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Major north American gold majors are under the pump – by Lawrie Williams (Mineweb.com – August 10, 2015)

http://www.mineweb.com/

While the major North American gold mining companies are successfully cutting costs to keep their heads above water, it’s far from all plain sailing.

LONDON – With the quarterly and half-yearly reporting season well under way we can report that most of the top North American gold miners, which have all now reported their 2nd quarter figures, have been continuing to make progress in cutting costs. Here we are looking at the gold miners projected to produce in excess of 1 million ounces (circa. 31 tonnes) of gold, or gold equivalent, in the current year.

All, bar Kinross Gold, have come in with All-In Sustaining Costs (AISC) guidance figures for the year at comfortably under the $1,000/oz ounce level which leaves them in a relatively strong position in the current weak gold price environment.

Indeed as multi-operational gold producers, they probably have more scope for further cost cutting should prices weaken further, although at the expense of reducing reserve levels in tonnage terms, and more flexibility in making potential closure or divestment decisions concerning marginal or unprofitable operations.

But so saying, while corresponding earnings figures may be better than might have been anticipated given the gold price falls, continuing write-downs are making financials look depressing in terms of the reported bottom line figures.

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GLOBE EDITORIAL: To glimpse the future of oil, look at coal in the U.S. (Globe and Mail – August 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.

“We’re the first generation to feel the impact of climate change, and we’re the last generation that can do something about it,” Barack Obama said on Monday. The President backed up his words with the Clean Power Plan, a White House initiative that will almost certainly end coal-fired electricity production in the United States in the next decade.

There are five lessons in the announcement for Canada, which recently signed on to the G7 commitment to “decarbonize” the global economy by the end of the century.

Lesson 1: Greenhouse-gas emissions are a legitimate public-health issue. Mr. Obama has done an end run around Congress and unilaterally set regulations to cut carbon-dioxide emissions from electricity production by 32 per cent (compared with levels in 2005) by the year 2030.

He can do this under the Clean Air Act, which obliges the Environmental Protection Agency to regulate any pollutant that is a danger to public health. Last year, the U.S. Supreme Court ruled that large amounts of carbon dioxide qualify as a dangerous pollutant, since they lead to climate change.

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Brazil the winner from the Andrew Forrest way – by Matthew Stevens (Australian Financial Review – August 10, 2015)

http://www.afr.com/

The only way Australia and its miners would benefit from any form of co-ordinated iron ore production constraint would be if Brazil could be convinced to add its name to our cartel.

But even with Brazil’s unlikely and illegal embrace of a cartel, the net gains for Australia would be marginal and fleeting, says the most authoritative and technical analysis conducted yet on Andrew Forrest’s contention that Australia’s economy is being abused by its biggest iron ore miners, Rio Tinto and BHP Billiton.

Forrest and his company Fortescue continue to rail about planned expansion, under which both their Pilbara competitors will add about 20 million tonnes to production over coming years, while Gina Rinehart introduces another 55 million tonnes to an already bloated global system.

Having initially taken the Forrest bait on the idea of some sort of market review, governments state and federal promptly backed off after some unusually blunt criticism from the likes of BHP boss Andrew Mackenzie.

But that didn’t settle things for good old Brian Fisher. Fisher is the economist who ran the Australian Bureau of Agriculture and Resource Economics during its pomp as government’s commodity industry number cruncher, and now directs his own firm, called BAEconomics.

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UPDATE 1-K+S says private shareholders back rejection of Potash offer (Reuters U.S. – August 10, 2015)

http://www.reuters.com/

FRANKFURT, Aug 10 (Reuters) – German salt and fertilizer company K+S AG has claimed support from private or retail investors for its rejection of a 7.9 billion euros ($8.6 billion) offer from Potash Corp of Saskatchewan.

K+S said on Monday it had surveyed private or non-institutional shareholders, who hold about 30 percent of its shares, and said more than 84 percent who replied were in favour of rejection, though it also said only about 28 percent had responded to its questionnaire.

