Republic of Mining

Pope Francis And Coal Country Catholics – by Dan Boyce (Inside Energy – September 20, 2015)

September 21, 2015

Pope Francis is visiting the U.S, this week. On Thursday he will make a historic address to Congress.

Some conservative Catholics say Pope Francis is meddling in American politics with his recent encyclical on the environment, the biggest papal statement ever on the subject and one which included a call for action on climate change. Meanwhile, for the faithful in western coal country, he is raising moral questions.

Donna Zofcin’s husband was injured in a coal mining accident in Kentucky. He was paralyzed for a time, then doctors helped him walk again. He died a few years later, in 1992. Still, the walls of her humble Cheyenne, Wyoming home are an homage to coal, with framed watercolor prints of mining equipment. Living now in the country’s biggest coal state, that theme still runs through her life. So too, does her Catholic faith.

“Oh, we’re very devout,” Zofcin said of her and her family, “and we go to church every Sunday.”

Back in June, Wyoming’s State Bishop, Paul Etienne, delivered a special homily at Zofcin’s church in Cheyenne. The homily focused on the Pope’s headline grabbing encyclical. A challenging and bold teaching, Etienne said, which lines out humanity’s responsibility to be good stewards of the earth.

Miners turn to alternative finance to cut debt as downturn grinds on – by Nicole Mordant (Reuters U.S. – September 21, 2015)

September 21, 2015

http://www.reuters.com/

DENVER – A niche form of mining industry finance is emerging as the new go-to funding for miners bowed by debt, another sign of the sector’s distress as it plods through the fourth year of a commodities’ downturn.

Glencore, the world’s third-biggest miner, is in talks to raise more than $1 billion in so-called “streaming” deals, coming on the heels of transactions by No.1 gold producer Barrick Gold and diversified miner Teck Resources .

More such deals are expected as shareholders, ratings agencies and lenders pressure miners to slash debt amid a gloomy commodity price outlook and as other debt-cutting tools such as asset sales, dividend cuts and share issues are not enough.

Until now so-called “streaming” finance – upfront funds for miners in exchange for a portion of a mine’s future output – has most commonly been used by mid-sized miners with limited access to capital to fund mine builds.

That the world’s biggest miners are now prepared to do deals that see them giving up a portion of their future production, earnings and cashflow to cut debt is a reflection of their limited options.

Barrick says strong interest in U.S. gold asset sale – by Nicole Mordant (Reuters U.S. – September 20, 2015)

September 21, 2015

http://www.reuters.com/

There has been strong interest in a package of six U.S. gold assets that Barrick Gold Corp (ABX.TO) wants to sell, a senior Barrick executive said on Sunday, adding that he expects a deal to close before year end.

The interest has been largely from North American-based miners, Barrick President Kelvin Dushnisky said.

Denver-based Newmont Mining Corp (NEM.N) and Toronto-based Kinross Gold Corp (K.TO) are likely buyers of the assets, an investment banking source said, speaking on condition of anonymity. Kinross declined to comment and Newmonth could not immediately be reached for comment.

As part of its plan to cut at least $3 billion in debt this year, Barrick, the world’s biggest gold producer, last month said it would sell six of its U.S. gold mines and projects: Bald Mountain, Round Mountain, Spring Valley, Ruby Hill, Hilltop and Golden Sunlight assets.

“We just started it (the sale) but already the level of interest is extremely high,” Dushnisky told Reuters in an interview at the Denver Gold Forum, an annual gold industry conference.

Guinean Boom in Top-Quality Bauxite Set to Boost Economy – by Franz Wild and Ougna Camara (Bloomberg News – September 21, 2015)

September 21, 2015

http://www.bloomberg.com/

Red bauxite powder mined by Guinea’s biggest producer — flowing past a mangrove swamp on a conveyor belt and plunging through a giant funnel into the Rio Tamara ship — has been the country’s steadiest source of income since it was first mined four decades ago.

