Republic of Mining

COMMENT: New NRCan minister Jim Carr of Winnipeg – by Marilyn Scales (Canadian Mining Journal – November 5, 2015)

November 6, 2015

http://www.canadianminingjournal.com/

What a lovely day in Ottawa on Nov. 4 to swear in a new Prime Minister and his Cabinet. It was all warm sunshine and a renewed hope for better days ahead for PM Justin Trudeau’s Liberal government.

Trudeau’s Cabinet includes Jim Carr (Winnipeg South Centre) as Minister of Natural Resources Canada. Educated at the University of Manitoba and McGill University, Carr has been an oboist and a trustee with the Winnipeg Symphony Orchestra.

He won his first seat in the Manitoba legislature in 1988, and served as deputy leader of the provincial opposition. He resigned his seat in 1992 and became a columnist for the Winnipeg Free Press and CBC Radio. He is also the president of the Business Council of Manitoba. Carr made his successful first foray into federal politics this year.

Carr seems to have lots of business and political experience, but does any of it align with the mining industry?

Liberals killing $60M project – NDP – (North Bay Nugget – November 5, 2015)

November 5, 2015

http://www.nugget.ca/

Northern Development Minister Michael Gravelle came under fire in the provincial legislature Thursday for inaction at the Ring of Fire, with the NDP charging that the Liberals are on track to kill a $60-billion mining project.

The questioning followed a report earlier this week from the Financial Post that Noront Resources Ltd. warned the province that it will stop work unless they can show some progress has been made on First Nations agreements and infrastructure for the remote mining development.

The company has spent millions on the Eagle’s Nest project in the Ring of Fire but work and spending could stop by end of December if progress isn’t made.

“Minister, we attended Meet the Miners Day and you boasted of your government’s commitment to mining in Ontario. Last year, mining giant Cliffs, which spent $550 million in the Ring of Fire, said they can no longer do business with this Liberal government and sold their claims at a massive loss to Noront for $20 million,” charged Algoma-Manitoulin NDP MPP Michael Mantha.

[Lonmin Plc] The Rise and Fall of a Mining Company That Tried to Buy Harrods – by Rodney Jefferson and Kevin Crowley(Bloomberg News – November 5, 2015)

November 5, 2015

http://www.bloomberg.com/

From Cecil Rhodes’s legacy in southern Africa to takeover battles gripping the British public and a massacre at one of its mines, the 106-year-old epic that’s Lonmin Plc risks entering its final act.

The company, whose businesses spanned gold mining, hotels, textiles and newspapers in the 1980s, later focused its efforts on platinum and is the world’s third-largest producer of the metal. Management warned on Wednesday that it might have to shut down should shareholders reject a $400 million stock sale as it succumbs to the slump in commodity prices.

Should investors decide not to cough up the money, one of Britain’s most prominent companies of the 20th century and a symbol of the country’s blend of imperialism and capitalism would be consigned to history less than two decades after the death of the man who built it.

“It’s gone from darling of the stock market to completely distraught,” said Bernard Swanepoel, who has been in the mining industry for 30 years and was chief executive officer of Harmony Gold Mining Co.

Goldcorp’s Jeannes: ‘We’re close to the end of the gold bear market'(Northern Miner – November 2, 2015)

November 5, 2015

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

VANCOUVER — Despite posting a US$192 million net loss during the third quarter, Goldcorp’s (TSX: G; NYSE: GG) management team is telling investors to focus on what it labels “strong fundamentals.”

The company churned out record quarterly gold production and generated around US$243 million in free cash flow over the past three months. President and CEO Chuck Jeannes pointed out that successful cost control measures and promising macro-economic conditions should contribute to brighter days ahead.

Goldcorp produced 922,200 oz. during the third quarter at all-in sustaining costs of US$848 per oz. Assuming an average realized gold price of $1,114 per oz., the company reported adjusted revenues of US$1.3 billion and adjusted operating cash flow of US$374 million for the quarter.

Excluding unrealized losses from the foreign exchange translation on deferred income taxes, Goldcorp’s adjusted net loss totalled US$37 million, or 4¢ per share, during the quarter, which compares to adjusted earnings of US$65 million, or 8¢ per share, in the previous quarter.

Diamonds Aren’t Forever for Botswana as Mining Boom Fades – by Michael Cohen (Bloomberg News – November 5, 2015)

November 5, 2015

http://www.bloomberg.com/

The honeymoon is over in Botswana, where the diamond industry that led the world has fallen on hard times.
The discovery of the gems nearly half a century ago transformed the southern African nation from a dusty farming backwater into one of the continent’s wealthiest societies.

Thousands of miles of dirt roads were paved and schools and clinics built in every town. The capital, Gaborone, once a rural village, is now dotted with office blocks and malls occupied by South African chains like Shoprite Holdings Ltd. The country’s finances were in such good shape that Botswana earned the highest credit rating in Africa.

