Republic of Mining

Local View: A single mining job pays a lifetime of dividends – by Kirk D. Haldorson (Duluth News Tribune – April 2, 2015)

April 7, 2015

http://www.duluthnewstribune.com/

I grew up one of six children here in northern Minnesota, and my father was employed with Reserve Mining in Silver Bay. Growing up in a mining town, I never really thought of mining as anything but a normal, regular industry; and quite possibly I took for granted that it would always be there.

We grew up fishing, camping and swimming in the Boundary Waters Canoe Area Wilderness. We grew up planting trees for the U.S. Forest Service to help fund our college. We would plant as many as 200,000 trees a year and spend endless days enjoying the beautiful forests.

Saying all this, I never would support something such as PolyMet Mining if I thought it would harm our environment. I can honestly say there is no one who loves nature and the wilderness more than me. I feel blessed to see some of the trees I planted so many years ago now being harvested for this generation.

We need to either grow it or mine it if northern Minnesota is going to provide for future generations. My parents raised six children, and all six went on to some sort of higher education — all because of one mining job.

All six children went on to get married, and all six children and their spouses currently live, work and pay state income taxes to Minnesota — all due to one mining job.

‘Walking dead’ on the TSX Venture Exchange: How are ‘zombie’ companies surviving? – by Peter Koven (National Post – April 7, 2015)

April 7, 2015

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

Management at the TSX Venture Exchange would probably appreciate it if Tony Simon just shut his mouth for a while.

As the co-founder of the Venture Capital Markets Association, Mr. Simon is an unlikely torchbearer for the theory that Canada’s market for junior resource stocks is broken and the Venture Exchange is part of the problem. But he has assumed that role with gusto in the past few weeks as his thoughts have reached an increasing number of ears. It is hard to imagine that anyone else is causing more headaches for the Venture Exchange these days.

Mr. Simon, for his part, thinks he is just stating the obvious. “This is not something that’s an unknown problem,” the Vancouver-based entrepreneur said. The Venture management team has fired back, completely denying his claims that they are not doing their jobs properly.

However one feels about the debate, all would agree that Mr. Simon’s research paints a frightening portrait of Canada’s junior exploration sector. It raises questions about how hundreds of tiny resource companies can continue to exist. Sources said that auditors are offering these companies cut-rate fees to maintain their viability.

Media Release: Stop the fire sale of Ontario’s natural resources

April 7, 2015

Green Party Ontario leader Mike Schreiner is calling on the Liberal government to end the fire sale of Ontario’s natural resources as the government struggles to balance its budget.

(April/01/2015) Queen’s Park – “It’s irresponsible for the Liberals to sell off our natural resources at rock bottom prices, especially when the province’s finances are a mess,” says Schreiner. “The people of Ontario deserve their fair share of the province’s resource wealth.”

The Liberal government is looking at selling public assets such as Hydro One and extracting more money from alcohol sales. Yet, the Liberals have made no effort to maximize the value of Ontario’s natural resources, even though the Drummond Report called for increasing natural resource revenues, which would also create incentives to use them efficiently.

Ontario has the lowest effective mining royalty rate in Canada after all tax breaks are counted. In 2010 and 2011 the province’s mining industry extracted metals and minerals valued at $17 billion but only paid 1.4% ($250 million) for these resources. The average Canadian rate for the same period was 5.6%. Saskatchewan’s public return was over 9%.

Ontario only charges 11.5 cents/tonne for aggregate extraction. Quebec charges 50 cents/tonne. The province’s water-taking levy for industrial purposes is only $3.71 per million litres.

India’s $18 Billion Mistake? – by Dhiraj Nayyar (Bloomberg News – April 1, 2015)

April 7, 2015

http://www.bloombergview.com/

A decade ago, Korean steelmaker Posco’s proposed $12 billion investment in the eastern Indian state of Odisha (then still known as Orissa) was hailed as the country’s biggest-ever foreign investment commitment, as well as a vote of confidence in India as a potential manufacturing power. Ten years later, Posco’s reported pullout is a PR debacle and a blow to Prime Minister Narendra Modi’s hopes to convince companies to “make in India.”

