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 Teck, Antofagasta Said to Explore Copper Mining Merger – by Matthew Campbell and Dinesh Nair (Bloomberg News – March 30, 2015)

http://www.bloomberg.com/

(Bloomberg) — Teck Resources Ltd. and Antofagasta Plc are exploring a merger that would create one of the world’s largest copper producers, people with knowledge of the matter said.

The companies have held early-stage talks, and any agreement hinges on the approval of the families that control both miners, the people said, asking not to be identified discussing private information. There’s no guarantee they will reach a deal, which would be primarily stock based, the people said.

Teck shares in Toronto rose as much as 15 percent Monday, the most since April 2009 and were trading at C$20.03 ($15.78) as of 3:13 p.m. local time.

A combination of Teck, based in Vancouver, and London-based Antofagasta would be the first major mining transaction since an across-the-board slump in commodity prices hammered the industry. Both companies have extensive copper operations in Chile which could be combined by a merger, potentially reducing costs. Representatives for both companies declined to comment.

With a market value of about C$11.3 billion, Teck is Canada’s third-largest mining group after Goldcorp Inc. and Barrick Gold Corp.

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Mine your own business: Plan Nord’s disastrous consequences – by Jasreet Kaur (McGill Daily – March 30, 2015)

http://www.mcgilldaily.com/

With recent austerity measures affecting many economic sectors within Quebec, the provincial government is desperately looking for new sources of income. The precious metal industry is still profitable, and mining developments such as Plan Nord could bring investors to the province, acting as a safety net to protect people from the ongoing cuts. However, this would not come without a cost that would be shouldered by current and future generations.

The benefits of invasive projects such as Plan Nord are often only measured by their immediate value, leaving out negative externalities. Plan Nord is expected to cause substantial environmental damage to the region, due both to the resource extraction the project would entail, as well as its magnitude. In addition to the environmental damage, however, the project will have significant negative impacts on the local communities in the North, particularly with regards to women.

Plan Nord was initially proposed by the Liberal government led by Jean Charest in 2011, but was shut down by Pauline Marois after the Parti Québécois (PQ) came into power in 2012. The PQ has traditionally held an antagonistic position toward the mining sector. Recently, however, with the comeback of the Liberals, a revised version of the project has started to gain steam once again.

This version, which encompasses 72 per cent of the land area of Quebec, an area twice the size of France, is expected to create significant economic benefits for the province, including the creation of 20,000 jobs.

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An idea for Ring of Fire’s riches – by Tom Mills (Sault Star – March 28, 2015)

http://www.saultstar.com/

Ontario should look to socialist Norway if it wants to capitalize on the rich mineral deposits of the far north’s Ring of Fire.

Like Canada, Norway has a resource-based economy, exploiting extensive reserves of oil, natural gas minerals and lumber. Half its export revenues come from oil and gas.

Unlike Canada, Norway is not in hock up to its eyeballs. In fact, it’s the second-wealthiest country in the world. Every Norwegian is, theoretically, a millionaire. That’s a million kroner, which translates to about $177,000 US apiece.

That’s because, unlike many other resource-rich countries and provinces, Norway put its oil revenues, from taxes, fees and ownership stakes, into a fund where politicians couldn’t get their spendthrift hands on them.

The money was invested in financial markets outside Norway. It grew. Their sovereign wealth fund, created a mere 20 years ago, now controls about one per cent of all publicly traded shares in the world.

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Allana Potash Corp agrees to $137-million takeover bid from Israel Chemicals – by Peter Koven (National Post – March 28, 2015)

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

Allana Potash Corp. agreed to a $137-million takeover bid from Israel Chemicals Ltd. because its chief executive said there was no other way to avoid massive dilution of shareholders.

Toronto-based Allana is in the same position as many other junior mining firms: it has a great project but no easy way to finance it in the current rough market conditions. The company’s Danakil project in Ethiopia is expected to cost US$642 million; by comparison, Allana had less than $8 million on its balance sheet at the end of January.

