Republic of Mining

Barrick’s cyanide spill five times larger – by Herald Staff (Buenos Aires Herald – September 24, 2015)

September 24, 2015

http://www.buenosairesherald.com/

Company’s own new figures show leak had been massively underestimated

The amount of cyanide solution that spilled from Barrick Gold’s Veladero mine in San Juan province is almost five times more than previously believed, the company acknowledged yesterday as a second federal prosecutor moved to investigate national and provincial officials and mining executives amid growing environmental concerns.

By Barrick’s own estimates, approximately 1,072 cubic metres (1.072 million litres) of cyanide solution made it into the Potrerillos River, due to a valve failure and a sluice gate being left open on September 12.

Previous upper estimates of the spill had been in the realm of 224,000 litres. The Canadian multinational chalked up the revised number to the pinpointing of the approximate time of the valve failure, believed to be around 8pm. The cyanide solution is used to leach gold from processed rocks, a common method for the extraction of gold from ore.

Despite the revised estimate, Barrick insists the spill will not lead to any health risks for area residents.

COLUMN-Coal isn’t amazing – how to lose the PR war, and why it may not matter – by Clyde Russell (Reuters U.K. – September 24, 2015)

September 24, 2015

http://uk.reuters.com/

(Reuters) – – Can the coal industry win a public relations battle, and does it even matter if it can’t?

There’s no shortage of people and organisations claiming that coal is increasingly embattled and is about to go the way of whale oil and wood as a fuel of the past.

Does this mean that the Minerals Council of Australia’s new, and seemingly costly, campaign in support of the fuel is simply raging against the inevitable, or does it herald a new front in the war between coal miners and anti-coal environmentalists?

There’s little doubt that coal has an image problem, increasingly so in developed countries where the fuel’s major contribution to climate change is well-publicised and understood by the majority of the public.

One of the top producers has even gone so far as to say coal is on the losing side, and not just because prices have dropped by almost two-thirds in the current four-year losing streak.

Potash Corp.’s K+S Bid Helped by Commodity Slide, Analysts Say – by Scott Deveau and Jack Kaskey (Bloomberg News – September 24, 2015)

September 24, 2015

http://www.bloomberg.com/

Potash Corp. of Saskatchewan’s 7.85 billion-euro ($8.77 billion) proposal to acquire its largest European competitor is more attractive after price declines in the Canadian company’s namesake crop nutrient, according to two analysts.

Potash Corp.’s cash offer made in June was rejected by K+S AG of Germany as too low. Since then, spot prices for potash in the U.S. have dropped 12 percent and there have been forecasts for further declines on the export market. On Monday, Mosaic Co., the largest U.S. producer, said it was cutting output and blamed weaker demand.

Share prices of potash miners have fallen accordingly. K+S is down 9.3 percent this month and closed at 30.22 euros in Frankfurt on Wednesday. That makes Potash Corp.’s 41-euros-a-share bid attractive, said Nils-Peter Gehrmann, an analyst with Hauck & Aufhauser, and Jeffrey Stafford at Morningstar Equity Research.

“While we’re certain management believes EUR 41 per share undervalues K+S, we think the offer considerably overvalues the company,” Chicago-based Stafford said in a note Tuesday. He said his fair value estimate for K+S is 24 euros a share.

Copper’s bust-boom-slump-boom cycle continues in region (Arizona Daily Star – September 24, 2015)

September 24, 2015

http://tucson.com/

The sometimes dizzying bust-boom-slump-boom history of copper is especially well-known in Arizona, a region that — combined with New Mexico and Sonora — is the world’s second-richest source of the metal after Chile.

This historical cycle is documented by Arizona Daily Star archives in the 2000s alone — much less the decades before that.

(With credit to former Star reporter Richard Ducote, current Star reporters Gabriela Rico and Tony Davis and Assistant Business Editor David Wichner, Bloomberg News and The Associated Press for the reporting excerpted here):

Oct. 23, 2001: Phoenix-based Phelps Dodge Corp. announces it will cut 1,400 jobs, trim copper production, and kill its stock dividend to deal with weak copper prices and a sliding economy. Copper price: 63 cents a pound.

