Republic of Mining

[Sudbury mining] Death casts pall over conference – by Harold Carmichael (Sudbury Star – October 25, 2015)

October 26, 2015

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

The death last week of a miner at Glencore’s Nickel Rim South Mine cast a shadow Sunday evening over the start of an international conference on mining safety which is now being held in Greater Sudbury – and in Canada for the first time ever.

Not only was a minute of silence observed by the speakers and more than 60 delegates on hand at the Vale Cavern at Science North, but the death of Richard Pigeau also drew mention in several speakers’ addresses, including one by Ontario Minister of Labour Kevin Flynn.

“Ontario is one of the safest jurisdictions in all of America in which to work and we know the mining industry continues to be one of the safest industries,” he said. “But it was brought home to us workers’ lives can be lost in a matter of seconds … It simply did not have to happen: Every workplace fatality is preventable. People in this room know that. People buy into that. And we need to spread the message.”

Pigeau, 54, who had more than 20 years of mining experience, was killed when he was struck by a piece of equipment on Oct. 20, according to the Ministry of Labour. The mine was shut down for three days as the investigation was conducted.

The War Over the Periodic Table – by David S. Abraham (Bloomberg News – October 23, 2015)

October 23, 2015

http://www.bloombergview.com/

A little past 9:30 on the morning of Sept. 7, 2010, a Japanese Coast Guard vessel in the East China Sea spots a Chinese fishing trawler off the coast of islands, known as Senkaku in Japanese and Diaoyu in Chinese.

The Japanese have little tolerance for such incursions in the Senkakus, which they annexed in 1895 after the Sino-Japanese War. But recently China has asserted claims to these islands extending hundreds of years earlier. The island dispute is wrapped up in a morass of misunderstanding and oneupmanship, with an eye toward the rich seabed resources nearby.

When you ask Japanese officials about the territorial dispute, they will look at you as if it is almost insulting to answer the question. “It’s our land,” one government official told me, as if an American diplomat had been asked if Hawaii is part of the United States.

On that morning, the Japanese vessel pulls alongside the smaller Chinese trawler and blares messages to the crew in Chinese from loudspeakers: “You are inside Japanese territorial waters. Leave these waters.”

The ‘Electronification’ of Everything – by David S. Abraham (Bloomberg News – October 22, 2015)

October 23, 2015

http://www.bloombergview.com/

Only about 150 years ago, almost all materials in a person’s home came from a nearby forest or quarry. By the 1960s, with more developed supply lines and more consumer appliances, the average American home contained about 20 different elements.

Since then, a revolution has transformed the products we use and the materials that allow them to work. Products now rely on elements that were once mere scientific oddities just a couple decades ago. In the 1990s Intel used only 15 elements in its computer chips.

Now the company demands close to 60 elements. While rare metals have been around since the beginning of time, most were just discovered in the past few hundred years, and some just in the past century.

This transformation in the products we use appear subtle to the untrained eye. Modern lights, for example, emanate hues slightly different from predecessors. But these subtle changes mask a profound change in resource use. Whereas Edison’s lightbulb contained a simple metal filament, the resources in today’s LED lights are more akin to computer hardware, powered by gallium, indium and rare-earth elements.

The Elements of Power in the Rare-Metal Age – by David S. Abraham (Bloomberg News – October 21, 2015)

October 23, 2015

http://www.bloombergview.com/

“There’s no chance that the iPhone is going to get any significant market share — no chance,” Microsoft chief executive Steve Ballmer told a CEO forum before Steve Jobs released the iPhone in June 2007.

By the end of the first week of sales, however, most storeroom shelves were bare; Apple and its AT&T partner sold hundreds of thousands of phones. The company was on its way to taking more than 20 percent of the smartphone market within just a few months.

Only eight years later, we forget what a revolution the iPhone was. It became the first mainstream product to rely on a multi-touch glass screen, allowing the tapping, sliding and pinching that are now second nature for writing emails, determining directions and hailing a cab. As Steve Jobs himself said, “It works like magic.”

