Republic of Mining

Banks Face U.S. Manipulation Probe Over Metals Pricing – by David McLaughlin and Tom Schoenberg (Bloomberg News – February 24, 2015)

February 25, 2015

http://www.bloomberg.com/

(Bloomberg) — The U.S. Justice Department is investigating whether the world’s biggest banks manipulated prices of precious metals such as silver and gold as it pushes to wrap up probes into currency-rate rigging, according to people with knowledge of the matter.

At least 10 banks, including Barclays Plc, JPMorgan Chase & Co. and Deutsche Bank AG, are being probed by the Justice Department’s antitrust division, said one of the people, who asked not to be identified because the matter is confidential.

Precious metals have come under scrutiny as authorities around the world investigate allegations that other financial benchmarks have been rigged. While the Justice Department’s probe is in its early stages, the Swiss finance regulator included the issue in a November settlement with UBS Group AG over currency-rate manipulation. Switzerland’s antitrust regulator said Tuesday that it opened a preliminary probe into the possibility of price fixing in the precious-metals market.

The U.K. Financial Conduct Authority is continuing to scrutinize firms’ behavior in relation to precious metals as part of continuing supervisory work spurred by the foreign-exchange probe. While the FCA doesn’t have authority over physical markets, it does regulate derivatives. In that context, it’s already issued one fine, ordering Barclays to pay 290 million pounds ($447.5 million) in May for a former trader who artificially suppressed the price of gold in 2012 using fake positions to avoid triggering a payout to a client.

South Africa drops out of top 10 in Africa for mining investment – by Frik Els (Mining.com – February 24, 2015)

February 25, 2015

http://www.mining.com/

According to the latest annual global survey released Tuesday by Canadian think tank the Fraser Institute, South Africa has fallen out of the top ten mining investment destinations on the continent and dropped 11 places to 67th globally.

The institute’s Annual Survey of Mining Companies 2014, rates 122 jurisdictions around the world based on their geologic appeal and the extent to which government policies encourage exploration and investment.

“While it is useful to measure the attractiveness of a jurisdiction based on policy factors such as onerous regulations, taxation levels, the quality of infrastructure and so forth, investment decisions are often based on the pure mineral potential of a jurisdiction. Indeed respondents consistently indicate that roughly only 40% of their investment decision is determined by policy factors,” according to the report.

The survey covers Central African Republic, Egypt, Lesotho, Mauritania, Morocco, South Sudan, Sudan, and Uganda for the first time, but it’s at the top of the rankings that trends are most visible. And it’s not encouraging for the continent’s long-time stalwart.

South Africa is ranked the 11th most attractive African destination for investment in the resources sector behind the Democratic Republic of the Congo.

BHP in race between cost-cutting and commodity prices – Clyde Russell (Reuters U.S. – February 25, 2015)

February 25, 2015

http://www.reuters.com/

LAUNCESTON, Australia, Feb 25 (Reuters) – The jump in BHP Billiton’s shares after profits plunged shows a mindset akin to buying tickets for the Titanic’s second voyage because the gash in the hull from striking the iceberg isn’t as bad as feared.

BHP’s Australian-listed stock jumped almost 3 percent on Tuesday to close at A$33.06, and extended gains to A$33.54 in early trade in Sydney on Wednesday, a three-month high.

The world’s biggest mining company posted a 31-percent drop in half-year underlying attributable profits to $5.35 billion, but this was ahead of the consensus forecast of $5.1 billion. An increase in the interim dividend to $0.62 a share was also ahead of market forecasts, and this goes a long way to explaining the boost in the share price.

But delve deeper into BHP’s results for the half-year ended Dec. 31 and the impact of the rout in commodity prices becomes more apparent, as does the prospect of even lower profits in coming reporting periods.

Even Chief Executive Andrew Mackenzie adopted a sombre tone, telling a call with analysts that the price of iron ore, the miner’s main commodity, was likely to remain under downward pressure as more supply comes to market.

Global ferrochrome market to be in 11,000-mt deficit in 2015: Yildirim – by Mayumi Watanabe (Platts.com – February 25, 2015)

February 25, 2015

http://www.platts.com/

Tokyo (Platts) – The global ferrochrome market will be in a deficit of 11,000 mt, as demand from the stainless steel sector outgrows production, Turkey’s Yildirim Group said Wednesday.

Yildirim’s subsidiary, ETI Krom, is the world?s largest high-grade lumpy chromium ore producer and combined with Vargon Alloys in Sweden, is the world’s second-largest high-carbon ferrochrome producer, according to the group’s website.