Dec. 11, 2002: The long-awaited improvement in copper prices has not materialized. For the first three quarters of 2002, Tucson-based Asarco lost $38 million. In the same period of 2001, Asarco lost $81 million. Copper price: Just shy of 74 cents a pound. Prices would have to approach $1 a pound for happy days to return for Arizona producers.

NEWS RELEASE: Cameco and AREVA Celebrate Start of Production at Cigar Lake

September 24, 2015

http://www.cameco.com/

Saskatoon, Saskatchewan, Canada: Cameco (TSX: CCO; NYSE: CCJ) and AREVA officially marked the start of production at the Cigar Lake uranium mine and McClean Lake mill today at the minesite in northern Saskatchewan, Canada.

Cameco president and CEO Tim Gitzel, and Olivier Wantz, member of the executive committee and senior executive vice-president, mining and front end business group for AREVA, welcomed dignitaries including Saskatchewan Economy Minister Bill Boyd and community leaders from northern Saskatchewan, and led a tour of the underground workings.

“I thank all of our stakeholders and partners whose strong support helped us bring this rich and challenging deposit into production,” said Tim Gitzel. “This achievement took 10 years, great perseverance and technical creativity, and I commend the many people who contributed.”

“We are happy to celebrate these two major uranium mining assets in Saskatchewan, the Cigar Lake mine and the McClean Lake mill,” said Olivier Wantz. “Their successful operation demonstrates the determination and expertise of our employees to ensure the safe start-up and continued production.”

Mining at Cigar Lake began in March 2014. The first packaged uranium concentrate was produced in October 2014 at the McClean Lake mill which is majority owned and operated by AREVA Canada Resources Inc.

How Hillary Clinton and Rachel Notley are bringing more bad news to Alberta’s oilpatch – by Claudia Cattaneo (National Post – September 24, 2015)

September 24, 2015

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

When Alberta Premier Rachel Notley travels to Montreal, New York and Toronto next week to promote investment, she will discover that speaking from both sides of her mouth about her province’s energy sector doesn’t exactly instill confidence.

Sounding yet again like a cheerleader for opponents of Alberta’s energy industry, Notley, head of the left-leaning NDP government, reacted positively to U.S Democratic Presidential Candidate Hillary Clinton’s surprise announcement that she’s opposed to the Keystone XL pipeline from Alberta to the U.S. Gulf.

That’s right, speaking to reporters, Notley said she’d rather see more refining and upgrading in Alberta (which would have to be financially supported by her cash-strapped government because no one in the private sector wants to do it) than sending the province’s bitumen to refineries in the U.S. Gulf through a pipeline proposed by Calgary-based TransCanada Corp. and supported widely by the North American oil community.

“I do think we need to get our product to tidewater,” she said. “I’m just not convinced that getting our product down to the Gulf where there’s a whole bunch of cheap refining is absolutely the best strategy for an industry in Alberta when Albertans want to see focus more on upgrading and refining.”

Vale offers contrarian view of China steel output (Bloomberg/Sydney Morning Herald – September 24, 2015)

September 24, 2015

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

Vale reacted to claims steel consumption in China has peaked and, in a view that contrasts with a rising number of global banks, says demand in the top user still has some way to go.

“China’s steel consumption peak is still ahead of us but of course the growth will be much more gradual,” said Claudio Alves, Vale’s global director of ferrous marketing and sales. Vale aimed to boost its market share, he said.

The largest miners are seeking to figure out the implications of slowing growth on China’s demand for everything from iron to copper. While Vale’s view echoes outlooks from Rio Tinto and BHP Billiton, ANZ Bank brought forward its peak-steel estimate to 2014 from 2020 and Credit Suisse Group said local consumption will shrink 10 per cent by 2018. Citigroup warned on Tuesday commodities may see further losses amid excess supplies and a sluggish global economy.

“Despite the slowdown of the growth speed, China still remains the economic engine of the world,” Mr Alves said before the start of a conference in Qingdao. Further urbanisation and infrastructure projects will underpin demand for iron ore, steel, copper and other base metals, according to Alves.

