Republic of Mining

For many miners, there’s no avoiding the gold ‘production cliff’ now – by Peter Koven (National Post – October 3, 2015)

October 5, 2015

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

When Steve Parsons and his colleagues published their first report on the gold “production cliff” in early 2013, they thought the thesis was obvious, even though almost no one was talking about it.

“It’s not a matter of if or even when the production cliff will happen,” the National Bank analyst said in an interview this week. “It’s really a matter of how companies respond.”

Gold miners hardly ever spoke up on this issue over the last several years. It may be that they didn’t agree with the conclusion, or perhaps they just didn’t want to think too hard about the implications. But there’s no avoiding it now.

Parsons’ thesis, in short, is that global gold production is set to fall in a big way. He calls it the “production cliff” while Goldcorp Inc. and others call it “peak gold,” but it amounts to the same thing.

The cliff appears to be imminent. According to numerous professional estimates, gold output will top out in 2015 or 2016 and then go into decline for several years at least.

Canada reaches sweeping Trans-Pacific trade deal – by Barrie McKenna (Globe and Mail – October 5, 2015)

October 5, 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 — Canada is joining a massive Pacific Rim free trade zone, but has sacrificed some long-held protections for the country’s dairy, poultry and auto industries to gain entry.

Negotiators for the 12 members of the Trans-Pacific Partnership struck a tentative deal in Atlanta early Monday morning that will eliminate most tariffs in a region spanning roughly 40 per cent of the global economy.

But that will come at a hefty price for some sectors, and for taxpayers.

Ottawa said Monday it will spend $4.3-billion over 15 years to compensate dairy, chicken and egg farmers, who are ceding what Canadian officials called “limited access” to their now highly protected markets under the TPP deal. The subsidies will “keep producers whole,” according to a government press release.

The deal, originally slated to be announced Friday, was delayed numerous times over the weekend as countries haggled over last-minute details on autos, patent protection for drugs and agricultural products.

Nickel crisis rocks French islands in Pacific – by Claudine Wery (AFP/Yahoo.com – October 4, 2015)

October 5, 2015

https://en-maktoob.news.yahoo.com/

Plunging nickel prices and the market woes of world mining giants have shaken the French territory of New Caledonia, a tropical archipelago in the Pacific that is hostage to the metal’s fortunes.

Though best known for its stunning lagoon, pristine beaches and diverse wildlife, New Caledonia’s economy actually relies heavily on nickel, discovered here in the 19th century.

The price of nickel — essential to the manufacture of stainless steel — has plunged 35 percent so far this year to a six-and-a-half year low of less than $10,000 (9,000 euros) a tonne.

A slowdown in economic growth in China, the world’s biggest consumer of nickel, and stockpiles of the metal amounting to more than 450,000 tonnes, have depressed the market.

“We were already in a deteriorating situation when the crisis hit because every sector was in a slowdown. I think we are not far from zero economic growth,” Catherine Wehbe, director of the employers’ federation Medef in New Caledonia, told AFP.

Wealth of iron ore in Guinea’s Simandou buried by corruption, politics – by Eric Reguly (Globe and Mail – October 3, 2015)

October 5, 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.

LONDON — Aerial photographs of the 110-kilometre Simandou mountain range in southern Guinea depict a surreal landscape. Wherever the forest and grasslands are scraped away, the exposed earth is rust red or burnt orange, as if a child had splattered ketchup on a sheet of green paper. The vivid colours are the product of the unusually rich iron oxides in Simandou’s iron ore lode.

Simandou has been called the El Dorado of iron ore; it’s thought to be the biggest untapped resource of its kind on the planet and is worth a fortune. The problem is, too many companies want a piece of it and the intrigue and alleged corruption that have surrounded its exploitation seem lifted from a John le Carré espionage novel.

The battle for Simandou’s iron ore has gripped the mining world for more than a decade. It has pitted two of the world’s biggest miners – Rio Tinto Group and Vale SA – against each other and ensnared an unlikely resources player in the form or Beny Steinmetz, the buccaneering Israeli billionaire who built an empire out of diamonds and recruited Vale as his Simandou partner.

