Twitter

Three pension funds oppose Barrick Gold’s executive compensation – by Lisa Wright (Toronto Star – April 18, 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.

Pension plans in Ontario, B.C. and the Netherlands say they will vote against the re-election of the miner’s board of directors at annual meeting April 28

Three of the world’s largest pension funds say they won’t support the re-election of Barrick Gold Corp.’s board of directors or its executive compensation plan that includes a pay hike of 35 per cent for the board chairman.

The Ontario Teachers’ Pension Plan, British Columbia Investment Management Corporation and the Netherlands’ PGGM Vermogensbeheer B.V., which is one of Europe’s biggest pension funds, said Friday they will oppose the Toronto gold miner’s controversial pay scheme that awards $12.9 million U.S. ahead of the board’s annual meeting April 28.

The pension funds join two major proxy advisors who recently recommended shareholders vote against a boost in executive compensation after a year in which Barrick reported a net loss of $2.9 billion and lost a third of its market value as the gold price tanked.

Read more

Noront COO dies suddenly – by Carol Mulligan (Sudbury Star – April 20, 2015)

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

The man who was the face of Noront Resources Ltd. in Northern Ontario died suddenly last week.

Paul Semple, Noront’s chief operating officer, was known and respected in the towns of Northern Ontario, First Nation communities and in the halls of government, the company said in a news release.

Semple helped shape the culture and philosophy of Noront, and his guidance and leadership will be sorely missed,” Noront said in a news release.

“As a company, we will honour his legacy by continuing to forge strong relationships and dealing honestly and inclusively with all our stakeholders,” the company said.

Noront is focused on developing the high-grade Eagle’s Nest nickel, copper, platinum and palladium deposit, and the high-grade Blackbird chromite deposit, both located in the James Bay Lowlands of Ontario in the Ring of Fire.

Read more

The Worth of Rubies – by Thomas Biesheuvel (Bloomberg News – April 16, 2015)

http://www.bloomberg.com/

Ian Harebottle, who’s made his career from mining colored gemstones, has an emerald the size of a pineapple locked away in a safe. He’s not sold the unique bright-green rock because it’s so rare nobody really knows what it’s worth.

Welcome to the topsy-turvy world of colored gems, where abundance can mean higher prices and scarcity makes spectacular stones untradable. It’s a very different business from diamonds, the world’s most popular precious stone, traded in a liquid global market that makes pricing relatively transparent.

For colored stones, prices often increase with supply as jewelers acquire enough stock to justify marketing the gems to customers. Take regular emeralds: their value has appreciated 1,000 percent in five years as Harebottle’s Gemfields Plc and peers expanded mines, while marketing campaigns fronted by Hollywood star Mila Kunis gave demand a boost.

Now Harebottle wants to bring the same game to rubies. Gemfields’ Montepuez in Mozambique, estimated to contain as much as 40 percent of the world’s known supply of the deep-red stones, could triple output from the 8 million carats targeted for this year, according to the executive.

Read more

World’s Lowest Cost Iron Ore Miner Turns Screw on Rivals – by Jesse Riseborough (Bloomberg News – April 17, 2015)

http://www.bloomberg.com/

Rio Tinto Group Chief Executive Officer Sam Walsh is fast becoming the worst nightmare of rival iron-ore producers starved of cash.

Iron ore prices have slumped by more than half in a year on a deepening global supply glut. That’s pushed some into bankruptcy and left others on life support. News that the lowest-cost producer is mining a ton of ore even more cheaply signals a more protracted price slump.

After achieving an industry-leading $19.50 a ton last year, currency movements and a drop in fuel costs mean Rio Tinto is now producing at $17, Walsh told investors in London on Thursday. The company is still seeking ways to ship it to Asian buyers more cheaply, he said.

“I know there’s a lot of controversy,” Walsh said. “I know that there’s a lot of late entries into the market who have taken advantage of higher prices and they are now feeling the impact of that as prices have come down. ‘‘This is rational, normal economics,’’ he said. ‘‘This is what physically happens across a range of commodities not just iron ore. It’s a process that we and others have got to work through.’’

