Republic of Mining

UPDATE 1-Brazil court orders Vale to halt Amazon nickel-mine operation (Reuters U.S. – August 14, 2015)

August 14, 2015

http://www.reuters.com/

Aug 14 (Reuters) – A Brazilian federal court on Friday ordered Vale SA to halt activity at its Onça Puma nickel mine in Brazil’s Amazon state of Pará until it can demonstrate what actions it has taken to compensate indigenous communities in the region.

Vale’s operations in Pará face regular legal and protest action by native Brazilian groups seeking better schools, health care and other public services.

Onça Puma, in Ourilândia do Norte, is part of a complex of mines operated by Vale in the state’s Carajas region. The mine produced 5,900 tonnes of finished nickel in the second quarter, or about 8.8 percent of Vale’s finished-nickel output.

The most common protest by indigenous groups has involved blocking Vale’s rail line between Carajas and the Atlantic Ocean.

The court also ordered Vale, the world’s second-largest nickel producer, to deposit 1 million reais ($287,000) for each indigenous village in the area until it establishes a compensation program for the communities.

RPT-COLUMN-Yuan devaluation more likely to boost than hurt China commodity imports – by Clyde Russell (Reuters U.K. – August 14, 2015)

August 14, 2015

http://uk.reuters.com/

LAUNCESTON, Australia, Aug 13 (Reuters) – The sudden depreciation of the yuan will have flow-on effects in commodity markets, but reducing China’s demand for imports is unlikely to be one of them.

The yuan has lost around 3.5 percent of its value against the U.S. dollar in domestic trade since the People’s Bank of China this week took steps to devalue its currency, in a move widely interpreted as aimed at boosting the competitiveness of the struggling export sector.

The depreciation was more steep in international markets, where the yuan lost about 4.8 percent of its value as investors feared China was starting a sustained depreciation, which may lead to a global currency war.

Commodity prices, and the currencies of major natural resource exports such as Australia, also took a hit along with the yuan on the view that a weaker Chinese currency will dampen demand for imports.

Brent crude lost as much as 3.6 percent on Aug. 11, the day of the Chinese devaluation, although by the close on Wednesday at $49.66 a barrel, the decline had tempered to just 1.5 percent.

South Africa faces mining strike double whammy – by Sungula Nkabinde (Mineweb.com – August 14, 2015)

August 14, 2015

http://www.mineweb.com

Disputes have been declared in both coal and the gold sector negotiations. Strikes will happen if no resolution is found.

South Africa should brace itself for strikes in the gold and coal mining sectors. The latter is arguably more important to the country given our current electricity situation, but it would be disastrous to have two sector-wide strikes running concurrently within the mining industry.

The gold wage negotiations have come to naught after the Associated Union of Mineworkers and Construction (AMCU) and the National Union of Mineworkers (NUM) rejected the gold producers’ final offer and, as a result, the producers have taken the offer off the table and deferred back to what they refer to as their initial ‘firm’ offer. On Thursday, after the final opportunity for voluntary mediation, the NUM has declared a dispute.

“The final offer that was on the table was an extremely generous offer and represented increases ranging from 9% to 18%, which is more than you would find anywhere else,” said Memory Johnstone, who spoke on behalf of the gold producers.

What is on the table now is an increase ranging from 7% to 13%, but a key difference between the two was that the former was a cash payout that was not linked to benefits (i.e. overtime, pension fund contributions), while the latter would be.

K+S says it’s open to Potash Corp. takeover, despite its rejection of U$8.6-billion bid – by Peter Koven (National Post – August 14, 2015)

August 14, 2015

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

The chief financial officer of K+S AG said his firm is not opposed in principle to a merger with Potash Corp. of Saskatchewan Inc., despite its total rejection of the US$8.6-billion takeover proposal.

“Don’t get me wrong: We aren’t at all blocking a potential transaction,” chief financial officer Burkhard Lohr said on an earnings conference call on Thursday.

Potash Corp. is offering 41 euros a share, and K+S says that this is far too low. But the German firm also claims a takeover could be bad for its home country, as Potash Corp. could shutter domestic production.

If German politicians end up supporting that argument, Potash Corp.’s proposal may get effectively blocked. While there is no known mechanism for the government to block the bid, it would be difficult to do such a big transaction without at least some political support.

K+S argues that it is only logical for Potash Corp. to close its European mines. The potash market is oversupplied, and Potash Corp.’s Saskatchewan output is lower-cost than what K+S has in Europe.

Explosion in China disrupts oil, iron ore shipments at world’s 10th largest port in Tianjin – by Erika Kinetz (Associated Press/Global News – August 13, 2015)

August 14, 2015

http://globalnews.ca/news/

SHANGHAI – Explosions that sent huge fireballs through China’s Tianjin port have disrupted the flow of cars, oil, iron ore and other items through the world’s 10th largest port.

The blast sent shipping containers tumbling into one another, leaving them in bent, charred piles. Rows of new cars, lined up on vast lots for distribution across China, were reduced to blackened carcasses.

