Republic of Mining

Hubris led to destruction of investors’ money by mining groups – by Kunal Bose (Business Standard – September 7, 2015)

September 8, 2015

The onset of boom led the world’s leading mining groups to be on a capital expenditure binge to dig out new mines

Inspired by one single factor of voracious Chinese appetite ranging from oil to all minerals used in making metals, the now-ended commodity boom began in 2003. The onset of boom led the world’s leading mining groups to be on a capital expenditure binge to dig out new mines.

But the slowdown of the world’s second largest economy, as Beijing turns focus from investment to consumer-led growth, gives the feeling that earlier, long years of high mineral prices supported by growing demand led miners to drink Chinese potion to reach iridescent highs.

Their thought then was Chinese demand would continue to grow at high rates far into the future to justify colossal investments in mines’ capacity building. Chinese growth has now downshifted to a level not seen in a quarter century and that is proving to be a hard awakening for miners from their hallucinatory past.

Not very long ago, mining chief executives thought their investment in dredging more and more iron ore from the earth stood no chance of going wrong, since China was expected to be a one billion tonne (bt) steel producer by 2030.

PRESS RELEASE: Northern Superior Initiates Final Preparations for Trial Against the Ontario Government: October 5th, 2015

September 8, 2015

SUDBURY, ONTARIO–(Marketwired – Sept. 8, 2015) – Northern Superior Resources Inc. (TSX VENTURE:SUP) (“Northern Superior” or the “Company”) is now in the final phase of preparation for the trial of its lawsuit against the Ontario Government, scheduled to start October 5th, 2015. Following a busy summer of preparing and processing legal documents and organizing witnesses, several key steps have either been completed, or are in the process of being completed, in preparation for the trial.

Of particular importance was establishing Northern Superior’s quantum of economic damages resulting from the alleged acts and omissions of the Government of Ontario (“Ontario”) which Northern Superior claims caused it to lose access to further explore and develop the Company’s Thorne Lake, Rapson Bay and Meston Lake properties, located in northwestern Ontario.

Northern Superior retained NERA, an international economic consulting company specializing in damage assessment and business related valuations, to assist in determining a fair and defensible value for the damages suffered by Northern Superior (see Northern Superior press release, May 11th, 2015). This report was submitted on time, as have all of Northern Superior’s documents to the Ontario Government, on July 21st, 2015.

Subsequently, Roscoe Postle Associates Inc. (” RPA”), the Ontario Government’s expert witness on this matter, had an opportunity to respond to the NERA report. The Court set a date of August 28th for this purpose.

Franco-Nevada Mulls Credit as `Hokey’ Streaming Goes Mainstream – by Danielle Bochove (Bloomberg News – September 8, 2015)

September 8, 2015

http://www.bloomberg.com/news/

For Franco-Nevada Corp., the best time to take on debt is at the bottom of a market. The day may be approaching for the Canadian royalty and streaming company as the commodity rout boosts demand for alternative funding.

“There are so many opportunities out there, we might have to dip into our credit lines,” Chief Executive Officer David Harquail said in an interview last week from his Toronto offices. “The ideal is you lever yourself up at the very bottom of the bear market and hopefully, if you’ve called it right, then you really benefit as the market turns around.”

Streaming companies like Franco-Nevada, Silver Wheaton Corp. and Royal Gold Inc. give miners upfront payments in exchange for the right to buy metals at a discount in the future. Franco-Nevada also does royalty agreements, tying portions of production to land titles.

Plunging metal prices, with copper down 24 percent and gold 11 percent in the past year, combined with surging credit costs and volatile stock markets, have made streaming attractive even for majors such as Barrick Gold Corp. and Freeport-McMoRan Inc., giving the business more credibility.

Mining automation: The be all and end all? – by Cole Latimer (Australian Mining – September 8, 2015)

September 8, 2015

http://www.miningaustralia.com.au/

The fully automated mine has long since passed the days of concept and evolved into a reality. If the industry is to survive and grow, on this planet and elsewhere, total automation of many of the processes is the way forward.

