Republic of Mining

Red Chris proves B.C. still yields ‘good deposits’ – by Matthew Robinson (Vancouver Sun – June 23, 2015)

June 24, 2015

http://www.vancouversun.com/index.html

Imperial Metals estimates it will spend the next 30 years extracting gold, copper from site

VANCOUVER — Nearly six decades have passed since copper and gold deposits were found near Iskut, a Tahltan village in northwestern B.C.

Last week, after years of exploration, planning and negotiation, Imperial Metals received a full operating permit from the province to extract those deposits at its controversial Red Chris mine.

It was a big announcement for the Vancouver company, which has faced considerable opposition to the mine from environmental watchdogs, members of the local First Nation and Alaskans.

Red Chris is Imperial Metals’ largest mine and one the company sees as producing for years to come, said Steve Robertson, the company’s vice-president of corporate affairs.

“This is a huge milestone for us,” Robertson said. “(Imperial Metals) has been around since the ’50s and we’ve been slowly establishing our foothold in the mining business in the province of B.C. and the Red Chris project will really put us on a new plateau.”

Green shoots emerge in withered gold mining sector – by Nicole Mordant (Reuters U.S. – June 23, 2015)

June 24, 2015

http://www.reuters.com/

VANCOUVER – The global gold mining industry is showing signs of life as merger activity picks up and industry veterans set up new companies and hunt for projects, taking advantage of weak prices to lay the groundwork for a rebound.

Almost four years after the price of gold began tumbling, cash-starved and debt-ridden miners are selling, merging or closing shop, pushing the value of completed gold mining mergers and acquisitions in the first five months of this year to $3 billion, twice what it was in the same period in 2014, according to Thomson Reuters GFMS, a metals research consultancy.

At the same time, with stock markets near record highs, some fund managers are examining the sector. In the first quarter, Paris-based asset manager Carmignac Gestion bought 11.65 million shares of Goldcorp (G.TO), the highest valued gold mining company, making it the Vancouver-based miner’s eighth biggest shareholder, Thomson Reuters data show. Carmignac declined to be interviewed for this article.

“The perception that mining equities show good value is starting to spread,” said Hedley Widdup, a fund manager at Melbourne-based Lion Selection Group, which invests in small mining companies and explorers.

Phosphate Producers Set to Become New ‘Blue Chips,’ VTB Says – by Yuliya Fedorinova (Bloomberg News – June 24, 2015)

June 24, 2015

http://www.bloomberg.com/

Phosphate fertilizer makers are set to gain as a supply surplus in the $35 billion market narrows, reducing the premium investors pay for potash producers, according to VTB Capital.

“The phosphate fertilizer producers are set to become the blue chips of the agrochemicals market, the role which potash miners once held,” said Elena Sakhnova, an analyst at VTB Capital in Moscow.

While the two groups of fertilizers don’t directly compete as farmers require both, Sakhnova said the pendulum is swinging in favor of phosphates, with demand set to increase 3 percent this year. The $20 billion potash market hasn’t recovered from the 2013 demise of the trading venture between PAO Uralkali, the biggest producer, and its Belarusian partner, which depressed crop nutrient prices and shares.

The gap in the enterprise value to earnings before interest, taxes, depreciation and amortization ratio between potash producers and phosphate-focused fertilizer makers, which indicates the size of the premium investors are ready to pay for the shares, has narrowed to the lowest since at least 2013, according to data compiled by Bloomberg.

UPDATE 2-S.Africa ferrochrome industry sees big job losses if power prices hiked – by Peroshni Govender (Reuters Africa – June 23, 2015)

June 24, 2015

http://af.reuters.com/

JOHANNESBURG, June 23 (Reuters) – South Africa’s ferrochrome industry will be thrown into crisis if cash-strapped power utility Eskom is allowed to hike prices, with mines forced to close and as many as 200,000 jobs at risk, an industry group said on Tuesday.

Eskom, struggling to maintain power supplies and laden with debt, has asked the National Energy Regulator of South Africa to approve a 9.58 percent price increase.