The company churning out the ore — owned by Rio Tinto Plc, Alcoa Inc., Dadco Alumina & Chemicals Ltd. and the government — will also lead a new wave of investment that may spur the West African nation’s economy and more than double bauxite output, which is refined and then smelted into aluminum.

Compagnie des Bauxites de Guinee’s $1 billion plan will almost double its annual production to 28.5 million metric tons within five years, Chief Executive Officer Namory Conde said. Four other developments could see a further 20 million tons added to Guinea’s annual exports.

“There’s going to be a lot more bauxite coming out of Guinea,” Conde said at CBG’s headquarters in the town of Kamsar, where the ship was being loaded. “Our quality is much better than around the world.

Peru: Pope Gets Pushback on Environment – by Justin Catanoso (Pulitzer Center.org – September 20, 2015)

September 21, 2015

http://www.pulitzercenter.org/

LA OROYA, Peru – In Pope Francis’ teaching doctrine on climate change and environmental sustainability, released in June to worldwide attention, he intertwines two threads that often dangle separately: nature and the world’s poor.

“A true ecological approach always becomes a social approach,” Francis writes in his papal encyclical. “It must integrate questions of justice in debates on the environment, so as to hear both the cry of the earth and the cry of the poor.”

There are few places on Earth where the cry of both is louder than in this city of 33,000 more than 2 miles high in the central Andes. La Oroya, Peru, is recognized as one of the world’s most polluted places. A smoke-belching smelting plant for copper, zinc and lead, operating from 1922 to 2009, made it so. Chernobyl makes those same lists.

Every child in town has excessive levels of lead in his or her blood, according to health officials. The soil is contaminated with sulfur dioxide. Portions of the Montaro River, which flows past the smelting plant, has been dead for years. Seven decades of acid rain chemically transformed the mountains surrounding the plant so that they look like molten wax, not solid rock.

Day at the Denver Gold Forum – How to invest in junior golds – by Lawrence Williams (Lawrieongold.com – September 21, 2015)

September 21, 2015

http://lawrieongold.com/

This year’s Denver Gold Forum got off to a good start Sunday afternoon/evening with early registration, a well provisioned opening reception and an opening keynote address. The reception featured also seventeen junior gold, silver and pgm miners/developers which attracted decent attention from the assembled throng.

The opening keynote was from Adrian Day of the eponymously named asset management company. Day was giving attendees his expert advice on investment in gold mining companies – a sector which has been on the decline for the past four years since gold came off its September 2011 brief peak, but which could well be offering tremendous upside should gold be on the recovery trail once more.

The past three years in particular have seen numerous occasions when investment advisers have been calling a bottom to gold’s decline, only for the price stutter and fall further. Could this be the time to climb in and make mega profits assuming one picks the right stocks. The optimistic investor may well feel it to be so – and it is perhaps fair to say the lower the gold price falls the less the potential downside, but it still remains a potentially very volatile market.

Definitely not one for widows and orphans. Some will feel that the best time to re-enter it is just when all the mainstream analysts are calling for ever lower prices – as happened when gold fell to its recent low point of around $1,080.

Resources firms endorse call for aboriginal veto rights to projects – by Shawn McCarthy (Globe and Mail – September 21, 2015)

September 21, 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.

Two of Canada’s biggest resources companies have endorsed a call for governments and industry to clearly assert the right of aboriginal communities to veto major projects that negatively affect their traditional territories.

Suncor Energy Inc. and Tembec Inc. are members of the Boreal Leadership Council that is releasing a report Monday calling for the adoption of the principle of “free, prior and informed consent” when industry is working with indigenous populations. The council is composed of businesses – including Toronto Dominion Bank – environmental groups and First Nations that work together on northern issues.

Aboriginal communities have frequently reaped benefits in agreements with resources companies over development projects, but often complain they are not treated as full partners and have little real power over the fate of projects. In recent years, Canadian courts have made clear that these communities need to be consulted and their concerns accommodated, and that where they have clear title to land, their consent must be given.

Kinross Gold struggling to reverse losses at Mauritania’s Tasiast mine – by Geoffrey York (Globe and Mail – September 21, 2015)

September 21, 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.

