Republic of Mining

U.S. Steel to idle some production at Minntac, affecting hundreds of workers – by John Myers (Duluth News Tribune – March 31, 2015)

April 1, 2015

http://www.duluthnewstribune.com/

The string of bad economic news on the Iron Range compounded Tuesday when U.S. Steel announced that it will dramatically slow production at its Minntac taconite facility in Mountain Iron starting June 1.

Local union officials said the move will put 700 Steelworkers off the job, nearly half of the nearly 1,500 people who work at Minnesota’s largest taconite mine and processing plant.

The Pittsburgh-based steel giant said the move was forced by an oversupply of iron ore due to continued low demand for its American-made steel — a problem made critical in recent weeks by the ongoing flood of foreign steel made with cheap foreign iron ore.

“Global influences in the market, including a high level of imports, unfairly traded products and reduced steel prices, continue to have an impact,” the company said in a brief statement Tuesday.

State Rep. Jason Metsa, DFL-Virginia, said he’s been told that three of the plant’s five production lines will be shut down in an effort to reduce a backlog of 3.2 million tons of taconite. Union officials said they had not yet been told which employees will be laid off.

NEWS RELEASE: Minister Rickford: Canada’s Plan for Responsible Resource Development Supports British Columbia’s Energy and Mineral Potential

April 1, 2015

VANCOUVER, March 31, 2015 /CNW/ – The Honourable Greg Rickford, Canada’s Minister of Natural Resources, today delivered keynote remarks hosted by the Vancouver Board of Trade, where he highlighted how Canada’s plan for Responsible Resource Development is supporting jobs, protecting the environment and enhancing First Nations engagement.

Minister Rickford reinforced Prime Minister Stephen Harper’s recent announcement accelerating the capital cost allowance on equipment used for liquefied natural gas (LNG) development from eight percent to 30 percent. Our government is supporting the Province of British Columbia’s efforts to advance LNG development, thereby creating Canadian jobs and generating revenue to support critical social programs.

The Minister also highlighted the Harper Government’s recent decision extending the Mineral Exploration Tax Credit. During a challenging global economy, this incentive helps keep investment in the mining industry flowing. Since 2006, it has assisted junior mining companies in raising over $5.5 billion.

Minister Rickford also emphasized the Harper Government’s announcement earlier this month expanding the definition of Canadian Exploration Expenses for tax purposes to include costs of environmental studies and community consultations that are required to obtain a permit for grassroots exploration. Companies can deduct these costs, making it easier for them to raise capital, create jobs and contribute to the economy.

Feds provide funding to save Algoma passenger train – by Staff (Northern Ontario Business – April 1, 2015)

April 1, 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 federal government will provide $5.3 million over three years so the Algoma Central Rail (ACR) passenger service between Sault Ste. Marie and Hearst can continue.

The announcement was made on April 1. CN, the current operator of the train, said it would cease offering the service as of April 1, after Transport Canada announced last year it would no longer provide the subsidy to keep it going.

According to a government news release, the City of Sault Ste. Marie will receive federal support for three years for the continued operation of the passenger rail service.

This would allow Railmark, the proposed operator, to demonstrate its ability to deliver on its business plan. A review will be carried out at the three-year mark to determine if additional funding is warranted.

“The Harper government is pleased to provide funding over the next three years to maintain operation of the passenger rail service between Sault Ste. Marie and Hearst,” Sault MP Bryan Hayes said in the release.

Mercury in Mining a Toxic ‘Time Bomb’ for Indonesia – by Harry Pearl (Jakarta Globe – March 31, 2015)

April 1, 2015

http://thejakartaglobe.beritasatu.com/

Cisitu, Banten. Inside a dusty, cupboard-sized workshop in the remote mountains of western Java, Ateng spells out the toxic mix he uses to produce gold.

“I used 300 grams of mercury, in five ball mills, for two sacks of ore,” the 25-year-old says, flicking a blowtorch alight and taking aim at the amalgam of gold ore and mercury in front of him.

It’s a familiar calculation for Ateng, and one that in some form or another has been utilized for centuries — using mercury, a highly toxic liquid metal, to extract gold from ore. But here in Cisitu, a gold mining village deep in Gunung Halimun National Park, medical experts and environmental campaigners believe it could be the cause of a rash of illnesses among residents.

Rice fields and fishponds have been poisoned, environmental testing has found, and some residents are showing signs of severe mercury intoxication.

