Republic of Mining

COLUMN-China Shenhua’s Australian coal mine on troubled path – by Clyde Russell (Reuters India – July 14, 2015)

July 14, 2015

http://in.reuters.com/

LAUNCESTON, Australia, July 14 (Reuters) – A planned Chinese-owned coal mine in Australia has become the latest example in a long line of mud-slinging trumping sensible debate.

While it makes for great headlines, there are few things less edifying than seeing politicians, business and community leaders flinging gratuitous insults at each other.

The stoush is over the Australian federal government’s approval of a A$1 billion ($746 million) coal mine being developed by China Shenhua Energy Co in the Liverpool Plains region of New South Wales state.

It would be something of an understatement to say the 10-million tonne a year project has been controversial, with its approval showing splits in the ruling Liberal National coalition, while prompting threats of civil disobedience from farmers and legal action from a variety of opponents.

The main issue is that the proposed mine, known as Watermark, is in prime agricultural land and there is concern that not only will it take up land that could be used for farming, but also that the mine will deplete or degrade the region’s underground water table.

Zimbabwe’s desperate gold rush poisons children with mercury – by Andrew Mambondiyani (Reuters U.S. – July 13, 2015)

July 14, 2015

http://www.reuters.com/

MUTARE, Zimbabwe, (Thomson Reuters Foundation) – Cynthia Dzimbati was exhausted. Her three-month-old baby strapped to her back and panning dish in hand, she had spent the whole day working the Mutare River for not one single ounce of gold.

“This is now my life. I lost my job,” said the 31-year old single mother, looking so worn out she could easily have passed for 50. “I have three children to feed.”

Dzimbati poured a few drops of mercury into a bowl of dirty water and stirred it with her bare hands.

The gold in the river is growing more scarce these days, she said, so the illegal artisanal miners are relying on mercury, a highly toxic substance supplied by the smugglers who buy their product, to trap the precious metal from the muddy river waters in the eastern borders of Zimbabwe.

Public health and environmental experts say the consequences are disastrous. Mercury is contaminating drinking water for miles around and causing neurological damage, especially to children.

To talk transboundary mining, Taku Tlingit put folks in the same boat – by Katie Moritz (Juneau Empire – July 13, 2015)

July 14, 2015

http://juneauempire.com/

Taku Tlingit reinforce cultural ties to land in discussion on transboundary mines

Lillian Petershoare’s family fishes the Taku River and has done so for decades. A new generation is now learning the tradition. John Morris “grew up on the Taku until I was 15 years old; I knew no other place.”

Barbara Cadiente-Nelson read a passage by Elizabeth Nyman: “This river, this watershed … know who you are and, if you permit it, it will tell you.”

Tlingit men and women whose lineage can be traced to the Taku River area spoke on their connection to the water and the land during a daylong boat trip down the Taku River on Sunday. The cruise was organized by the Douglas Indian Association.

The trip was meant to “put us on the same boat” — drawing a link between Tlingit connection to the land and the need for mainstream awareness and protection of its resources, said the DIA’s Morris, addressing the diverse group of passengers on the catamaran.

Iron ore miners unprepared for challenges, warns BHP – by Paul Garvey (The Australian – July 14, 2015)

July 14, 2015

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

Australia’s iron ore miners are unprepared for the massive exploration challenges ahead of them, BHP Billiton’s head of iron ore exploration has warned.

Speaking at the AusIMM iron ore conference in Perth on yesterday, BHP’s Joe Knight said current exploration methods would be unable to discover and define the quantity of new ore bodies needed to sustain the Pilbara’s soaring iron ore output.

The Pilbara is home to three of the world’s four largest iron ore miners — BHP, Rio Tinto and Fortescue Metals Group — and exports almost 800 million tonnes of ore a year.

That figure is set to grow to about 965 million tonnes a year by 2017, Mr Knight said, based on the current publicly announced plans of the region’s miners and explorers.

At that rate, Mr Knight said, companies would struggle to replace their mined resources unless they evolved their approach to exploration, given the forecast annual production was the equivalent of more than three so-called “tier one” iron ore deposits.

New study quantifies how much mine permit delays can discourage investment [U.S.A.] – by Hal Quinn (The Hill – July 13, 2015)

July 14, 2015

http://thehill.com/

Quinn is the president and CEO of the National Mining Association.

Lawmakers pushing for mine permitting reform found support recently in a new study showing that U.S. mineral mines can lose up to half of their value waiting a decade or longer for permits. The study by SNL Metals & Mining was unveiled at a House Natural Resources Committee hearing last month on a bill to make the U.S. permitting process more efficient.

The study, “Permitting, Economic Value and Mining in the United States,” quantifies how protracted permitting delays impair and discourage investments in domestic mineral development projects. The study suggests that an average mine can lose a third of its value due to permit delays, and in some cases, a mine’s value can be cut in half as a result of increasing costs and investment risk. After years of delays, a project can even become economically unviable.

