Republic of Mining

Zambia’s tax regime keeps lid on First Quantum spending plans – by Geoffrey York (Globe and Mail – February 9, 2015)

February 10, 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.

CAPE TOWN — With no sign of compromise from Zambia on a controversial royalty tax regime, First Quantum Minerals Ltd. says it will prolong its suspension of more than $1-billion in mining investment plans in the African country.

The Vancouver-based company, whose investments in Zambia include a majority stake in Africa’s biggest copper mine, is among the Canadian miners that were heavily affected by Zambia’s decision to triple its open-pit mining royalty rate to 20 per cent from 6 per cent last month.

Some analysts had predicted that Zambia might roll back some of the royalty hike after its presidential election last month, but government leaders are giving no hint of a reversal so far.

“They’re sticking to their guns,” Matt Pascall, operations director for First Quantum, said in an interview on Monday. “All the latest statements by the minister of finance, and even the president, indicate no change.”

First Quantum had planned an expansion of its biggest Zambian asset, the Kansanshi copper mine, and a smelter, but those investments are now “still on hold,” Mr. Pascall said.

Mexican mining kidnap victims found safe – by Dorothy Kosich (Mineweb.com – February 10, 2015)

February 10, 2015

http://www.mineweb.com/

Although the Media Luna project kidnap victims have been recovered by Mexico authorities, analysts are still taking aim at Torex Gold Resources.

Torex Gold Resources (TSX:TXG) traded down Monday after news broke late Friday about the abduction of local community members near Torex’s Morelos mine project, located in the Guerrero state of Mexico, where 43 student teachers were reportedly kidnapped and allegedly burned to ashes in Cocula in southern Guerrero last year.

At least 12 people were reported kidnapped in Cocula Friday, according to the Associated Press. Initially there were conflicting reports concerning how many where taken and whether some of the victims worked for Media Luna, a subsidiary of Toronto’s Torex Gold Resources.

However, Bloomberg reported on Monday that Mexican security forces have freed 10 of the victims who had been abducted. Acting on information from Cocula residents, the Mexican army and federal police found 13 people spread out among three locations. At least two of the group allegedly helped carry out the kidnappings. One person was treated for gunshot wounds.

In a statement issued Friday, Torex Resources said only one of the 12 missing community members actually worked directly for the Media Luna gold project as a laborer, while three others work for contractors to the project.

IRS targets uranium producer Cameco as CRA tax dispute intensifies – by Peter Koven (National Post -February 9, 2015)

February 10, 2015

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

The U.S. Internal Revenue Service is demanding back taxes from Cameco Corp., adding to the miner’s ever-growing tax woes ahead of a crucial trial expected next year.

The IRS believes the revenue reported by Cameco’s Swiss subsidiary, Cameco Europe Ltd., is inadequate and that a portion should be taxed back in the U.S. at a much higher level. The claim is similar to the one made by the Canada Revenue Agency (CRA), which is trying to shift Cameco Europe’s revenue to Canada and apply a debilitating collection of back taxes and penalties.

Cameco insists it has done nothing wrong. But the Saskatoon-based miner said that if it loses the CRA dispute, the amount of back taxes and transfer-pricing penalties could amount to as much as $1.5-billion, with other penalties added on top. That would be a devastating blow to the company.

The IRS demand is much smaller, as it seeks to collect US$32-million from Cameco that it feels it was owed in 2009. It is also auditing tax returns from 2010 to 2012, and Cameco expects the U.S. agency to make similar claims for those years.

While the IRS demands are insignificant compared to those of the CRA, some experts think the IRS move against Cameco could bolster the CRA’s case. At the very least, it gives the company another sizable headache to deal with.

Alaska tribal groups push for study on B.C. mine safety (Canadian Press/CTV News – February 9, 2015)

February 10, 2015

http://www.ctvnews.ca/

KETCHIKAN, Alaska — A coalition of aboriginal tribes in southeast Alaska is calling for a Canada-U.S. commission to study the impacts of British Columbia’s mining industry on shared waters because of last summer’s collapse of a tailings-pond dam.

Some 14 tribes have formed the United Tribal Transboundary Mining Work Group to urge both governments to evaluate B.C. mining-safety practices through the International Joint Commission.

The call follows the release of an independent report in late January that blamed an inadequately designed dam for the Aug. 4, 2014 incident that saw 24 million cubic metres of silt and water flow into nearby lakes and rivers at the Mount Polley open-pit, gold-and-copper mine near Williams Lake, B.C.

“Alaskans, we’re not at all convinced that B.C. can do all this mining without harming us,” said Carrie James, the group’s co-chair. “Environmental safeguards in B.C., they’ve been weakened over the past decade.”