What’s more worrying to campaigners like Yuyun Ismawati, a Goldman Prize-winning environmental engineer and senior adviser at BaliFokus, is that a similar situation is being played out at hundreds of mining hot spots across Indonesia.

“You cannot see it now, but the cost of inaction could be huge,” says Ismawati, an Indonesian now based in the United Kingdom.

India seeks potash bargain after Belarus-China deal – by Rajendra Jadhav (Reuters U.S. – April 1, 2015)

April 1, 2015

http://www.reuters.com/

MUMBAI- (Reuters) – Belarus’ deal to sell potash to China at a lower-than-expected price has prompted India to seek a similar bargain ahead of the signing of new contracts this month, a move that could hit spot rates already under pressure due to stiff competition.

Belarusian Potash Company (BPC) last month agreed to raise the price of potash exports to China, the biggest consumer and which sets the benchmark, by $10 to $315 per tonne, undercutting Russian and North American rivals who were negotiating for a hike of $25-$30.

India, which imports all its potash needs, bought the crop nutrient at $322 per tonne on a cost and freight basis last year, the lowest level in seven years. It is seeking to keep the price at the same level this year.

India usually pays slightly more than China due to additional freight and as it buys in small consignments.

“The Chinese deal has highlighted the oversupply in the market,” said P.S. Gahlaut, managing director of state-run Indian Potash Ltd, the country’s biggest importer. “As far as India is concerned we cannot afford a price rise.”

Officials from Russia’s Uralkali, the world’s largest producer, are expected in India in the third week of April and any supply agreement around last year’s price will put pressure on spot prices that collapsed after Uralkali broke away from a joint trading venture with BPC in 2013.

Russian Miners With Billions of Dollars Weigh Dividend Increase – by Yuliya Fedorinova (Bloomberg News – March 31, 2015)

April 1, 2015

http://www.bloomberg.com/

(Bloomberg) — Russian metals exporters that are piling up cash after the ruble collapse are sharing the wealth with investors as the economy tilts into recession and global demand slows.

The weaker ruble has benefited Russia’s resource companies, which have costs in the national currency and revenues in dollars or euros. OAO Novolipetsk Steel, OAO GMK Norilsk Nickel and four other of Russia’s largest metals and mining companies together held $8.3 billion in cash and equivalents at the end of December, according to data compiled by Bloomberg. They had about $5.7 billion a year earlier.

Companies are using the windfall to reward shareholders, switching focus from debt repayments or investments. Prices for major materials have softened as China’s economic growth slowed last year to the weakest since 1990. Russia is sliding into its first recession in six years, as U.S. and European sanctions add to slowing consumer demand and a slump in oil prices.

“It makes no sense to start large investments now, and it’s better to pay excessive cash to the owners,” Kirill Chuyko, head of equity research at BCS Financial Group, said by phone on March 31. “The cost of capital for Russian companies increased, which also makes companies rethink their dividend policies.”

South Africa seeks court decision on mining black ownership rule – by Zandi Shabalala (Reuters U.K. – March 31, 2015)

April 1, 2015

http://uk.reuters.com/

PRETORIA – (Reuters) – South Africa’s mines ministry and the industry have agreed to ask the courts to help them resolve a dispute over a black ownership target of 26 percent for mining companies, the two sides said on Tuesday.

Mines minister Ngoako Ramatlhodi said there was “no consensus” on the issue as he gave details from an assessment of how the industry has complied with the targets set out for it in a state charter aimed at redressing the imbalances of white apartheid rule which ended two decades ago.

The main sticking point is the industry contention that once a company is 26 percent black-owned, it has effectively complied, even if some of the black shareholders then sell out. The government says companies must retain the 26 percent ratio as an absolute minimum.

Failure to meet the targets can result in mining permits or rights being revoked in an industry which is an increasingly hard sell to foreign investors in the face of often violent labour unrest, depressed prices and soaring wage and power costs.

South Africa’s Chamber of Mines said it had agreed with the ministry to approach the courts on the ownership target issue “in order to break the impasse, and to avert any confusion that may be damaging to investor perceptions”.

Sudbury smelter charges no surprise — union – by Carol Mulligan (Sudbury Star – April 1, 2015)

April 1, 2015

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

A committee of representatives from Vale Ltd. and United Steelworkers Local 6500 is working to ensure the 58 recommendations from a joint investigation into the death last year of a millwright are implemented and that history doesn’t repeat.