Currently, it takes a mine in the U.S. about seven to 10 years to get the necessary permits to operate; whereas, in countries like Canada and Australia, which have similarly stringent environmental standards, it takes an average of two to three years. Luke Russell, vice president of Hecla Mining Company, told the committee that “The U.S. process is fraught with duplication [and] inefficiencies. … It is by far the most arduous and tortuous process in the world.”

Iran Nuclear Deal Is Reached With World Powers – by David E. Sanger and Michael R. Gordon (New York Times – July 14, 2015)

July 14, 2015

http://www.nytimes.com/

VIENNA — Iran and a group of six nations led by the United States said they had reached a historic accord on Tuesday to significantly limit Tehran’s nuclear ability for more than a decade in return for lifting international oil and financial sanctions.

The deal culminates 20 months of negotiations on an agreement that President Obama had long sought as the biggest diplomatic achievement of his presidency. Whether it portends a new relationship between the United States and Iran — after decades of coups, hostage-taking, terrorism and sanctions — remains a bigger question.

President Obama, in an early morning appearance at the White House that was broadcast live in Iran, began what promised to be an arduous effort to sell the deal to Congress and the American public, saying the agreement was “not built on trust, it is built on verification.”

ut Mr. Obama made it abundantly clear that he would fight to preserve the deal in its entirety, saying, “I will veto any legislation that prevents the successful implementation of this deal.”

Vale Rallies Most in Month Amid Iron-Ore Supply Cut Plan – by Juan Pablo Spinetto (Bloomberg News – July 13, 2015)

July 13, 2015

http://www.bloomberg.com/

Shares of Vale SA, the world’s largest iron-ore miner, rallied the most in a month as the company presses ahead with plans to cut production and boost profit.

Vale will withdraw output of iron ore by 25 million metric tons starting this month, Peter Poppinga, the company’s executive director for ferrous and strategy, said at an industry conference in Sao Paulo.

The cuts will come from its lower-quality products at its mines in south and southeast Brazil and from third-party purchases, he said.

“Our mantra is not volume at any cost anymore, it’s to maximize margins,” Poppinga told reporters at the event. “It doesn’t mean shutting mines, it means optimizing some production flows at plants.”

The Rio de Janeiro-based miner is moving to trim low-quality output as it focuses on boosting profit amid what it sees as an oversupplied market in 2015, and one that will probably be in surplus next year, Poppinga said.

China imports of coal go into steep decline but there’s a silver lining for Australia – by Angus Grigg (Australian Financial Review – July 13, 2015)

July 13, 2015

http://www.afr.com/

China is demanding less coal and more wheat.

That’s the key message from first-half trade data released on Monday by the Customs Bureau, which showed China’s overall imports remained weak while exports were only marginally better.

In US dollar terms the value of trade in the world’s second biggest economy fell 6.9 per cent over the first half of the year as wheat imports surged and coal declined.

For Australia, these wildly divergent statistics are hard to ignore. Over the first six months of the year, the volume of China’s coal imports fell 37.5 per cent compared to the same period in 2014.

The volume of wheat imports was up 66.5 per cent over the same period. For coal, the decline is a combination of protectionism and falling domestic demand.

Australian miners linked to hundreds of deaths, injuries in Africa – by Will Fitzgibbon (Sydney Morning Herald – July 11, 2015)

July 13, 2015

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

Australian mining companies are linked to hundreds of deaths and injuries in Africa, which can go unreported at home. Some of the Australian Securities Exchange-listed companies include state governments as shareholders. One company recorded 38 worker deaths over an eleven-year period.

In Malawi, litigation continues against Paladin Africa Limited, a subsidiary of Perth-based Paladin Energy, and its subcontractor after an explosion disfigured one worker with such heat that his skin shattered when touched by rescuers. Two others died in the same incident.

Other allegations include employees in South Africa hacking a woman with a machete and Malian police killing two protesters after a mine worker reportedly asked authorities to dislodge a barricade on the road to the mine.

An investigation by the International Consortium of Investigative Journalists, in collaboration with 13 African reporters, uncovered locally-filed lawsuits, violent protests and community petitions criticising some Australian companies.

Gas overtakes coal at US power stations – by Ed Crooks (Financial Times – July 12, 2015)

July 13, 2015

http://www.ft.com/intl/companies/oil-gas

New York – The US generated more of its electricity from gas than from coal for the first time ever in April — in a sign of how the shale boom is putting mounting pressure on the country’s mining industry.

Plunging prices for natural gas, which have fallen alongside oil since last summer, led to it being used to generate 31 per cent of America’s electricity in April, while coal contributed 30 per cent.

This was the first month in US history that gas-fired electricity generation surpassed coal-fired generation, according to SNL Energy, a research firm — although it came close in 2012 when gas prices were also very weak. In 2010, coal provided 45 per cent of US power.

Since then, competition from cheap shale gas — unlocked by the rise of horizontal drilling and hydraulic fracturing — plus a growing regulatory burden on coal-fired power plants, has squeezed out coal use. That trend has accelerated in 2015.

Brett Blankenship of Wood Mackenzie, the research company, said the combination of cheap gas and new environmental regulations such as curbs on mercury and related pollution from coal-fired plants was having a particularly deleterious effect on coal generation.