While down from an original request of 12.7 percent, ferrochrome producers say that, on top of increases earlier this year, it would deal a hammer blow to the industry.

“The increase in electricity prices will further increase production costs and lead to the closure of most smelters in South Africa,” Jacobus Zaayman, a representative from the Ferro-Alloy Producers Association of South Africa, told a public hearing held by the regulator to consider tariff hikes.

Zaayman said as many as 200,000 jobs could go. It was not clear how many workers the industry employs.

On the Iron Range, a push for a new kind of iron – by Dan Kraker (Minnesota Public Radio News – June 24, 2015)

June 24, 2015

http://www.mprnews.org/

Duluth – For more than a century, iron ore mined from Minnesota’s Iron Range and formed into taconite pellets has fed enormous blast furnaces at steel mills around the Great Lakes in old rust belt cities like Chicago, Detroit, Cleveland and Hamilton, Ontario.

After the iron ore is combined with coal and limestone in 12-story-high stacks, the mixture is heated to more than 2,600 degrees to create the molten iron needed for steel. That steel has helped manufacture everything from toy wagons to pickup trucks.

But in the few months since steel companies on the Iron Range laid off about 1,000 mineworkers — one out of every five workers in a region where mining makes up about a third of the economy — two trends in the steel industry have Iron Range watchers feeling uneasy.

Even as officials contend with the current downturn, many worry about a longer-term question with even larger economic consequences. At issue is whether Minnesota is producing the right kind of iron ore product for a changing steel industry.

First, the blast furnaces that Minnesota taconite pellets feed are disappearing, said Brian Hiti, a senior policy adviser on mining for the Iron Range Resources and Rehabilitation Board.

Vale Looks to Sell Up to 30% of Metals Unit in Possible IPO – by Juan Pablo Spinetto (Bloomberg News – June 24, 2015)

June 24, 2015

http://www.bloomberg.com/

Vale SA, the world’s largest nickel producer, is considering selling about 25 percent to 30 percent of its base metals business in an initial public offering.

Work on the transaction continues, although the Rio de Janeiro-based miner will only proceed if nickel and copper prices reach “appropriate” levels, Investor Relations Director Rogerio Nogueira said in Sao Paulo Wednesday.

“We have the vision of doing this IPO to create value,” he said. “It was never thought as a way of getting cash.”

Vale, whose iron-ore business has been buffeted by a 50 percent price collapse since late 2013, may hold the base metals offering in two tranches as it seeks to unlock value at a time of rising profit and output after years of operational setbacks. Vale hired Canadian law firm Stikeman Elliott LLP for the possible IPO, people with knowledge of the matter said earlier this month.

While Nogueira declined to give a valuation for the base metals business during his presentation, Chief Financial Officer Luciano Siani said in a Bloomberg Television interview in December that it may be worth $30 billion to $35 billion.

First Nations better off to negotiate than litigate on resource projects, says report – by Claudia Cattaneo (National Post – June 24, 2015)

June 24, 2015

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

A string of legal victories has emboldened Canada’s First Nations to command unprecedented say over resource projects, the latest example being last month’s Lax Kw’alaams refusal of a $1.14-billion benefits package rather than giving consent to the Pacific NorthWest LNG project in northern British Columbia.

But constitutional scholar Dwight Newman argues the legal winning streak may be coming to an end.

Indeed, in a new research report for the Macdonald-Laurier Institute — entitled Is the Sky the Limit? — Newman argues last year’s Tsilhqot’in Supreme Court of Canada decision that granted title to the B.C. community based on evidence of its use of land may mark the legal peak for aboriginal claims.

“Anyone has the right to press the full extent of their legal rights, (but) Canada may have reached a point where aboriginal groups might be setting back their own position by litigating,” writes Newman, a professor of Law and Canada Research Chair in Indigenous Rights in Constitutional and International Law at the University of Saskatchewan. “We have already seen cases of what might be described as overreach by First Nations, pushing for rights beyond those they can plausibly attain within the legal system.”

