Republic of Mining

Three key takeaways from the US Geological Report (Mining.com – June 1, 2015)

June 2, 2015

http://www.mining.com/

Click here for the 2015 Mineral Commodity Summaries: http://minerals.usgs.gov/minerals/pubs/mcs/2015/mcs2015.pdf

The 2015 Mineral Commodity Summaries, an annual report from the U.S. Geological Survey, shares information about domestic minerals and their importance to the U.S. economy. Below are some key highlights from this year’s report:

• The estimated value of mineral raw materials produced at U.S. mines in 2014 was $77.6 billion.

The domestic minerals mining industry is a major stimulant of the U.S. economy. The estimated value of minerals produced at U.S. mines increased by $3.3 billion in 2014, and during that year, industries utilized those minerals to add more than $2.5 trillion to the U.S. gross domestic product (GDP).

Industries, including technology, manufacturing, construction and automotive all depend on a secure mineral supply chain to produce the products we use each and every day. With the world’s population growing and requiring more access to technology, the global demand for minerals will continue to increase.

NEWS RELEASE: OMA JOINS COALITION URGING GOVERNMENT TO PROTECT THE ECONOMY AND JOBS UNDER NEW PENSION PLAN

June 2, 2015

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

(June 2, 2015) The Ontario Mining Association, and a coalition of major Ontario employers under the leadership of the Ontario Chamber of Commerce (OCC), are calling on the provincial government to broaden its definition of a comparable pension plan under the Ontario Retirement Pension Plan (ORPP).

In a letter addressed to Premier Kathleen Wynne, the coalition of more than 150 organizations is urging the government to expand its definition of pension plan comparability to include capital accumulation plans, including (but not limited to) Defined Contribution plans. This move would ensure that companies in the province that have an existing pension plan for their employees would not be forced to incur this new cost of doing business, thus undermining the province’s economic competitiveness.

Set for introduction in 2017, the ORPP will require employees and employers to contribute 1.9% each (3.8% combined) on an employee’s annual earnings up to $90,000. Employers who offer ‘comparable’ workplace savings plans will be exempt from contributing to the ORPP.

Aureus Mining starts gold production in Liberia in shadow of Ebola crisis – by Eric Reguly (Globe and Mail – June 2, 2015)

June 2, 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.

Aureus Mining Inc. has survived the Ebola crisis to produce its first gold in Liberia, the West African country that had no gold mine until the Canadian company arrived.

Aureus, which trades on the Toronto Stock Exchange and on London’s AIM market, poured the first gold from its New Liberty open pit mine in Liberia’s northwest Friday evening. The $172-million (U.S.) mining project will be in full production in the autumn, when it will become one of the desperately poor country’s largest private employers.

David Reading, 59, the company’s Canadian-trained, British chief executive officer, said he was worried at one point that the Ebola crisis would doom the company’s Liberia plans. Liberia was one of the countries hit hardest by Ebola last year, with 10,666 reported cases and 4,806 deaths by the end of February, according to the World Health Organization (WHO).

“You go through sleepless nights as management,” Mr. Reading said. “If we stop everything, the company would go bankrupt. But if we keep going and we lose someone, we’d never forgive ourselves.”

TMAC Resources Inc launches $105 million IPO – by Peter Koven (National Post – June 2, 2015)

June 2, 2015

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

TORONTO — Canada’s initial public offering craze is finally seeping into the mining sector, as TMAC Resources Inc. has launched the sector’s first significant IPO in many months.

The Toronto-based company, which is named after its well-known executive chairman Terry MacGibbon, is planning to raise $105 million, according to a preliminary prospectus filed with regulators. TMAC’s underwriters plan to sell 52.5 million shares at $2 each, with an option to sell up to 7.875 million additional shares if demand is strong enough. The stock will list on the Toronto Stock Exchange.

TMAC owns the Hope Bay project in Nunavut, a massive undeveloped gold deposit. U.S. gold giant Newmont Mining Corp. acquired the project for $1.5 billion in 2007, but was never able to put forward a good development plan and eventually wrote it down. That paved the way for TMAC, an upstart company, to acquire it in 2013.

