Republic of Mining

Ontario’s Power Trip: How Hydro is walloping Ontario business – by Parker Gallant (National Post – August 19, 2015)

August 18, 2015

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

Over the past several months there has been a constant din of noise from all business segments in Ontario about the high price of electricity and its effects. Electricity prices have risen as they have absorbed the high costs of 20-year contracts for renewable energy in the form of wind and solar as additions to Ontario’s electricity grid. Ontario currently has a huge surplus which results in as much as 20 per cent of our generation exported at fire sale prices.

Couple that with a drop in demand, annual spending of $400 million on conservation messages, smart meters that allow time of use (TOU) pricing and the Hydro One, OPG and other Ministry of Energy employees enjoying wages and benefits that outstrip the private sector means electricity bills for all segments of businesses and households are now a drain on the economy versus an attraction for new business and the jobs they might create.

The foregoing recently manifested itself in a report from the Ontario Chamber of Commerce entitled: “Empowering Ontario: Constraining Costs and Staying Competitive in the Electricity Market.” The report stated soaring electricity prices would cause one (1) in 20 Ontario businesses to shut their doors within the next 5 years.

Decimated Toyota cars, mangled cargo containers: Tianjin blast forces companies to suspend operations – by Erika Kinetz (Associated Press/National Post – August 18, 2015)

August 18, 2015

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

SHANGHAI — Foreign companies have suspended operations around the Tianjin port as officials scramble to contain the toxic fallout of last week’s deadly chemical explosions, which dealt a blow to northern China’s emerging economic hub.

Toyota said over half its China production capacity would be offline at least through Wednesday. The company has operations near the blast evacuation zone and said Monday that it had suspended three production lines, which can produce 530,000 vehicles a year.

Thousands of Volkswagen, Toyota, Hyundai and Renault cars, mostly pricey imports, parked on lots near the blast were decimated.

The operations of Panasonic, logistics company Singamas Container Holdings and, reportedly, Deere & Co. have also been disrupted.

The list of name-brand companies impacted by the blast is a testament to Tianjin’s rise, but regulatory and safety lapses at the hazardous goods warehouses that exploded have drawn attention to the sometimes shaky infrastructure China has laid down as it pursues ultra-fast growth.

COLUMN-Chinese gold demand limbers up for bull-bear tussle – by Clyde Russell (Reuters U.S. – August 17, 2015)

August 17, 2015

http://www.reuters.com/article

LAUNCESTON, Australia, Aug 17 (Reuters) – Gold investors are trying to work out whether the yuan’s depreciation and the recent turmoil in Chinese equity markets is good, bad or indifferent for demand for the precious metal in the world’s biggest buyer.

It’s possible to construct plausible-sounding arguments why the recent drama in China’s financial markets could be both bullish and bearish for gold.

At the heart of most of the arguments is a view on how Chinese consumers will respond to the recent developments but it seems this is largely guesswork on the part of analysts, as there are few precedents to serve as a guide to future behaviour.

One big question is whether the yuan’s sudden 3 percent decline against the U.S. dollar last week and the swings in equity valuations are likely to be important drivers of Chinese gold demand, or whether other factors with a lower media profile are at work.

Looking at the yuan depreciation first, and the important thing seems to be that the authorities are signalling the drop last week was a one-off move, not part of any sustained weakening.

Colorado Spill Heightens Debate Over Future of Old Mines – by Julie Turkewitz (New York Times – August 16, 2015)

August 17, 2015

http://www.nytimes.com/

SILVERTON, Colo. — When the mine here opened in the early 1890s amid a frenzy of frontier gold exploration, its founders gave it a lofty name: the Gold King, reflecting their great hopes for finding riches in its depths. Over the next decade, the Gold King went on to become one of the most productive mines in Colorado’s San Juan County, with three shifts of men working 24 hours a day in its dark corridors.

But the mine’s prosperity proved short-lived. When the economy hit a recession in the early 1920s, its operators abandoned it, with open tunnels that filled with snowmelt and rainwater that eventually turned to acid, leaving behind a toxic legacy that this region has struggled to clean up for decades.

