Republic of Mining

Gold sector CEO pay is through the roof – and it’s embarrassing – by Tim Kiladze (Globe and Mail – April 28, 2015)

April 28, 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.

Someone needs to break the bad news to gold miners: their party’s all but over. If they keep paying their chief executives handsomely, there’s no chance they’ll win back the global investors they sought for so long.

After peaking in 2011, the S&P/TSX Gold Index has been decimated, losing 63 per cent of its value. Miraculously, though, boards of directors have barely noticed. Which is why, even after tens of billions of dollars worth of writedowns and rounds of executive upheaval, the gold sector’s chief executives still get paid through the roof.

Barrick Gold Corp. is feeling the heat. Despite a share price that plunged by nearly one-third in 2014 – Barrick’s stock now trades at $15.52, a level not seen since last century – chairman John Thornton was handed a 36 per cent pay bump, bringing his total compensation to $12.9-million (U.S.).

If only it ended there. Barrick’s in the spotlight, but many of its rivals, such as Eldorado Gold Corp. and Yamana Gold Inc., are in the same boat.

Barrick to sell part of Chilean mine in retreat from copper – by Rachelle Younglai (Globe and Mail – April 28, 2015)

April 28, 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.

Barrick Gold Corp. plans to sell part of its prized Chilean copper mine, in a move to reduce its $13-billion (U.S.) debt burden. The partial sale of Zalidvar will crimp Barrick’s cash flow at a time when it is dealing with a slump in copper and gold prices.

But Zaldivar, which used to be called the Andean ATM because it generated so much cash, is expected to attract top bids and help Barrick strengthen its finances under a revitalization plan laid out by chairman John Thornton.

“Potential buyers have expressed a strong interest,” Barrick said in a statement announcing its quarterly results.

The world’s biggest gold producer plans to cut its debt by $3-billion this year and said “no priority is more important than restoring our balance sheet.” The Toronto company has already put its Australian and Papua New Guinea mines up for sale. The partial sale of Zaldivar is a major step away from the copper business for Barrick.

The miner had tried to diversify further into copper with its ill-timed $7-billion acquisition of copper company Equinox Minerals, a purchase that it has written down completely and helped create Barrick’s debt problems.

Local 6500, Vale reach deal – by Carol Mulligan (Sudbury Star – April 28, 2015)

April 28, 2015

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

United Steelworkers Locals 6500 in Sudbury and Local 6200 in Port Colborne and employer Vale Ltd. have reached a tentative deal on a five-year contract for production and maintenance workers.

Members of the union’s bargaining committee are unanimously recommending the deal be accepted at membership meetings scheduled for Wednesday and Thursday.

News of the deal comes more than a month ahead of the expiry date of the current five-year contract, May 31, 2015. The parties began bargaining in late December, saying they were looking to get a new collective bargaining agreement without a labour interruption.

The last contract was hammered out after a bitter year-long strike that ran from July 2009-July 2010. USW Local 6500 president Rick Bertrand and Kelly Strong, Vale vice-president of Canada and UK operations, said in December that the company and the union had done a great deal of work to mend relationships after the longest strike in union’s history.

Occupational health: Workplace safety research centre opens – by Harold Carmichael (Sudbury Star – April 28, 2015)

April 28, 2015

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

In the heart of a building that is the epicentre of sports on the Laurentian University campus, cutting-edge research into workplace health and safety underway in the city for seven years finally has a place to call home.

The new Centre for Research in Occupational Safety and Health laboratory and research facility, which was made available by the university and consists of 1,695 square feet of laboratory space and 629 square feet of office and meeting space, officially opened in the Ben Avery building Monday.

“We are risk takers … and we are not going to stop until we get it right,” Tammy Eger, the centre’s research chairwoman and an associate professor in the Laurentian School of Human Kinetics, told more than 50 people on hand for the opening. “This centre is about community. It’s about the passion we have for health and safety…We’re going to develop the solutions, expand the knowledge and sustainability. We’re going to make a difference, not only in Northern Ontario, but nationally and internationally. This is your centre.”