Global charge chrome and high carbon ferrochrome production in 2015 is expected to rise by 4% from 2014 to 11.69 million mt in total, slowing from the previous year’s 8.8% growth, Yildirim said in a research report. Production in 2014 was 11.23 million mt, it added.

China’s production fell by 330,000 mt in the second half of 2014 from the fist half, triggered by slowing demand from the steel sector. China’s production as a result was 4.4 million mt in 2014, up 10% from 2013.

In 2015, China is expected to produce 4.5 million mt, up a marginal 2%, Yildirim said. Production outside of China is seen at 7.2 million mt in 2015, up 5.2% from 2014.

Malaysia worst global jurisdiction for mining – survey – by Dorothy Kosich (Mineweb.com – February 25, 2015)

February 25, 2015

http://www.mineweb.com/

Finland is ranked No. 1 for global mining investment, says the newly issued Fraser Institute survey.

The 2014 Fraser Institute Survey, which was made public Tuesday, ranks Finland, Saskatchewan, Nevada, Manitoba, Western Australia, Quebec, Wyoming, Newfoundland and Labrador, the Yukon, and Alaska as the top 10 jurisdictions for mining investment.

Five Canadian jurisdictions finished in the top 10 internationally, along with three US states, and the state of Western Australia.

Malaysia ranks as the least attractive jurisdiction for mining investment, followed by Hungary, Kenya, Honduras, Solomon Islands, Egypt, Guatemala, Bulgaria, Nigeria, and Sudan.

Six African countries ranked in the bottom 10 in the worldwide survey rankings in 2014. Kenya’s overall ranking plunged from 79th in the Fraser Institute’s 2013 survey to 112th in the most recent survey. The greater deterioration came from Nigeria which dropped from 75th in 2013 to 116th in 2014. Contributing to Nigeria’s decline was concerns regarding environmental regulations, trade barriers, regulatory duplication and the legal system.

At the same time, 2013’s lowest ranking jurisdictions all climbed out of the bottom 10. Niger, Argentina and its provinces Catamarca, La Rioja, Neuquén and Rio Negro, all improved their scores to move out from the bottom 10 ranking, along with Uruguay and Kyrgyzstan.

NEWS RELEASE: AME BC Responds to Fraser Institute Annual Survey of Mining Companies

February 25, 2015

http://www.amebc.ca/

Vancouver, BC — February 24, 2015 —The Association for Mineral Exploration British Columbia (AME BC) responded today to the release of the 2014 Fraser Institute Annual Survey of Mining Companies. According to the Fraser Institute, the survey attempts to assess how mineral endowments and public policy factors affect exploration investment. The province of British Columbia appears in the top third of the Investment Attractiveness Index, ranking 28th out of 122 jurisdictions in 2014 compared with 16th out of 112 jurisdictions in 2013.

However, its ranking within Canada, at 10th out of 12 provinces and territories compared to 7th out of 12 in 2013, is not consistent with actual investment in mineral exploration and deposit appraisal according to data from Natural Resources Canada.

“We appreciate the efforts of the Fraser Institute in developing an important barometer for sharing qualitative perceptions of jurisdictions,” mentions Gavin C. Dirom, President & CEO of AME BC. “However, according to quantitative data provided by Natural Resources Canada, BC’s share of mineral exploration investment has more than tripled from 6 per cent in 2001 to 21 per cent in 2014. At the same time, BC’s ranking among provinces in attracting mineral exploration and development investment has risen from fourth place in 2009 to second place, only behind Ontario, in 2013 and 2014.

Furthermore, one of the best indicators of success in exploration is seeing discoveries move through to mine development. In recent years, we have seen a number of new major metal mines constructed in our province, including Copper Mountain in 2011, New Afton in 2012 and Mt. Milligan in 2013.

Anglo’s zinc loss now Vedanta’s sweet gain – by Martin Creamer (MiningWeekly.com – February 25, 2015)

February 25, 2015

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

JOHANNESBURG (miningweekly.com) – London-listed diversified mining company Vedanta Resources has found itself in a sweet spot as the owner of the zinc assets that Anglo American saw fit to sell off four years ago, when China seemed in perpetual oversupply mode and small operations abounded.

But China is no longer supplying as it did in the past and there have been anticipatory price improvements over the last eight months on the expectation that zinc supply is leaving the market.
The only other London Metal Exchange commodity that is approaching zinc’s current price firmness is aluminium, also because of market pessimism engulfing it for so long.

Meanwhile, the reserves of Anglo’s former zinc assets have been significantly extended under Vedanta’s management, to a point where the India-rooted company will have full payback of its original investment even before the deal’s key Gamsberg asset comes into play.

