Republic of Mining

Lithium prices tipped to rise 20 per cent by 2017 on demand for electric cars – by Peter Ker (Sydney Morning Herald – October 27, 2015)

October 28, 2015

http://www.smh.com.au/

Prices for lithium are forecast to rise strongly in the next two years, with widespread adoption of electric cars tipped to be a game changer for the third element on the periodic table.

While most demand for lithium carbonate comes from industrial companies producing ceramics and glass, Citi analyst Matthew Schembri believes demand will rise significantly when electric vehicles become mainstream and need the commodity for lithium-ion batteries.

Citi is very bullish about electric cars, and forecasts production of pure electric models (not hybrids) like the Nissan Leaf or the Tesla Model S to rise from about 150,000 in 2015 to about 290,000 in 2016. By 2020, Citi expects 1.04 million electric cars to be in production, implying sevenfold growth over five years.

In an extensive study of what the boom in electric cars will mean for lithium carbonate markets, Mr Schembri said demand for the commodity would rise almost 65 per cent over the next five years.

Goldman sees significant ‘downside’ risk for iron ore – by Jasmine Ng and David Stringer (Sydney Morning Post/Bloomberg – October 28, 2015)

October 28, 2015

http://www.smh.com.au/

Iron ore is sinking back toward $US50 a metric ton as expanding low-cost supply and sputtering demand in China spur concern a global glut will persist into 2016, with Goldman Sachs frecasting significant losses.

“It’s going down significantly,” Katie Hudson, managing director and senior investment manager at Goldman Sachs Asset Management Australia, said in an interview on Tuesday. “The major producers are adding incremental volume at around $US20 a ton, that gives you a sense of where the vulnerability is.”

Ore with 62 per cent content delivered to the Chinese port of Qingdao rose for the first time in seven days, adding 0.9 per cent to $US51.50 a dry ton on Tuesday after falling to $US51.03 Monday, the lowest since July 16, according to Metal Bulletin Ltd. The raw material – which bottomed at $US44.59 on July 8, a record in daily price data dating back to 2009 – is set for the first monthly loss since July.

The renewed decline shows the global market has yet to reach a balance as the biggest miners boost cheap output while steel consumption contracts in China.

Why is beneficiation in the diamond industry failing? – by Nastassia Arendse (Mineweb.com – October 28, 2015)

October 28, 2015

http://www.mineweb.com/

Legislation has become a defining feature of the investment regime and is now a liability.

A beautiful parcel of rough diamonds lies across the table as Ilan Kaplan, Vice Chairman of the Diamond Manufacturers Association shares the story behind the issues faced by a typical beneficiator.

The audience at the Diamond Indaba looks on while he explains that apart from the sourcing of diamonds, one of the issues is finding a manufacturer. One has a choice of using an operation that is either based in Johannesburg (a state-of-the-art operation) or in neighbouring Southern Africa. Once you have sourced the goods, you have to pay VAT on your purchase.

Yes, you might get the VAT back in maybe 60 or 90 days, but it will have a major cash flow impact on your business. This reduces your further purchasing ability if another opportunity arises in the interim.

Kaplan says that 30% of the diamonds on the table cannot be manufactured profitably.

Odisha looks to revive bauxite mining in Niyamgiri hills – by Jatindra Dash and Krishna N. Das (Reuters India – October 28, 2015)

October 28, 2015

http://in.reuters.com/

BHUBANESWAR/NEW DELHI – Odisha is seeking to revive a controversial plan to mine for bauxite in the Niyamgiri hills, a lushly forested area that the Dongria Kondh tribe considers sacred, a minister said on Wednesday.

The proposal, which sparked an angry response from green groups, comes nearly two years after local residents successfully blocked a request by London-listed Vedanta Resources (VED.L) to mine in the area.

“We want the revival of this mining project because some local peoples’ representatives have told us (to do so),” Odisha’s steel and mines minister, Prafulla Kumar Mallik, told Reuters.

“Besides, it’s required to ensure long-term bauxite supply to the struggling aluminium industry including Vedanta.”

Vedanta Ltd (VDAN.NS), controlled by metals mogul Anil Agarwal’s Vedanta Resources, has set up a big alumina plant in Odisha betting on bauxite supplies from Niyamgiri.

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

October 28, 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.

U.S. challenges China’s sovereignty claim to artificial islands – by Nathan Vanderklippe (Globe and Mail – October 28, 2015)

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.

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

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.

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

October 28, 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.

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

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.

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

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.

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

October 28, 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.

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

October 28, 2015

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.”

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

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.

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

May 13, 2016October 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.

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

October 27, 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.