The group’s main concern is its $1-billion fishery, located downstream from several large-scale mining projects, James said. They want an investigation into any potential long-term effects on the fish and other wildlife located along the transboundary rivers.

Tahoe to Buy Rio Alto for $1.09 Billion to Add Peru Gold – by Simon Casey and Liezel Hill (Bloomberg News – February 9, 2015)

February 10, 2015

http://www.bloomberg.com/

(Bloomberg) — Tahoe Resources Inc. agreed to buy Rio Alto Mining Ltd. for about C$1.35 billion ($1.09 billion) to add the La Arena mine in Peru in the gold industry’s biggest takeover in almost 10 months.
The cash-and-stock offer is valued at C$4 a share, or 22 percent more than Vancouver-based Rio Alto’s Feb. 6 closing share price, both companies said Monday in a statement.

Unlike many other precious-metal miners struggling amid recent commodity-price declines, Tahoe has gained financial strength after its Escobal silver mine in Guatemala started commercial production in January. The Reno, Nevada-based company’s cash balance jumped more than eightfold in the first three quarters of 2014. It announced its first dividend payment in November.

The enlarged company will have no net debt and its market capitalization will appeal to a larger group of institutional investors, attract more coverage from analysts and improve share trading liquidity, Tahoe and Rio Alto said.

“The combination would arguably create an intermediate multi-mine producer with low production costs, a strong balance sheet with net cash, and with a genuine growth profile,” said Daniel Earle, a Toronto-based analyst at TD Securities Inc.

The supermaterial that could launch a revolution – by Joseph Hall (Toronto Star – February 7, 2015)

May 13, 2016February 10, 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.

Graphene, a material that can be derived from the lead in an ordinary pencil, is on the cusp of transforming everything from touchscreens to tennis rackets.

In a lab off of a shaft-like corridor below the University of Toronto’s old Lassonde Mining Building, PhD student Changhong Cao is employing some strikingly humble equipment: Scotch Tape.

Surrounded by a nuclear microscope and high-powered computers, the mechanical engineer uses the Christmas wrapping staple to peel off the top layers from a square of graphite the size of a Scrabble tile.

That’s the same sort of carbon-based graphite at the centre of every ordinary pencil you’ve ever used. Then, repeatedly folding fresh segments of the tape over the captured graphite smudge, Cao peels off more and more of the carbon layers originally deposited on the sticky surface.

The resulting material — known as graphene — is the strongest on Earth and may now be on the cusp of transforming the world.

COLUMN-Nickel’s bull story; just a simple matter of timing? – by Andy Home (Reuters U.S. – February 10, 2015)

February 10, 2015

http://www.reuters.com/

Feb 10 (Reuters) – Good things, they say, come to those that wait. Just ask a nickel bull.

The nickel market went on a super-charged rally over the first half of last year, the benchmark London Metal Exchange (LME) three-month price racing up from below $15,000 per tonne to a May high of $21,625.

The trigger was the well-flagged but widely unexpected decision by the Indonesian government to ban the export of unprocessed minerals in January. At the stroke of a presidential pen, China’s massive nickel pig iron (NPI) sector lost its main source of feed.

Great expectations, however, were dashed by reality, specifically a compensatory surge in nickel ore supply from the Philippines.

The subsequent price collapse was as spectacular as the original rally. And here we are again, the London nickel market kicking its heels around the $15,000 level.

But the bull story hasn’t gone away. It has merely been postponed. Nickel is still metal analysts’ favoured upside pick over a two-year time horizon.

So, will this be nickel’s year (again)? Possibly, but there are many moving parts to this bull story and at its core lies one of the least transparent parts of the global industry.

Taliban boosting ties to organized crime: U.N. report [illegal mining] (Japan Times – February 10, 2015)

February 10, 2015

http://www.japantimes.co.jp/

WASHINGTON – In a worrying development for Afghanistan’s new leaders, Taliban militants are increasing their dealings with narcotics traffickers, illegal mining rings and kidnappers for ransom, a U.N. report said Monday.

“They are increasingly acting more like ‘godfathers’ than a ‘government in waiting,’ ” a report by the U.N. panel of experts on the Taliban said.

While the Taliban’s ties to drug traffickers dates back to the 1990s, the report also details the movement’s involvement in controlling natural resources, and thus depriving the central government of revenue.

Lapis lazuli mines in northeastern Badakhshan province are controlled by the Taliban who demand around $1 million annually from miners in exchange for being allowed to mine without fear of Taliban attacks, said the report.

In addition, the Taliban earn $240,000-$360,000 per year in extortion from truckers who carry the semiprecious stone away from the mines located in a predominantly Tajik-populated area.

