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South32 looks better bet than parent BHP Billiton by Clyde Russell (Reuters U.S. – March 17, 2015)

http://www.reuters.com/

LAUNCESTON, Australia – (Reuters) – BHP Billiton has done a great job in making its spin-off South32 look attractive, perhaps to the point where it may be a better bet than its parent.

The world’s largest miner released documents on Tuesday outlining details for the new company, which will take over BHP’s aluminum, manganese, nickel, silver and some coal assets.

These assets are often described in the media as “unloved,” but the outlook for many of them is better than the core of iron ore, petroleum, copper and metallurgical coal that will remain with BHP. South32, so named for the line of latitude that links its main operating centers of South Africa and Australia, will get a head start from its parent.

The new company will assume only $674 million in net debt, about half the level analysts had expected, providing a boost to the management should they decide to pursue mergers and acquisitions. Analysts expect the new company, which will list in Australia, the United Kingdom and South Africa, will be worth up to $13 billion.

The South32 assets contributed net profit after tax of $738 million to BHP for the half year to December 2014, again an upside surprise that bodes well for the new company’s reception.

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India’s Conflict Minerals – by Anthony Loyd (National Geographic – April 2015)

http://ngm.nationalgeographic.com/

The gunman at the jungle’s edge lived and died by different names. Some knew him as Prashant, others as Paramjeet. Occasionally he called himself Gopalji, trading the alias with another insurgent leader to further confuse the Indian authorities trying to hunt him down.

When I met him, he was fresh from killing, and called himself by yet another name. “Comrade Manas,” he said as he stepped from the shadows beneath a huge walnut tree, machine gun in hand, a slight figure, his frame and features burned out and cadaverous with the depredations of malaria and typhoid, war and jungle.

The day was already old and the sun low. The silhouettes of a dozen or so other gunmen lurked in the deepening green of the nearby paddy fields, watchful and waiting. Manas and his men were on the move and had little time to talk.

In India they are known by a single word, Naxalites: Maoist insurgents at the heart of the nation’s longest running and most deeply entrenched internal conflict. Their decades-long war, which costs India more lives today than the embers of the conflict in Kashmir, has been described by former premier Manmohan Singh as India’s “greatest internal security threat.”

In the spate of violence 24 hours before our rendezvous, Manas, just 27 years old, and his men had killed six policemen and wounded eight more in an ambush across the range of low hills at whose base we now met.

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UPDATE 2-Protests, lawsuit at Chile mine cloud Antofagasta outlook – by Silvia Antonioli (Reuters India – March 17, 2015)

http://in.reuters.com/

LONDON, March 17 (Reuters) – Environmental protests and a court ruling affecting Antofagasta’s Los Pelambras mine in Chile have clouded the outlook for its copper production this year and driven the company to slash its dividend.

Antofagasta, majority owned by Chile’s Luksic family, is grappling with weaker copper prices and falling metal grades, as well as the protests and lawsuit affecting Los Pelambres, which produces more than half the miner’s copper.

A court in Chile ruled last week that the firm must demolish a mine tailings dam at Los Pelambres, which protesters say is affecting water availability. Antofagasta is appealing the ruling but said it casts doubt over the outlook for the mine.

“Local protests have reduced expected copper production at Los Pelambres by some 8,000 tonnes of copper,” the company said in a statement on Tuesday announcing 2014 results.

“These protests, along with the adverse ruling from the Civil Court of Los Vilos, mean that there is some inherent uncertainty as to the potential impact on Los Pelambres 2015 production levels,” the London-listed company said.

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2015 Prospectors and Developers Association of Canada (PDAC) Award Winners Videos [ALL VIDEOS IN THIS SINGLE POSTING]

2015 PDAC Bill Dennis Award: David Palmer, president and CEO of Probe Mines

http://www.pendaproductions.com/ This video was produced by PENDA Productions, a full service production company specializing in Corporate Communications with a focus on Corporate Responsibility.

This award, named for a former president of the association, honours an individual or team of explorationists who have accomplished one or both of the following: made a significant mineral discovery; made an important contribution to the prospecting and/or exploration industry.