Ships carrying oil and “hazardous products” were barred from the port Thursday, the Tianjin Maritime Safety Administration said on its official microblog. It also said vessels were not allowed to enter the central port zone, which is near the blast site.

Tianjin is the 10th largest port in the world by container volume, according to the World Shipping Council, moving more containers than the ports of Rotterdam, Hamburg and Los Angeles. It handles vast quantities of metal ore, coal, steel, cars and crude oil.

Australian mining giant BHP Billiton said the blast had disrupted iron ore shipments and port operations, but had not damaged any iron ore at the port. “We are working with our customers to minimize any potential impact,” it said in a statement Thursday.

Nuclear Revival Sparks Cameco Rally as Uranium Demand Is Growing – by Christopher Donville (Bloomberg News – August 13, 2015)

August 14, 2015

http://www.bloomberg.com/

Cameco Corp., the world’s second-largest producer of uranium, is emerging as a rare bright spot among Canada’s largest mining companies on signs nuclear power is shaking off its post-Fukushima slump.

Shares of Cameco have climbed 12 percent in Toronto in the past month. By comparison, Teck Resources Ltd., the world’s second-largest exporter of seaborne metallurgical coal, fell 16 percent and Barrick Gold Corp., No. 1 for bullion production, slid 18 percent.

A U.S. plan to cut carbon emissions from power plants may support new reactors and the restart of a Kyushu Electric Power Co. plant this week is highlighting a drive to get more atomic stations online in Japan. The improved prospect for uranium, the raw material in reactor fuel, is in contrast to slowing demand and ample supply for metals such as aluminum and zinc, which sent the Bloomberg World Mining Index to a six-year low in July.

“What we’re seeing is the U.S. and Japan really renewing their commitment to nuclear power,” Rob Chang, a Toronto-based analyst at Cantor Fitzgerald LP, said Aug. 11 in a phone interview. “You’ve also got India and China pushing ahead with their nuclear expansion.”

Copper Cliff takes leak in stride – by Ryan Byrne (Sudbury Star – August 14, 2015)

August 14, 2015

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

Thursday’s leak of nitrogen dioxide at Vale’s acid plant has at least one Copper Cliff resident thinking.

Carrie Calvano said the situation was scary. “I didn’t hear (the horn) initially and then when I went to let my dog out, I heard the sirens and the trucks and everything coming in – I even had my radio on,” Calvano said.

“I closed everything and got my husband out of bed and said, ‘OK, let’s see what happens.'” Calvano said she received a call from her work telling her not to come in until the situation was resolved.

“It was scary – we had to let our dog out and she really had to go, but we had to wait and she doesn’t understand. We had phone calls from all the relatives making sure we were OK.”

Calvano said she has been living in Copper Cliff for 14 years worry free, but has been re-evaluating her lack of concern after yesterday’s events.

Gas leak didn’t endanger public: Vale – by Ben Leeson (Sudbury Star – August 14, 2015)

August 14, 2015

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

It was a tense Thursday morning for those who live and work in Copper Cliff and the surrounding area, but no injuries have been reported after two gases combined to form a toxic mist at the Vale acid plant.

While a joint investigation into the cause of the gas leak is still ongoing, company officials said there was a larger-than-expected reaction between water used to wash out a cooling tower and the acid remaining inside. That created a yellow plume of NOx, a combination of nitrogen oxide and nitrogen dioxide, in the air above the site.

Exposure to nitrogen dioxide can cause irritation of the nose, throat, eyes, skin and respiratory system. Large doses are potentially fatal. The gas is also a major pollutant that plays a role in causing smog.

Air horns began sounding at the smelter around 6 a.m. and a Level 3 emergency, denoting a release of hazardous material, was called. Police and emergency services personnel responded and roads around the area were closed to traffic, while residents were cautioned through local media to remain indoors.

Ontario sets stage for Energy East battle as watchdog says pipeline’s risks outweigh benefits – by Yadullah Hussain (National Post – August 14, 2015)

August 14, 2015

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

TORONTO – Ontario’s energy regulator has cast doubts over the economic benefits of TransCanada’s Energy East crude oil pipeline proposal, setting the stage for a clash between the province and Ottawa at National Energy Board hearings on the project.

“What we have found is there is an imbalance between the economic and environmental risks of the project and the expected benefits for Ontarians,” Ontario Energy Board vice-president Peter Fraser said Thursday as he released its review requested by the province’s energy ministry on the $12-billion project Thursday.

TransCanada’s proposal to transport 1.1 million barrels of oil per day from Alberta to eastern refineries and an export terminal in New Brunswick partially through an existing pipeline is currently being reviewed by the NEB.

“I can assure you that Ontario plans to be an active intervenor in the National Energy Board approval process and our participation will reflect the concerns of the Ontario public to the federal regulator,” Ontario’s energy minister Bob Chiarelli said in a statement.

NEWS RELEASE BHP BILLITON CELEBRATING 130 YEARS OF HISTORY (August 13, 2015)

August 14, 2015

BHP Billiton is today celebrating the 130 year anniversary of the incorporation of BHP and its significant contribution to the Australian economy and society for more than a century.