Commodity nations must deal with the demise of a supercycle – by Daniel Yergin (Financial Times – September 24, 2015)

September 24, 2015

http://www.ft.com/

The writer, vice-chairman of IHS, is author of ‘The Quest: Energy, Security, and the Remaking of the Modern World’

The recent collapse in oil prices is part of a larger drama — the last act in the commodity “supercycle” that began more than a decade ago. That is why the 50 per cent fall in oil prices means not only hard times for the petroleum industry but also portends distress for commodity-exporting nations and the world economy.

The commodity boom took off in late 2003 and 2004 with the transformation of China’s role in the world economy. Following its accession to the World Trade Organisation in 2001, China was no longer just the traditional source of cheap goods, tough competition and a lid on inflation. It also became a huge market in itself.

Its voracious appetite for commodities supported the build-out of an entire country. Between 2003 and 2013, China accounted for 45 per cent of the total growth in world oil demand. Commodity producers were caught unprepared and, as they scrambled to add capacity, prices rose from $20-$25 a barrel in the early 2000s to $100 or so in 2011-2013. The conviction grew that this would go on forever.

Goldcorp stays positive on Éléonore gold mine (Northern Miner – September 23, 2015)

September 24, 2015

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

Goldcorp (TSX:G; NYSE: GG) highights the potential at its Éléonore gold mine in northern Quebec, despite recently lowering the project’s 2015 production forecast, partly due to higher-than-expected mining dilution.

“Looking forward, I’m not worried about Éléonore. It is a great plant; it’s a great orebody,” Chuck Jeannes, the company’s president and CEO, said in a Sept. 22 webcast presentation at the Denver Gold Forum.

The underground mine reached commercial production on April 1, 2015, after pouring first gold last October. The slower-than-anticipated startup resulted from commissioning issues in the first half of 2015, relating to the tailings filter press and primary crusher feeder. However, those issues have been resolved, Jeannes says.

In August, the Éléonore mill achieved nameplate capacity of 7,000 tonnes per day, with roughly 2,000 tonnes of the feed coming from low-grade stockpiles.

Riding Volks into the sunset? – by Terence Corcoran (National Post – September 24, 2015)

September 24, 2015

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

Poor old VW, caught in the giant pincers of the U.S. regulatory machine that keeps closing in on car markers and car drivers in the name of the climate and the environment. Volkswagen, whose Golf series won the 2015 Motor Trend Car of the Year award at the annual Green Car Congress for Sustainable Mobility, had diesel vehicles that beat the competition on fuel economy and carbon emissions.

As the Motor Trend judges put it, the VW Golf series has “low fuel consumption and carbon footprint, relative to the vehicle’s competitive set.”

But it now looks like the Golf and other VW diesel models have trouble meeting the toughest of the many U.S. emissions targets, the one for nitrous oxide. To get around this little problem, some collection of numbskulls at the global German auto giant decided they could to a little tweak of the on-board computer systems that would have the effect of producing a lower-than-actual reading of nitrous oxide emissions when undergoing official tests.

There may be a bigger issue here too. Clive Crook, writing for Bloomberg News, sees the VW scandal as a broader indicator of a major Europe-wide automotive gamble on “clean diesel” engines.

Don’t call it a scandal: Volkswagen corruption is a syndrome – by Henry Mintzberg (Globe and Mail – September 23, 2015)

September 24, 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.

Henry Mintzberg is the Cleghorn professor of management studies at McGill University in Montreal and author of Rebalancing Society: Radical Renewal Beyond Left, Right, and Center.

What were they thinking? That’s the question on everyone’s mind as the Volkswagen crisis unfolds. That question makes a big assumption: that the company’s leaders were thinking about anything beyond their greed. About decency, about our environment, about their progeny.

Okay, so you will not buy a Volkswagen. A Chevrolet instead? Watch out for the ignition. Or how about a Toyota? Just duck as the airbag comes your way. Do you, by any chance, see a pattern? Have we been thinking?

In Europe, the United States, Japan and most everywhere else, something is going on. There is a level of sheer corruption that transcends the automobile industry.