David Palmer, president and CEO of Probe Mines, is the recipient of this year’s Bill Dennis Award for a Canadian mineral discovery or prospecting success. Palmer is being recognized for the Borden gold project, a discovery located near Chapleau, Ont.

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NEWS RELEASE: MAC strikes an independent task force to review its tailings management program

BC independent panel report on Mount Polley will inform task force’s review

OTTAWA, March 17, 2015 /CNW/ – The Mining Association of Canada (MAC) has commissioned an independent, multi-stakeholder expert task force to review its tailings management requirements and guidance documents under its Towards Sustainable Mining (TSM) initiative, a mandatory program for all MAC members, to ensure they are as effective as they can be at preventing tailings dam failures and optimizing the design, construction and ongoing management of tailings storage facilities. MAC plans to publish the task force’s final report by the end of 2015.

The formation of the independent task force is part of MAC’s ongoing review of its tailings management program, which it proactively initiated immediately following the August 4th 2014 tailings breach at the Mount Polley mine, located in south-central British Columbia. The task force will review TSM’s tailings management requirements and MAC’s three tailings management guides, and will advise on how these can be enhanced and strengthened. The findings and recommendations of the BC independent expert engineering investigation and review panel’s report, released in late January, will be assessed by the task force as part of its review.

One of the BC panel’s key recommendations pertaining to corporate governance was that any mining operation proposing to operate a tailings storage facility in BC should either be required to be a member of MAC—ensuring adherence to TSM—or be obliged to commit to an equivalent program that would also include an audit function. Notwithstanding this endorsement, the MAC Board of Directors believes that a review to consider further enhancements to and strengthening of the tailings component of TSM is warranted.

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People share their vision for Greater Sudbury – by Mary Katherine Keown (Sudbury Star – March 16, 2015)

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

Noting that while Sudbury has the third largest mining cluster in the country —
behind Vancouver and Toronto — the province still does not recognize the expertise
that exists within its borders.

“All the political people in this city need to start hammering the province to recognize
Sudbury as the mining supply and technology centre for Ontario,” Robinson said. “We’ve got
a university, we’ve got mines — everything we need. What we don’t have is the province
saying they’re going to close down mining engineering in Toronto and move it up to Sudbury.
The province would be much better off doing this — it would save money and promote jobs.
So then it’s a political question.” (Professor David Robinson)

Picture Greater Sudbury in 2025: more residents living within the downtown core ” … bike lanes and paths criss-crossing and connecting all points of this sprawling city ” … robust industrial parks that capitalize on local expertise and drive socio-economic development ” … and a school of performing arts at Laurentian University.

These were just a few of the ideas participants brought to the table at last evening’s public input session, part of the Greater Sudbury Development Corporation’s economic visioning process.

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Timing not right for Ring of Fire project: Tony Clement – by Len Gillis (Kingston Whig-Standard – March 17, 2015)

http://www.thewhig.com/

TIMMINS, Ont. — The federal and provincial governments are not likely to make any significant moves on the Ring of Fire mining project until there is a vast improvement in mineral markets, says federal Treasury Board president Tony Clement.

The guest speaker at a Timmins Chamber of Commerce luncheon Monday, Clement responded to a question about the Ontario Chamber of Commerce’s Ring of Fire report card, which gave failing grades to both levels of governments for not being proactive enough to get mining projects up and running.

The report card blamed red tape in the mine permitting process, as well as a failure to provide infrastructure, such as better road or rail links. “There has been little progress developing this extraordinary economic opportunity,” it read.

The Ring of Fire project is a mining development about 600 kilometres northwest of Timmins, in the remote McFaulds Lake area. The prospect is identified mainly as a chromite project, valued in the tens of billions of dollars.

There are huge deposits of other metals there, too, but so far none of the three significant mining companies involved has moved forward with any sort of mining operation.

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Barrick Gold eyes sale of key Chilean copper mine – by James Wilson (Financial Times – March 15, 2015)

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

Barrick Gold is eyeing the sale of one of its “crown jewels”, a Chilean copper mine, as the Canadian miner tries to meet an ambitious debt reduction target to help restore its lustre for investors.

