Republic of Mining

Mining for more: How much is mining really worth to Ontario? – by Rita Celli (CBC News Business – May 11, 2015)

May 11, 2015May 11, 2015

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

For Rita Celli’s Ontario Today program on mining, click here: http://podcast.cbc.ca/mp3/podcasts/ontariotoday_20150511_48892.mp3

Are low royalty rates making the province a tax haven for mining or building a viable industry

Ontario has collected about 1.5 per cent in royalties on the billions of dollars worth of ore extracted in the province over the past decade, but critics say that’s not enough for the loss of non-renewable resources, a CBC News investigation supported by Michener-Deacon shows.

“One and a half per cent! That’s like 10 times less than a tip at a restaurant. Can’t we require that they tip us 15 per cent for using and extracting our resources?” says Ugo Lapointe of Mining Watch Canada.

In Ontario, companies pay a mining profits tax on precious and base metals. When the company makes money, it’s supposed to pay this so-called royalty.

Critics say precious and base metals are Crown assets and that the province should get the best deal possible as compensation for the loss of non-renewable natural resources. But the mining industry and government officials argue that mining is a uniquely expensive enterprise and that focusing on royalties distorts the big picture.

Vale to divide and conquer by lifting high-grade iron ore output – by James Wilson (Financial Times – May 10, 2015)

May 11, 2015

http://www.ft.com/intl/companies/mining

Vale is keen to build up its supply of higher-quality iron ore in a move that could increase pressure on some rival producers in the global market for the steelmaking commodity.

The Brazilian miner is one of a quartet of companies that dominate the global market in iron ore, where prices have plummeted over the past year as a glut of supply — mainly from Australian producers — has encountered weakening Chinese demand.

Vale’s recent indications that it would be prepared to hold back some supply have helped to arrest the slide in the iron ore price, while underpinning a rally in the company’s shares in the past month.

In an interview Luciano Siani, chief financial officer, did not rule out Vale cutting its growth plans for next year. The miner expects to produce 340m tonnes of iron ore this year and has previously estimated that 2016 output will be 376m tonnes.

However, Mr Siani said Vale would be likely to “push to the fullest” its production of the highest grade of iron ore, which commands a premium price from steelmakers. By contrast Vale would be more likely to “manage” its more “standard” iron ore supplies, he said.

Waterloo Region reaps dividends by being conduit to Baffin Island – by Greg Mercer (Waterloo Region Record – May 9, 2015)

May 11, 2015

http://www.therecord.com/waterlooregion/

BRESLAU — The sun is just starting to peek above the horizon as a handful of men in work boots suck on their last cigarettes outside the airport terminal, getting ready for the long commute.

In a few minutes, they’ll join dozens of others boarding the Boeing 737 for the five-and-a-half hour charter flight to Mary River, Baffin Island — where a small army of pipe fitters, machinists, cooks, engineers and other tradespeople are helping build and supply one of the world’s largest and most ambitious iron ore mining projects.

For hundreds of workers passing through the Region of Waterloo International Airport three times a week, Waterloo Region is a southern hub for the buried riches of the Far North. And that connection is pumping millions into the local economy.

The Mary River Project, run by an Oakville-based company called Baffinland, aims to move its first shipment of iron ore — the main raw material used to make steel — this summer.

The ore deposits in that part of Baffin Island, first discovered by a prospector in 1962, are so rich and pure they’re the stuff of legend. Pilots used to report the minerals would scramble their compasses as they flew over.

Old deals in risky countries continue to haunt junior resource sector – by Peter Koven (National Post – May 9, 2015)

May 11, 2015

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

Given recent headlines, it is hard to imagine that Khan Resources Inc. was ever in an enviable position. But in early 2010, it really was.

The tiny Toronto-based exploration company, which owned a uranium deposit in Mongolia, was the target of a bidding war between massive, state-owned entities from China and Russia that were chasing foreign uranium reserves. It was exactly the sort of scenario that shareholders dreamed of when Khan went public in 2006. The company appeared to have overcome nationalization concerns in Mongolia and set up a decent outcome for shareholders.

“I don’t know if they’ll be fighting over us. But it has the makings of one trying to outbid the other,” then-chief executive Martin Quick predicted. Of course, that isn’t what happened. Instead of engaging in a market-driven takeover battle, the Russians appeared to apply political pressure behind the scenes, forcing Khan off the uranium project without paying its investors a dime.