Opinion: Mining meeting of the minds at the Vatican – by Michael McPhie (Vancouver Sun – September 28, 2015)

October 5, 2015

http://www.vancouversun.com/

On September 18 and 19 this year I was fortunate enough to be part of a small group of senior mining industry executives and Non-Governmental Organization (NGO) representatives who travelled to the Vatican to meet with senior members of the Catholic Church in what was known as a Day of Reflection.

This followed a similar meeting in September 2013 that I also attended and is in keeping with Pope Francis’s deliberate and, I would argue, constructive efforts to engage with leaders of industry and civil society on the important issues of our time.

The gathering was convened by the Pontifical Council on Peace and Justice and led by his eminence Cardinal Peter Turkson. The meetings provided an opportunity for a wide ranging conversation about the role of mining globally as being fundamental to many sectors of human life and society but also recognition that it is an industry with many challenges given the pressing environmental, social and economic issues of our time.

There was honest and direct input presented from communities that had been impacted negatively by mining as well as a discussion of where mineral development had gone well and what the key factors were in contributing to these more positive outcomes.

Great Mines: Finland’s Kemi Chrome – by John Chadwick and Hugh Boden (International Mining – October 2015)

October 5, 2015

http://im-mining.com/

In September 2014 Kemi mine celebrated exactly 50 years since Outokumpu made the decision to begin chrome mining operations there in Kemi, Finland. Today it is one of the most efficient and environmentally friendly mines in the world. The deposit had been found five years earlier. Mining began in 1967, with large-scale mining operations and ferrochrome production beginning in 1968.

The chrome mine and ferrochrome works were the first steps in Outokumpu’s transition from state mining company to one of the world’s foremost stainless steel producers. Today the annual mill capacity is 2.7 Mt/y of ore (up from 1.3 Mt/y in 2010), producing lumpy ore and fine concentrate (all for internal use). The mine employs some 400 people including contractors, and the nearby ferrochrome works and stainless steel mill in Tornio employ some 1,900 (plus contractors).

CEO Mika Seitovirta: “Kemi is an essential part of the integrated production chain in the Tornio site. Chromium is what makes steel stainless, and our own chrome mine guarantees us competitive sourcing of chromium for the future. The Kemi chrome mine is a unique competitive advantage for us globally.” Outokumpu sees the competitive advantages of its ferrochrome operation as:

For a ghost town, Jerome remains quite lively – by Margo Bartlett Pesek (Las Vegas Review-Journal – October 3, 2015)

October 5, 2015

http://www.reviewjournal.com/

Jerome, Arizona’s liveliest ghost town, has turned the bust of its mining wealth into a boom of tourism income. Instead of extracting the copper, gold and silver of old, Jerome now exploits its colorful past, picturesque downtown, splendid setting and thriving arts community to entice visitors.

Located on a mountainside in central Arizona, Jerome straddles scenic Highway 89A and overlooks the beautiful Verde Valley with the striking red cliffs of Sedona in the distance.

The former copper boomtown of Jerome is 285 miles from Las Vegas. Follow U.S. Highway 93 to Kingman, Ariz., then head east on Interstate 40. At Ash Fork, turn south on Highway 89 and drive 45 miles toward Prescott. Watch for the turnoff for 89A as you approach Prescott. Turn there and head east about 26 miles to reach Jerome. The dramatic route will take you over Mingus Mountain and steeply down toward the Verde Valley. This is not a safe route for large RVs or vehicles hauling long trailers. Oversize rigs should approach using other routes from Prescott or Flagstaff.

The curvy highway takes hairpin turns through the old town, its bridges cantilevered over the slopes.

For Environmentalists, Mines Near Wilderness Are Too Close For Comfort – by Kylie Mohr (National Public Radio – October 3, 2015)

October 5, 2015

http://www.npr.org/

Amy and Dave Freeman are willing to risk brutal winters, thin ice and hordes of hungry mosquitoes to raise awareness about impending mining operations on the border of public lands in northern Minnesota.