Now the diamond mining industry is floundering as jewelry sales stagnate amid a slowdown in China. An index of rough diamond prices hit a five-year low last month. With most diamonds near the surface having been extracted from Botswana’s mines, the gems are also becoming increasingly inaccessible.

Last year Botswana was overtaken by Russia as the world’s top producer.

Coal isn’t going away anytime soon – by Nastassia Arendse (Mineweb.com – November 4, 2015)

November 5, 2015

http://www.mineweb.com/

Its a problematic trade-off between climate change and economic development.

Even as coal prices remain depressed, weighed down by oversupply, coal in South Africa isn’t going away. As more countries phase out their coal-fired power stations to decrease carbon emissions, South Africa may not find that easy to achieve.

The country is a big player in the production of coal although not as significant as countries such as China, the USA and India, who are much larger producers. Coal mining is a major employer and has helped power giant industrial companies like Eskom, Sasol, ArcelorMittal SA and the mining industry. The country has large coal reserves and is also a major consumer of coal; mainly for electricity production.

The outright replacement of coal-fired power plants will come at a great cost and the reduction of coal-fired generation capacity is expected to be minimal. “We have to acknowledge that we do have very significant coal reserves in South Africa, and we also have a huge fleet of coal-fired power stations and its not like we can just suddenly scrap them,” says Chris Yelland, managing director at EE Publishers.

For cash-strapped miners, ‘streaming’ companies offer a lifeline – by Ian McGugan (Globe and Mail – November 5, 2015)

November 5, 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.

It’s prime time for the companies that specialize in providing money to cash-strapped miners.

These businesses offer funds today in exchange for metals tomorrow. With most commodities trading far below their boom-era highs of four years ago, the cash-for-production swap has become a vital elixir for mining companies struggling to cope with debt hangovers from happier days.

So-called “streaming” companies, such as Silver Wheaton Corp., Franco-Nevada Corp. and Royal Gold Inc., have signed a flurry of deals in recent months with many of the world’s largest miners.

The details vary but the common pattern is that the streaming company pays cash to the miner now in exchange for the rights to buy future streams of metals at prices well below market levels.

PRECIOUS-Gold near 1-mth low with December rate rise still on table – by Clara Denina (Reuters U.S. – November 5, 2015)

November 5, 2015

http://www.reuters.com/

LONDON, Nov 5 (Reuters) – Gold held near a one-month low on Thursday as the dollar rose to a three-month high and the metal looked vulnerable to further losses after U.S. Federal Reserve officials left the door open to a rate rise in December.

Fed Chair Janet Yellen said on Wednesday that the United States was ready for higher interest rates if upcoming economic data justified them, pointing to a possible December rise.

William Dudley, president of the New York Fed, said later on Wednesday that December “is a live possibility, but we’ll see what the data shows”.

“Fed officials want to keep the December rate possibility open and the relation between gold prices and monetary policy expectations is very high,” ABN Amro analyst Georgette Boele said.

Spot gold was unchanged on the day at $1,106.96 an ounce by 1056 GMT, not far above the previous session’s low of $1,106, its weakest since Oct. 2.

Ring of Fire player feels pressure – by Carl Clutchey (Thunder Bay Chronicle-Journal – November 5, 2015)

November 5, 2015

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

Even as it starts a new exploration program in the Ring of Fire this week, the mineral belt’s lone main player admits it’s never been tougher to secure the funds for such projects.

“I don’t want to sound gloom-and-doom, but it is a tough market out there and investors want to see progress,” Noront Resources CEO Alan Coutts said Wednesday.

Noront has earmarked $600,000 to resume exploration in the area of its existing proposed Eagle Nest nickel mine about 500 kilometres northeast of Thunder Bay.

Though metal prices, including nickel, are down, Coutts said the Toronto-based company remains committed to getting its mine up and running about four years from now.

Biggest U.S. Iron Ore Producer Says Rio, BHP in ‘Imaginary World’ – by Jasmine Ng (Bloomberg News – November 4, 2015)

November 4, 2015

http://www.bloomberg.com/

The biggest iron ore producer in the U.S. says its larger rivals in Australia are hurting themselves as well as their competitors as they ramp-up production in an oversupplied market.

With iron ore slumping to less than $50 a metric ton, revenues at the biggest miners are shrinking faster than costs, according to the head of Cliffs Natural Resources Inc., who said the majors’ expectations that rivals will quit the market aren’t being fully realized.

“Prices below $50 are not comfortable to anyone, including the majors,” Chief Executive Officer Lourenco Goncalves said in a phone interview from the company’s headquarters in Cleveland, Ohio on Tuesday. “The cost-cutting is not even close to offset their loss in revenues. My entire point: the loss in revenue, totally avoidable. Self-imposed. Self-inflicted.”