The case ended up in international arbitration, with Khan actually winning a US$100-million award. Mongolia, an extremely poor country, signaled it would challenge the decision.

Newmont Mining Corporation History (1921- 1993)

May 11, 2015

For a large selection of corporate histories click: International Directory of Company Histories

Newmont Mining Corporation, primarily through two subsidiaries, is engaged in the exploration, mining, and processing of gold. The bulk of Newmont’s revenue is generated by Newmont Gold Company (NGC), of which parent Newmont controls a 90.1 percent interest. Operating in Nevada along a 38-mile stretch of the Carlin Trend, NGC is North America’s leading producer of gold. NGC controls a 58-square-mile area of mineral rights in the Carlin region, while Newmont owns rights to a surrounding additional 420 square miles. In 1991, NGC accounted for about $573 million of Newmont’s $623 million total sales, mining 132 million tons of gold ore and selling 1.58 million ounces of gold.

Newmont’s other main subsidiary is the wholly owned Newmont Exploration Limited (NEL) whose role is to discover new gold deposits in NGC’s areas of interest and to determine the minable ore reserves in these deposits by drilling. In exchange for a 10 percent royalty, NGC has rights to any gold discovered by NEL in the 2,300-square-mile area around its Carlin property. Newmont’s cost to produce an ounce of gold in 1991–$203–was a more efficient rate than 75 percent of the Western world’s gold production.

Newmont was founded in 1921 as Newmont Corporation by Colonel William Boyce Thompson as a type of holding company for his varied financial interests. Thompson was born in 1869 in Alder Gulch, Montana, and grew up in Butte. An overweight, cigar-smoking man with a penchant for gambling (a telling hobby for someone in his line of work), Thompson eventually landed at the Columbia School of Mines, after which he made some money in the coal business.

Kinross Gold Corporation History (1993 – 2001)

May 11, 2015

For a large selection of corporate histories click: International Directory of Company Histories

In just five years Kinross Gold Corporation went from a newly formed company to North America’s fifth largest gold producer. With revenues of $318 million in 1999, the young company considers itself the fastest growing gold producer in the world and its 1998 merger with Amax Gold helped put it there.

Among its flagship operations are the aptly named Fort Knox in Alaska, Hoyle Pond in northern Ontario, and the Kubaka property in eastern Russia. Kinross also mines properties in Chile, Zimbabwe, and in the United States’ richest gold vein, Nevada. Though gold is its raison d’être, Kinross also mines significant quantities of silver.

Birth of Kinross: 1992-93

Gold derived its name from the Latin aurum and its luster, malleability, and anticorrosive qualities have made it a prized possession since the earliest civilizations. More than 170 years after the establishment of the gold standard in 1821, several Canadian companies began discussions to unite and create a new company. Two of these companies were publicly held and controlled gold mining interests; the third was the equally-owned offspring of one of the gold industry’s titans, Placer Dome, Inc., and Dundee Bancorp.

Peru Sends 2,000 Police as Copper Project Protests Spread – by John Quigley (Bloomberg News – April 8, 2015)

May 8, 2015

http://www.bloomberg.com/

Peru sent police reinforcements to the Islay province as protests against Southern Copper Corp.’s Tia Maria mine project spread to more towns.

About 2,000 officers are being transferred to the coastal province in southern Peru as street protests against the project entered a 47th day, Interior Minister Jose Perez told reporters.

Southern Copper’s plans to build the $1.4 billion mine in the mountains above Islay’s Tambo Valley, about 780 kilometers (485 miles) south of Lima, are opposed by local farmers concerned that water and air pollution will damage their crops. One person died and four police officers were injured in clashes this week as the unrest spread to the seaside town of Mollendo.

President Ollanta Humala weighed options for declaring a state of emergency in Islay at a meeting Thursday. “We don’t rule out any decision that needs to be taken,” Perez said. “We’re prepared for this decision. More police are arriving at this moment.”

Police used a loader to clear boulders and rocks strewn across the highway between the port town of Matarani and Mollendo, where demonstrators set fire to buses Thursday, according to Canal N. Images broadcast by the Lima-based television station showed protesters blockading a highway Friday as tires burned along the side of the road.

