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Pondering PolyMet, Dayton visits site of South Dakota mining disaster – by J. Patrick Coolican (Minneapolis Star Tribune – October 27, 2015)

http://www.startribune.com/

Gov. Mark Dayton returned from seeing the environmental aftermath of the Gilt Edge Mine in South Dakota on Tuesday with strengthened resolve to guarantee environmental and financial safeguards for a mine proposed by PolyMet Mining Corp.

Dayton said all contingencies must be prepared for and be backed by company money in case something goes awry.

“If it does proceed, this emphasized the importance of doing it right with safeguards to make sure something like this doesn’t happen,” Dayton said upon returning. He added that the visit has made him no closer to a decision on the proposed Iron Range copper-nickel mine.

Dayton is visiting two mines this week on the counsel of opponents and supporters of the project to help guide his decision. Gilt Edge, a Superfund site that was once a former gold mine, has cost taxpayers more than $100 million in cleanup and is a model of what PolyMet opponents say could come to Minnesota.

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U.S. challenges China’s sovereignty claim to artificial islands – by Nathan Vanderklippe (Globe and Mail – October 28, 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.

BEIJING — The U.S. is pledging to sail more warships past the shores of artificial islands in the South China Sea as the world’s most powerful military seeks to strip away the expansionist claims of China and other nations in waters crucial to the global movement of goods.

Early Tuesday morning, the guided-missile destroyer USS Lassen deliberately came within 12 nautical miles of Subi Reef, one of the places in the Spratly Islands that China has transformed into a sizable air and sea outpost from a reef that once vanished at high tide.

In so doing, the ship breached the exclusion zone that would apply to territorial waters and underscored the U.S. position that China cannot claim that exclusion around its manufactured lands. The move escalates the conflict over who controls a sea the size of India that constitutes the maritime heart of East Asia. It provoked an angry response from China, which dispatched a missile destroyer and a patrol boat to shadow and attempt to warn off the Lassen.

In Beijing, China summoned U.S. Ambassador Max Baucus over the patrol, which vice-foreign minister Zhang Yesui called “extremely irresponsible,” while other officials warned of a Chinese retaliation.

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Venezuela warns Canada over mining activities in Guyana: ‘infringing on territorial sovereignty’ (MercoPress.com – October 28, 2015)

http://en.mercopress.com/

[The current president of Guyana is David Granger.]

Granger told Parliament that, in a move that shows no regard for diplomacy, Venezuela’s Ambassador to Ottawa, Canada had issued a warning letter to Guyana Goldfields Incorporated, informing that its operations are “infringing on the territorial sovereignty of Venezuela”.

Guyana Goldfields has a mining operation in the Cuyuni-Mazaruni Region.

The development comes a month after Granger and his Venezuelan counterpart Nicolás Maduro agreed to work to resolve the issues in the border dispute between the two neighbors.

“Venezuela’s claims are not only illegal; they are injurious to the economic development of Guyana. Venezuela, therefore, must desist from hindering our economic development in an obtrusive and obstructive manner that is tantamount to interference in our internal affairs. It must desist from threatening investors,” Granger said.

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Coal mining union says West Virginia should build new plants if EPA rules upheld – by Valerie Volcovici (Reuters U.S. – October 27, 2015)

http://www.reuters.com/

WASHINGTON – West Virginia can keep its coal mining alive by building “next-generation” power plants co-fired by coal and natural gas, even as the state challenges federal carbon emission rules in court, the president of the mine workers’ union said Tuesday.

United Mine Workers of America President Cecil Roberts told a conference hosted by West Virginia’s governor the state should become the first to build new power plants that run on coal and natural gas, keeping coal-mining viable in a state hit by changing market conditions.

The union and West Virginia’s attorney general have both filed petitions in federal court to block the Environmental Protection Agency’s (EPA) carbon rules that limit emissions from new and existing power plants.

West Virginia lawmakers also lead efforts in Congress to try block EPA regulations. But Roberts said the state should make plans for complying with the regulations in case legal challenges fail.

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Alberta NDP’s budget will force the oilpatch to fend for itself – by Claudia Cattaneo (National Post – October 28, 2015)

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

Alberta Finance Minister Joe Ceci tabled a “shock absorber” tax, spend and borrow budget Tuesday for Canada’s top oil and gas producing province to ease the impact of low commodity prices on provincial finances.

But if you are in the energy sector, and taking the brunt of that price shock and slashing spending and laying off people, the best you can hope for from the left-leaning NDP government is that you still have a viable business if and when oil prices recover.

In its first budget since unseating Alberta’s Conservative dynasty last May, the NDP government had harsh words for the previous regime for “squandering resource revenue” instead of saving it and for failing to “diversify” Alberta’s economy.