The strategy, employed by the world’s largest producers, of continuing to expand output in the face of a price rout has earned the ire of some analysts, investors and loss-making rivals. Rio’s main competitor BHP Billiton Ltd. has described the tactic as ‘‘squeezing the lemon.”

Read more

Floating nuclear power plants promise major savings for Arctic mines – by Peter Varga (Nunatsiaq News – April 17, 2015)

http://www.nunatsiaqonline.ca/

Diesel-fuelled power “not sustainable for the scale of development we want to see”

Mining projects in Nunavut are saddled with high expenses that could discourage development. With that in mind, why not go for a tried and proven cheaper source of energy that can come and go on the high seas, and reach the territory’s coastal communities?

That’s just what Dunedin Energy Systems Ltd., an Ontario-based energy consulting firm, suggested when it pointed to “floating nuclear power plants” as an alternative energy source, April 16 at the Nunavut Mining Symposium in Iqaluit.

Nuclear power generators have been cruising the high seas in the ships of the world’s biggest navies since the 1950s, Peter Lang, president of Dunedin, told an audience at the symposium.

“Since then, civilian applications have come along,” Lang said during his presentation, adding that icebreakers and carriers powered by nuclear energy also sail the high seas.

A generator on a ship can produce more than enough for the largest mines now operating in northern Canada, at a fraction of the cost that diesel-fuelled power generators require, he said.

Read more

SA gold miners wrestle with housing targets – by David McKay (MiningMx.com – April 17, 2015)

http://www.miningmx.com/

[miningmx.com] – THE release of a preliminary report into how South African mining firms measured up against the targets outlined in the 2004 mining charter, which was updated in 2010, was predictably focused on ownership.

This is the issue regarding the mining charter’s demand that a minimum 26% of South Africa’s mining companies be owned by historically disadvantaged South Africans (HDSAs). The mining sector believes that target has been met whilst the Department of Mineral Resources (DMR) insists it has not.

The difference of opinion turns on the DMR’s refusal to acknowledge transactions that are now no longer in existence of which the best example is Mvelaphanda Resources, a Johannesburg-listed mining company that was closed in about 2010.

Ngoako Ramalathlodi, mines minister, has agreed to take the matter to the High Court jointly with the Chamber of Mines. As a lawyer, he knows that fighting the matter separately could take a considerable amount of time and lead to more uncertainty for the sector.

A lesser known aspect of the mining charter, however, is the DMR’s unhappiness with the sector’s efforts to improve housing and living conditions, as well as sustainable development. As with the ownership targets, the DMR believes the sector has failed the charter.

Read more

Nickel miner TVI may delay Philippine IPO due to weak metal prices – by Erik dela Cruz (Reuters U.S. – April 17, 2015)

http://www.reuters.com/

Manila – (Reuters) – TVI Resources Development Phils. Inc (TVIRD), a Philippine nickel miner partly owned by Canada’s TVI Pacific Inc, may push back a planned initial public offering to next year if metal prices remain depressed, its chairman said on Friday.

After a sterling performance in 2014, shares in Philippine nickel miners have fallen this year because of a slump in metal prices and an economic slowdown in China. Shares in top producer and exporter Nickel Asia Corp have lost nearly 39 percent.

“The target is to list in the fourth quarter. But right now I would not be recommending to the board that we do it,” TVIRD Chairman Clifford James told reporters after speaking at an industry forum. “When market conditions are good, that’s when we’ll list.”

In October, TVIRD began nickel ore exports from its newly developed Agata mine in Surigao province in southern Philippines, a major nickel-producing region supplying ore to processing plants in Australia, China, South Korea and Japan.

Last year the Southeast Asian country became the biggest ore supplier to China’s producers of nickel pig iron, which is used in stainless steel production, after Indonesia banned exports of unprocessed metallic minerals.

Read more

Marten Falls First Nation and Webequie First Nation Sign Ring of Fire Protocol Agreement – by James Murray (Netnewsledger.com – April 17, 2015)

http://www.netnewsledger.com/

THUNDER BAY – The First Nations whose lands and resources will be most affected by the proposed Ring of Fire development met today to sign a protocol agreement. “This will not only be good for us, but will also be good for the exploration companies to know the protocols for exploration on our mutual traditional lands”, stated Chief Cornelius Wabasse of Webequie First Nation.

