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Australia’s Hockey vs Glencore’s Glasenberg – by Kip Keen (Mineweb.com – April 9, 2015)

http://www.mineweb.com/

Treasurer’s tough comments on Glencore-Rio Tinto merger could be read as a stern warning by Australia’s government.

Taken at face value Australia’s treasurer Joe Hockey has declared Rio Tinto untouchable. As widely reported now by media, Hockey is quoted as saying by numerous sources at a recent meeting including mining executives that there was “no way” he’d let Glencore merge with Rio Tinto “on his watch”. Assuming the reports are accurate, the question becomes, is Hockey serious?

If he is, then Australia truly has a curious way of dealing with possible foreign takeovers. Yes, it’s ultimately up to the treasurer (a political position equivalent to finance minister in other parliaments) to decide on big deals like this where the “national interest”, e.g. major tax revenue, is at stake.

But then the decision is usually taken as part of, or at least after, some due diligence. Australia’s Foreign Investment Review Board (FIRB) usually makes unbinding recommendations on such deals to the treasurer. Then the treasurer decides, however he/she and his/her government want.

Now, if Hockey truly means “no way” on another (hypothetical) attempt by Glencore to merge with Rio Tinto, he would effectively be turning the whole process on its head.

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Mexican gold mines beset by robberies, kidnappings – by Rachelle Younglai (Globe and Mail – April 9, 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.

For the third time this year, gold miners in Mexico have come under attack, highlighting the perils of mining in the country.

McEwen Mining Inc. became the latest victim, when armed robbers looted about $8.4-million (U.S.) worth of gold this week from the Canadian miner’s refinery in the Mexican state of Sinaloa.

The Toronto-based company said none of its employees were seriously injured, nor were its facilities damaged, when the approximately 900 kilograms of gold ore was stolen. The ore is expected to contain 7,000 ounces of gold, but it is unclear how the thieves will process the rocks.

The robbery comes about a month after four of Goldcorp Inc.’s Mexican employees went missing after leaving the company’s Los Filos mine. Three of the four have since been found dead, the Canadian company said. A Reuters report said the bodies were found in a mass grave and showed signs of torture. The fourth employee was released with minor injuries.

The kidnappings took place in Guerrero, a southern Mexican state where 43 students were seized en route to a protest last year and are presumed murdered.

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Mining the depths of frustration in Halkidiki [Greece] – by Yannis Palaiologos (Ekathimerini.com – April 9, 2015)

http://www.ekathimerini.com/

Eldorado Gold CEO Paul Wright talks to Kathimerini about the Canadian firm’s major investment in Greece and the difficulties it is facing

“I have never encountered anything like it.” Paul Wright, chief executive officer of Hellas Gold’s parent company Eldorado Gold, has difficulty understanding the quagmire in which the firm’s large investment in Halkidiki has found itself.

In an interview with Kathimerini, Wright says that the project in northern Greece bolsters employment, exports and tax revenues for the Greek state during what is a very difficult period. He also points out that the project has survived a number of court challenges. “And yet the government wants to stop it.”

We met at the company’s Athens headquarters. Wright was visiting the country for a third time since the January election in a bid to reach some sort of understanding with the new government. Despite efforts made by the company, as well as Canada’s government, his contacts with Greek government officials have proved difficult.

“It is uncertain what the government’s intentions are. We are receiving mixed signals. There has been interference, negative statements about the investment,” he said. Have there also been some positive signals?

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Shell-BG Group merger a game changer for B.C.’s LNG industry – by Brent Jang (Globe and Mail – April 9, 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.

VANCOUVER — A global powerhouse in liquefied natural gas has emerged in a blockbuster merger that is expected to reshape British Columbia’s LNG industry.

Royal Dutch Shell PLC’s £47.7-billion ($88-billion) deal to buy BG Group PLC creates a liquefied natural gas giant, and will allow the combined company to choose which energy projects to keep or jettison within B.C.’s fledgling LNG sector. The merger will bolster the Shell-led LNG Canada project in Kitimat while hampering BG’s chances near Prince Rupert, as pressure mounts for players to either drop out or consolidate to cut costs.

