Republic of Mining

Gold Analysts Split on Fed View as Rate Doubts Spur Volatility – by Luzi-Ann Javier, Eddie Van Der Walt and Ranjeetha Pakiam (Bloomberg News – October 14, 2015)

October 15, 2015

http://www.bloomberg.com/

The Federal Reserve is giving the gold market a splitting headache.

With mounting doubts over when Fed policy makers will raise U.S. interest rates this year, traders and analysts are becoming increasingly divided on where prices go from here. Half of the respondents in a Bloomberg survey expect bullion to drop for a third straight year in 2015, and the rest are predicting a gain.

As the outlook got cloudier for interest rates — which can erode the appeal of holding metals that don’t offer yields — gold volatility has jumped close to a three-month high. Hedge funds have been befuddled, betting the wrong way on price moves in four of the past seven weeks.

Even the two most-accurate forecasters over the past quarter are at odds over what the Fed moves mean for bullion, data compiled by Bloomberg show.

“Some people are just going crazy waiting,” said Alan Gayle, a senior strategist for Atlanta-based RidgeWorth Investments, which oversees $40 billion.

LMEWEEK-BHP gloomy on iron ore price, but cautiously optimistic on China – by Maytaal Angel and Eric Onstad (Reuters U.S. – October 14, 2015)

October 15, 2015

http://www.reuters.com/

LONDON, Oct 14 (Reuters) – BHP Billiton, the world’s largest miner, was downbeat on Wednesday about iron ore prices as low-cost producers continue to swamp the market and as the intensity of China’s demand for the steel making raw material ebbs.

However, there were some positive signs on the economic outlook for top commodity consumer China, BHP officials told a briefing during the LME Week industry gathering.

A global glut and falling Chinese steel demand have dragged spot iron ore prices .IO62-CNI=SI to less than $60 a tonne from a high of nearly $200 in 2011. The price is forecast to drop to $50 over the next two years, a Reuters poll showed.

“By the end of this year, there will be additional iron ore coming from Australia, from Brazil,” Arnoud Balhuizen, president of the group’s marketing unit, told a media briefing. “Our expectation is that the iron ore market cost curve will continue to flatten and continue to come under pressure.”

How Illegal Diamond Mining Threatens Brazil’s Indigenous Communities – by Fellipe Abreu and Luiz Felipe Silva (InSight Crime – October 14, 2015)

October 15, 2015

http://www.insightcrime.org/

The Cinta-Larga indigenous group in Brazil is on the brink of collapse as they struggle to confront illegal mining in one of the world’s largest diamond deposits.

“Our land is our spirit. An indigenous person without his land is an indigenous person without a soul.” This is how one of the leaders of the Cinta-Larga tribe ends his speech at a meeting held in May to discuss new indigenous policies. Believed by the indigenous to be inseparable, the land and the soul of the Cinta-Larga suffer together: the cultural genocide and the violence against their members is the result of violations that occurred on the grounds that they consider sacred.

Beneath the indigenous reserves Roosevelt, Serra Morena, Aripuanã and Aripuanã Park, between the states of Rondônia and Mato Grosso where the Cinta-Larga live, hides what may be the world’s largest diamond deposit. The glistening of the stones began to attract illegal miners to the Lajes creek region between 1999 and 2000. The demarcated indigenous territory (which in theory can not be used for mining activity, except for informal mining conducted by the indigenous themselves) is a clearing approximately 10 kilometers wide and 2 kilometers long, in addition to an appendix called the Grota do Sossego, which also spans 2 kilometers.

However, miners and indigenous estimate the area to be larger: they say more than 1,000 hectares are used for exploratory mining.

Lynas blames illegal China miners for weak rare earth prices – by Sonali Paul (Reuters U.S. – October 14, 2015)

October 15, 2015

http://www.reuters.com/

MELBOURNE – Oct 14 Australia’s Lynas Corp blamed illegal Chinese miners for adding to an oversupply of rare earths which has driven prices down to historic lows, while demand from magnet users has weakened due to uncertainty over global growth.