The Taliban also pocket two-thirds of earnings from chromite mining in southeast Paktika province and an estimated $16 million annually from ruby mining in Jagdalak, east of Kabul, the report said.

Gina Rinehart’s Roy Hill mine is set for nasty losses – by Robert Gottliebsen (The Australian – February 9, 2015)

February 9, 2015

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

IF THE current iron ore price decline continues into 2017 and beyond, then Gina Rinehart’s massive $10 billion Roy Hill mine project is set for very large losses when it starts production next year.

And if the reports of safety problems in the construction phase are right, then the capital costs will blow out beyond $10bn, especially if unions start playing hard ball, as they often do when there is a safety cause.

Accordingly, it makes perfect sense for Gina Rinehart to sell her Fairfax shares because additional funding will almost certainly be needed. The fact that she is unhappy with Fairfax management and can exit at a small profit makes the sale even more sensible. It’s an investment that was made when the iron ore price was booming.

The royalties the family receives from Rio Tinto iron ore production provide an underlying base of additional funding which means that the Hancock empire is not about to fall over. Nevertheless, the Hancock empire is set for a nasty experience.

If the mine, rail and ports are constructed on budget, the hi-tech facility is expected to have operating costs that would enable it to be profitable on a cash basis even if the iron ore price stays at existing levels.

Mining companies suffer reversal of fortune in Africa – by James Wilson and Andrew England (Financial Times – February 8, 2015)

February 9, 2015

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

Mining companies’ excitement over Africa is being cooled by fresh five-year lows in commodity prices — resulting in cuts to investment in even the most resource-rich countries.

When the commodities supercycle was in full swing, Africa was a frontier of choice, offering investors some of the best but least-explored mineral resources. Miners scrambled for choice assets, exemplified by Rio Tinto’s $3.7bn acquisition of a coal project in Mozambique in 2011. But, in sharp contrast, the past year has been bitter for miners. South Africa’s platinum sector endured a five-month strike; iron ore mines closed in Ebola-hit Sierra Leone; and copper-rich Zambia crossed swords with global companies over a tax rise.

This stark reversal of fortune was highlighted when Rio sold out of Mozambique for just $50m last year, cutting its heavy losses on a hasty deal. In in recent weeks, the outlook has turned even more ominous, as commodities prices reached their lowest in more than five years fuelled by oversupply and fears over Chinese demand.

“When you look at the prices, obviously all of the mines are seriously concerned,” says Jackson Sikamo, president of the Zambian Chamber of Mines. “The Chinese economy is affecting everybody around the world. The Chinese economy sneezes and all of us catch a cold.”

Uranium-rich Australian state to examine possible nuclear industry – by Morag MacKinnon (Reuters U.K. – February 8, 2015)

February 9, 2015

http://uk.reuters.com/

PERTH – Feb 8 (Reuters) – – South Australia, home to one of the largest uranium deposits in the world, will conduct an inquiry into the potential benefits and risks of establishing a nuclear industry there, the state government said on Sunday.

South Australian Premier Jay Weatherill said a commission would be set up to investigate the potential of the nuclear industry to deliver economic growth and combat climate change, and to examine the risks involved.

Australia’s uranium reserves are the world’s largest, according to the World Nuclear Association, accounting for almost a third of known global deposits, but it has no nuclear power plants of its own.

“This is an opportunity to explore practical, financial and ethical issues raised by deeper involvement in nuclear industries,” Weatherill wrote on his twitter account. BHP Billiton’s Olympic Dam mine in South Australia is one of the largest uranium deposits in the world.

In 2012, the global miner shelved a planned $20 billion expansion of the mine due to falling copper and uranium prices, dealing a big blow to South Australia’s economy.

After Mount Polley: ‘This is Indigenous Law’ – by Jerome Turner (The Tyee.ca – February 7, 2015)

February 9, 2015

http://thetyee.ca/

Six months after dam breach calamity, First Nation takes the lead on mining regulation.

Thursday marked six months since the Imperial Metals-owned Mount Polley mine became the site of the most devastating tailings storage facility disaster in Canadian history, when nearly 25 million cubic metres of toxic mine effluent waste and chemicals spilled.

The spill damaged both Hazeltine Creek and Quesnel Lake, which reside within the traditional territorial boundaries of the Secwepemc Nation.

An official report on why the spill happened from the Mount Polley mine itself was set for release at the end of January, but the B.C. government altered the regulations. Now a report from Mount Polley isn’t due until 2017.

Such moves from the provincial government have spurred the Secwepemc, and specifically the Xat’sūll (Soda Creek) First Nation, to takes steps to ensure nothing like Mount Polley happens again.