Last month, TMAC completed a pre-feasibility study on Hope Bay that projected a capital cost for the project of $206 million. The study found that the mine would have a net present value of $626 million at a gold price of US$1,250 an ounce.

Mine closures, job losses on Brazil’s iron ore frontline – by Stephen Eisenhammer (Reuters U.S. – June 1, 2015)

June 2, 2015June 2, 2015

http://www.reuters.com/

CONCEIÇÃO DO MATO DENTRO, Brazil, June 1 A giant truck carries chunks of sparkling mountainside to a web of yellow conveyor belts at a huge mine in eastern Brazil, a few more hundred tonnes of iron ore that are good for its owner Anglo American but bad for a battered global market.

Part of a new generation of massive mines contributing to a supply glut, the Minas-Rio mine has the scale and modern design to produce iron ore, the main ingredient in steel, at well below the costs of more traditional projects.

“We’ll be competitive wherever the price is,” Paulo Castellari, the iron ore head for Anglo in Brazil, said on a recent visit.

But only a four-hour drive away, in the sleepy town of Itatiaiucu, workers at older mines are being laid off. Almost everyone in the town of 12,000 people follows the price of iron ore and for the last year they have watched it drop in half to near the lowest level in a decade. With it, about 20 percent of mining jobs in the town have been cut, the local union says.

“I go to work every day wondering if I’ll be next,” said José Roberto, 55, who has worked for 27 years at a local mine now owned by steelmaker ArcelorMittal, where the union says 30 of about 300 workers have been laid off in recent months.

Lifton says forget the Wall Street Journal on rare earths. – by Jack Lifton (InvestorIntel.com – June 1, 2015)

June 2, 2015

http://investorintel.com/

Yesterday’s (May 31’s) Wall Street Journal had a really poor article about the impending fate of Molycorp, bankruptcy from failure to meet payment on debts, as it reflects, in the WSJ’s opinion, the rare earth market(s).

The rare earth share market “mania” that began in the USA in 2007 when a group of funds and an entrepreneur bought the defunct, moribund, and on “care and maintenance” Molycorp from Chevron with the stated purpose of bringing it back into production was an attempt to “get ahead” of the “market” as then perceived by this group.

This original core group of Molycorp investors had noted that a rapidly growing demand for the rare earths in high tech consumer goods was going to have to depend on the tumultuous but unpredictable (with regard to the impact of governance by the state as well as private interests) Chinese domestic economy, because at that time (as it remains today) China was the overwhelmingly largest producer of the rare earths.

Today Molycorp has failed as a business even though it has raised and spent between 2 and 3 billion dollars to re-start its California mine and base-level separation facility.

Canadian Extractive Sector Transparency Measures Act comes into force – by Henry Lazenby (MiningWeekly.com – June 1, 2015)

June 1, 2015

http://www.miningweekly.com/page/americas-home

TORONTO (miningweekly.com) – Canada’s new rules governing extractive sector transparency came into effect on Monday, forcing all extractive companies subject to the Act to report payments including taxes, royalties, fees, and production entitlements of $100 000 or more to all levels of government in Canada and abroad.

Canada’s Natural Resources Minister and Minister for the Federal Development Initiative for Northern Ontario Greg Rickford on Monday said that the ‘Extractive Sector Transparency Measures Act’ (ESTMA) was a multilateral mandatory reporting initiative that would help to ensure that Canada’s resource industries continued to prosper and to provide the broad economic benefits that were fundamental to Canada’s success.

The ESTMA followed through on the federal government’s commitment with its G7 counterparts to improve transparency and accountability of payments made by the extractive industry to all levels of government.

The eurozone had already developed similar legislation, which the UK had adopted late last year, with transparency directives to follow soon. The directives required oil, gas, mining and logging companies to publicly disclose the payments they made to governments to extract natural resources.

Wealth Fund Ban Betrays Norway’s Awkward Fossil Fuel Goals – by Saleha Mohsin and Mikael Holter (Bloomberg News – May 31, 2015)

June 1, 2015

http://www.bloomberg.com/

Western Europe’s biggest oil producer has decided coal is too dirty to invest in.