Mike Bond, chair of health and safety for USW Local 6500, said some progress has been made to resolve issues at the Copper Cliff Smelter Complex, where Paul Rochette, 36, was killed April 6, 2014, while working on an ore crusher.

Monday, the Ministry of Labour announced it had laid 17 charges under the Occupational Health and Safety Act in relation to Rochette’s death. Nine were laid against Vale Canada Ltd. and eight were laid against two supervisors, and a third supervisor who was classified as a worker at the time.

The charges against Vale relate to ensuring work was done properly, that workers were educated and trained, and that safeguards were put in place to keep pieces of machines in place.

Bond said no one who knew anything about the situation at the smelter complex last year was surprised so many charges were laid.

Tax breakthrough at Rio Tinto’s Mongolia copper mine -source – by Terrence Edwards (Reuters U.S. – March 31, 2015)

March 31, 2015

http://www.reuters.com/

ULAN BATOR – (Reuters) – Rio Tinto and Mongolia have made a breakthrough in a tax dispute that has been among issues stalling development of the $6.5 billion Oyu Tolgoi copper mine, according to an official familiar with the government’s position.

Disputes over costs and taxes have delayed an expansion of the mine that would extend its life beyond an estimated 15 years.

“Misunderstandings and issues surrounding the tax climates have been resolved,” the official told Reuters, without specifying the terms of an agreement or what other issues needed to be resolved for the next underground phase of the project to go ahead.

“The parties are working towards agreeing on the commercial terms of the underground project,” added the official, who asked not to be named because no announcement had been made yet. A Rio Tinto spokesman and a spokesman for Mongolia’s mining ministry declined to comment.

A spokesman for Rio’s Turquoise Hill Resources, which owns 66 percent of the mine, also declined to comment and pointed to a statement last week that said Oyu Tolgoi was appealing a ruling by Mongolia’s Tax Dispute Resolution Council to the country’s Administrative Appellate Court.

India: At the coalface – by James Crabtree (Financial Times – March 31, 2015)

March 31, 2015

http://www.ft.com/home/us

Failure to boost energy supplies will hurt Modi’s goal of turning India into a manufacturing force

A large, colourfully painted sign hangs above the entrance to the depths of Jhanjra, the largest underground mine in West Bengal’s Raniganj coal belt. The left side shows Indian mining as it once was, with roughly drawn cartoon figures wielding basic shovels and carrying woven baskets of coal, balanced on their heads. The right paints a more modern scene, featuring large yellow mining machines, operated by skilled technicians.

Take the cage-like lift down hundreds of metres into the darkness below, and walk for nearly an hour through narrow tunnels in stifling heat, and that second image suddenly becomes real as a cutting vehicle with fierce rotating metal teeth, known as a continuous miner and built by US manufacturer Caterpillar, rips tonnes of black rock from the coal face.

Appalachia Miners Wiped Out by Coal Glut That They Can’t Reverse – by Mario Parker (Bloomberg News – March 30, 2015)

March 31, 2015

http://www.bloomberg.com/

(Bloomberg) — Douglas Blackburn has been crawling in and out of the coal mines of Central Appalachia since he was a boy accompanying his father and grandfather some 50 years ago.

The only time that Blackburn, now a coal industry consultant, remembers things being this bad was in the 1990s. Back then, he estimates, almost 40 percent of the region’s mines went bankrupt.

“It’s a similar situation,” said Blackburn, who owns Blackacre LLC, a Richmond, Virginia-based consulting firm. Now, like then, the principal problem is sinking coal prices. They’ve dropped 33 percent over the past four years to levels that have made most mining companies across the Appalachia mountain region unprofitable.

To make matters worse, there’s little chance of a quick rebound in prices. That’s because idling a mine to cut output and stem losses isn’t an option for many companies. The cost of doing so — even on a temporary basis — has become so prohibitive that it can put a miner out of business fast, Blackburn and other industry analysts say.

So companies keep pulling coal out of the ground, opting to take a small, steady loss rather than one big writedown, in the hope that prices will bounce back.

