Republic of Mining

Mining losing growth obsession: BlackRock’s Evy Hambro – by Paul Garvey (The Australian – September 26, 2015)

September 28, 2015

http://www.theaustralian.com.au/

The scale of BlackRock’s resources arm means the brutal retreat in mining stocks over recent years has been particularly painful.

But for Evy Hambro, whose role as the head of BlackRock’s resources unit makes him one of the mining world’s most influential voices, one piece of upside from the carnage has been a return among mining executives to the core principles and philosophies that drove the industry before boomtime exuberance crept in.

Speaking to The Weekend Australian, Mr Hambro relates a recent conversation with the chief executive of one of the world’s big mining companies.

During the boom, the executive said, the share register was invaded by “tourists” who only wanted to focus on growth, growth and growth. That singular focus over time began to creep into the company’s culture.

As a result, the company strayed from its principles, invested a lot of money in acquisitions and capex, and has been struggling with debt and regretting the move ever since.

Commodity conundrum: Opposing views on Ontario’s Ring of Fire – Business Network News (September 24, 2015)

September 25, 2015

http://www.bnn.ca/ The Ontario government plans to spend $1 billion for infrastructure in the northern Ontario mining area known as “The Ring of Fire”. BNN gets the positive and negative view on the future of mining in this area from Alan Coutts, CEO of Noront Resources, a junior miner in the region, and Patrick Ryan, …

Coal prices turn off investors – by Amanda Saunders (Sydney Morning Herald – September 25, 2015)

September 25, 2015

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

First it was tobacco, then alcohol, gambling, then asbestos. Sugar might also be on the nose for investors. But right now it is hard to find a more loathed sector than coal.

Not only are the forces of environmentalists lining up against the commodity. But there seems to be no end in sight for depressed prices.

The gas industry turned rogue on their counterparts in coal a few months ago too, attacking the industry in a bid to position itself as a cleaner source of energy.

And in a fresh kick in the guts, news broke out from the United States on Friday that Chinese President Xi Jinping was preparing to announce a cap-and-trade scheme to curb emissions as part of a climate deal with the US, ahead of climate talks in Paris in December.

China is Australia’s biggest coal customer and as China and US face off in a climate change battle, the commodity is likely to be a victim.

Can Alberta go coal-free by 2025? – by Tyler Hamilton (Toronto Star – September 25, 2015)

September 25, 2015

The Toronto Star has the largest circulation in Canada. The paper has an enormous impact on federal and Ontario politics as well as shaping public opinion.

Alberta is a province that wears its fossil-fuel heritage with pride. But it’s taking aim at coal-fired electricity generation.

There may be no more power plants burning coal in Ontario, but it was only a decade ago that the province generated enough electricity from coal to supply three million households.

When the last coal-fired facility was closed in 2014, it capped the single-largest effort to reduce greenhouse-gas emissions in North America.

Now coal-dependent, Alberta is giving it a shot. It is something that would have been unthinkable less than a year ago in a province that wears its fossil-fuel heritage with pride. Depending on the plan, Alberta could set the stage for Canada to become virtually coal-free by 2030 – conceivably earlier.

Surveying the ‘golden’ landscape – by David Levenstein (Mineweb.com – September 25, 2015)

September 25, 2015

http://www.mineweb.com/

To see what this means for the ultimate store of wealth.

Gold prices retreated on Monday after a strong rebound last week after the US Federal Reserve announced that it will not be raising interest rates.

In what has become the most highly anticipated meeting of the Federal Open Market Committee (FOMC), the Fed announced that it was going to maintain its current policies, and left the policy rate at 0.125%. Yet, the accompanying statement and the economic projections came in more dovish than expected. The Fed showed concerns over the negative impacts of the recent global financial market volatility, as well as rapid slowdown in China and other emerging markets, on growth and inflation outlook.

In her press conference, Fed Chairwoman Janet Yellen made it clear that the U.S labour market is close to full employment, and that she’s reasonably confident that the inflation rate will drift back up to around 2% eventually.

While gold prices were given a boost on Thursday and Friday, after the Fed announced that it will not be raising interest rates, the U.S dollar tumbled but later staged a strong recovery towards the weekly close. However the greenback still closed the week as the second weakest major currency, after Euro. The dollar index dipped to as low as 94.06 last week but recovered to close at 94.86.

Copper comparison to iron ore neglects high-tech demand, OZ Minerals CEO Cole says – by Simon Evans(Sydney Morning Post – September 25, 2015)

September 25, 2015

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

Copper has been unfairly maligned by being lumped in with iron ore as the mining boom quickly evaporated, in what has been characterised too simply as a global resources rout, OZ Minerals chief executive Andrew Cole says.

Copper was a commodity of the future, which benefited from rising demand in electronics, electric cars, battery storage and industrial machinery, whereas iron ore was almost entirely dependent on Chinese demand, Mr Cole said.

