Republic of Mining

Robots Will Help Iron-Ore Miners Survive Price Rout – by Luzi-Ann Javier (Bloomberg News – September 10, 2015)

September 11, 2015

http://www.bloomberg.com/

When the rout in prices ends for the world’s iron-ore producers, those left standing probably will have more robots on their side.

Automated drills and driver-less trucks are among the new tools employed by the four biggest companies, including BHP Billiton Ltd., in a bid to preserve profit margins during a bear market that began more than two years ago. Using more technology helped reduce costs at Rio Tinto Plc by 8 percent since 2013, even as it boosted output by 5 percent, according to Paul Young, an analyst at Deutsche Bank AG in Sydney.

Improvements by top producers is defying a productivity collapse for the rest of the mining industry, which consultant McKinsey & Co. says declined as much as 28 percent in the past decade, forcing smaller operators to shut.

With demand for iron-ore slowing in China, the world’s biggest user, prices are probably headed lower as major suppliers expand output by tapping low-cost reserves, mostly in Australia, according to Citigroup Inc. The top four companies will see their share of the global market jump to 79 percent in 2018 from 64 percent in 2010, the bank said.

AUDIO: [De Beers and Attawapiskat] After the Last River screens at Bay Street Film Festival in Thunder Bay (CBC News Thunder Bay – September 10, 2015)

September 10, 2015

http://www.cbc.ca/news/canada/thunder-bay/

Movie highlights relationship between First Nation and mining company in northern Ontario

The Bay Street Film Festival kicks off Thursday through Sunday in Thunder Bay. One highly-anticipated film screens Thursday evening after receiving a great deal of attention during production.

After the Last River tells the story of the Attawapiskat First Nation’s experience with the nearby De Beers diamond mining company in northern Ontario.

The small community near James Bay garnered international attention for its’ social issues through the grassroots Idle No More campaign.

Vicki Lean, the film’s director, said there’s not enough discussion about how mining companies and small communities can impact each other.

A piece of mining history revived – the original Rio Tinto mine back in production – by Lawrie Williams (lawrieongold.com – September 10, 2015)

September 10, 2015

http://lawrieongold.com/

While the following article is not specifically on precious metals, but on the revival of one of the world’s oldest known mines, it has in its time produced silver and gold – indeed the Romans mined it primarily for its silver content – and the orebody still contains both precious metals.

While silver is still a byproduct, albeit a small one, the gold content is probably too low to be profitably extracted. Nevertheless as a piece of mining history – and a potentially decently profitable copper mining operation – even at current copper prices, readers may find it an interesting article.

In what has to be a mining engineer’s dream, the old Rio Tinto copper mine in Spain – which in its heyday was the foundation stone for the mega mining company which still bears its name – is being brought back to life. Indeed it is well on the way to becoming a major producer again – and the economics in comparison with low grade copper porphyries which provide the bulk of global copper production, are impressive.

The Rio Tinto mine in southwestern Spain has one of the world’s longest known mining histories with copper having been mined there even before Roman times, but it was in the late 19th Century, and the development of the operation into what at the time was one of the world’s largest copper mines as its first operation by the UK’s Rio Tinto company which made it into a mining classic – and as the world know Rio Tinto subsequently went on to become one of the world’s biggest diversified mining companies.

Gold’s Mr. Fixit Starts Second Act With Anglo Platinum Discards – by Andre Janse Van Vuuren and Kevin Crowley (Bloomberg News – September 10, 2015)

September 10, 2015

http://www.bloomberg.com/

Crippling labor strikes, geriatric mines and precious metals prices scraping along at their lowest levels in half a decade don’t faze Neal Froneman, head of the world’s best-performing gold producer over the past two years.

Froneman, known in the industry as Mr. Fixit, defied investors’ skepticism to build up Sibanye Gold Ltd. from a spinoff of three old, strike-prone South African mines owned by Gold Fields Ltd. Now he wants to do it again in platinum and maybe even coal.

“We think that we’re very well positioned to move into other difficult social environments within South Africa and make a meaningful difference,” Froneman, Sibanye’s chief executive officer, said in a Bloomberg Television interview.