Worse, it’s the government’s success rather than its policy failures that appear to have driven out the steelmaker. On the heels of a lucrative auction of telecom spectrum, which garnered bids totaling a record $18 billion last week, the government is set to sell off iron ore and the rights to limestone mines by auction as well. Under the old regime, the state would have allocated these kinds of resources to industry at a nominal price. Now that the government is looking to maximize profits by putting them up for bids instead, Posco has apparently decided that the additional costs make the Odisha project unappealing.

The political logic of auctions is obvious. Under the previous Congress-led government, the opaque process of allocating resources to private companies quickly led to accusations of cronyism and corruption. Anger over the 2G spectrum scandal of 2008 and the coal scandal of 2009 played a huge role in Modi’s landslide victory last year.

Unfortunately, criticism has focused on the idea that the government gave away India’s resources too cheaply.

Red Dog (Mining Themed Australian Movie – 2011)

April 7, 2015

http://en.wikipedia.org/wiki/Main_Page

Red Dog is a 2011 Australian family film directed by Kriv Stenders and produced by Nelson Woss and Julie Ryan. The film is based on a true story from the novel Red Dog by Louis de Bernieres about Red Dog.[2] At the 2011 Inside Film Awards, Red Dog was nominated in nine categories and won seven, including best feature film. The film was also nominated for seven AACTA Awards and won for Best Film.

Plot[edit]

In 1979, a truck driver Thomas (Luke Ford) arrives in Dampier, Western Australia, late one night. Upon entering the town pub he sees the silhouettes of a group of men, one of whom is holding a gun. Believing it is a murder, he rushes into the next room, where he sees that the men are trying to put down an apparently sick dog (Koko). Unable to bring themselves to carry out the euthanasia, the men, with Thomas, retreat to the bar.

Buddies (Mining Themed Australian Movie – 1983)

April 7, 2015

http://www.ozmovies.com.au/

(Note: this synopsis and listing contains spoilers).

Sapphire-grubbing Mike (Colin Friels) gets the show underway by wildly fornicating with Stella (Kris McQuade).

Mike is buddies with partner grubber Johnny (Harold Hopkins) as they hunt for sapphires in central Queensland – in even more wretched tin shanties just across the way in this small community lives tall Ted (Bruce Spence) and bearded, aged Hans (Ralph Albring).

The buddies decide that they’ll peg some new land, but then the big boys, led by evil, smirking Andy (Dennis Miller), with guns and ‘dozer drawn, move in on their stake. ‘Word is they’re pegging everything that isn’t nailed down’, says Harold, and the ‘dozer shows Andy means business by flattening Mike’s car.

My Bloody Valentine 3D (Mining Themed American Horror Movie – 2009)

April 7, 2015

http://en.wikipedia.org/wiki/Main_Page

My Bloody Valentine 3D is a 2009 American horror film, and a remake of the 1981 slasher film of the same name. The film was directed and edited by Patrick Lussier, and stars Jensen Ackles, Jaime King and Kerr Smith. The film had a 3D theatrical release;[2] it was released on January 16, 2009 by Lionsgate to generally mixed reviews but nevertheless a box office success. It was released on DVD and Blu-ray on May 19, 2009.

On the Valentine’s Day of 1997, in a small town, a cave-in on the north side of a Hanninger mine trapped six miners. Six days later, rescue teams found five dead miners and the comatose Harry Warden (Richard John Walters), who survived by killing the other miners with a pickaxe, allowing himself to breathe. Tom Hanniger (Jensen Ackles), the mine owner’s son, was blamed for the mine disaster because he forgot to vent the methane lines and caused a cave-in, but also Harry Warden for killing the miners.

[Vale] Thompson miners safe after underground fire – by Lara Schroeder and Peter Chura (Global News – April 6, 2015)

April 7, 2015

http://globalnews.ca/

WINNIPEG – All of the miners who were stuck underground after a fire broke out in a Thompson, Man., nickel mine have safely returned to the surface.

The eight miners who were still waiting to be rescued Monday afternoon were safely pulled out by 1:25 p.m., mine owner Vale Inco said.

The fire trapped 39 miners in the Vale Inco nickel mine in Thompson, Man., Sunday night.

The 39 mine employees moved to “refuge stations” after a remotely operated piece of equipment called LHD (load-haul-dump) caught fire at about 3:30 p.m. Sunday at the company’s T1 mine, Vale spokesman Ryan Land said in a news release Monday.

Shanda Skode of Penticton, B.C., said her husband was trapped overnight and she wasn’t happy with the way the company handled the situation.