BHP Billiton Ltd. spokeswoman Emily Perry said on Wednesday the company wouldn’t respond to Goncalves’s remarks, while Rio Tinto Group sent comments from Brendan Pearson, head of the Minerals Council of Australia, which represents miners.

Despite reports, Noront says it’s not threatening to walk away from Ring of Fire – by Jamie Smith (tbnewswatch.com – November 4, 2015)

November 4, 2015

http://www.tbnewswatch.com/

Noront is not threatening to walk away from the Ring of Fire its CEO says.

The Financial Post ran a story with anonymous sources Tuesday saying the company has threatened to walk away from its Eagle’s Nest project if it doesn’t see progress from the province and First Nations soon. Alan Coutts said that same day the company announced a new exploration program in the area with nearby First Nations as participants.

“We don’t have any plans to shut down operations,” he said. “I don’t want to get into speculative stuff but we’re active.”

It’s a weak market out there, especially for a junior company like Nortont but Coutts said they’ve been finding the money they need and that’s happened because they’ve shown progress. “There’s activity, there’s alignment and there’s progress in the Ring of Fire,” he said.

Obviously the company would like to see firmer plans from the province on infrastructure for the project but Coutts said there are current discussions on those issues.

Deals will spur start-up of talc mine, says owner – by Ron Grech (Timmins Daily Press – November 4, 2015)

November 4, 2015

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – The owner of General Magnesium says he has just signed a deal that will accelerate the start-up of a new talc-magnesium mine in Timmins.

“We’ve been working for the last 16 months on due diligence with Hunter Douglas Metals” explained William Quesnel. “It’s a 15-year renewable contract with a sales value of $4.9 billion Canadian. So what it does is give us the security and stability to accelerate our project and start creating the jobs we promised previously.”

Three years ago, when Quesnel initially announced his development plans, he outlined a proposal to establish three facilities which would employ up to 1,000 people, combined.
Quesnel said he is already in the process of hiring people, adding that he could have up to 200 people working within the next 18 months.

The Quesnel Group owns a mining property located just southeast of Porcupine Lake in Whitney Township.

Chinese Steel Slapped by 236% Tariff Plan After U.S. Probe – by Sonja Elmquist (Bloomberg News – November 3 2015)

November 4, 2015

http://www.bloomberg.com/

Imports of some corrosive-resistant steel from China may be taxed as much as 236 percent based on the level of subsidies they receive, according to a preliminary finding by the U.S. Department of Commerce.

The department found five Chinese exporters including Angang Group Hong Kong Co. and Baoshan Iron & Steel Co. got subsidies of that amount, it said in an e-mailed statement. U.S. Customs and Border Protection will be instructed to require cash deposits based on the subsidy rates. A Baosteel spokesman said the company’s operations are based on market forces.

The preliminary finding is the first decision in three sets of trade cases that U.S. steel producers have filed this year, as a glut of output from foreign producers led by China has pushed down prices to nine-year lows and seen U.S. mills idle 31 percent of capacity. If validated, the decision may end some imports and help lift domestic prices.

“Trade cases will have an impact by limiting tons showing up in the U.S.,” Timna Tanners, an analyst at Bank of America Corp., said Tuesday before the decision was made public.

Mining Alaska Part II: Digging into Alaska’s only producing coal mine – by Mallory Peebles (KTUU.com – November 3, 2015)

November 4, 2015

http://www.ktuu.com/

Of Alaska’s six currently operational mines, only one produces coal, a resource that supplies energy and heat to more than 37 percent of the Interior, according to the Alaska Energy Authority.

Usibelli Coal Mine near Healy has been a family-run operation since before Alaska obtained statehood. It holds five permits to mine areas within the Nenana coal field. The land within the area is leased by Usibelli from the state.

The company’s first ever tractor stays parked outside the main office while haulers and bulldozers five times its size help extract the mineral buried deep underground.

These 10 mines will set the copper price for the next decade – by Vince Peckham (Mining.com – November 3, 2015)

November 4, 2015

http://www.mining.com/

Chile’s state-owned copper giant Codelco’s announcement today of another round of layoffs is just the latest sign of an industry under stress. Copper has recovered from six-year lows struck late August on the back of supply cuts by major producers but at around $2.30 a pound or $5,000 per tonne on Tuesday there isn’t much breathing room for producers.

The latest estimates by the Lisbon-based International Copper Study Group paint a very different picture from the previous forecast made in April. The market is now expected to be broadly in balance this year and to fall into a deficit of 130,000 tonnes in 2016. This compares with April’s forecasts of surpluses of 364,000 and 228,000 tonnes respectively.

According to ICSG World mine production, after adjusting for expected disruptions, is expected to increase by around 1.2% in 2015 to 18.8 million tonnes. 2014 recorded similar growth rates. The expected market shortfall in 2016 will be against a backdrop of higher mine output of around 4% expected next year.