Then, on Aug. 5, the Gold King split open while a team contracted by the Environmental Protection Agency was investigating the source of a leak. The accident sent a yellow plume south into the Animas River and turned Western waterways into a mustard ribbon, causing three states and the Navajo Nation to declare states of emergency.

The accident heightened a debate here over the future of this region’s old mines, and served as a reminder, some critics say, that the Gold King’s toxic demise could be repeated at any of thousands of abandoned mines around the country.

[U.S. Coal] ET TU, TRIBE? – by Andrew Rice (New York Magazine – July 28, 2015)

August 17, 2015

http://nymag.com/

LAURENCE TRIBE, the president’s longtime confidant, is fighting the White House climate plan on behalf of Big Coal. His friends are furious at him, which breaks his heart.

Just after noon on June 18, Laurence H. Tribe, the nation’s foremost scholar of constitutional law, fired off an angry and anguished self-defense. “I just finished my roughly half-hour interview on WNYC with Brian Lehrer,” he wrote in an email to the publishers of his most recent book about the Supreme Court, Uncertain Justice. “I suppose I did well enough, but the interview was a complete disaster. Please let the Brian Lehrer Show know that I felt totally sandbagged.”

The appearance had begun innocuously, with a discussion of the most recent Supreme Court decisions — what the Harvard Law professor later called June’s “series of thunderclaps.” Tribe’s credentials as a liberal legal activist are the stuff of legend — counsel in Bush v. Gore, slayer of archconservative Supreme Court nominee Robert Bork — and he is as informed about the Court’s opaque inner workings as any outsider can be.

He taught Elena Kagan and John Roberts at Harvard and played an unusually involved role in Barack Obama’s education in the law; for a brief time during Obama’s first term, he served at the Justice Department.

Polish Black-Hole Mining Risks Labor Unrest Before Election – by Maciej Martewicz and Dorota Bartyzel (Bloomberg News – August 16, 2015)

August 17, 2015

http://www.bloomberg.com/

Poland’s struggle to help Kompania Weglowa SA, the European Union’s biggest coal producer, return to profitability risks unleashing union-led protests before October’s general election.

A threatened eruption of street demonstrations next month may seal Prime Minister Ewa Kopacz’s fate, with the ruling party already trailing the opposition in opinion polls. The cabinet extinguished demonstrations in January by scaling back its plans to shut unprofitable mines and agreeing to revamp Kompania with the aid of state-controlled utilities.

The government has missed two self-imposed deadlines for the overhaul and has a third looming on Aug. 31 as it seeks to stem the coal industry’s 1.4 billion-zloty ($372 million) loss in the first half of 2015.

Power producers are reluctant to invest in an industry they regard as a black hole, especially as this month’s heatwave triggered electricity supply curbs which, according to UBS AG analyst Michal Potyra, may raise calls for further investment in infrastructure by utilities.

South African nuclear power plan stirs fears of secrecy and graft – by Joe Brock (Reuters U.S. – August 14, 2015)

August 17, 2015

http://www.reuters.com/

JOHANNESBURG, Aug 14 (Reuters) – Fears are growing in South Africa that agreements to build nuclear power plants that could be the most expensive procurement in the country’s history will be made behind closed doors, without the necessary public scrutiny.

Among those voicing concern, two government sources say the Treasury is not being included in procurement discussions, despite the massive budgetary implications of a project that experts say may cost as much as $100 billion.

Construction on the first plant is due to start next year, breakneck speed compared with the years of regulatory and environmental checks for nuclear projects in countries such as Britain and the United States.

The Democratic Alliance, the main opposition party, believes the pace of the deal will prevent proper analysis before contracts are signed and huge sums of money change hands.

African trade partners feel the bite of China’s yuan devaluation – by Geoffrey York (Globe and Mail – August 15, 2015)

August 17, 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.

JOHANNESBURG — For African countries that have bet heavily on China as their economic saviour, the sudden devaluation of the Chinese currency is a painful reminder of the risks of over-dependence on the Asian giant.