Marten Falls First Nation and Webequie First Nation today entered into a “Negotiation Protocol Respecting Early Exploration in the Ring of Fire”. The protocol strengthens the commitment of both First Nations to work together to advance their common interests in a coordinated manner while respecting their mutual and unique interests over their respective lands and approvals to use the lands.

The need for such a protocol is evidenced by over 100 mineral exploration companies that have staked claims and proposed other related developments in the Ring of Fire. Both Marten Falls and Webequie agreed that they had to be come together to set out their mutual expectations respecting early exploration activities in the Ring of Fire.

Within the Ring of Fire only Webequie and Marten Falls share a unique relationship with Ontario. The Government of Ontario entered into a Memorandum of Cooperation with Webequie and a Memorandum of Understanding with Marten Falls related to mineral exploration and development activities.

Read more

NEWS RELEASE: VALE STATEMENT REGARDING CORONER’S INQUEST INTO FATALITIES AT STOBIE MINE

SUDBURY, April 17, 2015 — On Monday, April 20, a coroner’s inquest begins at the Sudbury Courthouse into the June 2011 deaths of Jason Chenier and Jordan Fram at Vale’s Stobie Mine. The purpose of the inquest is to review the circumstances around the deaths in hopes that similar deaths can be prevented in the future.

The deaths of Jason and Jordan continue to sadden our operations and our community. Revisiting events of June 2011 will be difficult for everyone involved. There will be a lot of testimony during the course of the inquest and it will be emotional for many, but will be hardest on the Fram and Chenier families. While we cannot turn back the clock, we hope the families find some comfort in the significant work done since that night to ensure this kind of tragedy never occurs again.

Following our own internal investigation into this incident, a plan of action, including more than 40 recommendations, was put in place to address the contributing factors and improve control measures to protect the health and safety of our employees.

We believe this work, coupled with the recent recommendations from the provincial Mining Health, Safety & Prevention Review, will help ensure that Vale and mining companies across Ontario become safer places to work.

Read more

Activist leads America’s biggest iron miner out of Ring of Fire, but not danger – by Stephen Gandel (Fortune Magazine – April 16, 2015)

https://fortune.com/

Hedge fund Casablanca Capital took over mining company Cliffs Natural eight months ago. So far, it’s not going so well.

These days, activist investors paint themselves as Wall Street’s turnaround specialists. Activists’ track record at getting companies to boost their share buyback programs, hand over board seats, or put themselves up for sale has been impressive. But when it comes to actually turning around a troubled company, or steering a company away from trouble, the jury on activism is still out.

Last July, activist hedge fund Casablanca Capital won control of the board of mining company Cliffs Natural Resources CLF -3.63% after a six-month proxy fight. Days later, the hedge fund installed a new CEO and said that it had a new strategy to increase shareholder value. Eight-and-a-half months later, Cliffs’ stock has plunged 69%. So much for increasing shareholder value.

To be sure, Casablanca’s biggest problem has been commodities prices, which are out of the hedge fund’s control. Cliffs is the largest U.S. miner of iron. And iron prices in 2014 fell nearly 50% in 2014. That drop has taken Cliffs’ cashflow with it.

But Cliffs was also over leveraged. And it may have tried to do too much too soon. The hedge fund may have also underestimated how hard it would be to compete against its larger and more diversified competitors, such as Rio Tinta Group and BHP Billiton.

Read more

Why coal looms large in India’s future – by Peter Foster (National Post – April 17, 2015)

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

Narendra Modi is the first Indian Prime Minister to visit Canada since Indira Ghandi. For much of the intervening period, relations were sticky because of that unfortunate business of India using Canadian technology to manufacture nuclear weapons. At the same time, India’s growth was held back by poor economic policies and widespread corruption, much of it soaked in socialist cant.

Those lousy policies also go back to Mrs. Ghandi. Mr. Modi is rightly seen as a breath of fresh air, even if he inevitably has to play the hypocritical game of global realpolitik.