But in the initial hubbub little attention was paid to the iPhone’s most remarkable characteristic. The reason such a powerful device can sit comfortably in the palm of your hand is that it relies on nearly half the elements on the planet.

FOCUS: Poland’s love affair with coal won’t end soon – by Paulina Pacula (Euobservor.com – October 23, 2015)

October 23, 2015

https://euobserver.com/

Poland’s coal-based energy sector provides a livelihood for hundred of thousands of people in Upper Silesia and has the potential to swing Sunday’s (25 October) national election.

In the small Polish town of Brzeszcze, part of the Upper Silesian coal basin, almost half of the 21,000 inhabitants depend on one employer: the KWK Brzeszcze mine, which is soon to be closed.

More then 2,000 men stand to lose their jobs because, for the last couple of years, the mine has been unprofitable – for every tonne of coal sold, the company had to pay an extra 265 zlotys.

If the mine is closed, unemployment in the municipality will skyrocket from its already-high level of 11.6%.

A similar fate probably awaits another 11,000 workers from unprofitable mines run by the biggest state mining company, Kompania Węglowa and 3,000 from JSW.

America’s Heartland Feels a Chill From Collapsing Commodity Prices – by Nelson D. Schwartz and Julie Creswell (New York Times – October 23, 2015)

October 23, 2015

http://www.nytimes.com/

In China and other emerging markets, growth is waning and demand for the raw materials that drive the global economy has dried up.

A thousand miles south of Granite City, Ill., a gritty steel town on the Mississippi River, West Texas oil rigs have shuddered to a halt. Seven hundred miles north, mines in the Iron Range of Minnesota have been stilled.

The drilling rigs, with their deep underground pipes, once consumed much of the steel that Granite City’s blast furnaces could produce, while the mines supplied the raw material.

So now, more than 2,000 workers at the mammoth United States Steel plant not far from St. Louis are waiting to see if they will be next. This month, the company warned them it might be forced to idle the plant. Layoffs could begin around Christmas.

Granite City may be waiting, but a chill in economic activity is already evident across a broad swath of the nation’s heartland stretching from the Gulf of Mexico to the Canadian border, as prices of commodities sink.

Rebounding mining sector defies DRC’s political woes (The Citizen – October23, 2015)

October 23, 2015

http://citizen.co.za/

The Democratic Republic of Congo (DRC) is no stranger to civil strife. For decades Africa’s second largest country (since the partitioning of Sudan) has been beset by political woes.

The mining industry, on the other hand, looks to be in promising health, as evidenced by strong support given to two international conferences held in the country this month.

Such has been the strife – from the era of the military dictator, Mobutu Sese Seko, in the 1960s to the current administration of Joseph Kabila – that many of the country’s enormous opportunities have largely been overlooked, but that is not the case with mining. The sector, among the most defiant in the economy, has withstood the many crises and emerged as the mainstay of the country’s economy.

Despite recent problems fuelled by allegations that Kabila plans to tamper with the constitution to remain in power at the elections next year, high levels of confidence in and commitment to the mining sector were on display at this week’s Katanga Mining Week in Lubumbashi and last week’s 11th Infrastructure Partnerships for African Development DRC Mining and Infrastructure Indaba in Kinshasa, which both enjoyed solid institutional and industry support.

COLUMN-China’s economic data is dodgy, but it doesn’t matter – by Clyde Russell (Reuters U.K. – October 23, 2015)

October 23, 2015

http://uk.reuters.com/

Oct 23 (Reuters) – There is widespread scepticism about the accuracy of China’s economic growth numbers, but the real question shouldn’t be whether the data is credible, it should be whether it matters that it isn’t.

The official gross domestic product (GDP) figure of 6.9 percent year-on-year growth for the September quarter was widely condemned by mainly Western economists as a fiction bearing little resemblance to actual economic activity.