The centre was established in 2008 by Laurentian to provide a formalized structure for industry, safe workplace associations, labour groups, government organizations, and researchers to share workplace injury and disease problems and solutions.

Industrial deaths: Testimony painful at Chenier, Fram inquest – by Carol Mulligan (Sudbury Star – April 28, 2015)

April 28, 2015

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

Day 6 of the inquest into the June 8, 2011 deaths of Jason Chenier and Jordan Fram at Vale’s Stobie Mine moved into painful and sensitive territory Monday.

After a morning and an hour in the afternoon of technical testimony by Ministry of Labour inspectors, assistant crown attorney Rebecca Bald told the inquest jury the causes of death for the two men.

Thirty-five-year-old Chenier died of smothering, compressional asphyxia and blunt-force injuries, according to forensic pathologist Dr. Martin Queen, said Bald. The cause of death for Fram, 26, was smothering and compressional axphixia, said the lawyer, one of two assistant crown attorneys acting as counsel to presiding coroner Dr. David Eden.

Members of the Fram and Chenier families have attended every day of the inquest, sitting in the front rows of courtroom A at the Sudbury courthouse.

The inquest has heard the men were overcome by an explosive and violent run of hundreds of ton of muck – broken ore, sand, slimes and water – that was hung up in No. 7 ore pass, then burst through a control gate where they were working.

In Argentina, $5 Billion of Mine Projects Is Riding on Elections – by Pablo Rosendo Gonzalez (Bloomberg News – April 27, 2015)

April 27, 2015

http://www.bloomberg.com/

Some of the world’s biggest miners are ready to spend at least $5 billion in Argentina if October’s presidential elections herald an easing of capital restrictions.

Goldcorp Inc., the largest gold miner by market value, billionaire Ivan Glasenberg’s Glencore Plc and Yamana Gold Inc. are among producers signaling new investments in the country if the next government is more receptive to the industry, according to the country’s mining association and provincial and company officials briefed on the matter.

President Cristina Fernandez de Kirchner restricted imports and repatriated export revenue since she was re-elected in 2011. She created currency controls that hurt international mining companies and led Brazil’s Vale SA to cancel a $5.9 billion potash project in the country. The main presidential candidates appear more amenable to luring foreign investment, according to Martin Dedeu, president of the Argentine Mining Chamber. Fernandez isn’t allowed to seek a third term.

“The three leading candidates are convinced about the importance of the industry,” Dedeu said by telephone from Buenos Aires. “Daniel Scioli has said mining should be an engine for the economy, Mauricio Macri has been consistent in his support and Sergio Massa has said the sector deserves attention.”

COLUMN-Iron ore rallies on small BHP output deferral? Ridiculous – by Clyde Russell (Reuters U.S. – April 23, 2015)

April 27, 2015

http://www.reuters.com/

LAUNCESTON, Australia, April 23 (Reuters) – While it’s well-known that markets can have irrational short-term moves, the 4 percent jump in Asian spot iron ore on Wednesday must be a more extreme case.

Spot iron ore .IO62-CNI=SI jumped to $52.90 a tonne from $50.80 on April 20, continuing its rally from the record low of $46.70 reached on April 2.

On the surface the catalyst for Wednesday’s spike was BHP Billiton’s announcement that it would defer an expansion of its output of the steel-making ingredient from 270 million tonnes a year to 290 million tonnes.

The future loss of 20 million tonnes from a market that’s oversupplied by multiples of that amount clearly isn’t a sound basis for a price rally. What it does show is a market where many participants are keen to call a bottom, and are happy to grasp onto any positive news as justification for a price rally.

It also shows that many in the market weren’t really reading into this week’s quarterly production reports from BHP Billiton, Rio Tinto and Brazil’s Vale.

Province murky on its budget commitment to Ring of Fire – by Jonathan Migneault (Sudbury Northern Life – April 27, 2015)

April 27, 2015

http://www.northernlife.ca/

2015 budget hints at 2018 start for infrastructure investments

While the province reaffirmed its $1-billion commitment to transportation infrastructure for the Ring of Fire, the timeline for any government spending remains murky.