The alleged landmark deal of Mr. Modi’s visit is India’s $350 million purchase of Saskatchewan uranium. This both symbolically buries the bomb issue, and enables Mr. Modi to trumpet his country’s commitment to “sustainable development,” even as SD is increasingly exposed for the unworkable non-concept that it is.

The notion first emerged at the 1972 UN conference on the environment in Stockholm. Conceived by British intellectual Barbara Ward, who thought the Industrial Revolution had been a mistake, SD’s conceit was that poor nations had to grow while avoiding free markets and fossil fuels.

Read more

RPT-COLUMN-China aluminium surplus to eat away global deficit – by Clyde Russell (Reuters U.S. – April 16, 2015)

http://www.reuters.com/

LAUNCESTON, Australia, April 16 (Reuters) – China’s exports of aluminium products have continued to surge, a trend that if continued may push the rest of the world toward a surplus.

China’s exports of primary, alloy and semi-finished aluminium grew by around 43 percent in the first quarter over the same period last year, according to preliminary customs data released on Monday.

While the initial data release doesn’t provide the detailed breakdown, figures for January and February show that the overwhelming share is semi-finished products, such as bars, rods, wire, plates, sheet and foil.

In the first two months of the year, exports in this category, commonly known as semis, surged 91 percent to 770,000 tonnes, a trend that will almost certainly be continued when the detailed March figures are released later this month. Exports of semis have surged because they get a 13 percent value-added tax rebate, that largely offsets the 15 percent export tax on aluminium.

The tax rebate doesn’t apply to exports of primary aluminium, but it’s a common view in the market that much of China’s exports of semis is melted down and re-fabricated by importers.

Read more

Between boom and bust – by Phil Hopwood (Lawyers Weekly – April 17 2015)

http://www.lawyersweekly.ca/

Cutting red tape just one of the ways to help junior miners raise money in hard times

I always say you can tell you’re at the peak of the market when your cab driver starts offering you stock tips. Likewise, I now say you can probably tell you’re at the bottom of the market when mining companies start transforming themselves into medical marijuana producers.

That may sound strange, but it’s true: Canadian mining companies have grown weary of lacklustre returns and are looking to other sectors that hold out greater promise. It just goes to show how very challenging the mining market has become, especially for the juniors.

Heavily responsible for exploration and discovery of new deposits, junior miners are the foundation of the industry’s food chain, often selling their new discoveries to larger developers before starting the cycle all over again. But after years of being battered in a bear market, juniors are struggling to keep the lights on, cutting back on exploratory costs in the past year by 29 per cent — on top of a 39 per cent cut the year before.

Given the time it takes from exploration to development to production, we are headed for serious supply shortages in key minerals and metals in the next decade if this trend continues. To compound the problem, investors have already been taking note of the poor returns from mining stocks and are leery of the sector. Gone are the days of Chinese investors financing large capital projects, while banks rarely offer favourable terms anymore.

Read more

Copper Miners Eyeing M&A as Red Metal’s Scarcity Sparks Interest – by Javier Blas, Agnieszka de Sousa and Juan Pablo Spinetto (Bloomberg News – April 16, 2015)

http://www.bloomberg.com/

In the world of mining, copper is by far the most sought-after industrial metal.

China is short of it, the mines that form the backbone of current supply are aging, and the few new deposits are positioned in far flung locations such as Mongolia. “Everybody likes copper because there is not much of it,” said Menno Sanderse, a mining analyst at Morgan Stanley.

And yet, mining companies that have long coveted copper assets have been thwarted by an industry tightly controlled by a handful of players. Until now. The news that producers Antofagasta Plc and Teck Resources Ltd. have looked at a potential deal suggests companies may be trying to find ways to break the impasse. Both have said they aren’t currently in merger talks.

“The opportunities for consolidation are real,” Paul Espie, managing director of mining-focused private equity group Pacific Road Capital, which has $800 million in assets, said in an interview Tuesday in Santiago. “It’s an interesting time because valuations are low. We are looking at the consolidation situation in Chile right now.”

The scarcity of new copper deposits, falling grades at mines in Chile, the U.S., Australia and Indonesia, and runaway costs to develop projects combine to make it more attractive to buy a rival than build a new mine.

Read more