There are 19 LNG proposals in B.C., though only three or four projects at most have a realistic chance to survive amid fierce global competition and a looming glut of LNG supplies. “We’re going to see some consolidation amongst the LNG projects. There really isn’t room for all of them,” BMO Nesbitt Burns Inc. energy analyst Randy Ollenberger said in an interview.

Premier Christy Clark describes the LNG industry as a once-in-a-generation opportunity to improve the province’s finances and create tens of thousands of jobs.

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Piping ever more petroleum: The world needs Canada’s oil and gas – by Russ Girling (National Post – April 9, 2015)

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

Canada and the rest of the world will transition to a less carbon-intensive energy future – it’s already happening – social and economic pressures will dictate that.

However, here in Canada and the United States, despite the rhetoric you may hear, we will continue to consume significant quantities of oil to fuel the 280 million vehicles that North Americans need to start every morning.

And as we transition off coal-fired electricity, it will be replaced largely by natural gas, and as a result, demand for natural gas will grow even higher.

And at the same time, global demand for oil and gas will continue to grow, driven by a massive population in developing economies striving to obtain a lifestyle for their families similar to what we enjoy here in Canada. For example, there are 1.3 billion people in China that want to have the same quality of life that you and I have.

The International Energy Agency – a group of 28 countries cooperating to provide the world’s most credible outlook for energy demand for the next 25 years — believes that the demand for energy is going to continue to grow at a rate of 1.1 per cent through 2040.

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Surprises aside, economic power shifts south, east [toward BRICs] – by Gwynne Dyer (Sudbury Star – April 8, 2015)

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

“The only function of economic forecasting is to make astrology look respectable,” said John Kenneth Galbraith, the wisest American economist of his generation.

But you still can’t resist wondering when the Chinese economy will be bigger than the American economy — or the Brazilian economy bigger than the British, or the Turkish bigger than the Italian — as if it were some kind of horse race.

The latest document to tackle these questions is The World in 2050, drawn up by HSBC bank, which ranks the world’s hundred biggest economies as they are now, and as (it thinks) they will be in 2050.

It contains the usual little surprises, like a prediction that per-capita incomes in the Philippines and Indonesia, now roughly the same, will diverge so fast that the average Filipino will have twice the income of the average Indonesian by 2050.

But what’s happening at the top of the list is of interest to everybody. That’s where the great powers all live, with the so-called BRICs — Brazil, Russia, India, China — nipping at their heels. Or rather, some of the BRICs are nipping at their heels, and some are not.

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Doubling Down with Bloomberg Philanthropies to Replace Coal with Clean Energy – by Mary Anne Hitt (Huffington Post – April 8, 2015)

http://www.huffingtonpost.com/green/

Today, I had the honor of standing with Michael Bloomberg and dozens of Sierra Club volunteers, staff, and supporters in Washington, DC, to announce a new round of investment by Bloomberg Philanthropies in the work of the Beyond Coal Campaign. With this new support of $30 million over three years, we plan to double down on our past success and secure replacement of half the nation’s coal plants with clean energy by 2017.

It’s been four years since I first stood with Michael Bloomberg, Sierra Club executive director Michael Brune, and our staff and volunteers in front of the polluting GenOn coal plant in Alexandria, Virginia, to announce the launch of our game-changing partnership with Bloomberg Philanthropies. The goal of that first round of funding: replace one-third of the nation’s coal plants with clean energy by the end of 2015.

That initial investment by Bloomberg Philanthropies has delivered some incredible results, and we’re on our way to meeting that goal. The Alexandria coal plant is one of 187 coal plants that have either retired or announced they will retire since 2010, thanks to the work of Sierra Club and over 100 partner organizations, helping to secure clean air and clean water for millions of Americans by supporting the amazing work of activists nationwide. Even better, we’re on track to replace that coal with clean, renewable energy like wind, solar, and energy efficiency.