[India] CM Help Sought to Tide over Chrome Ore Crisis (New Indian Express – June 24, 2015)

June 24, 2015

http://www.newindianexpress.com/

BHUBANESWAR: Pushed to the verge of closure on account of severe chrome ore crisis due to non-extension of mining leases, the ferrochrome industry in Odisha is crying for urgent attention.

With mining output from three major producers – Tata Steel, Misrilal Mines and BC Mohanty and Sons – dropping to a trickle, the industry has rushed an SoS to Chief Minister Naveen Patnaik seeking his intervention to resolve the issue.

The apex industry body, Indian Chamber of Commerce (ICC), has stated that non-extension of chrome ore mining leases in accordance with the new Mines and Minerals (Development and Regulation) Act, 2015 (MMDR) has not only threatened the plants but is also causing huge revenue loss for the Government.

The newly amended MMDR Act has allowed extension of lease period of captive mines till 2030 and non-captive mines till 2020. Under the rules, chrome ore mining leases of the three miners are deemed to have been extended up to 2020 as a majority of the mineral is used for non-captive purpose.

Liberals failing to deliver on Ring of Fire, opposition says – by Richard J. Brennan (Toronto Star – June 24, 2015)

June 24, 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.

The real Ring of Fire wealth sits untouched at Queen’s Park.

Experts say there are untold riches in the Ring of Fire but the real pot of gold sits untouched at Queen’s Park.

Not a dime of the $1 billion the provincial government has set aside to develop the mineral-rich area in northwestern Ontario has been spent. And it may not for a few years yet.

Last summer, Premier Kathleen Wynne made Ring of Fire development a central part of her election platform. However, the money is not officially booked until 2018-19, which is after the next provincial election.

“There is nothing preventing this provincial government to start building those roads to those communities and electrifying them . . . the government is in the driver’s seat here,” NDP MPP Michael Mantha (Algoma-Manitoulin) said.

Noront Resources ‘daunted’ but excited by Ring of Fire approval – by Jody Porter (CBC News Thunder Bay – June 23, 2015)

June 24, 2015

http://www.cbc.ca/news/canada/thunder-bay

Provincial government makes 17 amendments to Noront’s nickel mining proposal

Noront Resources will need to enhance its consultation with First Nations and study more potential transportation routes after the provincial government made 17 amendments to the company’s plan for an environmental assessment for its nickel project in the Ring of Fire.

The Minister of Environment and Climate Change approved Noront’s terms of reference last week for the environmental assessment of its planned underground mine north of Pickle Lake, Ont.

The amendments include a requirement for Noront to study four potential transportation routes for moving its ore. The company was looking at two. There are also many amendments prescribing the level of consultation and engagement with First Nations.

“It’s a bit daunting, but at the same time we’ve got our future in our own hands, we know what is expected of us and so that clarity is a great thing to have,” said Noront president Alan Coutts.

Dust from abandoned Cliffs’ mine casts pall over eastern Canadian town – by Mike De Souza (Reuters U.S. – June 19, 2015)

June 23, 2015

http://www.reuters.com/

OTTAWA – Heavy dust clouds blowing from Cliffs Natural Resources’ abandoned Wabush iron ore mine into a small township in the eastern Canadian province of Newfoundland and Labrador is putting a focus on the liability of miners that seek creditor protection and walk away from assets.

Iron ore and coal miner Cliffs Natural Resources Inc announced in February 2014 it was shutting down its Wabush mine. This year it sought creditor protection for its Canadian assets.

The fate of the deserted mine is in limbo until it is either acquired by a rival or Cliffs is able to restructure and exit creditor protection.

Local residents say the abandoned site has many open pits, with drilling equipment, trucks and other equipment stranded on the site.

“Now that the company has gone into closure, it is very hard to maintain a relationship with them. From a corporate level, we have not heard anything from them in almost a year, if not longer,” said Colin Vardy, mayor of the town of Wabush.