At the World Commodities Week conference in London this week, the consensus was that Chinese growth was more in the region of 5 to 6 percent, and that the official number owes more to political expediency than to economic reality.

While this may indeed by true, the issue really should be whether absolutely accurate data is necessary when trying to get a handle on China.

If you move from the economic world to the commodities world, China watchers have grappled with dubious statistics for so long that they have become inured to them, to the point where some barely reference official numbers.

Coal Industry Has Wounded Itself Much Worse Than Obama’s Policies Ever Could – by Ken Silverstein (Forbes Magazine – October 23, 2015)

October 23, 2015

http://www.forbes.com/

With America’s most notorious coal boss standing trial on conspiracy and securities fraud charges, the industry should be asking itself just who is to blame for its woes. The overlooked irony of this federal case is that the sector should be looking closely at itself, and undergoing a thorough self-evaluation.

The coal industry, however, will continue to blame President Obama and his “radical” Environmental Protection Agency that has sought to ensure a cleaner environment while also using the public levers to advance green energies. What it refuses to acknowledge, though, is its own role — that its own strong-armed tactics have worked to oust it from America’s energy throne. And no individual personifies that trait more than the man on trial: Don Blankenship, former chief executive of Massey Energy.

Prosecutors are still making their case, all before the defense gets a chance to present their evidence. And Mr. Blankenship is presumed innocent unless proven otherwise. He is charged with conspiring to evade workplace safety laws, which subsequently led to an April 2010 mine explosion outside Beckley, W.V. that killed 29 miners. The government is also alleging he filed false information with the Securities and Exchange Commission.

Vale SA investigated for allegedly leaking toxic run-off in Sudbury (Canadian Press/MACLEAN’s Magazine – October 23, 2015 )

October 23, 2015

http://www.macleans.ca/

Allegations of run-off leaks going back to at least 1963 come following seizure of documents, computers from Vale’s Sudbury offices in early October

Environment Canada is investigating Vale SA’s Sudbury, Ont., smelting operations for allegedly leaking toxic run-off into local waterways since at least 1963.

The allegations are contained in a warrant the government agency used to seize documents, computers and related materials from Vale’s Sudbury offices on Oct. 8 as part of its investigation into potential violations of the Fisheries Act.

In the warrant, Environment Canada accuses the company of allowing “acutely lethal” seepage from the smelter waste piles into water frequented by fish, and of knowing about the leakage for years. The warrant contains allegations not proven in court.

The accusations indicate the seepage started well before Vale took control of the smelter when it acquired Inco Ltd. in 2006 for US$17.6 billion.

Cash-Starved Mines Draw New Money on Bet Metal Slump Ending Soon – by Danielle Bochove (Bloomberg News – (October 23, 2015)

October 23, 2015

http://www.bloomberg.com/

The world’s mining companies are so desperate for cash that more are selling their future metal production, drawing interest from investors willing to bet that the worst commodity slump in a generation is near a bottom.

Producers including Glencore Plc and Barrick Gold Corp., seeking to shore up weakened balance sheets, are looking to tap “streams” of metal from existing mines in a financial transaction that was previously used mostly for early-stage exploration.

While the number of so-called streaming deals has more than doubled as prices tumbled over the past four years, the need for cash is outpacing the capacity of a handful of specialists like Franco-Nevada Corp. and Silver Wheaton Corp. who are the main sources of funding.

Macquarie Capital Markets Canada Ltd. says unmet demand for deals may reach $6 billion, even as Franco-Nevada pledged to tap a $1 billion credit line to fuel more transactions.

The growing need for mine financing is drawing interest from fund managers hoping to acquire secure supplies of metal at low prices for years to come.

Teck Resources Ltd posts massive $2.1 billion loss as it writes down resource assets – by Peter Koven (National Post – October 23, 2015)

October 23, 2015

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

Underneath the noise, Teck Resources Ltd. continues to perform pretty well.