According to professor of mining engineering at the University of British Columbia, John Meech, autonomous vehicle operations can help increase productivity by between 15 to 20 per cent, and truck uptimes by up to a fifth, with Rio Tinto automated fleets recording a 12 per cent production increase compared to manned vehicles.

Rio Tinto, BHP, Roy Hill, and Fortescue are making massive strides forward in implementing autonomous haulage systems in the Pilbara, forging a new place for the technology, combining them with manned operations; particularly in terms of Rio’s Mine of the Future program and BHP’s automated operations centre, both located in Perth.

Hitachi is also trialling its autonomous vehicle systems at the Meandu coal mine in Queensland.

Total automation has also taken another angle with Vale, in Brazil, looking to go completely truckless by using mobile conveyor belts.

How First Nations resurgence could help or hinder pipeline projects (Business Vancouver – september 8, 2015)

September 8, 2015

https://www.biv.com/

There’s something significant going on in the aboriginal world, which needs to be viewed with a historical frame of reference. From demonstrations of indigenous identity …

The Canadian oilpatch was dumbstruck by incoming Alberta Premier Rachel Notley’s pre-election announcement that her government would withdraw support for Enbridge’s (TSX:ENB) Northern Gateway pipeline.

“It’s not worth it,” Notley said, suggesting that she considered First Nations opposition intractable and noting the “intense” environmental sensitivities in British Columbia.

Shortly after the NDP’s orange crush started giving Calgary energy executives the blues, B.C.’s Lax Kw’alaams Band unanimously rejected the $1.1 billion offer from Petronas-led Pacific NorthWest LNG to site its liquefaction terminal on Lelu Island near Prince Rupert.

As Canada’s oil and gas export industry starts shifting from the shrinking U.S. market to the expanding Asian markets, getting aboriginal buy-in for the requisite infrastructure has proved extremely difficult.

South Africa: Some of SA’s Top Companies Are Quietly Breaking the Law – by Alide Dasnois (All Africa.com – September 8, 2015)

September 8, 2015

http://allafrica.com/

Some of the top companies on the Johannesburg Stock Exchange are flouting environmental laws and not telling their shareholders, according to a study by the Centre for Environmental Rights.

The CER assessed 20 companies listed on the JSE and found that between 2008 and 2014 many of them violated their permits and licences or flouted the law. Examples of violations included toxic spills, unauthorised disposal of hazardous waste, contamination of soil or of ground and surface water, and air pollution.

Yet all the companies had regularly been listed on the JSE’s Socially Responsible Investment (SRI) index.

This index, launched in 2004, was intended to identify companies which “integrate the principles of the triple bottom line’ – environmental, social and economic sustainability. It was designed as a tool for investors, including retirement funds and asset management companies, looking for “socially responsible” investments.

But the CER research shows that many of these listed companies also feature on another list – the list of companies against whom the Department of Environmental Affairs has had to take action.

‘Mixed emotions’ in Quebec as Rio Tinto rebranding drops Alcan moniker – by Bertrand Marotte (Globe and Mail – September 8, 2015)

September 8, 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.

MONTREAL – A move by Anglo-Australian mining giant Rio Tinto Group to drop the storied Alcan name has touched a nerve in Quebec and fostered a feeling in some quarters that the company is cold-heartedly discarding a priceless piece of Quebec’s heritage.

The chief executive of Rio Tinto’s Montreal-based aluminum division, Alfredo Barrios, said in a recent internal memo the corporate name is being changed from Rio Tinto Alcan to “the Aluminium product group of Rio Tinto” by way of aligning with Rio Tinto’s other product divisions in a uniform global branding effort.

Mr. Barrios acknowledged the change “may understandably generate mixed emotions” for employees from within the ranks of the former Alcan, which Rio Tinto took over in a $38-billion (U.S.) deal seven years ago.

When Rio Tinto’s aluminum division headquarters moves next year from its current Sherbrooke St. location in the “Maison Alcan” to the spanking new Deloitte Tower next door to the Bell Centre, the major new tenant will be identified only as Rio Tinto.