Spectre of illegal mining looms over India – by Ajoy K Das (MiningWeekly.com – June 22, 2015)

June 23, 2015

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

Kolkata (miningweekly.com) – Is illegal mining rearing its head in India again?

The concern has moved centre stage following the murder of a journalist in the central province of Madhya Pradesh for opposing the mining mafia and moving the courts against illegal mining.

Even though three people, all involved in illegal manganese mining and part of the mining mafia in the region, have been arrested on charges of murder, sections within the federal and provincial governments have expressed concern about whether the murder was an isolated incident or whether it signalled the re-emergence of the mining mafia despite changes in legislation and stringent punitive action.

Data collated from Indian Bureau of Mines showed that provincial governments had filed 727 cases during the past year following the inspection of 2 427 operational mines. The courts upheld charges in the cases of 25 mines.

Of the mines inspected, as many as 1 347 were operating in violation of the newly promulgated Mines Minerals Development and Regulation Act (MMDRA) 2015 and 357 mines had their mining licences cancelled over the past year.

The Potential Impact Of Easing Indonesian Nickel Export Restrictions On Vale – by Trefis Team (forbes Magazine – June 23, 2015)

June 23, 2015

http://www.forbes.com/

Vale is a diversified mining company and the world’s largest iron ore producer. Though iron ore sales account for a majority of the company’s revenues, Vale also has interests in the mining of base metals, particularly copper and nickel. Vale is among the world’s largest producers of nickel, and prices of the metal can have a significant impact upon the company’s stock price.

Nickel is mainly used in the production of stainless steel. With demand for stainless steel mainly correlated with industrial activity, prices of the metal have suffered due to weakness in Chinese economic growth.

However, there is a chance of a sharper fall in nickel prices, if the Indonesian government revokes a ban on unprocessed nickel exports instituted in 2014. The Indonesian government had banned unprocessed mineral exports in January, in order to boost domestic mineral processing capacity. Though the country relaxed restrictions on exports of copper, the ban on unprocessed nickel and aluminum exports still remains.

With the Indonesian government considering a relaxation of export restrictions on bauxite, which is the precursor for aluminum production, there is a chance that the Indonesian government may also consider relaxing restrictions on unprocessed nickel exports.

Australia’s Paladin Energy Ltd wins historic approval to operate Canadian uranium mine – by Peter Koven (National Post – June 23, 2015)

June 23, 2015

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

Paladin Energy Ltd. has achieved a first for an Australian company: It has won the right to operate a uranium mine in Canada.

The approval from Ottawa, announced Monday by the company, is a signal that Canada welcomes more foreign investment in its uranium industry. And that has positive implications for a struggling sector that could really use some outside capital.

“This is an historic decision that could have implications for all uranium companies and projects in Canada,” Raymond James analyst David Sadowski said in a note.

Paladin said the federal government approved its request to be the majority owner and operator of the Michelin uranium mine in Labrador. The company hopes to begin production when the sputtering uranium market rebounds.

This approval was unique because Canada has a Non-Resident Ownership Policy (NROP) governing its uranium sector.

COLUMN-Technology may lower commodity prices, widen nation gaps – by Clyde Russell (Reuters U.K. – June 23, 2015)

June 23, 2015

http://uk.reuters.com/

LAUNCESTON, Australia, June 23 (Reuters) – The image of miners as mainly burly blokes in hard hats and high-vis vests is likely to change in the next decade to one of computer geeks controlling automated machines while sitting thousands of kilometres away from the pit.

That’s certainly the scenario outlined in a major report called “Australia’s future workforce?”, released last week by the Committee for Economic Development of Australia (CEDA), a think-tank encompassing businesses, community groups and academic institutions.

More than five million jobs, or about 40 percent of Australia’s current workforce, have a “moderate to high” likelihood of disappearing in the next 10 to 15 years, CEDA said in the report.

What is relevant for commodities in this scenario is that mining and agriculture are among the sectors likely to be affected the most because of technological advancements.

The report notes that technological changes, while disruptive, often lead to higher incomes and increased employment opportunities as more wealth is created and productivity boosted.