Lynas is now the only rare earths miner outside China, which controls about 90 percent of the world’s supply, following a move by U.S. rival Molycorp, now in bankruptcy protection, to mothball its Mountain Pass mine due to weak prices.

Lynas reported gross sales revenue fell 11 percent to A$46.2 million in the September quarter from the June quarter as falling prices offset a 14 percent rise in sales volumes to 2,691 tonnes.

Weaker prices were partly due to increasing competition between legal and illegal rare earths producers in China, said the company, which mines in Australia and processes the material at its plant in Malaysia.

Ring of Fire for people, not ‘American war machine’ – by David Starbuck (Sudbury Northern Life – October 14, 2015)

October 15, 2015

http://www.northernlife.ca/

David Starbuck is the Marxist-Leninist Party candidate in Nickel Belt.

One of the issues being discussed in the current election is the potential development of the Ring of Fire chromite-nickel deposits recently discovered in Northern Ontario. Each of the cartel parties is supporting this development and blaming one another and other levels of government for the perceived delay.

Even after Cliffs Natural Resources cancelled its plans to build a mine, beneficiation plant and refinery, the cartel parties are competing amongst themselves as to who can give away the most public resources to the foreign mining monopolies that have seized control of this project.

The Ring of Fire is said to possess more than $100 billion in mineral resources. The cartel parties see this as a huge bonanza, an opportunity for Ontario to get out of crisis. The relevance of the Ring of Fire to the Sudbury by-election is that the chromite refinery was to be built north of Capreol, in the City of Greater Sudbury, and that Sudbury-based mining supply companies seek to use the development of the Ring of Fire as part of their expansion in the global mining industry.

Centerra Gold hires former AuRico CEO to replace retiring chief executive – by Peter Koven (National Post – October 14, 2015)

October 14, 2015

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

TORONTO — Scott Perry is going to have his hands full. Perry, 38, has been named the next chief executive of Centerra Gold Inc. He will take over on Nov. 1 from Ian Atkinson, a veteran mining executive who is retiring.

Perry is stepping into one of the toughest jobs in the mining industry, or indeed any industry. Centerra’s flagship asset, the Kumtor gold mine, is located in Kyrgyzstan, where the political environment is as challenging as it gets.

Toronto-based Centerra has faced some massive obstacles over the years, including accusations from Kyrgyz officials that it engaged in international fraud, massive environmental destruction and other criminal acts.

None was ever proven. Len Homeniuk, the company’s founding CEO, got arrested and detained in Bulgaria this year after the Kyrgyz put him on Interpol’s wanted persons list on corruption allegations. Both Centerra and Homeniuk said the claims were nonsense.

Gina Rinehart scores WA royalties win against mining major Rio Tinto (The Australian – October 14, 2015)

October 14, 2015

http://www.theaustralian.com.au/

BILLIONAIRE Gina Rinehart has had a multi-million dollar High Court win against mining giant Rio Tinto.

The High Court of Australia ruled that Rio Tinto subsidiary Mount Bruce Mining (MBM) is liable to pay royalties to Ms Rinehart’s Hancock Prospecting and joint venture partner Wright Prospecting in relation to iron ore mined in the Eastern Range and Channar areas of the Pilbara in Western Australia.

The High Court dismissed an appeal from the NSW Court of Appeal in relation to a tenement sale agreement reached in 1970 between Ms Rinehart’s father Lang Hancock and his business partner Peter Wright about the payment of royalties by MBM.

Rio Tinto temporarily lost control of the tenements and later regained control to mine the rich iron ore region. The sale made Ms Rinehart the richest woman in Australia and one of the richest people in the world.

Zinc turning bull? – by Kip Keen (Mineweb.com – October 13, 2015)

October 14, 2015

http://www.mineweb.com/

We look at the question of how much Glencore’s zinc cuts matter.