“We have some experience and we understand these risks very well. “While other investors flee the nation, Froneman, 55, reckons he can overcome its fractious labor relations, high costs and low productivity to buy assets cheaply, turn them around and make money.

Atlas MD David Flanagan optimistic about outlook for iron ore – by Jasmine Ng (Australian Financial Review – September 10, 2015)

September 10, 2015

http://www.afr.com/

Iron ore’s prospects for the rest of the year aren’t that poor as supplies from less efficient mines dwindle, according to Atlas Iron.

Chinese buyers are also replenishing inventories, boosting demand, said David Flanagan, managing director of the Perth-based company. Global supplies from high-cost mines will continue to shrink, he said in an interview on Wednesday. Atlas operates mines in Australia’s ore-rich Pilbara region.

The commodity’s been on a roller-coaster in 2015, sinking to a six-year low in April on rising low-cost output and weaker growth in China, the biggest buyer, before rebounding into a bull market the same month.

Ore then fell to a new low at the start of July as some banks forecast that prices would tumble below $US40, before rallying into another bull market and reaching a two-month high on Wednesday.

“There’s more opportunity for an uptick in iron ore prices than there is for a downward tick,” Flanagan said by phone. “There’s opportunity for more mines to close and there’s also opportunity for a buying rally leading into December.”

Editorial: Signs of life in copper market – by John Cumming (Northern Miner – September 9, 2015)

September 10, 2015

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

Glencore’s surprise decision to cut back its copper production coupled with stronger-than-expected Chinese copper import data have had a salutary effect on copper prices, which jumped 5% on Sept. 8 to record their biggest one-day percentage gain in two and a half years to US$2.43 per lb. at press time.

That’s a 9.5% rise from the near seven-year low of US$2.22 per lb. seen a little over two weeks earlier on Aug. 24, 2015. For context, that’s still well above the recessionary low of just US$1.26 per lb. on Dec. 24, 2008, but nowhere near the sweet, sweet record-high price of US$4.60 per lb. on Feb. 14, 2011. In some ways, copper’s price gyrations have mirrored that of crude oil, which saw sudden price gains of 27% over three days in late August on lower U.S. production estimates, and expectations of supply cuts from other producing countries.

In light of what it calls the “challenging environment for commodities,” Glencore has had its subsidiaries Katanga Mining in the Democratic Republic of the Congo and Mopani Copper Mines in Zambia launch a major review of their copper-mining businesses, and suspend production at both Katanga and Mopani operations for 18 months until finishing expansion and upgrade projects that will continue to get funding, including the whole-ore leach at Katanga and the new shafts and concentrator at Mopani.

NEWS RELEASE: The Aluminum Association Concerned about CNIA Call for Removal of Export Tax on Primary Aluminum

September 10, 2015

http://www.aluminum.org

ARLINGTON, Va., Sept. 9, 2015 /PRNewswire-USNewswire/ — The Aluminum Association, which represents producers and suppliers to the North American aluminum industry, expressed strong concern today about a recent call for the removal of a long-standing 15 percent tax on primary aluminum exported from China.

The call came from the Chinese Non-Ferrous Metals Industry Association and “appealed to all relevant national authorities to eliminate as soon as possible the provisional export tariff on aluminum to achieve integration of domestic and international aluminum markets.”

The Chinese government, which relies heavily on imported bauxite, has long applied export taxes on primary aluminum as part of a broader strategy to discourage exports of energy-intensive products and emphasize sustainable, quality growth. The unilateral removal of these taxes could have unforeseen impacts on the balance of trade and the global aluminum market.

Welcome to Rustenburg, Mr Froneman – by Warren Dick (Moneyweb – September 10, 2015)

September 10, 2015

http://www.moneyweb.co.za/

Sibanye to join the ranks of the platinum producers

The CEO of Sibanye Gold* (to be amended shortly) in negotiations with Anglo American Platinum (Amplats) has bobbed and weaved, ducked and counterpunched, but finally, Neil Froneman appears to have landed a potential title-winning blow for shareholders. In the process Sibanye might well move up a category, from middle to heavyweight.

This is because the R1.5 billion plus deal (more about this later) looks to provide a sizable entry point for Sibanye to enter the platinum group metals (PGM) market through the acquisition of the Rustenburg Operations from Amplats.