Ceci said his government is prioritizing stable funding for health care, education and social services as the province battles a mild recession, plans to return to a balanced budget by 2019/2020, and will help with job creation and economic diversification in areas like petrochemicals, agriculture, tourism, technology, creative industries and manufacturing.

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He shorted Bre-X. Now fund manager is going long NexGen – by Tommy Humphreys (CEO.ca – October 28, 2015)

http://ceo.ca/

Disclosure note: Author is long NXE and biased. NXE was a CEO.CA sponsor in 2014 but is not anymore. Author will trade the stock without further notice. This is provided for information purposes only and is not investment or professional advice of any kind. Always do your own due diligence and speak to a licensed investment advisor prior to making any investment decision. Junior mining stocks such as NexGen Energy are incredibly risky and can lose their entire value. Read NexGen’s profile on www.SEDAR.com for important risk disclosures. You are responsible for your own trades.

The Toronto office of Warren Irwin, hedge fund manager and CEO of Rosseau Asset Management, is decked out with memorabilia from Bre-X Minerals Ltd., the largest and most famous gold mining fraud in history.

Irwin made a fortune as a young money manager trading Bre-X stock. He had heard about the Indonesia-focused exploration company in 1995, and had some experience in the country and with gold miners.

Irwin encouraged Deutsche Bank, his employer at the time, to take a position in Bre-X at roughly $13 per share. The bank declined, so Irwin acquired a substantial position for his personal account at approximately $18 a share.

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Mining was at the heart of Ely’s selfhood – by Angie Riebe (Mesabi Daily News – October 27, 2015)

http://www.virginiamn.com/

City Could Renew Former Identity

ELY — The Ely that Mayor Chuck Novak knew as a child was very different from the one he governs today. Several of its mines were active.

And even when Ely was down to two, and then one remaining operation, the community that came to be because of the industry retained that identity. It was a mining town.

Sure, with a grand wilderness as its neighbor, those seeking outdoor adventures flocked to the town to traverse and camp amid what would become the Boundary Waters Canoe Area Wilderness.

And logging trucks and lumberjacks were part of the city’s personality as logging operations endured. But each day miners headed to work — just as they had since the 1880s.  Mining was at the heart of Ely’s selfhood.

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NEWS RELEASE: Modern Treaties Boost First Nations Income, Benefit Resource Companies

https://www.cdhowe.org/

…beyond bettering First Nations economically, there are material benefits for resource companies and neighbouring communities.

Click here for the full report: https://www.cdhowe.org/sites/default/files/attachments/research_papers/mixed/e-brief_218_0.pdf

October 28, 2015 – Modern treaties have boosted incomes in First Nation communities and have led to more resource development, according to a new C.D. Howe Institute Report. In “The Effect of First Nations Modern Treaties on Local Income,” author Fernando M. Aragón shows that, beyond bettering First Nations economically, there are material benefits for resource companies and neighbouring communities.

“Despite the 1982 Constitution and several supportive decisions by the Supreme Court of Canada, the scope and extent of Aboriginal rights over their ancestral land are, in many cases, not well defined,” remarked Aragón. “As a result, many so-called ‘modern’ treaties, or Comprehensive Land Claim Agreements, which began in the 1970s, have sought to clarify who owns the land and its resources.”

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[VIDEO] Inside Rio Tinto’s Oyu Tolgoi underground mine – by Robert Spence (Global Mining – October 27, 2015)

 

http://www.miningglobal.com/

Located in the southern Gobi desert of Mongolia, roughly 50 miles from the China border, Rio Tinto’s Oyu Tolgoi mine is anticipated to become one of the largest copper-gold deposits in the world.

First discovered in 2001, the mine is expected to produce an average of 430,000 tons of copper and 425,000 ounces of gold per year, as well as by-product silver and molybdenum, over its mine life. The mine estimated to contain 2.7 million tons of recoverable copper and 1.7 million ounces of recoverable gold in reserves, with an estimated operating life cycle of 50 years.

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POSCO may build Magnis Resources’ Tanzanian graphite project – by Sonali Paul (Reuters U.S. – October 27, 2015)

http://www.reuters.com/

MELBOURNE – Oct 27 South Korea’s POSCO may build and help arrange financing for a graphite project in Tanzania being developed by Magnis Resources , as the Australian explorer races to start producing from the east African site by 2017.

Demand for graphite is expected to soar as it is a major ingredient in lithium-ion batteries for hybrid vehicles and wind and solar energy storage, with appetite for greener transport and energy booming.

Magnis said on Tuesday it had signed a memorandum of understanding that could see POSCO Engineering & Construction arrange debt from lenders it has ties with for the $210 million Nachu project, as well as coming up with a fixed-price bid by mid-2016 to build the mine and processing plant.