Copper advances as Glencore plans mine shutdowns (Sydney Morning Herald – September 8, 2015)

September 8, 2015

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

Copper gained after commodities group Glencore announced plans to shut down loss-making mines to help to reduce a glut of supply that has weighed on prices.

Bearish investors scrambled to close out positions by buying futures, but analysts said it was uncertain whether Glencore’s move to close some African copper operations for 18 months would create a trend.

“It’s probably not enough to see prices go up (substantially), but it certainly supports the market,” said Grant Sporre, head of metals research at Deutsche Bank in London. “It also ensures that copper is probably not going to fall in the same way that iron ore and met (metallurgical) coal have done.”

Sporre had forecast a global copper supply/demand surplus of 350,000 tonnes for next year and said that Glencore’s move would bring the market close to balance, given that it is expected to remove 300,000 tonnes in 2016.

Blame fossil fuel users – not producers for greenhouse gas emissions – by Gwyn Morgan (Globe and Mail – September 7, 2015)

September 8, 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.

Since the dawn of the Industrial Revolution in the mid 1700s, fossil fuels have transformed humankind’s journey in almost every conceivable way. Agricultural production has soared, transportation was revolutionized, electrical power enabled breathtaking technological advancements, and petro-chemistry has provided synthetic materials for the manufacture of everything from fertilizers to plastics to clothing and even heart valves.

Real GDP per capita, the measure most closely reflecting global living standards, has soared by more than 1,600 per cent (according to Indur Goklany, a member of the U.S. delegation that established the Intergovernmental Panel on Climate Change) in lock-step with the per-capita growth in fossil-fuel consumption.

Harnessing our planet’s enormous endowment of natural hydrocarbon energy is, without doubt, the greatest factor underpinning the huge gains in virtually every aspect of humanity’s remarkable progress. And the technological advances made by the workers who unlock those buried resources have been equally profound.

Glencore Investors Force CEO Glasenberg to Prepare for Doomsday – by Javier Blas and Jesse Riseborough (Bloomberg News – September 8, 2015)

September 8, 2015

http://www.bloomberg.com/

After a breakfast meeting with a small group of hedge funds in New York last week, Glencore Plc Chief Executive Officer Ivan Glasenberg concluded that investors could no longer stomach his famously bullish outlook.

The meeting capped two weeks of discussions with shareholders from North America to Europe after the Swiss miner and trader reported a 56 percent decline in profit. His plan to trim Glencore’s $30 billion debt by 10 percent by the end of next year wasn’t enough to halt a plunge in the company’s market value, which has more than halved to about 17 billion pounds ($26 billion) this year. On Monday, the company announced a strategy to reduce debt much more quickly.

“This is definitely the first time you get the impression that shareholders are the most important voice in the room versus management,” Ben Davis, a mining analyst at Liberum Capital Ltd., said by phone from London. “Until now, a lot of the market has seen Ivan as the smartest guy in the room.”

The U-turn was unprecedented for the 58-year-old South African billionaire, who has run Glencore almost single-handedly from the sleepy lakeside Swiss city of Zug for a decade and a half.

Do tax credits help Northern mining? Economists and industry disagree – by Chris Windeyer (CBC News North – September 4, 2015)

September 8, 2015

http://www.cbc.ca/news/canada/north/

‘Everybody thinks it’s a magic bullet but it doesn’t do anything,’ economist says

It’s been a regular feature of Conservative federal budgets since 2006: an extension, for another year, of the 15 per cent Mineral Exploration Tax Credit.

The Conservative Party is now promising to extend that credit for another three years, if it’s re-elected, and boost the credit to 25 per cent in remote areas, including the territories and large parts of the provincial North.

There’s just one problem, says Lindsay Tedds, an economist with the University of Victoria: it may not actually work.

“Everybody thinks it’s a magic bullet but it doesn’t do anything,” Tedds says. “It does not increase investment to the point where you’re going to have increased exploration.”