NOUAKCHOTT, MAURITANIA — When the executives of Kinross Gold Corp. fly in from their Canary Islands office to the dusty capital of the desert country where their flagship African gold mine is located, they can’t avoid seeing the hulking symbol of mining failure that dominates the skyline: the empty shell of a 15-storey skyscraper that the state mining company had started building.

Mauritania’s state-owned iron-ore company, SNIM, was due to finish the tower months ago. Instead it sits half-built and abandoned, flanked by a pair of idle construction cranes. There are no signs of life. The foreign construction contractors are long gone, leaving behind piles of sand and cement blocks.

Plagued by strikes and weak iron-ore prices, SNIM is in deep trouble, while most of Mauritania’s other resource projects are winding down or shelved. The national economic slump has compounded the pressure on Kinross as it struggles to reverse the losses at its huge Tasiast gold mine on the edge of the Sahara in northwestern Mauritania.

KGHM to shut down McCreedy mine: Union – by Ben Leeson (Sudbury Star – September 21, 2015)

September 21, 2015September 21, 2015

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

In the face of weak commodity prices, KGHM International will shut down the McCreedy West Mine next month, the union representing representing workers there told the Sudbury Star on Sunday.

Myles Sullivan, area co-ordinator for the United Steelworkers, said the company has informed members the mine will be placed under care and maintenance effective Oct. 1, affecting about 25 employees.

“In total, there’s about 40 of our members that are being laid off locally,” Sullivan said.

“It’s really hard. Things are tough in mining right now, with the price of nickel and copper and everything being low. We kind of hoped the (lower) dollar would help offset some of that and I’m sure it’s helping, but it’s still not enough.”

Based on seniority and qualifications, Sullivan said, some workers from McCreedy may have the opportunity to work at the nearby Morrison deposit. Attempts to contact a KGHM representative for comment on the weekend were not immediately successful.

How smaller Canadian gold miners are thriving despite today’s gloomy price environment – by Peter Koven (National Post – September 19, 2015)

September 21, 2015

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

KIRKLAND LAKE, ONT. – Deep underground in Kirkland Lake, 300 kilometres north of Sudbury, it is hard to think about the rich veins of gold near at hand. The heat and humidity overpower everything else.

Crews are currently working 5,400 to 5,600 feet below surface, making it one of Canada’s deepest gold mines. And in this part of the world and at these depths, a first-time visitor would find the temperature suffocating.

Work crews start dripping with sweat almost as soon as they step out from the shaft underground to begin their shift. Mining this far down is technically challenging and not for the faint of heart. But more than 100 years after the first shaft was sunk in this sturdy Northern Ontario community, it looks as attractive as ever — even if it is surrounded by an environment of gloomy gold prices.

The Kirkland Lake operation, known as Macassa, is one of the world’s richest gold mines by any measure — the data service IntelligenceMine ranks it second overall. The mine’s owner, Kirkland Lake Gold Inc., likes to say that of the world’s 10 highest-grade operations, this is the only significant one that isn’t owned by a major company.

Even the stars of mining deals are sidelined in sinking market – by Eric Reguly (Globe and Mail – September 19, 2015)

September 21, 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.

ROME — You know that something is seriously awry in the global mining industry when the two smartest men in the room – Ivan Glasenberg and Mick Davis – are crouching under rocks. Mr. Glasenberg, CEO and co-founder of Glencore , the world’s top commodities trader, is busy whittling down a mountain of debt in the wake of the company’s submarine performance on the London Stock Exchange. Mr. Davis, the former CEO of Xstrata , launched X2 Resources a couple of years ago but has yet to do a deal.

The mining market, in other words, is moribund. No one is selling, no one is buying and values are still in retreat. If either Mr. Glasenberg or Mr. Davis were convinced the bottom had been reached, you would think they would find ways to swing back into deal-making mode, for that was what they did best.

Today’s commodities markets are not about growth; they are about survival, and the body language of the industry’s biggest players suggests that won’t change any time soon.