HALIFAX, NS – There’s no doubt that Glencore, in planning to axe some 500 000 tonnes zinc output, is throwing it’s weight around in the zinc market. The cut amounts to nearly 4% of world supply from mines. Indeed, zinc is a market where Glencore can, acting alone, make a difference to the big picture by curtailing operations.

But with demand growth for zinc and other metals waning in China somewhat, with a notable downturn in new construction there among other things, you wonder if, or to what degree, Glencore is chasing down a declining market (in growth terms).

With this question in mind, we asked BMO analyst Jessica Fung her view on how much of a difference Glencore’s zinc cuts make to the zinc market. She responds, “Glencore’s cuts do matter.”

To give perspective, she puts the zinc cut in copper terms. “Another way I have been explaining the impact of these cuts is that if this were announced in the copper market, it would be equivalent to 1 million tonnes of mine supply, which would be a very big cut from a copper miner.”

Canada’s prosperity built on network of railways, ports — and pipelines – by Gary Leach (Globe and Mail – October 14, 2015)

October 14, 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.

Gary Leach is president of the Explorers and Producers Association of Canada.

The history of Canada is a story of nation-building across one of the world’s most difficult and challenging landscapes.

Our communities are separated by great distances and a sometimes-hostile natural environment. Our geography has endowed us, as a nation, with great natural resource wealth. But it also presents us with vexing challenges.

The great national transportation and infrastructure projects of the 19th and 20th centuries – our railways, highways, seaways, communications networks and pipelines – linked a string of remote and isolated communities and laid the foundation for one of the world’s most prosperous and respected countries. We were a nation that got things done. But today, much of that visionary infrastructure might never be built.

Ports are our lifelines to the world. Canada’s national prosperity is built on access to global markets, which maximizes the wealth we obtain from developing our abundant resources.

GLOBE EDITORIAL: Providing safe drinking water on reserves is simple. Just do it (Globe and Mail – October 14, 2015)

October 14, 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.

Last January, there were 1,669 Canadian towns under drinking water advisories. By far the most common were advisories to boil tap water for a minute before consuming it.

Thankfully, these advisories are usually lifted quickly, because municipalities are governed by provincial regulations that define clear lines of responsibility and lay out rules on how to respond to problems. It’s rare for DWAs to last more than a few weeks.

On native reserves, however, they can go on for decades. It’s easy to see why.

Drinking water on reserves is a federal jurisdiction. Ottawa provides 80 per cent of the funding; the local councils build and maintain the systems and are responsible for training the operators and doing regular testing.

So far, so good.

A story in charts: are miners at a turning point? – by Naomi Rovnick (Financial Times – October 13, 2015)

October 14, 2015

http://www.ft.com/

An ill wind is blowing across UK mining stocks, which are trading at around a five-year low. Stocks, however, are offering tempting dividend yields and some momentum-driven traders are predicting the cycle is about to turn. Volatile mining stocks have long been popular with individual investors with a more aggressive approach to risk. But is now the time to buy in, or does the sector remain too unpredictable for even the very brave?

The first thing private investors should be aware of is what is happening in China. The fall in mining shares can be blamed on slowing growth in the world’s second-largest economy, which has historically been the major global consumer of most commodities, from copper to cotton.

The China slowdown is not miners’ only problem. For several years until around 2012, the industry invested heavily in new mines, then greatly increased their production of commodities such as the steelmaking material iron ore.

So metals prices have been falling.

GroundUp Op-Ed: Will South Africa’s gold miners get justice? – by Marcus Low (Daily Maverick South Africa – October 12, 2015)

October 14, 2015

http://www.dailymaverick.co.za/

The landmark silicosis class action lawsuit in South Africa has thrown up some similarities between the history of the country’s gold mines and the violent history of the rubber trade in the Congo. Over decades, South Africa’s gold mines systematically exposed their mostly poor and black workers to dangerous levels of silica dust knowing it would kill them.