Bankers and mining executives said the Chilean copper mine, one of Barrick’s key assets, would be of potential interest to a number of private equity vehicles, including Mick Davis’s X2 Resources. Mr Davis, one of the best-known mining executives, headed Xstrata before its 2012 sale to Glencore. X2 has raised $5.6bn and is hunting for mining deals.

A sale of the Zaldívar mine by Barrick, which mines more gold annually than any other company, could be expected to realise more than $1.5bn. It would be one of the most eye-catching mine sales since the sector’s sharp downturn, showing how companies that are under fire are having to respond to falling commodity prices and protect balance sheets by selling choice assets.

While X2 would be interested in Zaldívar, other interest could come from Chinese groups looking to acquire resources, one banker said. China’s Minmetals bought Las Bambas, a former Xstrata project that is one of the largest copper mines under construction, last year.

Teck, the Canadian mining group, is also on the hunt for copper assets, its chief executive said this month. X2 declined to comment.

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COMMENTARY: Exploitation in disguise – Plan Nord is unfair and unsustainable – by George Ghabrial (McGill Daily – March 16, 2015)

http://www.mcgilldaily.com/

Plan Nord is an economic development project for Northern Quebec originally introduced by Jean Charest’s Liberal government in 2011. After a 19-month hold during the tenure of the Parti Quebecois, the plan was revived by Quebec Premier Philippe Couillard in 2014. Despite the official rhetoric, the government’s current approach to northern Quebec land and its Indigenous inhabitants is economically self-serving and environmentally destructive.

The plan is the second-largest mining development project in the history of Canada, just after the tar sands development in Alberta. If successful, 72 per cent of Quebec’s land will be transformed over 25 years. The aim is to develop the region to facilitate resource extraction and to make profit. The plan also entails developing infrastructure in northern Quebec, such as roads, airports, hydroelectric facilities and housing.

Couillard calls it “an exemplary sustainable development project,” and a report in Canadian Mining Journal estimates it will create and sustain 20,000 jobs, as well as $80 billion in public and private investment: $47 billion to renewable energy and $33 billion to mining and infrastructure. Bringing jobs to Northern Quebec is an aspect the government is particularly keen to stress; however, Quebec’s mining industry stands to benefit most.

The government does have a fund of $1.2 billion set aside for infrastructure development, but this is mainly meant to make it easier for mining companies to access resource-rich areas. Moreover, since the program’s revival in 2014, the government has been offering economic incentives for Quebec-based mining companies.

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Weak rand double-edged sword for mining companies in South Africa – by Ed Stoddard and Silvia Anonioli (Reuters India – March 12, 2015)

http://in.reuters.com/

(Reuters) – The sliding rand is a double-edged sword for mining companies in South Africa, with cost inflation, wage claims and potential labour unrest outweighing the gains that exporters traditionally derive from domestic currency weakness.

The drop in the rand , near 13-year lows against the dollar, should benefit diversified mining giants such as Anglo American, BHP Billiton and Glencore as well as domestic companies such as gold producers Gold Fields and Anglo Gold Ashanti.

The rand has lost 7 percent so far in 2015 against the dollar, which has risen against emerging market currencies across the board on expectations of U.S. rate hikes. The flip side of this is that the rand gold price has increased over 4 percent this year even as the spot gold price in dollars has fallen 2.5 percent over the same period.

That’s good news for mining companies in the country who benefit from mostly cheaper costs but higher income from sales of their commodities.

However, those gains may evaporate in the face of inflationary pressures which are poised to lift costs longer term and will strengthen the resolve of the South African labour force – no strangers to strikes – to obtain bigger pay rises.

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PDAC: Is Canadian mining poised for a rebound? – by Peter Diekmeyer (Australian Mining – March 16, 2015)

http://www.miningaustralia.com.au/home

Close to twenty-five thousand mining industry producers and suppliers converged earlier this month at the 2015 Prospectors & Developers Association of Canada conference. Sentiment at the gathering, which PDAC bills as the “world’s largest exploration and mining event,” was cautiously optimistic.

“When the average price of mining stocks listed in the Toronto Venture Exchange’s mining component is down 85 percent – 90 percent if you include companies that were taken out of the index because they went bankrupt, you have what amounts to a huge sale,” said Rick Rule, chairman of Sprott Global Resource Investments. “That means assets and properties are 90 percent cheaper. Years from now, investors will look back on 2015 as the “good old days,” when almost everything could be had at a really good price.”

