Republic of Mining

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.

EPA Mine Spill in Colorado Could Have Been Prevented, Probe Concludes – by Matthew Brown (Associated Press/ABC News – October 22, 2015)

October 23, 2015

http://abcnews.go.com/

BILLINGS, Mont. — Government investigators squarely blamed the U.S. Environmental Protection Agency on Thursday for a 3 million-gallon wastewater spill from a Colorado gold mine, saying an EPA cleanup crew rushed its work and failed to consider the complex engineering involved, triggering the very blowout it hoped to avoid.

The spill that fouled rivers in three states would have been avoided had the EPA team checked on water levels inside the Gold King Mine before digging into a collapsed and leaking mine entrance, Interior Department investigators concluded.

The technical report on the causes of the Aug. 5 spill has implications across the United States, where similar disasters could lurk among an estimated hundreds of thousands of abandoned mines that have yet to be cleaned up. The total cost of containing this mining industry mess could top $50 billion, according to government estimates.

The root causes of the Colorado accident began decades ago, when mining companies altered the flow of water through a series of interconnected tunnels in the extensively mined Upper Animas River watershed, the report says.

Despite barriers to adoption, cost pressure driving renewed mining interest in renewable energy – by Henry Lazenby (MiningWeekly.com – October 22, 2015)

October 23, 2015

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – Mine operators are in the current subdued economic reality increasingly looking at renewable electricity sources as a way to reduce current and future costs at operations; however, lower commodity prices hinder the widespread adoption of renewables, as falling profits and lower fuel prices maintain certain barriers.

This had resulted in miners shifting their primary motivation for implementing renewable projects to being a financial solution to drive down costs and improve productivity. Previous “softer” motivations involved the improvement of a project’s environmental footprint or satisfying social responsibility commitments, AngloGold Ashanti global VP of energy management and electrical asset integrity Bill Allemon told an audience during the third annual Energy and Mines summit, in which Mining Weekly Online participated.

Speaking during a panel discussion examining energy priorities, timelines and new technologies, he noted that while the company’s activities were mainly focused on the African tropical belt, where hydropower generation was impacted by ten-year drought cycles, the company had highlighted that each cycle was getting worse and more punctuated.

UPDATE 2-Vale posts $2 bln loss on weak Brazil currency, low iron ore prices – by Stephen Eisenhammer and Marta Nogueira (Reuters U.S. – October 22, 2015)

October 23, 2015

http://www.reuters.com/

Oct 22 (Reuters) – Brazilian miner Vale SA on Thursday posted a net loss of $2.1 billion in the third quarter due to low iron ore and nickel prices and a weakening real against the dollar.

The result was slightly less than analysts forecast, and shares in Vale rose by 2 percent in morning trade as investors responded favorably to the world’s No.1 iron ore miner cutting production costs and debt.

Vale produced a record amount of iron ore during the period and reduced cash costs to $12.70 a tonne, which it says is the lowest in the industry.

Despite rising production, Thursday’s loss is Vale’s fourth in five quarters. The company is struggling to absorb the cost of building a giant new mine in Brazil’s Amazon region as its cash take drops. The miner posted net revenue of $6.51 billion and adjusted EBITDA of $1.88 billion.

Trudeau’s promises to aboriginal people feared to be unachievable – by Gloria Galloway (Globe and Mail – October 23, 2015)

October 23, 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.

OTTAWA — Justin Trudeau has made some big promises to Canada’s indigenous peoples, and the head of the Assembly of First Nations says he is anxious to get working with the incoming Liberal government to see those commitments realized.

But critics say some of the goals that Mr. Trudeau has set for himself as he tries to improve the lot of the country’s aboriginal people are impractical, wrong-headed or simply beyond his ability to deliver.

Mr. Trudeau – during a virtual town hall last week aired by APTN, Canada’s indigenous television network – said he would repeal or reform many pieces of legislation that do not respect the rights of indigenous peoples, including their right to be adequately consulted about issues that affect them. He also said he would give the First Nations a veto over development in their territories.

Mr. Trudeau promised last spring to implement all 94 recommendations of the Truth and Reconciliation Commission (TRC) on indigenous residential schools, many of which are far-reaching.

Nickel Rim miners return to work today – by Jim Moodie (Sudbury Star – October 23, 2015)

October 23, 2015

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

It will be with heavy hearts and no doubt an eerie sense of their own vulnerability that miners return to work at Glencore’s Nickel Rim South facility near Skead tomorrow. Operations were scheduled to resume Friday, according to a Reuters report, after being shut down Tuesday due to the underground fatality of employee Richard Pigeau.

The worker, 54, was killed when he was struck by a piece of equipment, the Ministry of Labour reported. According to CBC, the accident occurred 5,000 feet below the surface.

Little else is known, however, about the circumstances of the tragedy, pending the outcome of a Ministry of Labour investigation and a separate probe that will be carried out jointly between Mine Mill 598/Unifor and the employer.

No funeral arrangements had been made publicly available by Thursday and the family of the late miner were asking that their privacy be respected in this difficult time.

Flinders reseacher’s new material lays waste to mercury pollution (October 20, 2015)

October 23, 2015

http://www.flinders.edu.au/

A brand new, dirt cheap, non-toxic polymer that literally sucks mercury out of water and soil is set to become a game changer in the battle against one of the world’s most reviled pollutants.