Nickel Belt MPP France Gélinas expressed her disappointment after the Liberals announced the budget April 23 that the Ring of Fire funding had been taken out of the budget and pushed back to 2018, when Ontarians are due to return to the polls.

“Whenever a government makes a promise that depends on winning the next election, there’s reason to start to doubt their commitment,” Gélinas told NorthernLife.ca. “It’s a huge step backwards for the Ring of Fire.”

Gélinas got the 2018 date from a graphic on page 54 of the budget, which depicted some provincial government funding commitments with red arrows pointing to the right. Below the arrows was a timeline of dates, starting at 2014-15, and ending at 2023-24.

Ring of Fire Press Release: University of Toronto Instructors Launch Kickstarter Campaign for Ring of Fire Academic Research Project

April 27, 2015

In early April, Shadi Ramos and Fionn Byrne, two Landscape Architecture Instructors from the University of Toronto, launched their 40 day Kickstarter campaign, Ring of Fire.

The Ring of Fire is set to be the largest infrastructural project in Canada second only to the oil sands of Alberta. Situated in the James Bay Lowlands of Northern Ontario, the potential development area is 540 kilometers north of Thunder Bay and another 1,400 kilometers north of Toronto. This 5,000‐squarekilometer crescent shape deposit of chromite, nickel, and other platinum group metals is thought to be worth as much as $50‐billion and will require massive investment in infrastructure and housing to make the mining project operational. The area’s economy and ecology will be drastically changed in the coming years.

METALS-Nickel hits one-month high on supply concerns – by Liisa Tuhkanen (Reuters Africa – April 27, 2015)

April 27, 2015

http://af.reuters.com/

LONDON, April 27 (Reuters) – Nickel prices surged to a one-month high on Monday on prospects for reduced supply, but analysts said the rally could be difficult to sustain.

Overall, base metals were boosted by higher Chinese equity prices and hopes for further stimulus in the world’s largest consumer of industrial metals.

Three-month nickel on the London Metal Exchange rose more than 3 percent to a session high of $13,690 a tonne. The steel ingredient ended at $13,550 a tonne – up from $13,195 on Friday, when it rose nearly 4 percent.

Expectations of a more balanced nickel market rose last week after the International Nickel Study Group said the global surplus would shrink to about 20,000 tonnes this year as an export ban on nickel ore by top producer Indonesia further crimps production in China.

Also on the radar are production problems at BHP Billiton’s Colombian ferronickel operations. However, Robin Bhar, metals analyst at Societe Generale, said the nickel rally could peter out as prices seemed to have returned to an equilibrium after falling to $12,205 in mid-April, the lowest level since May 2009.

China plans new commodity superhighway, altering energy trade flow – by Ilan Solomons (MiningWeekly.com – April 24, 2015)

April 27, 2015

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

JOHANNESBURG (miningweekly.com) – China’s Go West strategy of encouraging coastal to inland flow of capital and people will result in the formation of a new commodity superhighway, says advisory firm Wood Mackenzie (Woodmac).

This new superhighway will impact the energy trade flows within China and externally, through the new Silk Road routes, and will link the country from east to west, onwards to Central Asia and beyond.

“This represents a significant business and investment opportunity for China’s western region,” states Woodmac. Woodmac principal Asia economist Cynthia Lim explains China’s Go West policy is already under way and is often touted as the country’s “silver bullet” to ensure long-term gross domestic product (GDP) growth, as China’s economically dominant coastal regions approach maturity.

“The coastal provinces will have to upgrade their industries to higher value-add sectors, such as services, while industries will relocate inland, westwards. This is shifting the regional distribution of demand centres and power generation; and the impact will become more apparent over the next two decades.

China is burning through its natural resources – by Vladimir Basov (Mining.com – April 26, 2015)

April 27, 2015

http://www.mining.com/

China is the world’s top mining country, but lack of local reserves of main mineral commodities forces local companies to hunt for mining deals globally.