Brent Cook, a mining investor and publisher of Exploration Insights agrees. “The industry has had a terrible time during the past five years, particularly on the exploration side, where discoveries of economically feasible deposits are fewer and farther between. There will be some further washing out of unsuccessful plays in coming months. But we are beginning to see green shoots indicating that a recovery may be on the way.”

Canada, which like Australia, is blessed with a wide variety of resources, can somewhat be regarded of a proxy for global extractions industries, which have literally been clobbered across the board. A recent report by Barcley’s described 2014 as the worst for commodities since 2008.

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Canada’s big mining firms to expand prospecting within the nation – by Rachelle Younglai (Globe and Mail – March 16, 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.

After three years of falling commodity prices, big mining companies are taking the lead on exploration in Canada as cash-strapped junior miners struggle to stay afloat.

Centerra Gold Inc. will spend upward of $100-million to develop a gold deposit in Ontario. Goldcorp Inc. is spending about 10 per cent more on exploration in 2015 than it did last year. Agnico Eagle Mines Ltd. is expanding its exploration team in Nunavut after it found gold on boulders near its mine in the territory.

“We have a lot of evidence that there is gold in the area,” said Sean Boyd, Agnico’s chief executive. The company is moving eight drill rigs and about 80 miners to its arctic camp, in order to locate the source of the golden boulders.

Traditionally, small mining companies have done the bulk of the prospecting in Canada. But with commodity prices at multiyear lows and a dearth of high-profile discoveries, investors are unwilling to bankroll junior miners with little or no track record.

Last year, junior companies spent a total of $742.5-million exploring in Canada, while the senior companies spent a total of $1.2-billion, according to government data. At the height of the commodity boom in 2011, the groups of small and big companies each spent around $2-billion.

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Exploration companies get consultation tax break (CBC News North – March 14, 2015)

http://www.cbc.ca/news/canada/north

Companies can now write-off cost to consult aboriginal groups

The federal government has created a new tax break for Canadian exploration companies that will allow them to deduct expenses related to consultation with aboriginal groups.

Exploration companies can spend tens of thousands of dollars explaining their projects to aboriginal communities that live near proposed mine sites. Costs associated with environmental and First Nations consultation will now qualify as a Canadian Exploration Expense.

Costs include flights to communities, hotels, hall rentals, vehicle rentals, publication of materials, translation of information into local languages — and of course, the small courtesy of bringing coffee and snacks.

Resource Analyst John Kaiser says offering tax deductions could help junior companies survive the early financial hurdles of early-stage exploration. “When it starts to show up early in the exploration cycle, before you even know if there’s anything worth developing, the costs become onerous,” he said.

Jamie Kneen of MiningWatch Canada says the change could attract more investors but it doesn’t address capacity issues that aboriginal groups face. “The mounds of applications and papers they get to go through — from water permits to land use plans — they don’t have time time and capacity to deal with it all. This doesn’t address that at all,” he said.

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Where’s the logic in Ontario’s power play? – by Konrad Yakabuski (Globe and Mail – March 16, 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.

The mandate Ontario’s Liberal government handed former TD Bank chief Ed Clark was flawed from the outset. Selling off prized electricity assets to pay for transit projects smacked more of a cash grab than a considered approach to maximizing value and making sound energy policy.

In the end, Mr. Clark’s panel recommended last fall that Ontario maintain full ownership of Hydro One’s transmission assets, made up of 30,000 kilometres of high-voltage lines across the province, and privatize the utility’s distribution arm, which serves 1.4 million Ontarians. “There is far less reason to regard distribution as a core strategic asset than transmission,” the panel said.

As The Globe and Mail revealed last week, however, Premier Kathleen Wynne’s government is now thinking of both selling up to 60 per cent of the transmission business to investors and privatizing the distribution arm in order to spur a sector-wide consolidation among the spate of “local distribution companies” that interface with electricity customers across the province.

Both are interesting ideas. But the devil is in the details. And when it comes to Ontario governments meddling in the electricity sector, the details always seem to ruin everything.

On what grounds can the provincial government justify using proceeds from selling electricity assets to fund transit?

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