Potash Corp has been pushing to talk with K+S management despite the German company’s initial rejection last month of the Canadian company’s bid worth 41 euros per share.

K+S, whose shares traded up 0.8 percent at 37.43 euros by 1130 GMT, lacks the protection of a big anchor investor, with nearly all its shares freely traded on the stock exchange, and the results of K+S’s survey provide the first real indication of how investors may respond to Potash Corp’s approach.

Only about 4 percent of the more than 39,000 private shareholders who participated in the survey said they would accept a 41 euros per share offer, K+S said.

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EPA: Pollution from mine spill much worse than feared – by Steve Garrison and Joshua Kellogg (USA Today – August 10, 2015)

http://www.usatoday.com/

FARMINGTON, N.M. — Officials from the Environmental Protection Agency said Sunday that the Gold King Mine discharged an estimated 3 million gallons of contaminated water, three times the amount previously believed.

The mine continues to discharge 500 gallons per minute, EPA Region 8 administrator Shaun McGrath said in a teleconference call Sunday afternoon, but the polluted water is being contained and treated in two ponds by the site of the spill near Silverton, Colo.

According to preliminary testing data the EPA released Sunday, arsenic levels in the Durango area of the Animas River were, at their peak, 300 times the normal level, and lead was 3,500 times the normal level. Officials said those levels have dropped significantly since the plume moved through the area.

Both metals pose a significant danger to humans at high levels of concentration.

“Yes, those numbers are high and they seem scary,” said Deborah McKean, chief of the Region 8 Toxicology and Human Health and Risk Assessment. “But it’s not just a matter of toxicity of the chemicals, it’s a matter of exposure.”

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Editorial: [Virginia, U.S.A.] Uranium mining debate resurfaces again (Richmond Times-Dispatch – August 9, 2015)

http://www.richmond.com/

For decades, the commonwealth has been having an on-again, off-again debate over uranium mining. With the filing of a federal lawsuit by Virginia Uranium Inc., the debate is officially back on.

The lawsuit makes a straightforward claim: The Atomic Energy Act vests all authority for radiation-related regulation in the federal Nuclear Regulatory Commission. Virginia can write rules for a uranium mine on any number of grounds, such as hours of operation or surety bonds.

But it cannot regulate radiation safety matters, which are the exclusive province of the feds. And yet, the plaintiffs claim, Virginia’s ban on uranium mining is based almost exclusively on concerns about the hazards presented by radioactive tailings from the mining process.

That much will ring true to anyone who has followed the debate over the moratorium. In its resolution in support of keeping the ban, the Danville-Pittsylvania Chamber of Commerce cited “significant questions around whether uranium can be mined and milled safely in the commonwealth.”

Gov. Terry McAuliffe said he opposed uranium mining because “my job is to make sure that our communities and our citizenry are safe.”

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Whose Sovereignty? Gabriel Resources v. Romania – by Adam Cernea Clark (Huffington Post – August 6, 2015)

http://www.huffingtonpost.com/

Adam Cernea Clark is a writer on sustainable development issues and an environmental attorney.

Two weeks ago, a little-known Canadian gold mining company that has developed or operated exactly zero mines over 17 years announced to its investors that it had initiated international arbitration proceedings against the government of Romania for failing to permit what would be the largest open-pit gold and silver mine in Europe.

Claiming this right under Romania’s bilateral investment treaties (BITs) with Canada and the U.K. (the company consists of ten separate entities in half a dozen countries), Gabriel Resources opined that the Romanian government had unlawfully deprived them of their right to develop the project and extract the full value of their investment.

Using some 40 tons per day, Gabriel subsidiary Roşia Montana Gold Corporation’s project would have created a massive pool of cyanide over priceless archaeological gold mining sites dating back to the Roman Empire and possibly earlier. It would have destroyed the village of Roşia Montana and two adjacent villages, as well as four mountains in this remote corner of the Carpathians.