The Northern Secwepemc te Qelmucw leadership council, which is composed of four northern Secwepemc bands, finalized a mining policy dated Nov. 19, 2014. Formation of the mining policy began in 2012, but the Mount Polley spill provided the council the motivation to finish it.

Mine Tales: Nonmetals a valuable resource in N. Arizona – by William Ascarza (Arizona Daily Star – February 9, 2015)

February 9, 2015

http://tucson.com/

While Southern Arizona is known for its porphyry copper deposits, Northern Arizona is better known for its nonmetallic commodities, including basalt, helium, potash and carbon dioxide (CO2).

More than 600 cinder cones comprise the 1,800-square-mile San Francisco Volcano Field and its south-central edge of Flagstaff in Coconino County.

Created by strombolian (low-level) eruptions over the past 6 million years, the San Francisco Volcanic Field includes Sunset Crater, the state’s youngest volcano and most recent example of an eruption that occurred 1,000 years ago.

The area is known for its commercial production of scoria, a volcanic rock composed of basalt and andesite. These fine-grained, dark-colored, igneous rocks make up the cinder cones, which average 1,000 feet in height and a half-mile in diameter at the base.

The Atchison, Topeka & Santa Fe Railway Co. quarried and stockpiled basalt at Winona for use in railroad ballast, concrete aggregate and cinder block. Sheep Hill, a large volcanic cone on the east side of Flagstaff, hosts a cinder pit mining operation clearly defined by the impacted disturbance on its western flank. Its colorful striations dominate the landscape, and its product is used to provide traction on winter roads and as a decorative landscape material.

Afghanistan’s dilemma: copper or culture – by Lynne O’Donnell (Associated Press/Regina Leader Post – February 7, 2015)

February 9, 2015

http://www.leaderpost.com/index.html

Mining could endanger treasures

Treasures from Afghanistan’s largely forgotten Buddhist past are buried beneath sandy hills surrounding the ancient Silk Road town of Mes Aynak – along with enough copper to make the land glow green in the morning light.

An estimated five million tonnes of copper, one of the biggest deposits in the world, could provide a major export for a war-ravaged country desperately in need of jobs and cash. But the potential bonanza could endanger rare artifacts that survived the rule of the Taliban and offer a window into Afghanistan’s rich pre-Islamic history.

“The copper mine and its extraction are very important. But more important is our national culture,” said Abdul Qadir Timor, director of archeology at Afghanistan’s Culture Ministry. “Copper is a temporary source of income. Afghanistan might benefit for five or six years after mining begins, and then the resource comes to an end.”

The government is determined to develop Afghanistan’s estimated $3-trillion worth of minerals and petroleum, an untapped source of revenue that could transform the country. The withdrawal of U.S.-led combat forces at the end of 2014 and a parallel drop in foreign aid have left the government strapped for cash. It hopes to attract global firms to exploit oil, natural gas and minerals, ranging from gold and silver to the blue lapis lazuli for which the country has been known since ancient times.

NEWS RELEASE: Carlisle Signs Exploration Agreement With First Nation

February 9, 2015

TORONTO, Feb. 9, 2015 (GLOBE NEWSWIRE) — Carlisle Goldfields Limited (“Carlisle” or the “Company”) (TSX:CGJ) is pleased to announce that it, together with its Lynn Lake Joint Venture (the “LLJV”) partner AuRico Gold Inc. (“AuRico”), has entered into a comprehensive Exploration Agreement (the “Agreement”) with the Marcel Colomb First Nation (“MCFN”) and the Marcel Colomb Development Corporation (“MCDC”).

The Agreement states that “…the MCFN is committed to principals of economic sustainability and growth for its members, environmental stewardship and self-determination in respect of MCFN lands and resources and wishes to establish a cooperative and respectful long-term relationship with both AuRico and Carlisle.” Further, “the LLJV recognizes and respects the Aboriginal and Treaty rights and interests of MCFN, together with their constitutional and other legal rights and desires to maintain open and friendly, cooperative, on-going communications and a positive working relationship,” and further that “this Exploration Agreement is not in derogation of abrogation of any inherent treaty, aboriginal, title or like right of MCFN.”

The Agreement also states that “…the parties agree that it is their common objective to assist MCDC and MCFN members to benefit from business opportunities associated with Exploration Activities undertaken by the LLJV…” and that…”assuming the Feasibility Study is positive, the Parties commit to make best efforts to develop an Impact Benefit Agreement (IBA) consistent with this Exploration Agreement.”

Chief Andrew Colomb of the Marcel Colomb First Nation stated that “We are pleased to have signed this Agreement with Carlisle and AuRico. Carlisle has proven to be a supportive and engaged partner of the Marcel Colomb First Nation over the years.