Speaking at the announcement of the deal yesterday, Froneman said, “we were very disciplined and structured. We had to make sure our first entry into platinum was significant, but we haven’t rushed into it.” Froneman demonstrated that discipline when he walked away from a deal with Amplats in October last year with those immortal words, “Well if they [the assets up for sale] are so good, they should keep them.”

In response to a question from an analyst on how the two parties came to agree on the price the second time around, Froneman revealed why he has a reputation as a skilled dealmaker.

Want off China’s market roller coaster? Look to the U.S. – by Joe Chidley (National Post – September 10, 2015)

September 10, 2015

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

Stock market lingoists will tell you that the 29th element on the periodic table is dubbed “Dr. Copper.” That’s not because the malleable metal is good for your health, but because its predictive capabilities are allegedly so strong that it should hold a PhD in economics.

As goes the global economy, so goes the price of copper, which is used in just about every manufactured good that human beings make these days. As a result, you might think this week’s rally in copper is a sign that the global economy has at last turned a corner.

You might be wrong.

Until the recent rally, the good doctor had spent the summer looking more like a patient on life support than a healer. Copper futures on the Comex in New York had been hit hard over continuing concerns about the slowing economy in China, which consumes about 40 per cent of global supply, and eventually reached US$2.25 a pound on August 26, the lowest level this decade.

Since then, however, copper has staged a remarkable rebound. The most dramatic signs of life came early this week. On Tuesday, futures rose more than five per cent, the biggest one-day gain in years.

UPDATE 2-Zambia to address jobs threat at Glencore’s Mopani Copper – by Chris Mfula (Reuters U.K. – September 10, 2015)

September 10, 2015

http://uk.reuters.com/

LUSAKA, Sept 10 (Reuters) – Zambia is to hold talks with Mopani Copper Mines (MCM) over parent company Glencore’s plan to suspend operations after a drop in the metal’s price, the mining minister said on Thursday.

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

The power problems and slide in copper prices have driven the kwacha currency to record lows amid a sell-off in commodity-linked currencies as key consumer China’s economy has slowed, renewing pressure on Zambia to diversify its economy.

Glencore, Vedanta Resources and China’s NFC Africa and CNMC Luanshya Copper Mine have all said they will shut down some operations because of the harsh business environment.

Zambia minining minister Christopher Yaluma said that the government would not respond to Glencore directly but would instead negotiate with Mopani because it is more familiar with the local economy.

What the influencers are saying about commodities – by Frank Holmes (U.S. Investors) (Mineweb.com – September 9, 2015)

September 10, 2015

http://www.mineweb.com/

All the big names are making investments – Soros, Druckenmiller, Icahn and Faber.

A few legendary influencers in investing are making huge bets right now on commodities, an area that’s faced—and continues to face—some pretty strong headwinds. What are we to make of this?

I already shared with you that famed hedge fund manager Stanley Druckenmiller made a $323-million bet on gold, now the largest position in his family office fund. It’s also come to light that George Soros recently moved $2 million into coal producers Peabody Energy and Arch Coal. Meanwhile, activist investor Carl Icahn took an 8.5-percent position in copper miner Freeport-McMoRan, which we own.

My friend Marc Faber, the widely-respected Swiss investor and editor of the influential “Gloom, Boom & Doom Report,” is now plugging for the mining sector and precious metals. Speaking to Bloomberg TV last week, Faber claimed that investors are running low on safe assets and suggested they revisit mining companies:

If I had to turn anywhere where… the opportunity for large capital gains exists, and the downside is, in my opinion, limited, it would be the mining sectors, specifically precious metals and mining companies… like Freeport, Newmont, Barrick.

Mining companies must be more efficient, says MD of consulting firm Hatch – by Charlotte Mathews (Business Day Live – September 2015)

September 10, 2015

http://www.bdlive.co.za/

HELSINKI — Financial cost cutting by mining companies is achieving short-term savings but in the long term it is hurting performance, MD of Hatch mining and mineral processing consulting firm Jan Kwak said on Tuesday.