The Betrayal of Brazil – by Michael Smith, Sabrina Valle and Blake Schmidt(Bloomberg News – May 8, 2015)

May 8, 2015

http://www.bloomberg.com/

As a massive corruption scandal unfolds, Brazilians are facing some stark truths: The powerful and connected are still dividing the country’s riches among themselves. The past decade’s economic miracle was in large part a mirage. And the future is again on hold.

In mid-2013, Brazilian federal police investigator Erika Mialik Marena noticed something strange.

Alberto Youssef, suspected of running an illicit black-market bank for the rich, had paid 250,000 reais (about $125,000 at the time) for a Land Rover. The black Evoque SUV ended up as a gift for Paulo Roberto Costa, formerly a division manager at Brazil’s national oil company, Petrobras. “We were investigating a money-laundering case, and Petrobras wasn’t our target at all,” says Marena. “Paulo was just another client of his. So we started to ask, ‘Why is he getting an expensive car from a money launderer? Who is that guy?’”

Marena had spent the previous decade building cases against money launderers, and Youssef had been a perennial target. He’d been arrested at least nine times for using private jets, armored cars, clandestine pickups by bagmen, and a web of front companies to move illicit cash. But Youssef had been spared serious jail time by testifying repeatedly against other doleiros, Brazilian slang for specialists in laundering unreported cash.

Opinion: Mining industry continues as integral part of B.C. fabric – by Karina Brino (Vancouver Sun – May 7, 2015)

May 8, 2015

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

Karina Briño is president and CEO of the Mining Association of British Columbia.

Mining Week is a time when British Columbians have the opportunity to celebrate an industry that has greatly contributed to the prosperity of this province since before it joined Confederation in 1871.

Mining operations provide payments to government that help fund health care, social programs and education, and create thousands of jobs across the province. British Columbia is a global centre for mining and is home to some of the most innovative, sustainable mining companies in the world. Thanks to its diverse geology, the province is rich in high quality mineral resources, in every corner of the province.

Despite all these advantages, 2014 was a challenging year for the B.C. mining industry. Largely due to falling commodity prices, several operating mines were placed in care and maintenance, resulting in workforce reductions, primarily in the North Eastern corner of the province. These external pressures are continuing in 2015.

Notwithstanding these challenges, there are a significant number of projects in the approval process which provide an opportunity for growth of the mining industry, further strengthening the provincial economy.

UPDATE 2-South Africa mining union NUM vows to fight job cuts at Lonmin – by Zandi Shabalala and Silvia Antonioli (Reuters India – May 8, 2015)

May 8, 2015

http://in.reuters.com/

JOHANNESBURG/LONDON, May 8 (Reuters) – South Africa’s National Union of Mineworkers (NUM) said on Friday it would fight platinum producer Lonmin’s plan to cut 3,500 jobs, raising the prospect of a resurgence of the labour unrest that has plagued the sector.

Lonmin, the world’s third-largest producer of the precious metal, said on Thursday it needed to make the layoffs in response to depressed prices and it was holding talks with employees and unions at its South African mines.

But the NUM, which represents roughly 10 percent of Lonmin’s workers, said it was shocked by the announcement and had not yet been officially consulted.

“We are going to fight against any job losses … The platinum sector had cut 35,000 jobs since 2012 and it is time to join forces to end this bloodbath,” it added.

AMCU, by far the largest mining union with about 85 percent of Lonmin’s workers among its members, was unavailable for comment.

Sudbury family ‘overwhelmed’ by recommendations – by Carol Mulligan (Sudbury Star – May 8, 2015)

May 8, 2015

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

A coroner’s jury went beyond the eight recommendations jointly submitted at an inquest into the deaths of two men at Vale’s Stobie Mine and added 16 of its own to improve mine safety in Sudbury, in Ontario and throughout Canada.

The three-woman, one-man jury accepted eight recommendations suggested and agreed upon by Vale, United Steelworkers Local 6500, the Ministry of Labour and the families of Jason Chenier and Jordan Fram.

The first recommendation was that the Ministry of Labour implement the recommendations of the Mining Health, Safety and Prevention Review regarding water management in mines and the internal responsibility system.