In King Leopold’s Ghost, the historian Adam Hochschild uncovers the horrors committed in the Belgian Congo in the years before and after 1900. It is a history of slavery, murder and mutilation – anyone who’s seen the pictures of piles of cut-off hands cannot but be horrified by it.

Rather than just focusing on “the horror”, Hochschild zooms in on the courageous individuals who stood up against this cruelty. These are people like George Washington Williams, a black American journalist who travelled to the Congo in the late 1880s, and ED Morel, who dedicated much of his life to exposing the atrocities to the British public and to changing public opinion.

King Leopold’s Ghost recognises and bears witness to the atrocities in the Congo. Atrocities like these are too easily forgotten, too easily reduced to boring facts and figures.

X2 Said to Be Last Remaining Bidder for Rio Australia Mines – by Brett Foley, Dinesh Nair and Thomas Biesheuvel (Bloomberg News – October 12, 2015)

October 14, 2015

http://www.bloomberg.com/

X2 Resources, the private-equity firm founded by former Xstrata Ltd. chief Mick Davis, has emerged as the last remaining bidder for control of two Rio Tinto Group coal mines in Australia, people with knowledge of the matter said.

X2 is progressing in negotiations with Rio as the other interested parties, including Glencore Plc and New Hope Corp., are no longer in talks to buy the assets in New South Wales state’s Hunter Valley region, according to the people. The mine stakes may fetch more than A$3 billion ($2.2 billion), one of the people said, asking not to be identified because the talks are private.

Rio Chief Executive Officer Sam Walsh has sold $4.5 billion of less-profitable assets since January 2013, reducing its coal portfolio amid falling prices in order to focus on larger iron ore and copper operations. Any deal would be the first purchase for Davis’s X2 fund since he raised several billion dollars from investors to pursue mining acquisitions.

New Hope, which agreed last month to buy Rio’s 40 percent stake in the Bengalla coal venture in Australia for $606 million, isn’t pursuing the other mines Rio is selling in the country, according to the people.

Copper King Has Stomach to Keep Producing, Spending in Rout – by Jesse Riseborough and Agnieszka De Sousa (Bloomberg News – October 13, 2015)

October 13, 2015

http://www.bloomberg.com/

For copper bulls betting on more mining companies cutting production like Glencore Plc, the news out of Chile isn’t good.

Codelco, the world’s biggest copper producer, is maintaining output targets and warning investors not to expect any dramatic changes to its record investment plans.

Codelco’s mines probably will remain profitable even as concern over Chinese demand is set to keep prices low in the coming years, Chairman Oscar Landerretche said in an interview Monday in London. While there will be minor revisions, the majority of a $25 billion, five-year investment plan to help replace aging deposits will be rolled out as planned, he said.

“We will have to rationalize, but the projects, we will do,” he said, adding that a review of the state-owned Chilean miner’s investment budget will be completed later this month. “One shouldn’t expect big dramatic changes in the strategic position.”

Nickel prices rebound, boosted by speculation of Glencore output cuts – by James Regan and MElanie Burton (Reuters U.K. – October 13, 2015)

October 13, 2015

http://uk.reuters.com/

SYDNEY/MELBOURNE – Oct 13 Nickel prices have rebounded after dropping to a near seven-year low last week, buoyed by market speculation that heavily indebted miner and trader Glencore Plc could curb output following cuts to its copper and zinc production.

Glencore is the world’s fifth-biggest producer of nickel, with operations in Australia, Canada, Norway, New Caledonia, and Dominican Republic, much of which was acquired in its 2013 takeover of Xstrata.

Glencore, whose shares have been hammered by worries about its debt burden, declined to comment on the speculation.

“In nickel, as in copper and zinc, an output cut by Glencore could have an immense impact,” said Minelife commodities analyst Gavin Wendt.

“It would not only send the right message to Glencore’s investors and bankers, it would be saving the company money and probably lift the nickel price in the process.”