In an interview on the sidelines of the Global Cleantech Summit in Finland on Tuesday, Mr Kwak, whose global company (which operates in Africa as Hatch Goba) specialises in strategic consulting and research, project management and operational support for mining, energy and infrastructure companies, said mining companies should rather be making savings through solutions that deliver sustained output using fewer resources.

The three-day Global Cleantech Summit, which is organised by the Finnish government, brings together about 800 delegates from around the world to discuss issues relevant to “green” technology development, financing and marketing.

Mining companies, squeezed by falling commodities prices, have intensified cost-saving programmes in the past two years, including retrenchments and cutting back on new capital investments. Anglo American has said it will cut about one-third of its global workforce, including through disposals of assets.

PRESS RELEASE: OUTOTEC’S DEWATERING TECHNOLOGY CENTER INAUGURATED IN LAPPEENRANTA, FINLAND

September 10, 2015

SEPTEMBER 8, 2015 – Outotec’s Dewatering Technology Center inaugurated in Lappeenranta, Finland

Outotec has established a Dewatering Technology Center in Lappeenranta, Finland, to further strengthen its position as a leader in dewatering solutions. The center, inaugurated today, is dedicated to developing new products, processes and services for solid-liquid separation and raw material reuse for the entire life cycle of processing plants.

Outotec’s customers are constantly looking for more efficient processes in mineral slurry dewatering, process water reuse and by-product handling in metals and chemical processing as well as in industrial water treatment. Outotec has comprehensive offering for dewatering and strong process understanding in systems integration of relevant unit operations. With the new Dewatering Technology Center, Outotec can simulate and optimize customer processes to integrate them with Outotec technology to capture new levels of efficiency throughout the life cycle of a plant.

“In line with our mission ‘sustainable use of Earth’s natural resources’, we continuously develop new resource-efficient equipment, processes and services for our customers. With the recent acquisition of Kovit Engineering and Outotec’s expansion into tailings management solutions, the new dewatering technology center brings world-class knowledge in the study of tailings dewatering and treatment.

[South Africa] Brink With Half of Mines Losing Money – by Kevin Crowley (Bloomberg News – September 9, 2015)

September 9, 2015

http://www.bloomberg.com/

South Africa’s gold mines, the deepest and among the oldest in the world, are in big trouble.

The four largest producers in the country are losing money on about 35 percent of production at current prices, according to company data compiled by Bloomberg. At the same time, higher costs are cutting into profits as electricity bills climb to a record. Workers are also pushing for wage increases, with some threatening to strike if salaries aren’t doubled.

The nation, whose Witwatersrand Basin has supplied about a third of all gold ever mined, dropped from the top producer to sixth-biggest in just eight years.

Now that miners who still crawl through tunnels using hand drills and dynamite have extracted much of the easy-to-dig metal, companies use modern technology to go deeper. That’s another expense, especially when bullion prices are near a five-year low.

“What you’re seeing in South Africa is a major margin squeeze,” Srinivasan Venkatakrishnan, chief executive officer of AngloGold Ashanti Ltd., the country’s biggest gold miner by market value, said in an interview. “If you do nothing, the future of South African gold mining always heads towards a declining trend.”

‘Overburden’: Powerful New Film Doc Captures Big Coal’s Enduring Trauma — And Two Women’s Work to Heal Its Damage – by Jeff Biggers (Huffington Post – September 8, 2015)

September 9, 2015

http://www.huffingtonpost.com/

While recent headlines hastily declare the death of King Coal, a powerful new film documentary based on seven years of investigation poignantly captures the complexities and largely overlooked stories of the enduring trauma of the coal industry on miners, their families, affected neighbors and the ravaged communities and Appalachian mountains they call home.

As one of the most timely, poetic and informed film documentaries released this year, Overburden: Two Women and the Mountain Between Them, chronicles a quintessential American journey–amid the tragedy of lawlessness in the workplace and the environment–of two courageous women, formerly divided, who shed their fears and find common ground to begin the painful process of dealing with their grief, seeking terms of justice, and healing their damaged communities and mountains.

“We’ve all become family,” Betty, a once fervent pro-coal supporter tells Lorelei, a coal miner’s widow and vocal mountaintop removal mining organizer, in the film. “Don Blankenship has put us together,” she adds, referring to the notorious former Massey Energy CEO.