“China drives iron ore and the correlation is almost one to one,” he said. But the sheer diversity of different uses for copper and the number of countries around the globe seeking it to drive hi-tech advances wasn’t being factored in by investors, he said.

“The more electric cars that are made, the higher the demand for copper.” Copper’s strong underlying fundamentals weren’t being reflected in the share prices of copper miners like the $1 billion, Adelaide-based OZ, he said.

BHP Billiton in climate caucus as China joins carbon war – by Matthew Stevens (Australian Financial Review – September 25, 2015)

September 25, 2015

http://www.afr.com/business/

BHP Billiton’s membership of a new coalition of high powered commerce with the lofty aim of assisting the transformation of emerging nations into low carbon economies says much about the gathering pressures of climate change on those who make money in the fossil fuel cycle and just as much about the Global Australian’s radically changed view of its place in the world.

BHP was formally invited to become a foundation member of an “energy transitions commission” in a letter to chief executive Andrew Mackenzie penned by Royal Dutch Shell boss Ben van Beurden.

The Shell initiative, which will be formally announced in Houston on Monday, has been made all the more timely by China’s confirmation that it is contemplating the imminent introduction of a cap-and-trade carbon trading scheme and of stricter limits on the level of public funding for “high carbon projects”.

This is patently a deeply worrying development for big coal. China’s economic development is powered by electricity and that means it sits front and centre to any and all the optimism that the miners can muster about the medium and long-term outlook for coal.

Aluminum Isn’t the Answer – by Adam Minter (Blomberg View – September 25, 2015)

September 25, 2015

http://www.bloombergview.com/

Some of the world’s top manufacturers have seized upon a simple way to reduce the carbon footprint of their products: Use more aluminum. Ford is now cladding its best-selling F-150 pickup in the lightweight metal to achieve better fuel efficiency; Apple is going a step further and switching to aluminum produced using – among other means – low-carbon hydropower.

Several big aluminum manufacturers are discussing a “green” aluminum certification to encourage such low-carbon manufacturing and charge a premium for it, according to Bloomberg News.

All this is laudable, of course. But it ignores something important. The true test of how “green” a product is can only be decided once it completes its life cycle and the materials used to produce it are recycled or thrown away. Unfortunately, the focus on the front end often obscures what happens to these trucks, mobile phones and even beer cans over the long run.

Apple offers a textbook case. The most interesting feature of its new iPhone 6s isn’t the better selfie camera, 3D touch technology, or even the pink aluminum case. Rather, it’s the 15 percent reduction in greenhouse-gas emissions expected to be produced over the life cycle of the phone compared to the iPhone 6.

Caterpillar’s cost-cutting plans a mark of struggling global economy – by Brian Milner (Globe and Mail – September 25, 2015)

September 25, 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.

It must have seemed like a good idea when Caterpillar Inc. forked out $7.6-billion (U.S.) in 2011 to acquire mining machinery heavyweight Bucyrus International Inc.

At the time, Caterpillar could not keep up with the soaring demand for massive trucks, earth-movers and other heavy equipment in the midst of a global resource boom.

So the company happily paid more than a 30-per-cent premium to get its hands on Bucyrus and its hydraulic shovels, draglines and other expensive specialized gear it did not produce on its own.

But as it soon turned out, the timing of the costly expansion could not have been worse for the world’s biggest maker of construction and mining equipment. The resource balloon began deflating by mid-2012, and things have been going from bad to worse for Caterpillar ever since.

BARRICK GOLD NEWS RELEASE: Processing Restrictions at Veladero Lifted

September 25, 2015

http://www.barrick.com/

TORONTO, September 25, 2015 — Barrick Gold Corporation (NYSE:ABX)(TSX:ABX) (Barrick or the “company”) today announced that restrictions on processing activities at the Veladero mine in San Juan province, Argentina, have been lifted.

A local court previously restricted the addition of new reagents to the mine’s heap leach circuit following the failure of a valve on a pipe carrying cyanide solution at the leach pad, which led to a release of solution.

The safety of people and the environment has been the company’s top priority since the faulty valve was detected. Barrick immediately implemented a comprehensive downstream water monitoring program. This monitoring, as well as testing results from an independent third-party laboratory, have confirmed that there are no risks to the health of downstream communities as a result of this incident.

These findings are consistent with independent water testing results released by other third parties in San Juan province, including the Public Health Department and the state water distribution company.

Gold stocks explode higher – Barrick up 11% – by Frik Els (Mining.com – September 24, 2015)

September 25, 2015

http://www.mining.com/

On Thursday, the price of gold spiked higher after turmoil on world equity markets and global economic fears sparked a return to safe-haven buying.