Norway’s $890 billion sovereign wealth fund, built on more than four decades of extracting crude from the North Sea, was ordered by lawmakers on Wednesday to limit holdings of companies that produce or burn coal. That could trigger at least $4.5 billion in divestments of stocks such as RWE AG and Duke Energy Corp.

“There’s this incredible logic that coal is the climate problem, and Norway is helping solve the world climate problem by producing gas that can replace coal in Europe and reduce emissions,” Rasmus Hansson, a lawmaker for the Green Party, said in a phone interview.

“That logic has unbelievably been accepted by the Norwegian majority as credible — which it isn’t.”

The cognitive dissonance is on display in Stavanger, Norway’s oil capital. The local Scandic hotel, which charges around $200 a night, tells guests it runs on wind and hydropower. The view is of the North Sea, where Norway — a country that boasts the highest per capita income in Europe after Luxembourg — spends billions extracting its oil.

China Inc circling Australian iron ore – by Tess Ingram (Sydney Morning Herald – June 1, 2015)

June 1, 2015

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

The sustained lull in iron ore prices has put iron ore miners under considerable pressure, with Chinese investors circling distressed Australian companies.

Chinese investors are circling distressed Australian iron ore miners, according to local dealmakers fielding growing interest in the commodity’s struggling mid-tier ranks.

The sustained lull in iron ore prices has put iron ore miners under considerable pressure, causing market values to plummet and a handful of Australian producers to suspend operations.

The price of iron ore has slumped close to 50 per cent in the past 12 months to hover at around $US63 a tonne, after slumping as low as $US47 a tonne in April.

Against this backdrop, an increasing number of Chinese entities had expressed interest in providing debt or equity to iron ore miners, acquiring an asset or attempting a takeover, Minter Ellison West Australian managing partner Adam Handley said.

Finding Minnesota: The ‘Grand Canyon Of The North’ – by Mike Binkley (CBS Minnesota – May 31, 2015)

June 1, 2015

http://minnesota.cbslocal.com/

HIBBING, Minn. (WCCO) – This year, thousands will take a side trip to a giant hole in the ground in northern Minnesota that locals like to call “the Grand Canyon of the North.”

It’s not a natural wonder. It’s a panoramic collection of cliffs, ridges and valleys that have all been carved up by humans. The Hull Rust Mahoning Mine on the edge of Hibbing is the second largest open pit iron ore mine in the world.

Beauty was not the main objective when miners first arrived there in the 1890s, but after 120 years of blasting, digging and hauling, beauty is what many visitors see. Anne Varda, whose family includes three generations of miners, is now president of the adjacent tourist center.

Nothing dull about zinc if supply falls – by Trevor Sykes (Australian Financial Review – June 1, 2015)

June 1, 2015

http://www.afr.com/

Zinc was the hot tip at the Resources Investment Symposium held in Broken Hill last week.

Probably a natural call given that Broken Hill is home to the greatest silver-lead-zinc mine the world has ever known.

In its 130-year life Broken Hill has produced total of 50 million tonnes of lead and zinc combined plus 100 million ounces of silver. It has been mined almost continuously over that time and still has a long life ahead at deeper levels and in exploiting remnant ore.

In his opening address at the symposium, Emeritus Professor Ian Plimer of the University of Melbourne noted that the market for mining shares had been slow and sluggish for the past four years.

He said: “This market will turn around when there is a fundamental commodity shortage and I think that commodity will be zinc. I think we will go into shortage in the first quarter of next year.” It was a big call, because as far as investors are concerned, zinc is the least sexy of all the major metals.

At various times, investors have been excited about diamonds, gold, copper, oil and nickel, but some minerals just don’t seem capable of arousing them. Mineral sands are a good example. Australia is rich in them, but the market is never much better than lukewarm.

Nevada mining innovates and endures – by Dana R. Bennett (Elko Daily Free Press – June 1, 2015)

June 1, 2015

http://elkodaily.com/

Dana R. Bennett is the Nevada Mining Association President.

Nevada mining is dynamic—an evolving industry that changes over time. From our 21st century perspective, after many years of solid gold production numbers, it can be hard to imagine a time when gold was not the preeminent mineral in Nevada. There was a time – a long period of time – when gold mining was essentially dying in this state.

