Republic of Mining

Miners can exploit opportunities in alternative energy – by Prinesha Naidoo MoneyWeb.com – October 16, 2015)

October 16, 2015

http://www.moneyweb.co.za/

And learn from past failures.

JOHANNESBURG – South Africa’s mining directors did not act fast enough in response to the country’s energy challenges. That’s according to Thomas Garner, CEO of Cennergi, an independent power producer.

Participating in a panel discussion about the energy crisis and changing energy mix at the Joburg Indaba, Garner said the stability of the country’s electricity supply had been flagged as a risk since the mid-2000s: “We predicted that electricity prices would treble and no one believed us”.

At that stage, electricity was never listed as a massive risk or even one of the top five risks to industrialisation in South Africa due to Eskom’s reliability and the fact that it was cheap to buy electricity from the utility, he said. And this, according to him, raises questions as to how directors with fiduciary responsibilities make decisions.

But fellow panelist and energy thought leader Mike Rossouw said the fact that “nobody knows what energy demand is going to be in the future” has profound implications for investing in growth.

Lithium, the love story – by Antoine Dion Ortega and Pierrick Blin (Corporate Knights.com – June 16, 2014)

May 13, 2016October 16, 2015

http://www.corporateknights.com/

Purmamarca, ARGENTINA – When Tesla Motors revealed in February it would build the world’s largest lithium-ion battery plant, shares in major lithium producers such as SQM, FMC and Rockwood – all active in South America’s so-called lithium triangle – got a noticeable boost.

Tesla pledged to invest more than $5 billion in its factory, construction of which would begin in 2017 with an eye to producing 500,000 batteries a year. Analysts now expect the Palo Alto, California-based electric carmaker to strike a strategic lithium supply agreement in the near future.

When that deal comes through, it could be huge. Tesla alone might represent an 8 per cent increase in global demand for lithium, and that’s good news for countries in the lithium mining game. Yet it’s unclear to what extent South America’s resource-rich nations will truly benefit from it, and whether the foreseen “white gold rush” will be a sustainable one.

Just a few days before Tesla’s announcement, Bolivian President Evo Morales was dressed in white overalls, carefully examining a battery cell during the inauguration of a pilot manufacturing plant, located within the 10,000 square kilometre salt flats of Uyuni.

Could lithium become the new oil? – by Vikram Mansharamani (PBS Newshour – October 15, 2015)

May 13, 2016October 16, 2015

http://www.pbs.org/

Vikram Mansharamani is a lecturer in the Program on Ethics, Politics & Economics at Yale University and a senior fellow at the Mossavar-Rahmani Center for Business and Government at the Harvard Kennedy School.

I recently spoke with a group of Nigerian leaders who were visiting Yale. I expressed to them my confidence in the long-term outlook for oil demand. A booming middle class in the emerging markets, I argued, would consistently demand more fuels. They were engaged throughout my talk and cared about many different topics, but kept returning one.

“OK, but Vikram, what will oil prices be next year?” I answered honestly, “I don’t know.”

Several other questions came up, but then another person asked, “OK, very compelling presentation, thank you. But do you think oil prices will be higher or lower next year than they are today?” Again, I pleaded ignorance.

The process continued, and eventually, everyone was laughing about the persistent focus on oil prices.

[Minnesota] Gov. Dayton traveling to view best and worst of mining – by Josephine Marcotty (Minneapolis Star Tribune – October 15, 2015)

October 16, 2015

http://www.startribune.com/

His visits to Michigan and South Dakota are preparation for PolyMet decision.

Gov. Mark Dayton plans to visit two mines in other states — examples of good and bad environmental outcomes — as he prepares to decide whether Minnesota should move forward with a controversial project proposed by PolyMet Mining Corp. on the Iron Range.

The $650 million open-pit operation would be Minnesota’s first copper-nickel mine. It promises to bring some 300 to 350 jobs to northeastern Minnesota, but it also would bring unprecedented environmental risks to a region known for beautiful lakes and forests.

A 10-year environmental review of the project is due for completion in November, and shortly after that PolyMet is expected to apply for a permit to start construction. Dayton has called it “the most momentous, difficult and controversial decision I will make as governor.”

That’s why he is taking the unusual step of examining mines in other states on Oct. 27 and Oct. 30.

Indonesian battle over Freeport threatens to mar leader’s U.S. trip – by Randy Fabi and Wilda Asmarini (Reuters U.S. – October 16, 2015)

October 16, 2015

http://www.reuters.com/

Jakarta – Indonesian ministers are battling over control of U.S. mining giant Freeport-McMoRan’s future in the country, threatening to mar the president’s first trip to the United States later this month.

President Joko Widodo starts a five-day trip to Washington and San Francisco on Oct. 25, as investor sentiment in Southeast Asia’s largest economy brightens following a cabinet reshuffle and a series of new stimulus measures.