“Even if we could raise half of the money through debt, which is uncertain, we would still have to raise substantial amounts through equity,” Allana CEO Farhad Abasov said in an interview. “And that equity would come at a substantial discount to the current price.”

Allana did have options apart from an outright takeover. According to a source, the company was in negotiations to sell a large stake in itself to a state-owned Chinese construction firm that could finance the project. The source said the premium was very significant. But Mr. Abasov argued the Chinese option would be punitive for shareholders.

“It would be close to 100%, if not more, dilution for shareholders,” he said.

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The Iron Ore Bust into a Housing Boom – by Greg Canavan (Daily Reckoning Australia – March 30, 2015)

http://www.dailyreckoning.com.au/

Irony is thick on the ground this morning as we head into a shortened Easter trading week. Just as Sydney property prices go absolutely bonkers, the iron price crashes.

Of course, revenue from the great iron ore boom helped to fuel the housing bonfire, along with regular petrol douses from RBA boss Glenn Stevens. But now, with iron ore crashing, property prices continue to detach from reality. It’s a cheap money driven boom if there ever was one.

In case you missed it, the benchmark iron ore price finished trading on Friday down US$2.22 to US$53.14, a new low. It was another dose of irony that probably knocked the price lower.

Last week, Fortescue Metals [ASX:FMG] Chairman and major stakeholder Andrew Forrest implicitly called on iron ore miners to form a cartel to control the price (and save his company from a slow death). Rio Tinto [ASX:RIO] boss Sam Walsh replied with scorn, which the market interpreted to mean that Rio will continue to dig up as much red dirt as it can. Hence the price crack on Friday.

The comments from Forrest indicate just how much damage the iron ore bear market is having on marginal cost producers. Aussie juniors won’t survive this price rout. It’s just a matter of time before they fold.

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Mining for tourists? A dubious economic savior in Appalachia – (Chattanooga Times Free Press – March 29, 2015)

http://www.timesfreepress.com/

Associated Press – SECO, Ky. (AP) – Mines built this company town. Could vines – the wine grapes growing on a former strip mine in the hills above – help to draw visitors here?

Jack and Sandra Looney sure hope so. Their Highland Winery – housed in the lovingly restored, mustard-yellow “company store” – pays tribute to coal-mining’s history here, as do their signature wines: Blood, Sweat and Tears.

“The Coal Miner’s Blood sells more than any of them,” Jack Looney says of the sweet red. He and his wife have converted the store’s second and third floors into a bed and breakfast. They’ve also bought and restored a couple dozen of the old coal company houses as rentals, and rooms fill up during their annual spring Miner’s Memorial Festival.

Seco, like so many Central Appalachian communities, owes its existence to coal – its very name an acronym for South East Coal Company. But as mining wanes, officials across the region are looking for something to replace the traditional jobs and revenues.

In some of the poorest, most remote counties, about the only alternative people can come up with is tourism – eco-, adventure, or, as with the Looneys, historical and cultural.

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Accent: Nuke waste plans stir Northern angst – by Mary Katherine Keown (Sudbury Star – March 28, 2015)

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

Nuclear is in the news, making some residents of Northern Ontario nervous. The Nuclear Waste Management Organization is scouting for a permanent storage solution for the waste produced by Ontario Power Generation Inc., Hydro-Quebec and the New Brunswick Power Corporation reactors.

Blind River and Elliot Lake are in the running to host a deep geologic repository (DGR), a storage facility that plunges more than 500 metres underground, in which nuclear waste will be buried. White River, Ignace, Hornepayne and Manitouwadge are also under consideration.

Robert Beaudoin sees red flags. A regular contributor to the Facebook group, Citizens Concerned about Nuclear Waste in Elliot Lake, which currently has 274 members, he believes there is “a lot of business potential” in the city and the presence of a DGR would be a deterrent.

“This is just going to put the big red letter on us,” he says. “Who’s going to want to live here? I can’t. I’ll take a loss on my house just to get away. I don’t want to raise my son around this.” He says he would rather lose his house and declare bankruptcy than jeopardize the safety of his seven-year-old. If the DGR is built in Elliot Lake, Beaudoin plans to relocate his family to the East Coast.