Futures contracts in New York with December delivery dates jumped 2% to a high of $1,156 an ounce – gold’s best level in a month.

After weeks of lacklustre trade ahead of the US Federal Reserve interest rate decision, volumes on Comex shot up to twice the daily average on Thursday with just under 20 million ounces traded.

With fundamentals pointing to further upside potential for the metal, gold investors piled into mining stocks in massive volumes. The world’s top gold mining stocks gained steadily during the day and traded at their highs at the close on Thursday.

Barrick Gold Corp (NYSE:ABX, TSE:ABX) jumped 10.8% with more than 33 million shares changing hands, 12 million more than already high post-Fed interest.

Francis: Mining industry in need of ‘a radical paradigm change’ – by Brian Roewe (National Catholic Reporter – July 17, 2015)

September 25, 2015

http://ncronline.org/

The global mining sector is called to “a radical paradigm change” to make improvements in how the industry impacts the planet and the poor, said Pope Francis ahead of a Vatican meeting on the topic.

The pope’s message was sent Friday to representatives from Africa, Asia and the Americas gathering at the Vatican this weekend to discuss their experiences living within mining communities.

“You come from difficult situations and in various ways you experience the repercussions of mining activities, whether they be conducted by large industrial companies, small enterprises or informal operators,” he said.

Francis described minerals as “a precious gift from God” that humanity has used for thousands of years and that are fundamental to many aspects of human life and activity. He then repeated an appeal from his environmental encyclical, “Laudato Si’: on Care for Our Common Home,” that people collaboratively work toward “countering the dramatic consequences of environmental degradation in the life of the poorest and the excluded.”

Papal fundamentalism – by Peter Foster (National Post – September 25, 2015)

September 25, 2015

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

John Boehner, speaker of the U.S. House of Representatives, couldn’t stop tearing up. Although Boehner is famously lachrymose, his watery eyes symbolized that for U.S. Catholics, indeed for all Catholics, Pope Francis’ address to a joint session of Congress on Thursday was a matter of faith, hope and charity.

The Pope has become a Zelig-like figure onto which the faithful project all their best intentions and highest aspirations. He plays to the role, turning up at Congress in a super humble Fiat (He left Washington later in a super jumbo jet).

For the not quite so enchanted, Francis is less a symbol of universal love and goodwill than a figurehead who has become deeply involved on the wrong side of some of the most divisive and dangerous political issues of our day. The question for the more cynically-inclined is how far those involvements represent an attempt to divert attention from the ongoing problems of the Church itself, which is still beset by the reverberations of sexual and financial scandals.

The Pope does not fit into normal political categories. He is a hybrid of social conservatism and socialism, which made his speech an inevitable mixed bag, a platter of papal platitudes peppered with elements of controversy, some carefully-padded, some not.

Cameco defends safety of uranium mining as Cigar Lake mine opens – by Ian Bickis (Canadian Press/Global News – September 24, 2015)

September 25, 2015

http://globalnews.ca/

SASKATOON – Cameco’s CEO Tim Gitzel defended the safety of uranium mining as the company opened its operations at Cigar Lake this week amid trying times for the sector.

“Anyone that’s toured these mines, talked to our workers, they can talk to the communities, they can see our statistics, it’s a very safe occupation, and we’re proud to be part of it,” Gitzel said.

Those comments stand in stark contrast to a report released in July by Quebec’s environmental regulation agency (BAPE) concluding after a year of study that it would be premature to allow uranium mining in the province.

The three-person BAPE panel wrote that there are still many uncertainties and “significant gaps in scientific knowledge of the impacts of uranium mining on the environment and public health.”

Gitzel disagrees. “I thought that was a very unfortunate finding in Quebec,” said Gitzel.

Alcoa completes $300 million expansion to boost aluminum output for auto industry – by Dave Flessner(Chattanooga Times Free Press – Septmeber 24, 2015)

September 25, 2015

http://www.timesfreepress.com/

Lightweight metals leader Alcoa announced today it has completed its $300 million expansion at its Tennessee facility dedicated to supplying aluminum sheet to the automotive industry.

The plant will provide aluminum sheet to automakers that include Ford Motor Company, Fiat Chrysler Automobiles and General Motors. The expansion is projected to add about 200 full-time jobs.

Tennessee Governor Bill Haslam and other state and local officials will celebrate the expansion with a ribbon cutting event this afternoon.

The project in Blount County, Tenn., which began customer shipments earlier this month, is Alcoa’s second major automotive expansion in North America backed by long-term customer contracts. The first, in Davenport, Iowa, reported record volume of automotive sheet shipments in the second quarter of 2015, up approximately 200 percent from the second quarter 2014.

“Automakers are demanding lighter, stronger materials that improve the performance of their vehicles and Alcoa is at the forefront of capturing that demand,” Alcoa CEO Klaus Kleinfeld said.