One of Widodo’s first stops will be with Freeport executives at a breakfast ahead of his meeting with U.S. President Barack Obama, according to a tentative schedule obtained by Reuters.

At the heart of talks will likely be Freeport’s years-long bid to renew its contract, allowing the firm to continue operating beyond 2021 at the lucrative Grasberg mine in Papua, one of the world’s biggest deposits of gold and copper.

Miners need to invest $150bn to avoid looming supply shortages – by Cecilia Jamasmie (Mining.com – October 16, 2015)

October 16, 2015

http://www.mining.com/

While miners are holding off on new projects and looking to slow the completion of ones in the works as they face the worst commodity price collapse since 2008, research house Wood Mackenzie warns the industry could be paving the way for a major supply shortage.

In a presentation prepared for clients at LME Week in London, the firm’s vice chairman of metals and mining research, Julian Kettle, draws together the overall outlook for metals, citing the challenges of lower commodity prices, pressure from shareholders to curtail investment and a new reality of lower demand growth. Wood Mackenzie concludes that if the industry fails to invest the US$150 billion required to meet future supply needs, looming supply shortages will follow.

“The need for investment is becoming desperate in zinc and lead and will be an issue in copper in the next few years,” Kettle writes. “Unfortunately there is little appetite to invest with prices cutting into the cost curve, low free cash-flow, surpluses building, difficulty in financing and shareholders demanding dividends.”

China yet to hit ‘great wall’

Glencore’s Zinc Rationale Defies History – by Liam Denning (Bloomberg News – October 15, 2015)

October 16, 2015

http://www.bloomberg.com/

“You shut up!/No, YOU shut up!” is how schoolyard scuffles kick off. Miners tweak it slightly to: “You shut down!/No, YOU shut down!”

Ivan Glasenberg, the chief executive of Glencore, has long bemoaned miners’ tendency to literally dig themselves into a hole with too much supply. As concern about Glencore’s swollen debt has hit the stock price, Glasenberg has recently taken himself at his word, ordering a temporary shutdown of some of the company’s zinc output. That caused the price of the metal to jump 10 percent last Friday.

But history suggests Glencore’s fight to raise zinc prices sustainably could be a tough one. Taking yourself out of the market in order to reduce excess supply can be a great strategy— but primarily for those rivals who keep producing and benefit from higher prices while your own reserves stay in the ground.

Sure enough, this week the marketing chief at one of said rivals, BHP Billiton, confessed himself “quite intrigued” about all the talk of cutting production, as he hadn’t seen any capacity being shut-in that was making cash.

Alrosa president ‘concerned’ over synthetic diamonds – by Tom Davis (Jewellery Focus – October 15, 2015)

October 16, 2015

http://www.jewelleryfocus.co.uk/

Andrey Zharkov, president of Russian diamond mining company Alrosa, has warned that the diamond industry is suffering from reputation risks due to synthetic stones.

Speaking at the World Diamond Council (WDC) in Moscow on Tuesday, October 13, Zharkov said that the industry should be concerned by “growing occasions” on the market when natural diamonds are mixed with synthetic diamonds, or when “stones are worked on for the purpose of their improvement.”

Under a new Russian law “stones of synthetic origin, even having characteristics of natural stones, are not considered to be precious ones,” he said. “Therefore, the law determines that synthetic stones cannot be associated with precious stones.”

He said that Alrosa is conducting research into developing faster and more effective synthetic diamond detection devices. The WDC will play a more active role in defending and supporting the “favourable reputation and positive image of the diamond industry”, he said.

UPDATE 2-Rio Tinto lifts iron ore shipments despite China risks, draws on inventory – by James Regan (Reuters U.S. – October 16, 2015)

October 16, 2015

http://www.reuters.com/

SYDNEY, Oct 16 (Reuters) – Rio Tinto on Friday posted a 17 percent rise in third-quarter iron ore shipments and said it was on track to meet a full-year target of 340 million tonnes, shrugging off risks from slower economic growth and peaking steel output in China.

In a sign market conditions may be improving, the miner dipped into its inventories – 4 million tonnes from its Australian operations and 1 million from the Canadian business – after production fell short of shipments.

Rio Tinto shipped 91.3 million tonnes over the quarter, outstripping production of 86.1 million tonnes, data from the company’s quarterly production report showed.

“Clearly, the iron ore market is reasonably tight,” said Shaw Stockbroking mining analyst Peter O’Connor in a note to clients.

Linamar Corp’s biggest deal yet bets that the cars of the future are aluminum – by Kristine Owram (National Post – October 16, 2015)

October 16, 2015

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

Canadian auto-parts maker Linamar Corp. is betting that aluminum will continue to replace steel as automakers strive to produce more fuel-efficient vehicles, announcing the biggest acquisition in its 50-year history Thursday.

The Guelph, Ont.-based company has made an offer to acquire France’s Montupet SA for $1.16 billion plus debt, subject to shareholder and regulatory approval.