Mining Documentary: Yamashita’s Gold – World War Two History

April 5, 2015March 31, 2015

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

Yamashita’s gold, also referred to as the Yamashita treasure, is the name given to the alleged war loot stolen in Southeast Asia by Japanese forces during World War II and hidden in caves, tunnels and underground complexes in the Philippines. It is named for the Japanese general Tomoyuki Yamashita, nicknamed “The Tiger of Malaya”. Though accounts that the treasure remains hidden in the Philippines have lured treasure hunters from around the world for over fifty years, its existence is dismissed by most experts.[1][2] The rumored treasure has been the subject of a complex lawsuit that was filed in a Hawaiian state court in 1988 involving a Filipino treasure hunter, Rogelio Roxas, and the former Philippine president, Ferdinand Marcos.[3]

The looting and the alleged cover-up[edit]

Prominent among those arguing for the existence of Yamashita’s gold are Sterling Seagrave and Peggy Seagrave, who have written two books relating to the subject: The Yamato Dynasty: the Secret History of Japan’s Imperial Family (2000) and Gold Warriors: America’s Secret Recovery of Yamashita’s Gold (2003). The Seagraves contend that looting was organized on a massive scale, by both yakuza gangsters such as Yoshio Kodama, and the highest levels of Japanese society, including Emperor Hirohito.[4]

De Beers toughens rules for diamond customers – by James Wilson and Avantika Chilkoti (Financial Times – March 29, 2015)

March 31, 2015

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

De Beers is making the biggest reforms in more than a decade to the way it sells most of its diamonds, amid concerns over the financial stability and transparency of some of its best customers.

The diamond group, which sells $6bn of unpolished diamonds annually and is the world’s largest supplier by value, is introducing tougher rules for companies wanting to join its coveted group of customers known as “sightholders”.

Under the new rules, expected to be announced this week, sightholders will have to present their accounts according to international standards. De Beers will also insist customers hold a specified proportion of equity in their businesses, making them less reliant on bank borrowing.

De Beers sells about 90 per cent of its mined output to sightholders, which play a vital role in the diamond trade, cutting and polishing rough stones and channelling them into global jewellery markets.

Only about 80 companies — most from traditional diamond trading and polishing centres such as Antwerp, Israel or India — are approved by De Beers to become sightholders and take part in regular sales, or “sights”, each year where they buy rough stones.

Former Xstrata CEO under pressure to make new mining deals – by Silvia Antonioli and Freya Berry (Reuters India – March 31, 2015)

March 31, 2015

http://in.reuters.com/

LONDON, March 31 (Reuters) – More than a year after he launched his private fund, former Xstrata boss Mick Davis is coming under pressure to build a new mining empire with the $6 billion in capital he has raised.

The renowned dealmaker set up X2 Resources 18 months ago after Glencore’s $46 billion takeover of Xstrata, when he was passed over for the top job in favour of his Glencore counterpart, Ivan Glasenberg.

Davis has since approached most large mining companies looking to buy a variety of assets, banking and industry sources said, but nobody has agreed to sell given a feeling that current prices are at rock bottom and may turn up again before long.

“Mick’s team has been looking at so many assets closely. But nobody wanted to sell to them. Vale didn’t want to sell, Rio didn’t want to sell, BHP didn’t want to sell,” said an industry source close to Davis. With his portfolio still empty, some sources expressed concern that some investors’ patience with Davis may run thin.

A banking source said: “Not all those investors are stuck on mining. So they say: if we can’t spend on this, we’ll go buy a bank or a supermarket.”

Teck Resources Ltd, Antofagasta Plc deny merger talks – by Peter Koven (National Post – March 30, 2015)

March 31, 2015

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

Investors got excited at the prospect of a merger between Teck Resources Ltd. and Antofagasta PLC on Monday, but any deal would likely require major compromises by the families in control of each company.

Vancouver-based Teck is controlled by the Keevil family and Japanese firm Sumitomo Metal Mining Co. through multiple-voting shares. Antofagasta is under the thumb of Chile’s Luksic family, which owns 65% of the shares.

Both companies denied they are in merger talks, but Bloomberg reported that they held early-stage negotiations.

A merger would create a dominant copper producer with more than one million tonnes of output per year, vaulting it into the top five producers worldwide. It would also reduce Teck’s reliance on coking coal, where it is is facing very weak market conditions.

Their valuations are quite similar, as Teck is worth $11-billion while Antofagasta is worth slightly above $13-billion. Any deal is likely to be all-stock or very close to it, which puts the family share ownership in the spotlight. No deal will happen unless the families endorse it and loosen their respective grips on the companies.