Vedanta bought Anglo Zinc for $1 338-million in May 2010 and has been investing in underground and near-pit development since 2012. The additional life it has given to the Black Mountain mine in South Africa’s Northern Cape and the Skorpion operations in Namibia has added significant value.

Vale to pay Newfoundland $230-million for nickel export boost – by Sue Bailey (Canadian Press/Globe and Mail – February 25, 2015)

February 25, 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.

ST. JOHN’S — Mining giant Vale SA will pay Newfoundland and Labrador $230-million for letting the company export more Voisey’s Bay nickel concentrate while a processing plant ramps up in the province.

Vale will be allowed to export another 94,000 tonnes that must be replaced later, Natural Resources Minister Derrick Dalley said Tuesday.

The move will mean $200-million in compensation from Vale over three years. Another $30-million in community investments from the company are to be negotiated with the province. Complex design and other issues have delayed full operation of the Long Harbour processing plant, about 120 kilometres west of St. John’s.

The $4.3-billion facility will be an asset for years to come, Mr. Dalley said. The announcement is on top of other export allowances in 2013 and 2002, totalling 633,000 tonnes in potential processing exemptions that must be replaced.

Stuart Macnaughton, Vale’s vice-president of operations in the province, said the added flexibility means mining at Voisey’s Bay in Labrador will continue while the plant in Long Harbour is finished.

Obama’s veto of Keystone XL bill is a slap in Canada’s face – by Claudia Cattaneo (National Post -February 25, 2015)

February 25, 2015

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

U.S. President Barack Obama made good Tuesday on his threat to veto a bill to approve the Keystone XL pipeline, maintaining under his full control the final decision on the Canadian project’s future.

His office downplayed the gesture, only the third veto of his presidency. There was to be no “drama or fanfare around it,” said White House press secretary Josh Earnest.

It’s “certainly possible” that Obama will approve the pipeline once a State Department review of the project is completed, he added, though he gave no deadline for a decision.

Yet the move is another slap in the face to Canada, which has championed the pipeline for years and did everything by the book to get it approved, only to be led down the garden path, through a maze of roadblocks and traps, by its supposed best friend and ally.

“I think you should take this personally,” said Matt Koch, vice-president at the U.S. Chamber of Commerce’s Institute for 21st Century Energy.

[Japan] Govt aims to commercialize seafloor mining in 2020s (The Japan News – February 22, 2015)

February 24, 2015

http://the-japan-news.com/

The Yomiuri Shimbun

The government is aiming to commercialize the mining of rich seafloor deposits around Japan of such mineral resources as copper in the 2020s, according to officials.

The nation has relied on imports to meet demand for mineral resources like copper, lead, gold and silver since many domestic mines were shut down by the end of the 1970s. Mining these resource-abundant seafloor deposits could help shake off Japan’s reputation as a nation with few resources.

At a press conference at the end of January, Tetsuro Urabe, a professor emeritus of the University of Tokyo, could hardly conceal his excitement. He was announcing the discovery of a deposit about 1,400 meters below the ocean surface off Okinawa Prefecture’s Kumejima island.

“The minerals there are of a quality I’ve never seen before,” Urabe said. “One could say this discovery is astonishing.”

The research was conducted by Japan Oil, Gas and Metals National Corporation (JOGMEC) using a remote-controlled vehicle, which retrieved six samples of ore with copper concentrations 15 to 30 times higher than those mined in South America.

Rio Tinto boss Sam Walsh: Glencore merger is ‘fantasy’ – by Matt Chambers (The Australian – February 25, 2015)

February 24, 2015

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

RIO Tinto managing director Sam Walsh says a merger with Ivan Glasenberg’s Glencore will never happen because it would not clear regulatory hurdles even if Glencore came up with an offer that provided value for Rio.

And the mining boss claims BHP Billiton’s planned South32 spin-off, which BHP chief Andrew Mackenzie describes as a “key differentiator”, is just portfolio management that Rio has already completed.

At a Chatham House event in London, Mr Walsh said the much-hyped prospect of Glencore making a bid for Rio when a six-month “put up or shut up” moratorium ends, and then somehow taking Rio over, was fantasy.

“Part of the reason is value but part of the reason is the anti-trust and people who collect tax and what have you, they’re simply not going to let it happen,” he said.

Mr Walsh added that BHP’s failed $US160 billion takeover of Rio in 2007 fell over primarily because anti-trust regulators would not let it happen.