In 1942, the U.S. War Production Board ordered the closure of non-essential gold mines in order to concentrate the production of minerals needed for the war effort. Some Nevada mines closed completely, but some, such as the Getchell Mine in Humboldt County, were able to remain open by focusing on the production of industrial minerals.

After World War II ended and gold mines were allowed to open, Nevada’s gold industry was slow to recover. Production continued to decline. Nearly 20 years after the federal government order, Nevada’s gold production dropped to the second-lowest point in all of Nevada history.

Instead, Nevada’s mining industry focused on industrial minerals, producing iron, lead, manganese, tungsten and zinc in the early 1950s. Lander County produced world-renowned turquoise. By 1957, however, even the industrial mineral industry began to slide.

[Canada Aboriginal Issues] McLachlin said what many have long known – by Ken Coates (Globe and Mail – June 1, 2015)

June 1, 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.

Ken S. Coates is a professor and Canada Research Chair in Regional Innovation at the University of Saskatchewan and the Macdonald-Laurier Institute’s senior policy fellow for aboriginal and northern Canadian issues.

Supreme Court Chief Justice Beverley McLachlin changed the national vocabulary on Thursday. Her simple comment that Canada had attempted “cultural genocide” on indigenous peoples, an explanation central to aboriginal understanding of Canadian history and well-known to students of Canada’s past, is a demonstration of this country’s slow-changing political maturity on the indigenous file.

In 2008, Prime Minister Stephen Harper stood, with indigenous leaders joining him on the floor of the House of Commons, and uttered a similarly meaningful statement about residential schools. He said, on behalf of all Canadians, that he was “sorry.” Why it took so long is a mystery known only to the legal advisers who guided the government’s hand, for aboriginal people and historians long knew of the perhaps unintended but nonetheless destructive impact of residential schools. But it was a start.

It was a simple and honest word, with substantial political implications.

[Canada Aboriginal Issues] Truth and reconciliation: This is just the beginning – by Perry Bellegarde (Globe and Mail – June 1, 2015)

June 1, 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.

Perry Bellegarde is National Chief of the Assembly of First Nations.

The closing events of the Truth and Reconciliation Commission are under way this week in Ottawa. The Commission has played an important role in shining a light on the Indian residential schools, the darkest chapter in our shared history. The issue facing all of us now is our shared future. What is required for real reconciliation between First Nations and Canada?

I believe reconciliation is about closing the gap – the gap in understanding between First Nations and Canadians and the gap in the quality of life between us. Closing the gap in understanding starts with confronting the purpose of the residential schools, which was nothing less than the eradication of First Nations identity from Canada. The intent was to kill our cultures and our languages. Once you lose those, you lose everything – your pride, self-image and self-worth.

First Nations identities are central to Canada’s identity. We must support and promote indigenous languages and cultures in the school system and in Canadian society as a proud part of our heritage.

The Cornish Mines – by Graham Jaehnig (The Daily Mining Gazette – May 30, 2015)

June 1, 2015

http://www.mininggazette.com/

From the very beginning of the mineral rush in 1843, miners from other countries worked Copper Country lodes. John Hays, in working the area around Copper Harbor, worked teams of German coal miners he had retained from Pennsylvania. Colonel Charles Gratiot, working for the Lake Superior Copper Company, had brought with him a crew of some fourteen Cornish miners from the lead district of Wisconsin.

Cornwall is a small peninsula on the southwest portion of England that juts into the Atlantic Ocean, and enjoys a remarkable mining history. Mining in Cornwall had begun as early as the Bronze Age (2100-1500 BCE) and by the beginning of the 17th century CE, the Cornish had earned the reputation as experts and world leaders in mining and mineral dressing.

At the time when Cornish mines were becoming too deep to be profitably mined, large copper deposits were discovered in England’s North Wales. To compete with these new, shallow mines, Cornish engineers made great advancements in mining technology, such as pumping engines and mineral processing.

By the mid-1840s, as the Cornish copper industry was in major decline, the mineral lands of Lake Superior were just beginning to make world news for their finds of huge masses of pure copper.