The devaluation of the yuan, coupled with a broader slowdown of the Chinese economy, is likely to weaken demand for the commodities that have spearheaded Africa’s booming trade with Beijing. It could also help Chinese manufacturers to compete even more ruthlessly against African producers as Beijing’s exports become cheaper.

China, hungry for minerals and oil, has rapidly gained dominance in African markets over the past decade. Its trade with Africa last year was more than $220-billion (U.S.), three times greater than U.S. trade with Africa. It’s the biggest trading partner of most African nations. But while this has helped spur African growth, it also leaves the region vulnerable to a slowdown or a devaluation.

Alberta and Norway: Two oil powers, worlds apart – by Brian Milner and Jeff Lewis (Globe and Mail – August 15, 2015)

August 17, 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.

OSLO AND CALGARY — s world oil production outstrips demand, China’s outlook darkens and prices plumb levels not seen since the Great Recession, energy-exporting countries around the world face a prolonged period of thinner revenues and deepening economic woes.

The chill winds have now reached Norway, long regarded as the world’s most prudent manager of an economy heavily exposed to the ups and downs of commodity prices.

Faced with the steepest decline in oil and gas spending in a decade and a half and the biggest job losses since the global financial meltdown, the centre-right Norwegian government is pledging to tap more of the country’s accumulated resource wealth in an effort to stanch the bleeding.

The sudden decline in its fortunes has put a spotlight on Norway’s unusual handling of its gusher of resource cash over the years, parking 100 per cent of the government’s revenue from royalties and dividends in a fund that is barred from investing a krone in the domestic economy.

The Gold Bull of the Great White North Is Ready to Mine More – by Danielle Bochove (Bloomberg News – August 17, 2015)

August 17, 2015

http://www.bloomberg.com/

Ian Telfer is the proud father of a spanking new $2 billion gold mine named Eleonore. Perched near the rocky shore of James Bay, 500 miles north of Montreal, Eleonore might seem like a problem child given the collapse in world gold prices.

But in this unhappy season for gold bugs, Telfer, chairman of Goldcorp Inc., scoffs at suggestions that gold is somehow falling out of fashion. “Yeah right. Just like Tiffany’s,” he says. “For thousands of years people have wanted to own gold.”

For the moment, the market is far less enthusiastic. Since 2011, gold has generally headed in one direction: down. The price has fallen from a high of more than $1,900 an ounce to around $1,100 and, in the process, lost at least some of its vaunted status as the ultimate safe haven investment.

On an inaugural visit to Eleonore, Telfer is unbowed. While other miners respond to the downturn by selling assets and seeking partners to offset risk, Goldcorp is presiding over a major expansion that includes this mine north of Canada’s 52nd parallel, another in Mexico and one in Argentina — three multibillion-dollar projects in five years.

Barrick Gold Corp shakes up management structure, drops co-president model- by Peter Koven (National Post – August 17, 2015)

August 17, 2015

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

Barrick Gold Corp. is scrapping its unusual “co-president” management structure less than a year after it went into effect.

Co-president Kelvin Dushnisky has been appointed Barrick’s sole president, the company said Monday morning. Until now, Dushnisky was sharing the president duties with Jim Gowans. Barrick announced that Gowans will retire at the end of this year, which was a surprise.

A couple of other management appointments were made in conjunction with these moves. Chief of staff Richard Williams has been named chief operating officer and will report directly to Dushnisky. Williams is a very unconventional choice for a COO, as he has a military background rather than a technical mining background. However, he will be assisted by Basie Maree, a mining veteran who was promoted to chief technical officer.

“As we work to accelerate Barrick’s return to the lean, decentralized model that drove the company’s early success, the time is right to put a structure in place that supports this vision,” chairman John Thornton said in a statement.

Alaskans concerned with Canadian mining plans – by Becky Bohrer (Associated Press/Durango Herald – August 16, 2015)

August 17, 2015

http://www.durangoherald.com/

JUNEAU, Alaska – A provincial map showing the planned or potential mining activity in British Columbia is so pocked that Alaska Lt. Gov. Byron Mallott says it looks like it has the measles. It’s the cluster of dots in northwest British Columbia – including a prospect billed as one of the largest undeveloped gold projects in the world – that has many residents across the border in southeast Alaska on edge.

