more maintenance, or customers relocate and delivery costs increase.

In mining, operations get deeper, hotter, technically more difficult and logistically more complex, and every day these factors erode mine productivity.