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Bloomberg Philanthropies brings ‘Beyond Coal’ investment total to $80 million – by Sarah Tincher (The State Journal – April 8, 2015)

http://www.statejournal.com/ [West Virginia Business Newspaper]

Bloomberg Philanthropies announced it will invest an additional $30 million in the Sierra Club, following a previous $50 million commitment, to secure the replacement of half the nation’s coal fleet by 2017 with clean energy. Sierra Club said it expects the investment in the Beyond Coal campaign to put the United States in a stronger position to drive more ambitious climate action at the 2015 United Nations climate change conference in Paris.

“The single biggest reduction in carbon pollution in the U.S. has come by retiring and repurposing coal-fired power plants — and that’s the direct result of our Beyond Coal campaign,” said Michael R. Bloomberg. “Thanks to the community leaders who have spearheaded this work, the U.S. led every industrialized nation in reducing carbon emissions last year.”

National Mining Association President and CEO Hal Quinn, however, released a statement calling the donation and coalition a “campaign to shut down affordable sources of electricity generation.”

“Policies favored by the Sierra Club have already destroyed large portions of the nation’s most reliable sources of electricity generation, leaving consumers more dependent on fewer and costlier sources of electricity and a less reliable supply, leaving tens of thousands of Americans without jobs and low-income families plus those on fixed incomes with still higher bills to pay,” Quinn stated. “There is no reason to celebrate raising costs for society’s most vulnerable.

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PC blunder over Highway 407 looms over Liberals on Hydro – by Martin Regg Cohn (Toronto Star – March 30, 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.

Unless we learn the lessons of the 407 fiasco, we are condemned to be fleeced again — this time on Hydro One.

If you build it, they will come. And pay the toll. When Highway 407 opened in 1997, drivers not only came, they kept coming back — transforming the toll road into a short-lived success story.

Two years later, the storyline changed: The PC government of the day took an abrupt detour by brokering a 99-year lease of the highway for a fraction of its true value. If you lease it — and undervalue it — they will profit. At our expense.

The 407 deal is now considered a financial blunder on a par with Newfoundland’s lease of Churchill Falls to Quebec, and China’s surrender of Hong Kong to Britain, for equally ill-fated 99-year leases.

As today’s Liberal government ponders selling off part of Hydro One’s transmission lines, after more than a century of public ownership, the 407 debacle looms over the debate. Unless we learn the lessons of that fiasco, we are condemned to be fleeced once again.

If the toll highway hadn’t been handed off for a pittance in 1999, it could have been paid off by now. Imagine driving free on the 407, instead of being hit up for steadily increasing tolls that have flowed to the consortium’s overseas owners for years.

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Australia treasurer would block a Glencore-Rio Tinto merger – by Sonali Paul (Reuters U.S. – April 8, 2015)

http://www.reuters.com/

(Reuters) – Australia’s treasurer has told business representatives he would not allow Glencore Plc to merge with Rio Tinto due to concerns about losing tax revenue, a person familiar with his comments said on Wednesday.

Treasurer Joe Hockey said based on the tax implications he had seen from the treasury, he would not allow a Glencore takeover of Rio, Australia’s second biggest miner and one of its biggest taxpayers, the person said. He declined to be identified due to the sensitivity of the issue.

Treasurer Joe Hockey’s office declined to confirm the comments. Four people said Hockey had spoken at a private meeting on March 30 organized by the Business Council of Australia and including members of the Minerals Council of Australia, but three would not give details.

Glencore approached Rio Tinto about a merger last July that would have created a $160 billion mining and commodities trading giant. Rio revealed in October it had rebuffed the approach, but under UK takeover rules, Glencore is now free to make a new bid, following a six-month breather.

“Any takeover would have to go through the normal processes at FIRB (Foreign Investment Review Board),” a spokesman for Hockey said.

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Taking a closer look at mining’s economic impact in Elko, Nevada (Barrick Beyond Borders – April 08, 2015)

http://barrickbeyondborders.com/

There are 670 mining vendors in Elko County alone, according to the Nevada Mining Association. At 53,000, the county’s population has climbed 7.5 percent since 2010 and 15 percent since 2002. Between 2003 and 2013, the gold-mining industry added 3,600 jobs across Elko, Lander, White Pine and Eureka Counties. Another 1,360 mine industry support jobs were added during the same period.