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Barrick Gold hires John Baird, Newt Gingrich – by Rachelle Younglai (Globe and Mail – March 27, 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. has tapped former foreign affairs minister John Baird and former top U.S. lawmaker Newt Gingrich to serve on its advisory board, the company said in regulatory filings.

Mr. Baird and Mr. Gingrich, a former Republican speaker of the U.S. House of Representatives, will join other political heavyweights including former Canadian Prime Minister Brian Mulroney on the miner’s international advisory board.

The board meets once a year and gives advice to the world’s biggest gold producer, which has operations in the Americas, Africa and Australia.

“The role of the board is to provide advice on geopolitical and other strategic issues that affect our business,” a company spokesman said. “Both Mr. Baird and Mr. Gingrich bring with them excellent credentials and experience in this regard,” he said. Mr. Mulroney chairs the board, which also includes former U.S. and German defense officials and a former prime minister of Spain.

No compensation details for Mr. Baird and Mr. Gingrich were disclosed in the filings.

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My turn: Mine development in British Columbia raises concerns – by Abe Tanha (The Juneau Empire – March 29, 2015)

http://juneauempire.com/

Abe Tanha is owner and operator of Hooked On Juneau, a locally operated fishing tour company.

As owner of a sportfishing business based in Juneau, I join a large group of Alaskans including Sens. Lisa Murkowski and Dan Sullivan, Rep. Don Young, 11 municipalities including CBJ and the Southeast Conference of Mayors, tribes, fishermen and tourism operators who are deeply concerned with the scale and speed of mine development in British Columbia. Thank you, Juneau Empire, for a thorough job documenting this issue for your readers.

Last week the Empire responded to a litany of outrageous claims from B.C.’s Minister of Energy and Mines, Bill Bennett, about the Mount Polley mine tailings dam failure and development in the transboundary region. Bennett’s remarks are a total mischaracterization of Alaskans’ concerns and the widespread call from Alaskans for International Joint Commission involvement.

As unprecedented as the Mount Polley catastrophe may have been, the tailings dam failed because of regulatory oversight. Bennett claimed government inspectors could not have detected the glacial silt layer; however, they did identify a plethora of issues related to poor design and maintenance of the dam. These went unaddressed by Imperial Metals.

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A Word From The Editor-in-Chief, March 27, 2015 – by Michael Stutchbury (Australian Financial Review – March 28, 2015)

http://www.afr.com/

Andrew Forrest’s eye-popping call for the world’s big iron ore producers to drive the iron ore price back up by capping their production shows what crazy things the desperate can do. Twiggy even made his “national interest” call in Shanghai, among Chinese buyers of the iron ore dug up by his own Fortescue, Rio Tinto, BHP Billiton and Brazil’s Vale and just as he was about to meet Xi Jinping.

The Fortescue founder is a man of bold ambition and enthusiasm: creating the third force in Australian iron ore, enlisting the Pope to help end modern slavery, and pushing Tony Abbott to narrow indigenous disadvantage. He won’t end up behind bars for his latest big idea, but he is calling for what both Joe Hockey and ACCC chairman Rod Sims suggested would be an illegal producer cartel. As our Matthew Stevens asked: What was Forrest thinking?

Twiggy’s call is a spectacular sign of Australia’s big iron ore price squeeze. Forrest became a billionaire in the 2000s by creating Fortescue on the back of the China boom that drove the iron ore price from US$20 or so a tonne to $US180 a tonne. Now supply has belatedly responded to the increased demand, the price has hurtled back into the US$50s. That’s crunching Fortescue’s margins and forced it to keep producing more to keep its head above water.

In fact, in the past four years, Fortescue has boosted output more than Rio or BHP. But that’s just kept driving down the price towards Fortescue’s cost of production.

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Copper price falls as Chile brings 1.6mt back on line – bt Frik Els (Mining.com – March 27, 2015)

http://www.mining.com/

Some 1.6 million tonnes of copper capacity is being restarted in Chile following torrential rains in the north of country which halted production at a number of the country’s largest operations.

