Republic of Mining

SNL Official: Exploration Spending Declines With Price Of Metals (Kitco News – September 21, 2015)

September 22, 2015

http://www.kitco.com/

(Kitco News) – The amount of exploration spending for gold and other metals has declined in the last few years along with prices, said David Cox, senior sales executive for SNL Metals & Mining, during a presentation to the Denver Gold Forum Monday.

Exploration by junior-mining companies has fallen especially sharply, with a weaker equity market cutting into the amount of money these firms can raise for drilling and other work to discover new mines, he said.

The reduced exploration and capital spending have implications for the future supply of metals. “Discovery is the only way to add new resources and reserves to supply,” Cox said.

He said over the last decade, “there has been a declining rate of discoveries in the gold sector, and now that’s being exacerbated by the capital cutbacks, in particular by the majors but also junior companies are unable to raise money to do their work.”

Aboriginal consultations lengthy but necessary step for mine development – by Jonathan Migneault (Sudbury Northern Life – September 21, 2015)

September 22, 2015

http://www.northernlife.ca/

KGHM makes progress with Victoria Mine

After many years of groundwork, KGHM’s Sudbury operations expect to submit a report to their parent company in Poland by the end of October to approve further development and production of the Victoria Mine, says the company’s local environment and community manager.

Ian Horne addressed the Canadian Institute of Mining Thursday about his years of experience negotiating agreements with local first nations regarding the mine’s development.

In 2010 the modernized Mining Act required mining companies operating in Ontario to consult with Aboriginal people before they could submit their mine closure plans to the Ministry of Northern Development and Mines.

The mine closure plan is a necessary part of any mining project. “Once you get involved in something like Aboriginal consultation you realize the value and importance of it,” Horne said.

Sherritt moves to protect liquidity (Northern Miner – September 18, 2015)

September 22, 2015

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

Sherritt International’s (TSX: S) president and CEO David Pathe did not mince words when he said the firm must take action to protect its balance sheet in order to withstand lower commodity prices at a time when “more than 60% of global nickel production is underwater on a cash cost basis.”

After markets closed on Sept. 17 Sherritt suspended its 1¢ per share quarterly dividend, noting that at current spot prices of US$4.50 per lb., nickel is down 32% since the company last cut its dividend in the first quarter of 2014 from 4.3¢ per share to 1¢ per share.

A world leader in the mining and refining of nickel from lateritic ores and the largest independent energy producer in Cuba with oil and power operations across the island, Sherritt said prices for nickel and crude oil haven’t traded this low since 2009.

Sherritt also said it would cut capital expenditures in 2016 by as much as 25%-35%. Earlier this year the company trimmed its 2015 capex guidance by $15 million to $195 million.

Is it time to go for growth in metals and mining? – by Clyde Russell (Reuters U.K. – September 21, 2015)

September 22, 2015

http://uk.reuters.com/

(Reuters) – – If one was to compile a list of the biggest risk to metals and mining companies right now, it’s unlikely that planning and executing a renewed growth strategy would the top issue.

But that’s exactly the view of consultants Ernst & Young (EY), who recently produced a report highlighting the top risks for metals and mining companies in the next year, and how these have evolved since the peak of the commodity cycle in 2008.

There is obviously merit in the idea of thinking ahead and preparing for an upswing in commodity demand and prices, even if that recovery is nowhere to be seen presently and to many in the industry seems like it’s not even on the horizon.

“Pro-cyclical, short-term behaviour currently prevails, with the collective industry mindset focused on consolidation and capital returns in a low-growth environment,” EY said in the report. “But standing still is not an option: we believe now is the time to prepare for a switch to growth.”

[Sudbury Basin] McCreedy closure likely won’t impact Victoria mine: Union – by Jonathan Migneault (Sudbury Northern Life – September 21, 2015)

September 22, 2015

http://www.northernlife.ca/

KGHM nickel mine to go into care and maintenance Oct. 1

KGHM’s Victoria Mine project should still move forward, despite the recent announcement the company will be closing its McCreedy West nickel mine in Levack next month, says a representative with United Steelworkers Local 2020.