Mining makes its debut in Canadian election – by Andrew Topf (Mining.com – September 6, 2015)

September 8, 2015

http://www.mining.com/

It’s not often that mining makes headlines as an election issue in Canada, but there it was last week, when Prime Minister Stephen Harper made a scheduled campaign stop in the battleground riding of Nipissing–Timiskaming in Northern Ontario.

Harper, whose incumbent Conservative Party finds itself in a tight three-way race with the Liberal Party and the NDP, told a group of supporters in North Bay that the 15 percent mineral exploration tax credit, in place since 2006, would be extended at least another three years if the government is re-elected.

Projects that face steep overhead costs due to remote locations, such as the Ring of Fire in Northern Ontario and the Plan Nord in Quebec, would qualify for a 25 percent tax credit.

The cost of extending the credit and the new enhanced credit would be about $60 million a year starting in 2016-17. Both Liberal Party leader Justin Trudeau and the leader of the NDP, Tom Mulcair, have said they oppose the tax credit.

Recession has little impact on Sudbury [mining]: Chamber – by Jonathan Migneault (Sudbury Northern Life – September 02, 2015)

September 8, 2015

http://www.northernlife.ca/

Mining supply and services remain steady, but not great

While Canada officially entered a recession Tuesday, it has mostly been business as usual for the last two quarters in Sudbury, says the Greater Sudbury Chamber of Commerce.

“I think Sudbury, as a whole, is doing reasonably well,” said Karen Hourtovenko, chair of the Greater Sudbury Chamber of Commerce.

Statistics Canada announced Tuesday Canada’s gross domestic product decreased by 0.5 per cent between April and June, which marked the second GDP decline in as many quarters. The technical definition of a recession is two consecutive quarters of negative GDP growth.

The recession has been driven by a slump in the oil and gas sector, but other sectors of the economy have seen more positive growth. The resale housing market, for example, increased nearly 10 per cent in the same quarter.

Why the Mineral Exploration Tax Credit is such a bad idea – by Lindsay Tedds (MACLEAN’S Magazine – September 2, 2015)

September 8, 2015

http://www.macleans.ca/

With taxpayers worried about government spending, we should demand better than the renewal of a credit that represents a wasteful use of tax revenues

Conservative leader Stephen Harper speaks with Joe Guido, President of Premier Mining Products as he is shown drill bits during a campaign stop in North Bay, Ont., on Wednesday, September 2, 2015. THE CANADIAN PRESS/Adrian Wyld
Conservative leader Stephen Harper speaks with Joe Guido, President of Premier Mining Products as he is shown drill bits during a campaign stop in North Bay, Ont., on Wednesday, September 2, 2015. THE CANADIAN PRESS/Adrian Wyld

As I am sure all of Canada knows (and much of the world), Canada’s much awaited gross domestic production (GDP) numbers came out Tuesday. Everyone, by now, knows the punchline, but buried in those numbers were little gems that I was certain would lead to policy announcements today. And I was right. The first ones out of the gates have been the Conservative Party of Canada (CPC) which announced an extension to and enhancement of the Mineral Exploration Tax Credit.

Mining For Gold Song- by Cowboy Junkies

September 5, 2015

Have a great Labour Day weekend everyone! – Stan Sudol (RepublicOfMining.com)

https://en.wikipedia.org/wiki/Main_Page

The band was formed by three siblings from the Timmins entertainment family.
Another sibling, Cali, rose to fame as an actress on Ryan’s Hope. The Timmins
siblings are descendants of Noah Timmins, a mining prospector who founded
the Ontario [gold mining] city of Timmins. (Wiki)

Cowboy Junkies are a Canadian alternative country/blues/folk rock band. The group was formed in Toronto in 1985 by Margo Timmins (vocalist), Michael Timmins (songwriter, guitarist), Peter Timmins (drummer) and Alan Anton (bassist).[1]

The Junkies first performed publicly at the Beverley Tavern and other clubs in Toronto’s Queen Street West, including The Rivoli. Their 1986 debut album, produced by Canadian producer Peter Moore, was the blues-inspired Whites Off Earth Now!!, recorded using an ambisonic microphone in the family garage.[1]