Almost two years ago, the project triggered historic street protests of tens of thousands of people around Romanian cities.

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Carmichael mine: End green sabotage of coal, says Tony Abbott – by Jared Owens and Dennis Shanahan (The Australian – August 7, 2015)

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

Bill Shorten has challenged Tony Abbott to propose “sensible” reforms to environmental laws, rather than “attacking the court system” for overturning the proposed Queensland Carmichael mega coalmine.

The Opposition Leader today accused Mr Abbott of “second-guessing our judges” by proposing a new environmental standard that “near enough is good enough”.

“If there’s a problem with the way the law is formed then we go back and debate it in parliament, but Mr Abbott seems to be creating a new test for environmental protection in this country that near enough is good enough – well it’s not,” Mr Shorten said.

“If Mr Abbott doesn’t like the law … he can always sit down with Labor and talk about sensible amendments which may need to be made … rather than just attacking the court system.”

Mr Abbott today touted the environmental benefits of Australian coal, describing it as “invariably … much better for the environment than the alternative”.

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New Caledonia mining trucks protest over nickel export ban to China – by Cecile Lefort (Reuters U.S. – August 6, 2015)

http://www.reuters.com/

SYDNEY – Aug 7 Dozens of mining trucks on Friday took to the streets of Noumea, capital of the South Pacific island of New Caledonia, to protest the government’s ban on some nickel exports to China.

Last week, the heads of the national and local governments along with mining executives vetoed exports of nickel laterites to China because of New Caledonia’s longstanding supply agreements with Australia.

“The opening to China is against the mining strategy established in 2009 to maintain export volumes to traditional clients of New Caledonia,” Philippe Germain, president of New Caledonia said in a statement.

Germain also said exports to China were unpredictable and blamed the Asian giant for the substantial fall in nickel prices. Nickel prices hit a six-year low in July and are down 27 percent this year, largely on slowing demand.

The veto angered a large number of truckers who subcontract for mines such as Société Minière du Sud Pacifique SA (SMSP), Ballande Group and Gemini, saying the ban will force many of them to shut down in an already difficult environment with falling export volumes.

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Embattled Barrick selling assets to cut debt, reduce costs – by Lisa Wright (Toronto Star – August 7, 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.

Gold miner cuts dividend and will shave another $2 billion from operations in pursuit of profitability.

Just about everything is for sale or on the chopping block – except for a handful of core mines – as Barrick Gold Corp. fights to stay atop the gold mining industry amid crippling debt and a tanking bullion price that has dragged its stock down to 26-year lows.

“If you have interested parties, be in contact with us please,” company co-president Kelvin Dushnisky said with a slight chuckle when an analyst asked on Thursday’s conference call if the miner’s equipment was up for sale at its now dormant Pascua-Lama site in Chile.

The Toronto-based gold miner said it will now target spending cuts across its operations at $2 billion before the end of 2016 — a move that tacks an extra $1 billion of cuts onto a previously announced target to lower expenses and improve productivity.

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Coal Industry Wobbles as Market Forces Slug Away – by James B. Stewart (New York Times – August 6, 2015)

http://www.nytimes.com/

In April 2005, President George W. Bush hailed “clean coal” as a key to “greater energy independence,” pledging $2 billion in research funds that promised a new golden age for America‘s most abundant energy resource.

But a decade later, the United States coal industry is reeling as never before in its history, the victim of new environmental regulations, intensifying attacks by activists, collapsing coal prices, and — above all — the rise of cheap alternative fuels, especially natural gas.

This week President Obama slammed the industry with tougher-than-expected rules from the Environmental Protection Agency limiting power plant carbon emissions, which will accelerate an already huge shift from coal to natural gas and other alternatives. “Clean coal” remains an expensive and thus far impractical pipe dream. Coal is the world’s biggest source of carbon emissions by far and the leading culprit in global warming. Coal advocates like Mitch McConnell, the Kentucky senator and Republican majority leader, have accused the president of an out-and-out “war on coal.”