Montupet makes complex aluminum castings for the global automotive industry with a particular focus on cylinder heads, complementing Linamar’s existing aluminum machining business.

“Aluminum is becoming more and more prevalent in the vehicle,” Linamar CEO Linda Hasenfratz said in an interview from Paris, where she announced the deal.

Looking Past the Federal Election for Real Results [in the Ring of Fire] – by James Murray (Netnewsledger.com – October 15, 2015)

October 16, 2015

http://www.netnewsledger.com/

THUNDER BAY – EDITORIAL – Most people are focused on October 19th and the election. What is really important, and what is more important for Northwestern Ontario is what happens on October 20th and beyond.

Once the campaign is over, and the rhetoric is safely stored away, it is time for real work.

Our region faces challenges, and Thunder Bay faces challenges.

All of the elected leaders – regardless of their political party – need to start to really work hard on solving these issues. If not, nothing will change, and for Thunder Bay the long-term costs are going to be very high both financially and socially.

Many of the really important issues that have long-term impact on the health and well-being of residents across Northwestern Ontario still need to be addressed and solved.

Supreme Court rejects Rio Tinto’s efforts to dismiss Innu class-action lawsuit – by Ross Marowits (Canadian Press/Vancouver Province – October 15, 2015)

October 15, 2015

http://www.theprovince.com/

MONTREAL – The Supreme Court of Canada has refused to end a class action lawsuit filed by two Innu communities against the Iron Ore Co. of Canada and the Quebec North Shore and Labrador Railway Co.

The country’s highest court dismissed with costs their appeal of a Quebec Court of Appeal ruling. No reasons were provided Thursday as is customary when the court makes such a decision.

The Innu First Nations of Uashat Mak Mani-Utenam (Uashaunnuat) and Matimekush-Lac John claim the IOC, which is majority owned by Rio Tinto (NYSE:RIO), has violated their rights for nearly 60 years and are seeking $900 million in compensation.

The Innu claim the mines and other facilities have ruined the environment, displaced members from their territory and prevented them from practising their traditional way of life.

They also say a 578-kilometre railway between Schefferville and Sept-Iles has opened up their territory to “numerous other destructive development projects.”

‘Keep on going’, urges Freeport chief – by Henry Sanderson and Neil Hume (Financial Times – October 15, 2015)

October 15, 2015

http://www.ft.com/

Copper miner CEO says tough decisions needed as low prices reign

“If you’re going through hell, keep on going.” That is how Richard Adkerson, chief executive of US copper miner Freeport-McMoRan, summed up sentiment at his company’s party to mark the end of LME Week in London.

The song by Rodney Adkins was an apt metaphor for this year’s annual gathering of miners, traders and smelters, who are dealing with commodity prices at their lowest levels since the financial crisis.

Miners and traders look forward to Freeport’s party every year, but Wednesday’s bash at the Intercontinental Hotel in Park Lane reflected the new austerity: gone were the oysters and the large arrays of sushi stations. Delegates picked at marshmallows dipped in chocolate instead.

One attendee reflected on the boom years, remembering how people would retire to private clubs nearby for all-night parties, providing their Chinese guests with lavish entertainment.

BHP says shutting down mines won’t help commodity prices – by James Chessell (Australian Financial Review – October 15, 2015)

October 15, 2015

http://www.afr.com/

A senior BHP Billiton executive has played down the impact of production cuts by miners such as Glencore, arguing that commodity prices will not be affected because most of the mines being shut down are unprofitable.

Asked if prices of key commodities such as copper would benefit from higher-cost “marginal” producers cutting back production, BHP marketing president Arnoud Balhuizen said it would not make a significant difference.

“I am quite intrigued by all the conversation about cutting down production because I haven’t seen any production being shut which is making cash,” Mr Balhuizen told journalists in London on Wednesday.

“So for me it is just a normal rational economic decision. If you have a cash negative operation you shut it but it doesn’t do anything for price. You should have done it anyway.”

COLUMN-Glencore changes the debate, but can it change the zinc market? – by Andy Home (Reuters U.S. – October 15, 2015)

October 15, 2015

http://www.reuters.com/

Oct 15 (Reuters) – Everyone’s talking about Glencore. The Swiss trading and mining giant is the hot topic of conversation in the myriad meetings and cocktail parties taking place in London for LME Week.

And, Glencore executives will be pleased to note, this isn’t speculation as to whether the company is about to go bust. That particular panic seems to have passed for now after a flurry of announcements intended to shore up its balance sheet, most recently the proposed sale of two copper mines.

Rather, it was Glencore’s announcement on Friday of massive cuts to its zinc and lead production portfolio that has been exercising the minds of the thousands of metal executives meeting in London this week.

The London zinc price went on a super-charged rally on the news, exploding from its opening at $1,701 per tonne to $1,875 in a matter of hours. As with last month’s announcement of 400,000 tonnes of copper cutbacks, the timing was exquisite, catching off guard a market that had been grinding steadily lower for months under the weight of relentless short selling.