‘They called me six hours after he was supposed to be back on the surface,” she said. Her husband, who she preferred not to name, was supposed to surface at 5 p.m. CT Sunday, and she worried when he didn’t text her as usual and she couldn’t contact him.

A new deal for the Ring of Fire – by Rick Millette (Thunder Bay Chronicle-Journal – April 5, 2015)

April 7, 2015

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

Rick Millette is senior executive director: Ring of Fire at Northern Policy Institute.

The cards have been shuffled on the ownership and history of the Ring of Fire. Noront Resources has made a brilliant play in buying the claims of Cliffs Natural Resources for a small fraction of what was originally paid for them. Noront’s shares jumped on the news. Optimism has returned.

The recent announcement of a road study for an east-west link to First Nations communities near the Ring has furthered hopes for movement on the entire project. The study is inclusive of the Matawa Tribal Council.

Some of their communities will be connected to the outside world in a way that will help improve living conditions by making everything from food to building materials more affordable. And, whatever route the road takes, it will get Noront closer to its proposed mine site.

The cherry on the cake is that the joint federal-provincial funding of the road study has served as an olive branch, calming the stormy rhetoric between the two levels of government. From shareholders, to landholders, to vote holders, everyone is beaming.

Ontario Government is blind to exploration problem – by Rick Owen (Northern News – April 2, 2015)

April 7, 2015

http://www.northernnews.ca/ [Kirkland Lake]

KIRKLAND LAKE – Monday and Tuesday there were about 300 delegates attending the Northeastern Ontario Mines and Mineral Symposium, at Northern College.

Every three years the Northern Prospectors’ Association host this event, which is a great time for networking with prospectors, geologists, mining companies and Ministry of Northern Development and Mines representatives.

Once again the organizing committee from the NPA did an excellent job and considering how small the active membership in NPA this was a huge accomplishment. While the symposium was officially two days long, it was in fact four days as the NPA also hosted courses in the two days leading up to the symposium.

During the symposium there were several talks given, on everything from exploration techniques to updates on projects, many of which are in the Kirkland Lake area. The NPA did a great job keeping everything running on schedule, which in itself is a major achievement.

Another component of the symposium is the trade show area, where local exploration companies, service providers and the provincial government had booths. The trade show floor was a busy place as there scheduled coffee and lunch breaks so delegates had time to visit the booths.

Vale sets aside $185m to finance expansion – by Tama Salim (Jakarta Post – April 1 2015)

April 1, 2015

http://www.thejakartapost.com/

Publicly listed nickel mine operator PT Vale Indonesia (INCO) will allocate up to US$185 million in capital expenditures (capex) this year to finance expansion projects, including the construction of new refining facilities. The company’s chief financial officer, Febriany Eddy, said on Tuesday the allocated sum was significantly higher than last year’s capital spending realization of $76.8 million.

She said that Vale would be gearing up for the second phase of its ore processing and refining facility in Sorowako, South Sulawesi, as well as operations in Bahodopi, Central Sulawesi. “Phase 1 is currently being concluded, so we’re starting to plan out the next phase while we await the licenses for expansion,” Febriany told reporters in South Jakarta, on Tuesday.

“If everything goes according to plan, we can realize all our capital spending and put our projects into motion.” Vale’s capital expenditure for 2014 was 51 percent lower than the $163 million target, because of delays in the issuance of required permits and the decision to further assess the rebuilding of an electric furnace.

On the other hand, stakeholder returns in 2014 were high as the firm reached a dividend payout ratio of 58 percent, equal to $50.2 million. Febriany argued that the high payout rate was in line with Vale’s previous actions, citing average dividend payments of more than 50 percent in the last five years.

Deutsche Bank cuts [BHP Billiton] South32 valuation – by Amanda Saunders (Sydney Morning Herald – April 2, 2015)

April 1, 2015

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

South32, the company being created in the demerger of BHP Billiton, will be in a “perfect position” to pursue acquisitions of up to $US3 billion ($3.9 billion) in Australian coal, and offshore in base metals and manganese – but its stock is likely to trade at just about $2 a share, well short of market expectations, according to Deutsche Bank.