While it’s not clear how many of the projects ultimately may become mines – many are only in exploration – last year’s failure of a mine-waste storage facility in another part of British Columbia heightened fears about how development near Alaska’s shared border with the province could impact salmon-bearing rivers and streams that flow into southeast Alaska.

Currently seven major projects have potential trans-boundary implications. One is the Red Chris copper and gold mine, upstream from the Alaska towns of Wrangell and Petersburg, which received final permits in June.

It’s owned by Imperial Metals, which also owns Mount Polley Mine, the site of last August’s tailings dam breach that sent water and mine-related materials into waters near the mine. Activists in Alaska said the incident showed that dams can fail.

Essar has been to the Sault everything that U.S. Steel has not to Hamilton – by Steve Arnold (Hamilton Spectator – August 14, 2015)

August 17, 2015

http://www.thespec.com/

Call it a tale of two steel companies. One has a record of broken promises, shuttered plants and labour relations based on confrontation. The other has a legacy of investment in a struggling company, expansion and a deep commitment to its community.

The contrasts between Essar Steel, of India, and U.S. Steel, of Pittsburgh — the foreign owners of the Algoma and Stelco mills, respectively — are stark. Small wonder then that news this week Essar is a likely bidder for the Stelco plants has caused such excitement in a mill that has endured little but bad news for the last eight years.

Both companies came to Canada in 2007 — Essar bought Algoma in April and U.S. Steel acquired Stelco in August. The prices of both deals were about the same — $1.9 billion in cash and assumed debt for Stelco and $1.8 billion in cash for Algoma in Sault Ste. Marie.

That’s where the similarities end, however. Stelco was just out of a tortured two-year restructuring under creditor protection and was owned by three hedge funds anxious to take their profits and move on to the next deal.

Northern Dynasty’s Last Stand – by Tommy Humphreys (CEO.ca – August 13, 2015)

August 14, 2015

http://ceo.ca/

Pebble’s new backers bet on EPA compromise and new JV partner for the world’s largest undeveloped copper-gold deposit

Two experienced mining financiers are making a $4.7 million bet that one of the world’s largest and most controversial minerals deposits is about to turn a major corner.

Frank Giustra and Gord Keep’s Cannon Point Resources (CNP.TSXv) is being acquired by Northern Dynasty Minerals (NDM.T) for a touch over its cash value (C$4.7 million). Pro forma, the deal would give Cannon Point about 8% of Northern Dynasty.

Northern Dynasty owns 100% of the Pebble Deposit in Alaska. The project saw over C$750 million of investment over the past decade and contains a jaw-dropping 107 million ounces of gold, 80 billion pounds of copper, 5 billion pounds of molybdenum, and over 500 million ounces of silver* and showed robust economics at $1050 gold and $2.50 copper in a February 2011 PEA.

Pebble is also vehemently opposed by the EPA, which began a process to veto the project in February 2014 and more recently has tried to impose development restrictions.

Glencore sells assets as downturn bites – by James Wilson (Financial Times – August 14, 2015)

August 14, 2015

http://www.ft.com/intl/

Glencore sold a trio of mining assets for $290m, extending its retreat from unwanted projects and continuing a trend among the largest resource companies to streamline their portfolios as the commodities downturn bites.

The UK-listed miner confirmed the sale of Tampakan, a copper project in the Philippines. It also revealed deals to sell Falcondo, a nickel producer in the Dominican Republic, and Sipilou, another nickel project in Ivory Coast.

Glencore inherited the assets as part of its takeover of Xstrata, completed in 2013, but has not significantly invested in them. For a project such as Tampakan, it could cost close to $6bn to build a mine.

Ivan Glasenberg, Glencore’s chief executive, has repeatedly said he dislikes the risks of “greenfield” mining developments, preferring to seek growth by expanding existing mines or via deals.

“Tampakan is one of those giant greenfield deposits . . . that’s been on the table for a long time, but struggling to obtain development approvals in the Philippines,” said analysts at Numis.