“I know that Victoria is a big priority for KGHM, and I think that project will still be going ahead,” said Myles Sullivan, an area co-ordinator with the United Steelworkers. “It’s a higher grade deposit. It’s a very good deposit, and that will be going ahead from what I’ve been told.”

Sullivan confirmed over the weekend that KGHM’s small McCreedy West Mine will go into care and maintenance on Oct. 1. NorthernLife.ca is awaiting a call back from KGHM regarding Victoria Mine.

The mine’s closure will displace 25 United Steelworkers members, who could apply for jobs at the nearby Morrison Mine – also part of the Levack complex – but would in turn displace workers there with less seniority.

China’s rising output, price rout deepen aluminum industry gloom – by Luc Cohen (Reuters U.S. – September 21, 2015)

September 22, 2015

http://www.reuters.com/

NEW YORK, Sept 21 (Reuters) – Sinking aluminum prices and a ballooning surplus of the metal have deepened the industry’s worst crisis in years, intensifying pressure on high-cost smelters to embark on another round of production cuts to revive prices from their malaise.

The 25 percent drop since last September has pushed benchmark London Metal Exchange prices to six-year lows, and the unprecedented plunge this year in premiums, surcharges paid for physical delivery, to their lowest in 3-1/2 years are the biggest test for producers’ margins since the 2008 financial crisis.

More than 10 percent of smelting capacity outside of China, or 3.5 million tonnes of production, is running in the red with a combined LME and U.S. premium of $1,800 per tonne, according to Wood Mackenzie data from second-quarter results. On Friday, three-month aluminum was at $1,621, with a U.S. premium of $175 a tonne.

The data illustrates the increasing pain across the sector as producers worry about growing exports from China and production costs such as power remain relatively high.

Stephen Poloz for Prime Minister – by Terence Corcoran (National Post – September 22, 2015)

September 22, 2015

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

After months of hyperventilating media reports on Canada’s slide into recession and a looming national economic crisis over falling oil prices, along comes Bank of Canada Governor Stephen Poloz to calm the frothing waters.

The idea that Canada is undergoing a destructive economic mega-shift away from oil and natural resources has been one of the driving metaphors of the current election campaign. To avoid sliding helplessly beyond recession into some dark unknown future, Canada supposedly needs a retooled national policy “vision” from government — new strategies, bold investment initiatives, revamped incentives, grand innovation programs.

No such policy imperatives appeared in Poloz’s speech to the Calgary Economic Club Monday. On the contrary, the central bank governor declared Canada to be a resource-rich economy that will continue to thrive on its natural endowments. “While an abundance of raw materials may complicate the management of companies and the conduct of economic policy, it is far better for a country to have resources than not to have them.” They represent, he said, a “store of value and a source of future riches.”

[Canada] Our resource-rich economy – by Stephen S. Poloz (National Post – September 22, 2015)

September 22, 2015

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

Stephen S. Poloz is Governor of the Bank of Canada. This is an edited excerpt from his speech Monday to the Calgary Economic Club.

Because Canada has been endowed with such a wide variety of resources, we’ve had to learn how to deal with large swings in their prices. I don’t just mean the usual high degree of volatility common among many raw materials. I’m also referring to the long-term swings in prices that are often called “supercycles.” These long-term swings are driven by the fundamental economic laws of supply and demand, as well as the continuous technological progress that can affect both output and consumption.

The pattern is familiar. A large and persistent increase in demand leads to sustained upward pressure on resource prices. The higher prices act as an incentive to boost supply, and companies act by, for example, investing in new capacity and finding methods to increase efficiency.

While high prices can certainly spur research and development, technological progress has been a constant theme in natural resource industries. Because of this progress inflation-adjusted commodity prices have generally been trending lower for 200 years.