BHP was formed in 1885 after a rich silver and lead deposit was discovered by Charles Rasp on a rocky outcrop known as the ‘Broken Hill’ in western New South Wales two years earlier.

BHP Billiton CEO, Andrew Mackenzie, said the milestone was an opportunity to reflect on the Company’s long history and events that shaped its culture.

“It’s not often that we get the opportunity to stop and take a look at where we have come from, but history has a lot to teach us,” he said.

“From humble beginnings mining silver and lead at Broken Hill and tin at Billiton (Belitung) island, Indonesia, in the mid-1800s, it has been a long journey to becoming the world’s largest diversified resources company.

B.C. First Nations and Alaskan Natives Join Forces to Fight Border Mines – by Judith Lavoie (Desmog Canada.com – August 12, 2015)

August 14, 2015

http://www.desmog.ca/

A powerful alliance of B.C. First Nations and Southeast Alaska natives has been forged in the aftermath of the Mount Polley dam collapse and tribes, who have not worked together for generations, are aiming to put the brakes on B.C.’s border mining boom.

Tears flowed after a May meeting in Vancouver when Union of B.C. Indian Chiefs (UBCIC) president Grand Chief Stewart Phillip and vice-president Bob Chamberlin agreed to support the newly formed United Tribal Transboundary Mining Work Group in its bid for Alaskan — and particularly tribal — input into B.C.’s decision-making process on mines along the Southeast Alaska border.

“We are bringing together the tribes from both sides of the border and building a relationship. We can make more noise together than when we are separated by a border that has not been part of our tradition,” said Mike Hoyt, leader of the Teeyhittaan clan from the Stikine River.

It was a historic meeting that could be a catalyst for change, according to Phillip.

“It was very significant, coming together with our brothers and sisters in Alaska. I think it was a long time coming,” he said.

Toxic gas leak contained at Sudbury mining facility (CTV News Sudbury – August 13, 2015)

August 13, 2015

http://www.ctvnews.ca/

SUDBURY, Ont. — The Canadian Press — Toxic gas that leaked from a Sudbury mining facility early Thursday has dissipated and no longer poses a risk to the community, the mining company said.

Residents near the Vale facility at Copper Cliff had been told to stay inside with the windows and doors closed due to a release of nitrogen dioxide.

[Australia] Samsung races to deliver Roy Hill – by Tess Ingram (Sydney Morning Herald – August 13, 2015)

August 13, 2015

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

Contractors building Gina Rinehart’s $10 billion Roy Hill project have been forced to send hundreds of workers to the Pilbara to try to avoid hefty penalty fees for delays finishing the project.

Head contractor Samsung C&T and its subcontractors have been racing to ensure they meet Roy Hill’s aggressive deadline to ship its first ore, which was slated for next month but now not expected until October.

If the first shipment does not sail by the end of October, Samsung faces penalty fees of almost $2 million for each day the project is late.

Sources said between 1000 and 1500 workers, unable to be accommodated at Roy Hill’s onsite accommodation, were being housed in various sites around the Pilbara town of Newman, about a three-hour round trip from Roy Hill.

A Roy Hill spokeswoman confirmed about 1100 workers were being housed in Newman “and have been for more than three months as part of Samsung’s efforts to meet schedule”.

Mining mergers and acquisitions – still under the bridge – by Kip Keen (Mineweb.com – August 13, 2015)

August 13, 2015

http://www.mineweb.com/news

EY figures are more confirmation of moribund merger and acquisition volume.

HALIFAX – You could almost recycle last year’s EY reports on mining mergers and acquisitions (M&A) to represent deal flow during the first half of 2015.

Which isn’t knocking EY. Just to say that mining M&A is still in the dumps.

As EY put it in their recent report on mining, “Overall activity in the 1st half of 2015 (H1 2015) remained subdued, following similar levels of malaise in 2014.” In fact, in some important ways, this year is worse off than last. EY was dead on describing IPO activity as flat-lining in the first half of 2015.

It looked dead last year. It’s deader now. Noting “persistently weak” IPOs in mining, E&Y data suggests the value of IPOs in the first half of 2015 is down 71% to $335 million from the first six months of 2014. The number of IPOs was also down to 6 from 8 and that says a lot.

Co-ordinated market intervention is the way out of this ‘currency war’ – by David Parkinson (Globe and Mail – August 13, 2015)

August 13, 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.

Until now, most experts have been reluctant to use the term “currency war” to describe this year’s global arms race in foreign exchange markets. But China certainly fired a big shot over the bow this week.

By formally cutting the government-managed value of the yuan, China raised the trend of increasingly competitive currency devaluations to a new level. In a world where struggling economies have been adopting policies that have driven their currencies lower in not particularly transparent attempts to stimulate export growth (30 central banks have cut interest rates this year), the world’s biggest exporter went to a new extreme to defend its turf.

Other export countries – including Canada, which has cut rates twice since January and is banking on an export recovery to revive its flagging economy – will surely feel the heat. So will the global financial markets, which look more fragile with every new volley in the currency battle.

There’s no reason to think all this will end well. About the best we can hope for is that it will all prove pointless.