Ring of Fire: Bring on the mining Marshall Plan (Part 2 of 2) – by Stan Sudol (Sudbury Star – July 13, 2015)

July 21, 2015July 13, 2015

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

Editor’s note: This is the second part of a two-part story.

Roads, the best way to find new deposits

One of the first priorities is road transportation. Last March at the PDAC mining convention, the federal and provincial governments jointly announced roughly $800,000 in funding for four of the five isolated First Nations – Webequie, Nibinamik, Neskantaga and Eabametoong – to begin consultations on an east-west road that will connect their communities and the Ring of Fire camp to the provincial highway system. A small baby step of progress.

However, Marten Falls is currently not part of this initiative. While this community is the smallest populated of the Matawa Tribal Council, it probably has the most clout as its traditional territory encompasses the Ring of Fire. Although Webequie is considerably closer to the mining camp, it didn’t receive full-reserve status until 2001. Hence it is critical that Martin Falls be strongly encouraged to join the consortium discussing the road connection.

Manitoba is currently undertaking a visionary initiative to build all-season roads on the east side of Lake Winnipeg (which has similar Canadian Shield geography as in Northwestern Ontario) to connect isolated First Nations communities. The primary reason for the establishment of the East Side Transportation Initiative is to lower travel costs for essential supplies to 13 Aboriginal communities. In addition, winter roads are becoming less dependable due to climate change.

Accent: Bring on the mining Marshall Plan (Part 1 of 2) – by Stan Sudol (Sudbury Star – July 11, 2015)

July 13, 2015

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

Editor’s Note: This is first installment of a two-part story. The second will appear in the Monday edition of The Star.

There has been much commentary about healing and rapprochement with Canada’s First Nations due to the recent Truth and Reconciliation Commission report on the horrific abuse Aboriginal children experienced at residential schools during the last century.

However, if Ontario, which has the largest population of First Nations people in the country, truly wants to make amends for the sins of the past, then we need to look at “economic and social reconciliation” as our primary vehicle for restitution.

Until every First Nation community in the province has the same level of infrastructure and social services as non-Aboriginal towns and cities, most of the remorseful speeches by guilty white politicians are nothing more than hot air.

Without a doubt, some of the most destitute and impoverished First Nations communities are located in Ontario’s mineral-rich but isolated northwest, near the Ring of Fire – the most significant Canadian mineral discovery in almost a century – and in the regions to the west.

In northern development, put northerners’ unique realities first – by Adam Fiser ad Brent Dowdall (Globe and Mail – July 13, 2015)

July 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.

Adam Fiser and Brent Dowdall are senior research associate and senior manager for research and business development, respectively, at the Conference Board of Canada.

Many of Canada’s pressing socio-economic, political and environmental challenges are most intense in the North. Blessed with resource endowments, the North has much potential for economic growth, but resource development doesn’t automatically lead to sustainable development. How we prepare and plan for this growth will determine whether northerners benefit.

Initiating and sustaining a broad-based response to that challenge has been a mission of the Conference Board of Canada since 2009. A recently published compendium report of the Centre for the North affirms that the obstacles are complex, but not insurmountable.

Meeting the challenge requires an acceptance of the North’s unique realities. Not only are northern and southern Canada vastly different, but provincial and territorial northern regions themselves vary in geography and climate, demographics and culture, economic resources and business potential, governance structures and public services.

Shock and ore: What iron ore’s 10% rebound means – by Nyshka Chandran (CNBC.com – July 9, 2015)

July 13, 2015

http://www.cnbc.com/

Iron ore’s near 10 percent rebound on Thursday following a horror streak this week left strategists debating whether more pain is in store for the beleaguered commodity.

Benchmark ore for delivery to the Chinese port of Tianjin ended a ten-day rout overnight, rising to $48.30 a ton, a 9.5 percent increase from an all-time record low of $44.10 hit in the previous session.

Major banks like Citigroup remain bearish, predicting prices to fall below $40 a ton this year due to the commodity’s fundamental oversupply. HSBC meanwhile expects prices to trade around $45 during the third quarter. “We expect the market to go into oversupply and shake out mode again,” it said in a report this week.

But some analysts are optimistic.

“A near 10 percent bounce suggests people will think iron ore is now relatively cheap. A market that breaks to new lows and stays low is very weak, but to see such a bounce suggests there’s more comfort.

Employee concerns main hurdle in Potash Corp. takeover of K+S – by Rachelle Younglai (Globe and Mail – July 13, 2015)

July 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.

In Potash Corp. of Saskatchewan Inc.’s quest to buy K+S AG, one of its biggest hurdles may lie in the German company’s corporate structure.

K+S has two boards of directors, one comprised of executives and another of employee representatives and shareholders.

The employee-shareholder group, known as the supervisory board, has enormous influence over the company with the power to hire and fire executives.

Unlike most takeovers, where a high enough bid will succeed, the buyer must also deal with the supervisory board, which takes into account the employees.

“The representative of the employees represent different interests,” said Martin Imhof, a partner at law firm Heuking Kuhn Luer Wojtek, who specializes in cross-border mergers and acquisitions in Germany.