BHP Billiton spin-off a bright spot in commodities gloom – by Sonali Paul (Reuters U.S. – February 23, 2014)

February 24, 2015

http://www.reuters.com/

MELBOURNE – (Reuters) – When global miner BHP Billiton reports its half-year results on Tuesday, the only parts of the company that are likely to report profit growth are some of the unloved assets it aims to spin off by June.

Commentators had dubbed the company BHP plans to hand to shareholders “DudCo” before it was christened South32, as the aluminum, manganese, nickel, some coal and silver businesses barely contributed to BHP’s earnings.

But now those businesses are looking rosier as prices for aluminum and manganese are improving in a world where prices for BHP’s four biggest products, iron ore, petroleum, copper and coal, have all collapsed to near six-year lows.

Despite the improvement, BHP wants to shed the smaller assets so it can focus on its four core commodities, and still believes that shareholders will gain more if South32 is freed to develop assets that were starved of capital amid an iron ore and coal boom.

The world’s biggest miner is expected to report a 34 percent slide in half-year underlying attributable profit to $5.1 billion, but within that, Deutsche Bank sees earnings from aluminum nearly tripling while manganese earnings are seen improving by around 45 percent.

Vale gets extension for exporting Voisey’s Bay ore – by Terry Roberts, CBC News Newfoundland – February 24, 2015)

February 24, 2015

http://www.cbc.ca/news/canada/newfoundland-labrador

Long Harbour nickel plant now schedued for full production by 2018-19

Vale has won approval from the Newfoundland and Labrador government to export more nickel concentrate from its mine at Voisey’s Bay, as a result of delays in commissioning its $4.25 billion processing plant in Long Harbour.

The company will pay $200 million over four years in compensation for the right to export an additional 94,000 tonnes of nickel concentrate from its mine on Labrador’s northern coast to its other processing facilities in Ontario and Manitoba. Vale will contribute another $30 million to a community fund.

The exemption gives Vale flexibility in its efforts to bring its nickel processing plant in Long Harbour, in Newfoundland’s Placentia Bay, up to full capacity, and to avoid any production interruptions at the Voisey’s Bay mine, which is one of the Canada’s most significant nickel finds.

The latest amendment to the Voisey’s Bay Development Agreement was announced Tuesday morning by Natural Resources Minister Derrick Dalley and Stuart Macnaughton, Vale’s vice-president of operations in Newfoundland and Labrador.

“Had the export cap not been increased, we would have been left with no choice but to stop operating in Labrador for up to 18 months and not resume normal operations at Voisey’s Bay until Long Harbour was able to process larger quantities of nickel concentrate from Voisey’s Bay,” said Macnaughton.

My Turn: Mining disasters must end with Mount Polley – by Bill Bennett (Juneau Empire – February 24, 2015)

February 24, 2015

http://juneauempire.com/

Bill Bennett is the Minister of Energy and Mines for the province of British Columbia.

It’s unfortunate your editorial has seized upon the Mount Polley mine tailings storage facility failure to undermine the long tradition of respectful relations and co-operation between British Columbia and Alaska on mining development and environmental protection.

A breach of this magnitude is unprecedented in British Columbia in over 160 years of mining. Major breaches of tailings storage facilities have happened all over the world, including in many U.S. states. Your suggestion, based on the Mount Polley failure, that in B.C. we are somehow less responsible in developing our mining industry than you are in Alaska, or that we’re charging forward without due care for environmental protection is based on a misrepresentation of the facts. Let me set the record straight on a few things.

The independent panel traced the cause of the failure at Mount Polley to the original design of the tailings storage facility, and concluded that government inspectors could not have detected the issue.

The panel also noted that it considered the technical qualifications of British Columbia government inspectors as among the best that it has encountered among agencies with similar duties.

Most importantly, it is most certainly not “business as usual” in British Columbia regarding mine tailings storage facilities.

Commodity crash reflects global economic slump – by Brent Jang (Globe and Mail – February 24, 2015)

February 24, 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.

VANCOUVER — Global commodity prices have tumbled to levels below the depths of the Great Recession, underscoring the widespread difficulties facing the global economy.

While crude oil’s price collapse has been in the spotlight, a wide range of other commodities are suffering as well, including natural gas, coal, iron ore, copper, grain and pulp and paper.

The commodity crash is the result of too little demand for raw goods now in plentiful supply after producers ramped up capacity in recent years in anticipation of steady global growth.

But trouble spots are everywhere. Commodity markets have declined during worldwide turbulence as the pace of growth in China continues to slow, Russia grapples with an imploding economy and ruble and Greece struggles through an economic crisis that Europe must solve. Oil’s big drop has hurt many energy-producing countries, including Canada, where low prices are hammering Alberta and reducing growth for Canada as a whole.