Deutsche mining analyst Paul Young cut his valuation of South32 from $US13 billion to $US11.2 billion after reviewing the more than 1500 pages of shareholder documents on the spin-off released by BHP last month. His valuation for the spin-off falls to $US7 billion when based on current spot prices for commodities.

While the new company’s growth and savings opportunities will be limited, parent BHP with its strong balance sheet has put it “in the perfect position to pursue [value enhancing] acquisitions up to $US3 billion”, Mr Young said.

Also playing in its favour is the fact that the largest miners are selling non-core assets following the fall in commodities prices, and have all but ruled out acquisitions.

South32 is expected to first eye greenfield mining assets, rather than entire companies, according to the analyst report. High up on its list would be Anglo American’s 40 per cent stake, valued at $US1.4 billion, in the maganese group Samancor.

[South Africa] Mining charter ‘silent’ on crucial ownership issue – by Liesl Peyper (Miningmx – April 1, 2015)

April 1, 2015

http://www.miningmx.com/

[miningmx.com] – SOUTH Africa mines minister, Ngoako Ramatlhodi, made the best of a very bad situation when he said yesterday he would allow the High Court to rule on the ‘once-empowered, always-empowered’ principle in the Mining Charter.

“It was a good PR exercise on behalf of the Department of Mineral Resources (DMR),” said Nicola Jackson and Eric van den Bergh, both partners at law firm Fasken Martineau’s global mining group.

“His announcement sends the right message to current (and future) industry stakeholders that the DMR values the participation of the industry players, and that it’s cognisant of the ramifications of the ‘once-empowered, always-empowered’ principle not being applied.”

Jackson and Van den Berg said that despite the practical issues that lie ahead, it was a good call for Ramatlhodi to look to the courts for clarification on the ‘once-empowered, always-empowered’ matter. “Any other route would only exacerbate the trust issues between government and the sector.”

However, whether Ramatlhodi and his legal team would successfully argue against the contentious principle in court remains to be seen. “It’s difficult [to predict the outcome], because the charter is a very nefarious, nebulous document,” said Chris Stevens, a director at Werksmans Attorneys.

At midday: TSX drops as Teck, resource shares decline – by Solarina Ho (Reuters/Globe and Mail – March 31, 2015)

April 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.

Canada’s main stock index dropped on Tuesday on a decline in miner Teck Resources Ltd and other resource stocks, but the fall was cushioned by modest gains in industrials and heavily weighted financials.

Vancouver-based Teck was the most influential decliner, retreating 8.6 per cent to $17.78. The stock had surged on Monday after Bloomberg News reported that Teck and Chile’s Antofagasta Plc were in early-stage merger discussions. The two companies subsequently denied the report.

The index’s materials sector, home to mining issues, was off 0.45 per cent, pressured in part by weak commodity prices. Gold was headed for its third quarter of price drops, while nickel prices extended recent hefty losses, hitting the lowest price in nearly six years on record supply and weak demand.

“The commodities sectors are still challenged. You still don’t have any robust rallies in any of the real commodities and those sectors have been beaten up for so long that people are weary,” said Paul Hand, managing director at RBC Capital Markets. The Toronto Stock Exchange’s S&P/TSX composite index was off 24.71 points, or 0.17 per cent, at 14,883.68. Seven of the index’s 10 main groups fell.

Mining stocks hit as iron ore price slump continues – by Sarah-Jane Tasker and Matt Chambers (The Australian – April 1, 2015)

April 1, 2015

http://www.theaustralian.com.au/

Australia’s iron ore miners continue to feel the pain of the brutal slump in the price of the commodity, with falls on the local market in early trading.

As the price of iron ore sits on the cusp of falling below $US50 a tonne, Fortescue Metals Group lost almost 2 per cent of its value after the market opened to sit at $1.92, while Atlas Iron’s stock was off 3.85 per cent at 12.5c.

BHP Billiton, the world’s largest miner, was 1.7 per cent lower this morning at $30.50, while its main rival, Rio Tinto, was off 1.28 per cent at $56.60.

Overnight, Chinese iron ore prices monitored by The Steel Index fell $US1.90, or 3.6 per cent, to $US51 a tonne, representing a record low since the index starting monitoring prices.

When current freight prices of about $US4.50 a tonne are removed, it is the lowest price Australian iron ore has been sold at since March 2006, when prices were still negotiated annually. The price could face a fresh round of negative news today, with China’s official manufacturing index data due.