A year without a shower takes a tremendous amount of dedication and passion. Why do the Freemans believe the Boundary Waters Canoe Area Wilderness is worth the sacrifice?

“The Boundary Waters belong to all of us. It’s a national forest, it’s federal lands. It’s like a Yellowstone or a Yosemite,” Dave says. “There’s no other place like it on Earth.”

Amy, 33, and Dave, 39, are no strangers to strenuous outdoor adventures. Last year, they paddled and sailed from Ely, Minn., to Washington, D.C., a grand total of 101 days and 2,000 miles on the water, to raise awareness for the Boundary Waters. Their boat acted as a petition, garnering the signatures of thousands of people who oppose sulfide mining in northeastern Minnesota.

Sudbury POV: The flaw in Northern Ontario plans (Sudbury Star – October 3, 2015)

October 5, 2015

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

The NDP’s plan for Northern Ontario is the best plan for the region anyone has come up with in this federal election. But that’s only because it’s the only plan any of the three major parties has released.

There is nothing wrong with its provisions – $1 billion to help develop the Ring of Fire; money to improve the lives of people on first nations; upgrading FedNor to a full standalone regional economic agency and increasing funding by $12.6 million; help the for agriculture sector; and fixing the Nutrition North food subsidy program by immediately including the 25 fly-in communities in Northern Ontario that have been excluded.

All these are good ideas and ones the new federal government should implement. The plan, however, is timid and would do little to improve Northern Ontario’s economy. Its most interesting aspect — $1 billion for the mineral-rich Ring of Fire — has already been matched by the Liberals (the province has also committed $1 billion). But unlike the Liberals, the NDP proposes to spend it over 20 years, or $50 million a year.

There may be little need for the money today, given low commodity prices and the provincial government’s decision to study it to death.

Lifting of sanctions seen boosting Iran’s mining sector after years of underinvestment – by Ilan Solomons (Mining Weekly.com – October 2, 2015)

October 5, 2015

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

The agreement reached between Iran and world powers in Vienna, Austria, in July over the country’s nuclear programme is reopening the Iranian economy to global trade and investment after ten years of international sanctions against the country.

US-based think-tank the Council on Foreign Relations (CFR) recounts that the US, the United Nations (UN) and the European Union imposed multiple sanctions on Iran for its nuclear programme since the International Atomic Energy Association (IAEA), the UN’s nuclear watchdog, found in September 2005 that Tehran was not compliant with its international obligations.

“The US spearheaded international efforts to financially isolate Iran and block its oil exports to raise the cost of Iran’s efforts to develop potential nuclear weapons capability and bring its government to the negotiating table,” the CFR says.

However, Iran agreed to restrictions on its nuclear programme and intensive inspections in the agreement signed with China, France, Russia, the UK, the US and Germany on July 14.

No limits to growth – by Pierre Desrochers and Vincent Geloso (National Post – September 28, 2015)

October 5, 2015

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

Pierre Desrochers is an Associate Professor of Geography, University of Toronto. Vincent Geloso is a PhD Candidate at the London School of Economics.

In 1968 Stanford biologist Paul R. Ehrlich burst into American popular consciousness with his best-selling book, The Population Bomb. Like many doomsayers before him, he argued that in a world of finite resources, the biggest slices of pie get cut at the least-crowded table and that a reduced population would leave each individual a greater share of scarce resources.

Because low hanging fruits are always picked first, resources would become more difficult to access and more expensive over time. Increased population and consumption would unavoidably result in greater environmental degradation.

While Ehrlich’s arguments were nothing new, he was especially good at communicating them. Among other achievements, he became a regular fixture on Johnny Carson’s Tonight Show because of the confidence he exuded in turning up the volume on apocalyptic predictions. “The battle to feed all of humanity [was] over,” he said in no uncertain terms. Soon hundreds of millions of people would die no matter what emergency measures were adopted. Things were so bad he was even willing to bet England would not exist by the year 2000.