According to the U.S. Bureau of Labor Statistics, Nevada’s unemployment rate is 7.1 percent as of October 2014. According to the same source, Elko County’s unemployment rate is 4.4 percent as of September 2014, down from 6.3 percent in February of 2014.

Below are a few vignettes that offer snapshots of mining’s impact in this Nevada community.

A carnival-like atmosphere

A new store opening isn’t a major event in big cities, but it is in rural America. So when a Jo-Ann Fabrics opened in Elko in late 2011, the local radio and television stations were both on hand to cover the event and so, it seemed, was half the population of northeast Nevada. That may be a slight exaggeration. But the new Jo-Ann’s in the Elko Junction Shopping Center did enjoy the largest grand opening in the history of the company. Within two months, a Rue21 and Famous Footwear had opened at Elko Junction and also reported record grand openings.

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Province to renew mineral development strategy – by Jonathan Migneault (Northern Ontario Business – April 8, 2015)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

The province’s decision to renew its mineral development strategy – first established in 2006 – comes at a time when the sector is in a downturn, says the executive director of the Ontario Prospectors Association.

When the strategy was developed nine years ago, Ontario’s mining sector was on an upturn, but the timing for the renewed strategy will give the province a very different picture, said Garry Clark.

“They have to understand – and they are coming to grips with the fact – that the only way we stay as a vibrant mining province is to have lots of things in the pipeline coming up from prospectors and junior companies to look at and put into production,” he said.

While Ontario’s mining sector has been in a downturn for two years, Clark said the province has only taken notice over the last six months.

Their statistics, he said, are usually a year behind. In a discussion paper meant to inform the renewed mineral development strategy, the province admits “Ontario could face many challenges in the years ahead.”

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Lower coking coal contract price shows downward pressure – by Clyde Russell (Reuters U.S. – April 8, 2015)

http://www.reuters.com/

LAUNCESTON, AUSTRALIA – (Reuters) – – Coking coal prices are yet to show signs of bottoming with bearish signals from both contract talks between Australian producers and Japanese buyers as well as Chinese demand.

Hard coking coal for second quarter delivery was settled at $109.50 a tonne free-on-board between producer BHP Billiton and buyer Nippon Steel, Morgan Stanley said in a research noted on April 6.

This was down 6 percent from the previous quarter’s contract and represented a 7 percent premium to the spot price at the time the deal was concluded. The premium to the spot price is in line with prior settlements, with Japanese buyers willing to pay above spot in order to guarantee supplies.

Coking coal, also known as metallurgical coal, is used in steel-making and is traditionally a higher value product than thermal coal used in power generation because it has a higher energy value and fewer impurities.

However, coking coal prices are now down two-thirds from their peak around $300 a tonne in 2011, while benchmark thermal coal prices at Australia’s Newcastle Port have dropped about 55 percent over the same period.

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Primero Mining CEO Sees Black Fox Fix Clearing Way for Expansion – by Christopher DonvilleLiezel Hill (Bloomberg News – April 2, 2015)

http://www.bloomberg.com/

Primero Mining Corp. says a fix of its troublesome Black Fox gold mine in Canada is within reach, restoring the miner’s credibility for investors while clearing the way for future expansion through acquisitions.

The Toronto-based company, which has fallen 45 percent in the past year, expects to show signs of improved performance at the northern Ontario mine this year, Chief Executive Officer Joe Conway said. In July, the company cut its gold-reserve estimate at Black Fox, which it acquired in a takeover last year to add to output from its flagship San Dimas gold and silver mine in Mexico.

“The reality is we’re very much focused on demonstrating to the investment community that we’ve turned Black Fox to account,” Conway, 57, said in a phone interview.

Analysts, at least, are giving the former CEO of Iamgold Corp. the benefit of the doubt. With 15 buy, one sell and two hold ratings on Primero, they project the share price will rise at least 50 percent in the next 12 months, based on target prices compiled by Bloomberg. They also estimate the company’s per-share cash flow will expand faster than most of its Canadian peers, according to data compiled by Bloomberg.

“Black Fox really drives the bus” in terms of expectations for the share price, Joe Fazzini, a Toronto-based analyst at Dundee Capital Markets, said by phone.

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