The dark red material, developed by Flinders University’s Dr Justin Chalker, is made from the industrial waste products sulphur and limonene and turns bright yellow when it absorbs mercury.

Dr Chalker says the new polymer is cheap to produce due to the global abundance of waste sulphur and limonene. That makes it affordable for use in large-scale environmental clean-ups, to coat water pipes carrying domestic and waste water, and even in removing mercury from large bodies of water.

This has significant implications for human health and wellbeing as mercury exposure – whether through the skin or through ingestion, such as eating contaminated fish, is proven to damage the central nervous system and is particularly dangerous to pregnant women and children.

Commodities: Gina Rinehart is queen of Australia’s desert – by Jamie Smyth (Financial Times – October 21, 2015)

October 22, 2015

http://www.ft.com/

The ‘iron lady’ is opening an $11bn mine as rivals cut investment and her children vie for more control

It has taken two decades to develop, $11bn of investment to build and is at the centre of a bitter family feud. But Gina Rinehart, Australia’s richest person, is finally poised to achieve her ambition and that of her late father, Lang Hancock, to develop, own and operate an iron ore mine.

“This is the holy grail she has been aspiring to her whole life,” says Michael Yabsley, a former adviser, of the Roy Hill project that formally opens next month. “It’s Gina’s crowning glory.”

The first ore exports from Roy Hill, 1,100km from Perth, will be a landmark moment for Hancock Prospecting, a private company controlled by the 61-year-old heiress who has earned the nickname “iron lady” as much for her uncompromising personality as the commodity that built her family’s fortune.

Cut forecasters some slack, but don’t bet on accuracy either – by Nastassia Arendse (Mineweb.com – October 21, 2015)

October 22, 2015

http://www.mineweb.com/

Some get the call right more often than not.

Humans are inherently obsessed with knowing the outcomes of the future. In some cases, forecasters are bad at predictions. The business of forecasting happens all the time when it comes to financial markets, especially from the likes of Goldman Sachs, JP Morgan, Citigroup, and the myriad of other investment banks that employ analysts. The financial media and investors clearly believe that the forecasts add value, or they wouldn’t tune in.

The majority of investors subscribe to the investment newsletters and reports published by the Wall Street oracles. Most of them employ sophisticated and complex models that are used to forecast growth and other market factors. Evidence from events such as the dot.com bubble and the 2009 financial crisis show that you would perform just as well if you had simply guessed.

“There are too many different opinions and it is also not clear what the time horizon of the various forecasts is,” says Rowan Williams, Director at Nitrogen Fund Managers.

Is iron ore headed for US$40 per tonne? – by Cole Latimer (Australian Mining – October 22, 2015)

October 22, 2015

http://www.australianmining.com.au/

Pundits are predicting a massive decline and a new low for iron ore.

Vice president for Citigroup’s China commodities research group, Ivan Szpakowski, has pointed to a new recent low for the metal of US$40 per tonne next year, according to the Sydney Morning Herald.

it comes as the price of iron ore hits its lowest point since late July, and the benchmark 62% Fe import price at the port of Tianjin fell to the US$52.50, although it is yet to reach the seven year low seen in early July of US$44.59.

According to Szpakowski, the slowdown in Chinese demand coupled with oncoming oversupply thanks to record production rates from Vale and BHP is likely to drive down the price below US$50 per tonne by the end of this year, and to US$40 per tonne or lower by the end of the March quarter next year.

Documentary film looks at effects of mine on Attawapiskat – by Tanya Talaga (Toronto Star – October 22, 2015)

November 3, 2015October 22, 2015

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

What is it like for a northern First Nations community to live beside a diamond mine?

Documentary filmmaker Victoria Lean zeroes in on what it is like for the Attawapiskat First Nation to be neighbours with the Victor diamond mine in her film After the Last River.

The Victor mine, owned by global mining giant De Beers, is just 90 kilometres west of Attawapiskat, a community in James Bay District that has battled floods, an ongoing housing crisis and a massive diesel spill underneath an old school.

Lean set out to tell a story about the consequences of mining in one of the most ecologically sensitive areas in the North, and in doing so she unearthed the challenges of a community struggling to exist.

[Liquid sulphur dioxide] Rail access was key to Calabrian choosing Timmins – by By Len Gillis (Timmins Daily Press – October 22, 2015)

October 22, 2015

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Mayor Steve Black had a tangible example of some good news for Timmins Wednesday, when he made his first ever state-of-the-city address. Speaking at the Days Inn, as part of Small Business Week, the mayor was able to point to a table at the front of room where several American businessmen were sitting.

“As noted a few weeks ago, Calabrian Corporation will be opening a new liquid sulphur dioxide production facility in Timmins. The company hails from Texas and the site in Timmins is part of the Canadian expansion plans,” said Black, adding that he expects the businessmen are now becoming Blue Jays fans.

Calabrian is the leading producer of liquid sulphur dioxide in North America and has secured a five-acre site in the east end of Timmins to build a new plant. The mayor said he was pleased the Timmins Economic Development Corporation worked tirelessly to bring the company to Timmins.

“We are very pleased the company will create jobs and opportunities for local residents. Having a new mining supplier in our municipality is certainly welcome news,” said Black, who asked company representatives to stand and be recognized at the lunch event.