Glencore Isn’t Out of the Woods Yet – by Stanley Reed (New York Times – October 1, 2015)

October 2, 2015

http://www.nytimes.com/

LONDON — Shares of Glencore, the giant Swiss-based mining and trading company, may have recovered from a panic sell-off this week, but few analysts consider the company out of danger.

Glencore still has a heavy debt load, and investors remained worried about global economic trends and some management missteps. And the slowing Chinese economy is hurting demand for many of the commodities, like copper, that the company not only mines but also heavily trades.

Those factors have sent the stock reeling in trading in London this summer, from 289 pence in early June to a 52-week low of 68.52 pence on Monday.

“There is clearly a very strong degree of fear in the market more broadly associated with China,” said Paul Gait, a mining analyst at Bernstein Research in London. Until recently, though, the company’s management, led by Ivan Glasenberg, seemed reluctant to acknowledge the severity of the situation.

COLUMN-Australia takes cautious, maybe premature, bullish iron ore view – by Clyde Russell (Reuters U.S. – October 1, 2015)

October 2, 2015

http://www.reuters.com/

Oct 1 (Reuters) – – It’s a brave analyst these days who would call a bottom in the iron ore price, which makes the call for better times by 2017 from the normally cautious Australian government forecaster all the more interesting.

While any forecast for iron ore prices to rise is worth more than just a glance, there are a few things to note about the Australian Department of Industry’s Resource and Energy Quarterly, published on Wednesday.

The most important is that the government forecaster isn’t calling for a dramatic rebound in iron ore, rather for modest gains.

The second is that the recovery isn’t expected until 2017, with next year expected to show further losses for the steel-making ingredient. The report projected that iron ore will rise to average $60.40 a tonne in nominal terms in 2017, up from $51.20 in 2016 and $52.90 this year.

By way of comparison, the department’s June quarter report forecast iron ore would average $54.40 a tonne in 2015 and $52.10 in 2016, but didn’t provide forecasts for further out years.

The Fall Of King Coal – by Tim Murphy (Mother Jones Magazine – November/December 2015)

October 2, 2015

http://www.motherjones.com/

After 29 men died in his company’s mine, Don Blankenship is fighting to stay out of prison. But he’s already won the battle to convert coal country to his brand of conservative politics.

THE PEOPLE OF the Kentucky and West Virginia borderland, where Don Blankenship’s family has lived for generations, have always clustered, out of tradition and necessity, along river valleys and in low-lying hollows amid the nubby Appalachian peaks. The winding roads there, crumbling under the weight of overloaded Mack trucks, are lined with trailers like the one Blankenship grew up in, many with “Friend of Coal” placards in their windows.

But at the peak of his 18-year reign as the CEO of coal giant Massey Energy—as if in a symbolic nod to his rise from hardscrabble roots—Blankenship erected a four-story villa that evoked a fairy-tale castle on a Kentucky mountaintop. It was a short helicopter ride from his primary home, a gated estate on the other side of the Tug Fork River. From a white tower atop his Massey-owned mountain retreat, Blankenship could look out on the coal yards and misty hollows of West Virginia’s Mingo County like a king surveying his domain.

Blankenship earned his way to this summit by reducing many of the nearby mountaintops to heaps of gravel and harvesting the bituminous seams inside them to nearly triple his company’s revenue.

Chief Economist indicates the bottom of the mining bust – by Cole Latimer (Australian Mining – October 2, 2015)

October 2, 2015

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

A report from the Department of Industry Innovation and Science’s Office of the Chief Economist states the bottom of the mining bust is here.

The report outlined an overall drop of around 12 per cent in Australia’s resources export earnings year on year, noting the commodity price decline playing a large part in the overall export earnings decline.

However the Department is still positive on the industry, recognising the shift from a capital and investment heavy construction boom into a period of production.

“Australian producers were well-positioned to meet the projected growth in demand as production starts to increase following a long period of investment,” the report said.

“The Australian resources and energy sector is transitioning decisively into the production phase of the resources boom,” the Department’s Chief Economist Mark Cully added.