Since nearly all essential production data has became available to the public, this is a good time to determine the biggest mining countries throughout the world in terms of their domestic mines output.

Due to lack of a common methodology, a simple principle of appreciated mining points credited to countries comprising the top 10 was used in this preliminary estimation.

For example, the leader in copper production was awarded 10 points, whereas a country sitting on tenth place earned one point. If a country placed out of the top 10 producers for a particular commodity, it earned zero mining points.

To simplify calculations, no weights reflecting the importance of each commodity, and other modifying factors, were taken into account. Only those most important for the world economy and most popular among investable mineral commodities, have been considered.

RPT-For hard-hit silver miners, gold is the silver lining – by Nicole Mordant (Reuters U.S. – April 27, 2015)

April 27, 2015

http://www.reuters.com/

(Reuters) – Pure-play silver miners, a niche investment market popular with retail investors, are moving up the endangered list.

Buffeted by a 68 percent plunge in the price of silver since 2011, miners who traditionally made most of their money from silver are increasingly diversifying into gold, buying mines that have been put up for sale and looking to acquire more.

In addition to spurring deals in the precious metals space, the trend is reducing investment avenues for those wanting to take a bet on a commodity that often outperforms gold when bullion is rising.

“The real silver nuts such as myself like pure silver companies. The more leveraged to silver the better… but you have to be able to tolerate the risk,” said David Morgan, founder of the Silver-Investor.com website.

According to BMO Capital Markets, large primary silver miners have increased their gold output on average by 19.4 percent a year since 2009 to 2 million ounces.

Barrick Gold faces shareholder wrath over pay hikes at annual meeting Tuesday – by Lisa Wright (Toronto Star – April 27, 2015)

April 27, 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.

Toronto-based mining giant’s board of directors in hot water over ‘exorbitant’ executive compensation plan.

Barrick Gold Corp. is in for a showdown Tuesday at its annual meeting in Toronto amid investor blowback over its controversial executive pay scheme that includes a 35 per cent salary hike for its board chairman.

The Canada Pension Plan Investment Board, the country’s largest pension fund manager, joined three other big pension funds Friday in saying it too will vote against the Toronto mining giant’s executive compensation plan awarding John Thornton $12.9 million.

The CPP Investment Board also said it plans to withhold support from Brett Harvey, one of Barrick’s board members and the chair of its compensation committee, which approved the 2014 pay hikes for Barrick’s top brass in a year when shares plunged 33 per cent and the miner lost $2.91 billion.

“We continue to be concerned with the company’s practice of granting outsized awards on a largely discretionary basis, which we believe is inconsistent with the governance principle of pay-for-performance,” said the CPPIB in a statement.

NEWS RELEASE: THUNDER BAY HIGHLIGHTED AS ONE OF CANADA’S LEADING RESOURCE CITIES

April 27, 2015

THUNDER BAY – April 27, 2015 – The Canadian Chamber of Commerce is highlighting Thunder Bay & Northwestern Ontario as the first region of its new ‘Canada’s Resource Cities’ series. These short reports will help Canadians living in urban areas understand how much the prosperity of their communities depends on our natural resource industries.

Thunder Bay Chamber of Commerce President Charla Robinson comments, “Thunder Bay and Northwestern Ontario are proud of our heritage as one of Canada’s resource cities. We are honoured to partner with the Canadian Chamber of Commerce to highlight the success stories of our region with businesses across the country.”

Perrin Beatty, President and CEO of the Canadian Chamber of Commerce says, “Canada’s cities are the places where rocks, plants and hydrocarbons are transformed into the engines of our economy. They are the places that create the knowledge and technology to extract, harvest, transport and process natural resources in an efficient and environmentally responsible manner.”

Our Canada’s Resource Cities infographic is online at: www.tbchamber.ca/resource-cities . Printed copies of the infographic booklet are available at the Chamber of Commerce office.