How about banking in the United States and Europe? How about politics, most everywhere?

TMAC Resources, Pretium Resources key to future of junior mining sector – by Tim Kiladze (Globe and Mail – September 24, 2015)

September 24, 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.

Few companies are reeling from the commodity collapse as badly as junior miners. Three years into the supercycle’s crash, investors who stick by the sector have largely abandoned smaller explorers and developers in favour of established companies whose projects are up and running.

The major knock against junior miners has been financing risk. No one knows if they will be able to raise the money they need to get their projects into production because shareholders have been so badly burned. That makes the recent developments at TMAC Resources Inc. and Pretium Resources Inc. all the more interesting.

In June, TMAC raised $135-million in a rare mining initial public offering, giving the company enough cash to get to the production phase. Last week, Pretium announced a $540-million (U.S.) financing package that gives the miner 70 per cent of the capital it needs to build its Brucejack mine in northern British Columbia.

UPDATE 1-Glencore slump spoils commodity trader appetite for IPOs – by Sarah McFarlane and Dmitry Zhdannikov (Reuters U.S. – September 23, 2015)

September 24, 2015

http://www.reuters.com/

LONDON, Sept 23 (Reuters) – Unprecedented shareholder pressure over the past six months at listed commodities firms Noble and Glencore have taught their private rivals an unforgettable lesson – think twice before going public or amassing large physical assets.

Noble’s stock is trading near its lowest since the 2008 global financial crisis and Glencore’s touched an all-time low on Tuesday due to plunging commodities prices and earnings.

“In the last two years you were possibly better off being private and not being listed, with the short sellers being so active in commodity companies,” said Karel Valken, global head of trade and commodity finance at Dutch bank Rabobank.

After the record $10 billion Glencore share offering in 2011, which turned its managers into billionaire shareholders, commodity traders had come under an unprecedented spotlight.

Even though most unlisted merchants kept insisting they saw the private model as the most appropriate for now, many market watchers said it was only a matter of time before the likes of Louis Dreyfus followed suit to raise money for expansion via listings.

New Old World: How Indian families took over the Antwerp diamond trade from orthodox Jews – by Pallavi Aiyar (Quartz India.com – July 23, 2015)

September 24, 2015

http://qz.com/

This is excerpted from New Old World: An Indian Journalist Discovers the Changing Face of Europe.

Antwerp’s diamond business had long been controlled by its orthodox, largely Hasidic Jewish community.

Although 65% of the Jewish population of the city was exterminated during the Second World War, those who had remained, their ranks swelled by others fleeing former Nazi-occupied countries in Eastern Europe, had been able to regain control of the centuries-old diamond trade.

In the popular European imagination, diamonds remain inextricably linked with the Jews. When I’d told a group of Julio’s colleagues in Brussels my plans for a story on the Indian community’s role in the trade, they’d expressed surprise. Diamonds? Wasn’t that a Jewish fiefdom?

Once upon a time, it had been. But today it is the Mehtas and the Shahs rather than the Epsteins and Finkelszteins who rule Hoveniersstraat. Indians have come to control almost three-quarters of Antwerp’s diamond industry, a figure that had been associated with the Jews only a few decades ago.

UPDATE 1-Glencore’s Zambian unit plans to cut more than 3,800 jobs – govt sources – by Chris Mfula (Reuters U.K. – September 23, 2015)

September 24, 2015

http://uk.reuters.com/

(Reuters) – Glencore’s Zambian unit Mopani Copper Mines (MCM) has notified the government that it plans to lay off more than 3,800 workers due to lower metal prices and high production costs, government sources said.

An electricity shortage in the southern African nation and weaker copper prices have put pressure on its mining industry, threatening output, jobs and economic growth in Africa’s second-biggest producer of the metal.

Mopani had initially said it planned to cut 4,300 citing lower metal prices and high production costs.

“Mopani has served the labour commissioner with a notice stating that they plan to declare 3,817 workers redundant,” a source at the labour ministry told Reuters late on Tuesday.

“They now have to wait for the labour commissioner’s opinion. The labour commissioner has to consent before they can implement the plan,” the source said.