Anti-energy campaigns harming countries – by Dr. Patrick Moore (Toronto Sun – September 21, 2015)

September 22, 2015

http://www.torontosun.com/

Co-founder and leader of Greenpeace for 15 years, Dr. Moore is now Chair of Ecology, and Energy with the Frontier Centre for Public Policy.

It is obvious that civilization would not be possible without the mineral and energy resources mined and extracted from the Earth. Yet there is a growing movement to oppose nearly all such activities.

Even though 86% of the world’s energy supply, including 98% of the energy for transporting people and goods, comes from fossil fuels, there are proposals to end their use altogether. The G7 countries, including Canada, recently agreed that “zero emissions” is the desired long-term goal.

It is very difficult to obtain approval for a new mining development, even in the leading mining countries like Australia and Canada. It is virtually impossible in any European country where nearly all their metals are imported, mostly from developing countries.

This trend is based on the perceived negative environmental impacts caused by disturbing the land and water and by emitting CO2 into the atmosphere.

Few will support Naomi Klein’s revolution, thankfully sparing us from national suicide – by Conrad Black (National Post – September 19, 2015)

September 22, 2015

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

The Leap Manifesto unveiled by Naomi Klein and a coalition of somewhat kindred spirits this week in Toronto illustrates the phenomenon of regrouping in which the shattered Old Left, heavily buffeted eco-zealots, imperishable agitators for the native people, and the detritus of organized labour, together with an endearing rag-tail of old do-gooders, posturers and hemophiliac bleeding hearts have stood on each other’s shoulders and proclaimed once more that they are the wave of the future.

The inspiriting tocsin for this bedraggled resurrection, which if any of it actually occurs will be the greatest comeback since Lazarus, seems to have been Naomi Klein’s book last year, This Changes Everything: Capitalism vs. the Climate. Her organizing principle is that ecological necessities have made much of commerce, and especially the carbon-based economy, obsolete and unsustainable.

The bone-crushing defeat of international communism — the metamorphosis of China into a pure-capitalist/command-economy hybrid and of the Russian core of the old Soviet Union into a gangster state run by avaricious and cynical friends of the regime — has forced the traditional Marxists of the West to engage in frenetic networking and consensus-building. They have made their big move toward the environment zealots.

Analysis – Copper market may get a 2003-style supply shock from Glencore closures – by Josephine Mason (Reuters U.K. – September 22, 2015)

September 22, 2015

http://uk.reuters.com/

NEW YORK – As copper miners start to slash spending and shutter mines because of the plunge in the price of the metal, experts who analyse the market in the base metal are suddenly getting a little more cheery.

They are seeing the potential for a re-run of 2003 when Chile’s Codelco [COBRE.UL], the world’s top copper producer stockpiled 200,000 tonnes of the metal that is used in everything from pipes to autos, providing the market with a supply shock that soon drove copper prices back up.

This time around hopes are pinned on the announcement earlier this month from Glencore (GLEN.L) of a sweeping strategy to shore up cash and cut spending, including plans to shutter two major, high-cost copper mines in Zambia and the Democratic Republic of Congo over the next 18 months. That will cut company output by 400,000 tonnes and remove some 2 percent of global supply from the market.

For Glencore CEO Ivan Glasenberg, the plan helped placate shareholders worried about $30 billion (£19 billion) of debt as prices of its main products from copper to coal sank to six-year lows amid worries about China’s waning appetite for such commodities.

Times tough for miners all over – by Reuters/Star Staff (Sudbury Star – September 22, 2015)

September 22, 2015

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

Europe’s No. 2 copper producer Poland’s KGHM said on Monday it would put its McCreedy West copper mine in Sudbury on care and maintenance, the latest victim of sinking prices as worries about demand from China fuel the biggest market rout in years.

Copper prices plunged to six-year lows below $5,000 a tonne last month. They have since recovered to just under $5,300 a tonne, but that’s still about 18 per cent below the 2015 peak.