The Vancouver-based miner has been under immense scrutiny from investors in recent weeks, as three rating agencies have cut its credit rating to junk status. It is grappling with poor commodity prices and huge spending requirements in the oilsands. And on Thursday, it reported a massive third-quarter loss of $2.1 billion due to non-cash impairment charges.

Despite those overhanging issues, investors are giving the company credit for continuing to deliver solid operating results. The stock rose 43 cents or five per cent to $8.79 on Thursday as Teck reported an adjusted profit of $29 million, or five cents a share, which was well above expectations.

“The commodities cycle continues to provide a very challenging environment, but we are responding,” chief executive Don Lindsay said on a conference call.

The Commodities Boom Is Dead. Long Live the Commodities Boom. – by David Fickling (Bloomberg News – October 23, 2015)

October 23, 2015

http://www.bloombergview.com/

What’s going on with BHP Billiton? The world’s biggest miner bid for a share in a Chilean copper mine this year and is exploring for offshore petroleum in Australia and the Gulf of Mexico. Isn’t the commodities super-cycle meant to be over?

One way of thinking about it is to take a trip to your local supermarket. Its owners probably purchased a lot of steel, concrete and bricks while it was being built. Now the doors are open, they’re buying stuff that shoppers use every day: Food to fill their bellies, gasoline to fuel their cars, aluminum foil to wrap their lunch, electronic goods wired with copper, and stainless steel cutlery alloyed with nickel.

Similarly, the U.S. used up a lot of gravel, cement, and asphalt to build the Interstate Highway system. Once that was completed, the main beneficiaries were the oil companies powering the cars using it.

Sorting commodities into capital products that we use once, and operational ones we use again and again, helps make sense of what BHP Chief Executive Officer Andrew Mackenzie is up to.

Meet the `Miserable’ Metal: Aluminum Sinks to `09 Low on Surplus (Bloomberg News – October 23, 1015)

October 23, 2015

http://www.bloomberg.com/

Dwight Anderson had a point when it came to aluminum. The price sank to the lowest level in more than six years on Friday on concern that a global glut will endure, extending a losing run after the hedge fund manager dubbed the metal as miserable.

Three-month futures fell as much as 0.4 percent to $1,484.50 metric ton on the London Metal Exchange, the lowest level since June 2009, and traded at $1,486 at 12:28 p.m. in Singapore. The metal is set for an eighth daily loss.

Aluminum fell 20 percent this year as global supply exceeded demand, with output from top producer China surging even as economic growth slowed, spurring increased exports.

Anderson, founder of hedge fund Ospraie Management LLC, described aluminum in an interview this week as “miserable,” probably forcing closures and bankruptcies. BNP Paribas SA expects a surplus of 1 million tons this year.

“The fundamental outlook is weak for the metal with some miserable factors like oversupply not easing in China even as prices keep falling,” Wang Rong, an analyst at Guotai & Junan Futures Co. in Shanghai, said on Friday.

Recession hits steel in Sault, mining supply in Sudbury (CBC News Sudbury – October 22, 2015)

October 23, 2015

http://www.cbc.ca/news/canada/sudbury/

‘Commodity prices better change pretty soon,’ Sudbury mining supply official says

While there is some debate about whether or not Canada is in a recession, people in northeastern Ontario are feeling a downturn, with hundreds of layoffs over the last few months.

Some of the largest layoffs have been in the steel industry at Sault Ste. Marie. Essar Steel Algoma has laid off 100 workers, with notice that 80 more could come soon.

The other large local steelmaker, Tenaris Tubes, already has 270 workers on layoff and at the end of the month, a temporary shutdown will some of the remaining 230 employees on temporary lay-off, but the company expects to start calling them all back to work in late November.

Russell Rancourt was laid off at Tenaris in February and was hoping to get called back. He’s looked for other work in the region and out west, but has found nothing.