But it’s collapsing prices and heavy debt loads that are driving the industry into bankruptcy.

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Behind community protests in the platinum belt – by Sarah Evans (Mail and Guardian – August 5, 2015)

http://mg.co.za/

Who is responsible for the backlash? A research paper unravels the nexus of land ownership, traditional authority and mining elite interests.

ANALYSIS

A new paper reveals insights into the complexity of the land question and marries it with the plethora of issues that underlie community protests that plague the platinum belt.

This nexus of land ownership, traditional authority, government and mining elite interests, and the ultimate brunt to be borne by mining communities in the North West is explored by this recent research. Platinum mining in the North West province has resulted in “untold suffering” for residents near to mines, according to the paper released on Wednesday.

The paper, titled “Platinum, poverty and protests: platinum mining and community protests around Rustenburg”, was released at a seminar hosted at Wits University’s Society, Work and Development Institute (Swop), and researched by Dr Joseph Mujere and a Swop research associate from the University of Zimbabwe.

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Why Chevron, Adani, Fortescue show commodity mega-projects era is over – by Clyde Russell (Reuters U.S. – August 6, 2015)

http://www.reuters.com/

LAUNCESTON, Australia, Aug 6 (Reuters) – Want a snapshot of the problems facing natural resource companies and why the era of big projects is over? Consider the recent dilemmas of Chevron, Adani and Fortescue Metals in Australia.

The first is battling cost overruns and combative unions in trying to get a multi-billion dollar project ready.

The second is facing yet another delay to the world’s biggest coal-mining development, with a court victory by environmentalists adding to financing challenges amid deteriorating economics.

The third is playing coy about a possible rescue by a Chinese white knight, which could help it survive a severe downturn in the price of its product, largely self-inflicted by overly ambitious expansions within the industry.

The three companies have little in common other than they all operate in Australia and face the challenge of trying to successfully run major projects at a time of unrelenting commodity price weakness.

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Canadian gold mine companies pull back with bullion at 5-year low – by Susan Noakes (CBC News Business – August 06, 2015)

http://www.cbc.ca/news/business/

Barrick and Goldcorp cut dividend 60%, Barrick sells assets

With gold selling at a five-year low, Canada’s gold companies are selling off properties and cutting costs in an effort to stay profitable.

Barrick Gold Corp., the world’s largest gold producer, announced Wednesday it would cut its dividend by 60 per cent after reporting a $9-million loss in the second quarter. The dividend falls from five cents a share to two cents a share.

Barrick is racing to pay down debt and has been selling assets — $2.45 billion to date – to reduce costs.

The Toronto-based company said it plans a further $2 billion in cuts by 2016, including possible sale of its U.S. properties in Nevada and Montana.

Nor is Barrick the only gold company to cut its dividend. Goldcorp, which on July 30 reported net earnings of $65 million or 8 cents per share, also cut its dividend by 60 per cent.

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Philippine nickel miners confident production won’t drop – by Anne Lu (International Business Times – August 06 2015)

http://www.ibtimes.com.au/

While the agricultural sector in the Philippines dread the looming El Niño phenomenon that could introduce widespread dryness across the country, the mining segment see it as a “blessing.”

“The impact of El Niño on our operations is going to be positive. The dry weather means our mines can continue to be productive in October or November when the season of heavy rains usually starts.” Nickel Asia Corporation CFO Emmanuel L. Samson told Business World.

During wet season, metal producers are forced to suspend field operations for safety and technical reasons, as it would be difficult to get ore underground when the earth is wet and damp. Typically, the rainy season stretches from October to the second quarter of the following year, a long period when most mining operations are recording average productivity levels.

Nickel Asia, which is also partly owned by Japan’s Sumitomo Metal Mining, has projected an ore export volume of more than 19 million wet metric tonnes (WMT) for 2015. The company produced only 17.9 million WMT last year.

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