The review was struck in December 2013 in response to pressure by families and mine workers for an inquiry into mine safety after the Sudbury men’s deaths. Chenier, 35, and Fram, 26, were killed when a run of muck overcame them while they were working at the 3,000-foot level near the No. 7 ore pass.

Sudbury should be proud of jury’s work: coroner – by Carol Mulligan (Sudbury Star – May 8, 2015)

May 8, 2015

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

The community owes a debt of gratitude to the work of the jury that made 24 recommendations to make mining safer in Ontario at the inquest into the deaths of two Vale workers. Presiding coroner Dr. David Eden said the issues surrounding the deaths of Jason Chenier and Jordan Fram were complex and of great concern to the community.

The “very well-considered and essential questions” and “thoughtfulness and thoroughness” of the recommendations displayed the highest level of dedication and commitment on the part of the three women and one man who sat on the jury, said Eden.

A fifth juror had to drop out a week into the two-week inquest because of medical reasons. Eden read the recommendations Thursday at the Sudbury Courthouse. “The community that you represent here should be proud of your work,” Eden told the jury.

The jury answered five basic questions that are at the heart of every coroner’s inquest. They determined that Chenier, 35, and Fram, 26, were involved in an accident and were presumed to have died June 8, 2011, about 10 p.m. The men were pronounced dead by the attending coroner early the morning of June 9.

Franco-Nevada chairman rips ‘ridiculous’ pay packages at underperforming gold companies – Business Network News’ Andrew Bell interviews Pierre Lassonde (March 7, 2015)

May 8, 2015

http://www.bnn.ca/

Mining magnate Pierre Lassonde told us on Thursday’s Commodities show that big pay packages for gold mining executives whose stocks have tanked are “obscene.”

“That is ridiculous,” the Franco-Nevada (FNV.TO 0.84%) chair said. Compensation committees, he added, “should have been far more forceful and said ‘guys, our shareholders are suffering. You’ve got to take the pain as well.’”

John Thornton, the famously well-rewarded chairman of Barrick Gold, told shareholders last week that “we have heard you loud and clear” after they voted against the company’s pay policy. But he didn’t actually promise to refund any of his 2014 compensation, valued at US$12.9-million.

Essar ramps up construction [Iron Range] – by Beth Bily (Business North.com – May 8, 2015)

May 8, 2015

http://www.businessnorth.com/news.asp

The business news source for Northeastern Minnesota and Northwestern Wisconsin.

While recent news about price, demand and employment hasn’t been favorable for Iron Range mining operations, the largest mining construction project here during this century is nonetheless moving ahead, executives say.

Essar Steel Minnesota, a $1.9 billion project located north of Nashwauk on the former Butler mining site, is ramping up for a summer of large-scale activity with the goal of completing construction on the taconite mine by the end of this year. It’s permitted to produce 7 million tons of taconite pellets annually and is expected to operate for approximately 80 years.

Reestablishing mining operations here has been decades in the making. Butler ceased production at the site in the mid-1980s. Later, various would-be developers announced plans to reopen the site to mining. But for years, the plans never made it off the drawing board. That changed in 2007, when India-based Essar purchased what was formerly known as Minnesota Steel Industries.

At a ground breaking for Essar Steel Minnesota in 2008, executives then promised a mining operation that would be up and running within 27 months.

Glencore blames rivals for creating metals glut – by Silvia Antonioli (Reuters U.K. – May 7, 2015)

May 8, 2015

http://uk.reuters.com/

LONDON – The head of global mining and trading company Glencore (GLEN.L) said rivals were to blame for an oversupply of metals which depressed its share price.

Despite a partial recovery in the last few months, Glencore’s shares are down about 6 percent from a year ago, under pressure from a rout in prices for most of the commodities it produces and trades.

“Unfortunately our competitors in the world have produced more supply than demand and commodity prices are down for that reason,” Glasenberg said at the company’s annual meeting.

“I am doing my level best to convince my competitors we should understand the words demand and supply,” he added in response to a question from an investor about the share price.

Glasenberg has criticised rivals such as Rio Tinto (RIO.L) and BHP Billiton (BLT.L) (BHP.AX) at various times, blaming them for oversupplying the market, particularly in iron ore, a commodity Glencore has little exposure to.