Opinion: Alaska needs iron-glad guarantees on B.C. mines – by Dale Kelley and Cynthia Wallesz (Vancouver Sun – September 18, 2015)

September 21, 2015

http://www.vancouversun.com/

Dale Kelley is executive director of the Alaska Trollers Association. Cynthia Wallesz is executive director of United Southeast Alaska Gillnetters.

We were among a group of fishing, environmental and tribal representatives who met recently with Alaska Lt.-Gov. Byron Mallott, B.C. Mines Minister Bill Bennett and other officials on transboundary mining issues. Bennett’s visit was largely the result of Alaskans’ resistance to B.C.’s aggressive mining agenda and the risks it poses to our region.

Our organizations represent thousands of Southeast Alaska fishing families and businesses who fear development near the border could threaten water quality, habitat and the fish we rely upon. Last year’s tailings breach at the Mount Polley mine and plans to open several large acidic mines near our rivers heighten those concerns.

While the meeting was a good first step to starting a discussion with Canada, it did not alleviate our concerns.

Bennett told us the status quo cannot continue, but that he understands no amount of money or jobs is worth sacrificing our resource values. We absolutely agree.

U.S. Steel Canada threatens to leave Canada if court rejects request – by Greg Keenan (Globe and Mail – September 18, 2015)

September 21, 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.

U.S. Steel Canada Inc. is threatening to cease operating in Canada by the end of the year if an Ontario Superior Court judge rejects its request to stop paying municipal taxes, halt payments into pension funds, and cut off health care and other benefits to 20,000 retirees and their dependents.

A decision by the company’s parent, United States Steel Corp., to shift production of high-value-added steel to U.S. mills means the Canadian unit requires a “business preservation order” that will allow it to keep operating, U.S. Steel Canada said in a court filing.

Unless the court approves U.S. Steel Canada’s motion to conserve cash by slashing spending, “we don’t see any way to avoid ceasing operations at the end of 2015,” the company’s president, Mike McQuade, said in a separate memo to employees.

The prospect of a shutdown of operations in Hamilton and Nanticoke, Ont., comes as U.S. Steel and its Canadian unit prepare to enter mediation efforts after a year of protection from creditors under the Companies’ Creditors Arrangement Act.

India’s Gold Mining Sector Could Experience A Massive Renewal Soon – by Dave Forest (Oil Price.com – September 17, 2015)

September 18, 2015

http://oilprice.com/Metals/

I mentioned yesterday how global gold production hasn’t fallen much in the face of lower prices.

And this week we got some indications that supply could actually expand. With one of the world’s most famous gold mining districts looking to re-open, for the first time in nearly 15 years.

The place is the Kolar Gold Fields in India. One of the world’s legendary gold mines — with a production history that dates back to 1880.

According to local press, India’s government is very close to putting forward a plan to revive the Kolar. With officials saying they will table the scheme “within a month.”

The effort will reportedly include rehabilitating existing mining infrastructure — which consists largely of underground facilities, some extending two to three kilometres below surface. As well as reprocessing large amounts of gold-bearing tailings left behind by previous mining operations.

We’re losing the PR battle, says BHP coal boss – by Mark Ludlow (Australian Financial Review – September 18, 2015)

September 18, 2015

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

Australia’s coal industry is losing the public relations battle against environmental activists who are trying to shut down fossil fuels, says BHP Billiton’s coal business president Mike Henry.

Despite plummeting international prices and the rise of renewable energy such as wind and solar, Mr Henry said Australia’s coal industry was not in terminal decline and the outlook for Australia’s thermal and metallurgical coal was strong.

“While the overall share of market share of coal may decline, the outright cost competitiveness of coal, as well as the substantial, existing base of installed infrastructure, means we can expect to see demand support for decades to come,” Mr Henry told an American Chamber of Commerce lunch in Brisbane on Friday.

“I am optimistic that the market will improve in the medium term. But poor returns, and little indication of better times on the immediate horizon, make coal a pretty challenging business at the present time.”