“The quality of the graphite at Nachu is the best in the world and with the huge demand in the battery market, we are excited to be involved with Magnis,” POSCO E&C mining plant business group director Peter Lim said in a statement put out by Magnis.

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Big miners kick the empire building habit – by James Wilson (Financial Times – October 26, 2015)

http://www.ft.com/

BHP Billiton and Rio Tinto are being forced to curb their spending amid China’s economic slowdown

When the chief executive of one of the world’s biggest mining groups had to find words to describe his industry’s litany of problems, he turned to a US country song with an apt title: If You Are Going Through Hell.

“If you’re goin’ through hell keep on going,” were the lyrics recited by Freeport-McMoRan’s Richard Adkerson at a London reception this month, as his Arizona-based company battles a plummeting copper price and burdensome debts. “Don’t slow down, if you’re scared don’t show it . . . you might get out before the devil even knows you’re there.”

Forget the devil: mining investors are only too aware that the sector is a long way from paradise. The industry’s fortunes have deteriorated significantly since the end of the commodities “supercycle” — a big upward shift in demand driven by China’s post-2000 emergence as a manufacturing superpower.

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Aluminum prices down, output up, trade tensions boil over – by Andy Home (Reuters U.S. – October 26, 2015)

http://www.reuters.com/

LONDON – Aluminum touched a new six-year low of $1,479 per tonne in London last week.

It’s now trading at levels close to those seen during the depths of the Global Financial Crisis, when the London Metal Exchange (LME) three-month price fell briefly as far as $1,279 in February 2009.

And if you think that’s bad, the situation in China is even worse. The front-month contract on the Shanghai Futures Exchange (SHFE) closed Friday at 10,580 yuan per tonne, within spitting distance of the December 2008 trough of 10,040 yuan.

Basis the most liquid SHFE contract though, the price has already fallen far further than the 2008-2009 low of 13,665 yuan. At such depressed price levels, around 90 percent of China’s huge aluminum smelter sector is operating at a loss, according to consultancy AZ China.

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NEWS RELEASE: Innovation is imperative to growth in Canadian mining, PDAC and Monitor Deloitte report finds (October 26, 2015)

http://www.relocatemagazine.com/

Click here for “Innovation Start of Play” report: http://www.pdac.ca/docs/default-source/public-affairs—geosciences/innovation-state-of-play.pdf?sfvrsn=0

Innovation is critical to success and growth at a time when the mining industry is at a crossroads, according to Innovation State of Play, a study conducted by the Prospectors & Developers Association of Canada (PDAC) and Monitor Deloitte.

The study found that 81 per cent of innovation in mining falls in the offering types of innovation – how to find, extract and process more efficiently and effectively—but for innovation to thrive, mining companies need to create a viable business offering that looks beyond R&D.

Configuration innovations such as profit models, networks, structures, processes and “back of the house” activities and experience innovations that refer to services, channels, brand, and customer engagement and how an offering is delivered to customers should also be a focus.

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Declining copper prices a large factor in Zambia’s economic tumble – by Geoffrey York (Globe and Mail – October 27, 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.

JOHANNESBURG — Just three years ago, Zambia was the darling of international investors. Its debut euro bond was oversubscribed by a spectacular 15 times, attracting orders of nearly $12-billion (U.S.), even though it was offering lower interest rates than some developed-world bonds.

The copper-rich African country, newly anointed at the time as a “middle income nation” by the World Bank, had become a favourite of Canadian mining companies, including Barrick Gold Corp. and First Quantum Minerals Ltd., both of which were among Zambia’s biggest private employers.

Swiss-based mining giant Glencore PLC was another major player in Zambia as the country became the second-biggest copper producer in Africa. Copper accounted for 70 per cent of Zambia’s export earnings and there seemed no end to the boom.

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Investors zero in on costs again as gold miners set to report Q3 results – by Peter Koven (National Post – October 27, 2015)

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

As the senior gold miners begin to report third-quarter results this week, they find themselves stuck in a frustrating uphill battle.

Gold prices have moved steadily lower in the past three years, forcing miners to make deep cuts to operating costs and capital spending. Those moves were necessary to preserve liquidity, especially given that some companies (notably Barrick Gold Corp.) have too much debt. The cuts should pay off when the market turns.

Unfortunately, that day hasn’t arrived, and, notwithstanding a gold price rally in October, it has become increasingly tough for companies to generate free cash flow and investor interest. The senior producers have done a good job of meeting or beating their production and cost guidance over the past couple of years, but it hasn’t done much of note for their stock prices.

In a low price environment, it is no surprise that investors are zeroed in on cost reductions. Costs have been the main focus of every recent earnings season, and this one should be no different.

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