Also feeding the downward spiral were expectations of a small surplus this year and a larger one in 2016.

Major miners have up until recently mostly refrained from cutting production, but prices have now fallen to levels where some operations are no longer economically viable.

Mining giants Glencore and Freeport have waved the white flag and announced plans to suspend some of their copper production.

Potash Pessimism Clouds Prospects for BHP’s Jansen Project – by David Stringer (Bloomberg News – September 21, 2015)

September 22, 2015

http://www.bloomberg.com/

BHP Billiton Ltd.’s prospects of building potash into the fifth pillar of its portfolio of big-ticket businesses is looking a long way off. That’s the view of Macquarie Group Ltd., which has a “very pessimistic view” of the market.

The world’s biggest miner’s Jansen project in Canada, which has already consumed about $3.8 billion in capital, is unlikely to be developed unless prices rise, according to Macquarie. The bank has cut its long-term price forecast by 16 percent to $280 a metric ton.

“Our base-case scenario for BHP assumes the indefinite deferral of Jansen’s development,” Macquarie analysts wrote in a note to clients dated Sept. 21. The company will probably favor development of less capital intensive petroleum and copper projects, they said.

Mosaic Co., the largest U.S. producer of potash fertilizer, said Monday it plans to reduce output as low crop prices continue to erode farmer demand for agricultural products.

CANADA’S WATERLESS COMMUNITIES (Vice.com – September 2015)

September 22, 2015

http://www.vice.com/en_ca

This is a “must watch” series by Vice News, a current affairs media company that produces news documentaries that are not thoroughly covered by mainstream global news gathering organizations. The issue of non-potable drinking water in many of Canada’s First Nations communities is a national scandal that continues to be largely ignored by the very influential Toronto media. – Stan Sudol (RepublicOfMining.com)

CANADA’S WATERLESS COMMUNITIES, PART 2 (Vice.com – September 15, 2015)

Shoal Lake 40 has been cut off from the mainland for over 100 years. The First Nation community is fighting for an access road to the west so that it can build a water treatment plant. The community has been on a boil water advisory for 17 years. But so far, the federal government has failed to commit its portion of the funding. In Part 2 of this feature, Hilary Beaumont sees the community’s reaction to the latest government announcement.

Click here: http://en.daily.vice.com/videos/canadas-waterless-communities-part-2

CANADA’S WATERLESS COMMUNITIES, PART 3 (Vice.com – September 16, 2015)

The residents of Shoal Lake 40 rely on an aging barge to get food and water from the mainland. In the winter, they drive across the ice. But in the spring and fall, the crossing becomes treacherous. In today’s feature, Hilary Beaumont talks to a resident whose mother died while trying to cross the lake.

Click here: http://en.daily.vice.com/videos/canadas-waterless-communities-part-3

NEWS RELEASE: Morgan Stanley Pressured to Drop Coal Financing

September 22, 2015

Rainforest Action Network Announces Campaign as Next Major Bank Targeted Since Bank of America Coal Milestone

San Francisco – Today, Rainforest Action Network (RAN)announced that Morgan Stanley is the next major investment bank being targeted with a public campaign to demand that the bank commit to stop financing coal mining and coal-fired power.

“Morgan Stanley has longstanding financing relationships withsome of the worst offenders from the global coal mining industry, including Peabody Energy, the world’s largest private sector coal mining company,” said Ben Collins, Senior Research and Policy Campaigner at RAN. “Last year alone, the bank financed $477 million for coal mining.”

Morgan Stanley continues to finance top producers of mountaintop removal coal, even as eleven of its competitors have committed to cut financing for the practice. The bank also financed $1.2 billion in 2014 for the largest operators of coal-fired power plants in the world such as RWE, Europe’s largest single emitter of carbon dioxide.

For fifteen years, RAN has been holding the U.S. banking sector accountable for its environmental and human rights impacts, most recently campaigning against Bank of America’s coal financing.