The price of copper in New York fell on the news with May futures trading on the Comex market giving up 1.8% to $2.756 a pound. Copper is down 7.6% compared to a year ago, but up sharply from five-and-half-year lows struck in January.

Chile is responsible for a third of the world’s mined output of copper with many of the largest mines located in the Atacama desert. Before the unusual weather this week, a drought was reducing production as a result of water restrictions imposed by the authorities. In April 2014 a major earthquake also temporarily halted output at a number of large mines.

State-owned giant Codelco confirmed it had restarted mining operations at its Chuquicamata, Ministro Hales, Radomiro Tomic, Gabriela Mistral, and Salvador mines after a three-day hiatus due to the state of access roads, power problems and safety concerns following the downpours.

Codelco was forecast to produce 1.6 million tonnes of copper this year – already down 5% from 2014 – and the affected mines represented some 60% of the Santiago-based company’s production capacity.

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Noront CEO says new acquisition changes how industry, First Nations and goverment work together – by Matt Vis (tbnewswatch.com – March 27, 2015)

http://www.tbnewswatch.com/default.aspx

THUNDER BAY – The president and CEO of Noront Natural Resources acknowledges the acquisition of the claims formerly held by Cliffs Natural Resources is a game changer for the Ring of Fire.

Alan Coutts was in Thunder Bay on Friday in hopes of meeting with Matawa chiefs regarding the announcement earlier this week of Noront now holding nearly 65 per cent of the Ring of Fire.

While he did not get to meet with the chiefs, he said the consultation process needs to be completely re-evaluated. “I think we’ll probably have to take a couple of steps backwards to change the relationship and dialogue but ultimately it will allow us to go forward a lot further,” Coutts said at the company’s Thunder Bay office.

“We’re potentially redefining the landscape of how industry, First Nations and government work together for the entire nation.”

Matawa chiefs expressed concern about the sale, accusing the company of working outside of the framework agreement that had been signed last year and objecting to First Nations not having any input in the transaction.

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Posco Said to Be Backing Away From $12 Billion India Project – by Abhishek Shanker (Bloomberg News – March 27, 2015)

http://www.bloomberg.com/

(Bloomberg) — Posco is backing away from a planned $12 billion steel complex in India, which has been stalled by local disputes and lease issues since it was proposed a decade ago, people familiar with the development said.

South Korea’s biggest steelmaker has tried to get back the money it gave to government agencies in the eastern state of Odisha to secure some of the land, and for railway connections, according to three people and company letters seen by Bloomberg. Six of 13 employees at Posco’s Indian unit overseeing the project have also “voluntarily” resigned, spokesman I.G. Lee said in a text message.

“Still, we are on and waiting for further progress,” Lee said about the proposed steel complex. He isn’t aware of any letter from Posco seeking a refund, Lee said.

Posco’s Odisha project, the nation’s biggest foreign investment, has failed to take off since 2005 because of opposition from local farmers and the failure to secure iron ore mining leases. The steelmaker was able to overcome local resistance and get the state to acquire about 2,700 acres (1,093 hectares) of land for the first phase.

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Deadline looms for passenger rail service in Algoma – Linda Savory-Gordon Interview by Jason Turnbull (CBC News Sudbury – March 25, 2015)

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

 ‘There are resorts who are all booked up for this summer and they are frantic’

Advocates for rail service in the Algoma region say passenger trains will come to a halt at the end of the month without a deal with the federal government.

In February of 2014, CN Rail announced it was ending passenger service between Sault Ste. Marie and Hearst because the federal government was no longer willing to subsidize the route.

The federal government stepped in at the last minute to extend funding for an additional year to keep the trains rolling and allow time to make a business case for the service.

That one-year reprieve is almost over and there’s been no word from Transport Canada about what comes next for the rail line, which is the only way to access remote lodges between the Sault and Hearst.

“There are resorts who are all booked up for this summer and they are frantic and wondering if they are going to have to contact their clientele and tell them that there is no way they can come in,” said Linda Savory-Gordon with a group called the Coalition for Algoma Passenger Trains.

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