Republic of Mining

Investors hard to come by in mining industry downfall – by Rachelle Younglai (Globe and Mail – March 2, 2015)

March 2, 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.

TORONTO — As the beleaguered mining sector suffers through another year of its deepening slump, the industry’s boom days are but a distant memory.

It’s an ugly time for the junior mining industry, as companies descend on Toronto for the annual Prospectors and Developers Association of Canada conference. Already starved for cash, small mining companies are facing their fourth consecutive year of declining commodity prices.

Since 2011, gold is down 30 per cent. Iron ore and metallurgical coal, both used to make steel, are about 70 per cent lower. Copper is down 40 per cent and nickel is off by 50 per cent. Shares of a slew of junior mining companies have crumbled to just a few pennies apiece.

The downturn has made it much harder to entice investors. Don Hoy, who discovered the large chromite deposit in Ontario’s Ring of Fire mineral belt, said investors’ attitude toward small mining companies has changed.

During the commodity boom several years ago, Mr. Hoy said “people did not want to miss the boat. They had to get involved.” But, “a lot of projects were far fetched,” he said.

“Now, investors are much more sophisticated.

Ottawa, Queen’s Park fund Ring of Fire road study – by Ian Ross (Northern Ontario Business – March 01, 2015)

March 2, 2015

http://www.northernlife.ca/

Will spend $732K in a First Nations-led initiative

First Nations in Ontario’s Far North are being empowered to have a say on a future road to reach the stranded chromite and nickel deposits in the Ring of Fire.

Four Aboriginal communities in the vicinity of the isolated mineral belt in the James Bay lowlands received more than $732,000 from the federal and provincial governments to conduct a Regional Community Service Corridor study.

In championing it as a First Nation-led initiative, federal Natural Resources Minister Greg Rickford and Ontario’s Northern Development and Mines Minister Michael Gravelle kicked off the opening of the Prospectors and Developers Association of Canada’s annual convention in Toronto on March 1 with the joint announcement.

The partnership involves the remote communities of Webequie, Eabametoong, Neskantaga and Nibinamik. The money will cover the costs of satellite imagery and GIS mapping of the terrain in the James Bay region, combined with an extensive consultation process with the area communities that is expected to take four to six months.

PDAC 2015: Optimism clashes with reality on day one of conference – by Peter Koven (National Post – March 2, 2015)

March 2, 2015

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

As the junior mining sector continues to scrape along the bottom, the world’s biggest mineral conference is the one place where they can always find some reason for hope.

The annual Prospectors and Developers Association of Canada (PDAC) conference kicked off in Toronto on Sunday. Not surprisingly, the mood on the conference floor was a little subdued as metal prices continue to slump, financing dollars remain scarce, and the S&P/TSX Venture Composite Index trades near an all-time low.

“Everybody here is hoping to weather the storm,” Aubrey Eveleigh, chief executive of graphite firm Zenyatta Ventures Ltd., said in an interview. “They’re waiting for a turnaround in the sector because we’ve seen it before. They’re hanging on with the little bit of money they have.” But even in a rough year, the PDAC conference can reliably attract around 25,000 people, and another big crowd is expected at this year’s show.

On day one, they got a big burst of optimism from the mining industry’s most famous promoter: Robert Friedland of Ivanhoe Mines Ltd. He kicked off a commodity outlook panel with his usual gusto, talking about the giant urbanization trend that continues to happen worldwide and predicting it will have very positive implications for metal prices.

Republicans need to make it clear that Keystone will help end U.S. dependence on Mideast oil – by Ted Morton (National Post – March 2, 2015)

March 2, 2015

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

What do American Sniper, Chris Kyle and the Keystone XL pipeline have in common? Most Americans would probably say “nothing.” Unless that changes soon, U.S. President Barack Obama and the Democratic minority in Congress will succeed in sustaining the veto over Keystone that Obama exercised last week.

If the Republicans want to win this battle, they have to change their message. The Keystone pipeline is not about creating more jobs over the next three years, but about saving more lives over the next three decades — lives of young Americans being sent to the Middle East to defend America’s security of supply of imported OPEC oil.

The recent collapse of oil prices and availability of cheap gasoline have made it easy for Americans to forget how dependent on Middle East/Arab oil the U.S. and its allies still are. Thanks to the shale revolution of the past decade, U.S. oil production has risen three-million barrels per day (b/d) to 8.5-million b/d. But American consumption of oil is still double this amount, so the Americans are still importing 7.6-million b/d. While more and more of this is now coming from Canada — over three-million b/d — most of it still comes from the Middle East.

U.S. shale oil is not going to change this. Contrary to what most Americans may assume, OPEC’s share of global oil production has actually risen since 1985 from 30% to 39%. And OPEC’s share of global production is projected to continue to increase to 49% by 2040.

Roads from riches in Ring of Fire – by Rick Millette (Timmins Daily Press – March 1, 2015)

March 2, 2015

http://www.timminspress.com/

Rick Millette is a Senior Executive Director/Ring of Fire at Northern Policy Institute.

What is the one thing that would make living in Ontario’s far North communities better? If you asked that question to seven people knowledgeable about the North, you might very well get seven different answers. Clean drinking water. Functional sewer systems. Quality education. Improved health services. Reliable electricity. Healthy food at affordable prices. Better housing.

To a large degree, this wish list stems from the fact that Ontario’s far North communities are accessible only by air for most of the year. These challenges rarely exist for communities with road access.

Astronomically high costs are attached to anyone or anything that has to fly to these places. If the weather cooperates, a winter ice road might provide a month or two of access in every year. There have been poor weather conditions in recent years attributed to global warming. If the pattern continues, winter road construction and use will be progressively problematic.

So what is the one thing that would make living in the far North better? Answer: a network of year-round roads. While there are correlations to improving the quality of life at all levels through road access, none illustrate the benefits more strongly or tangibly than food and fuel.

Juniors struggle in sea of red tape, fees and demographic losses – Benjamin Cox – by Simon Rees (MiningWeekly.com – February 27, 2015)

March 2, 2015

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

TORONTO (miningweekly.com) – As the industry prepares for the 2015 Prospectors and Developers Association of Canada’s conference, many have written off the past year as another annus horribilis – a horrible year filled with more impairments, fire sales, debt headaches and muted prices.

The junior sector has struggled most, with many falling by the wayside or clinging on by their fingernails. But some have bucked the trend and have advanced their projects with inventiveness and flexibility.

The situation is unlikely to change any time soon, Oreninc MD Benjamin Cox told an audience at the Canadian Institute of Mining’s Management and Economic Society, in Toronto, on Wednesday. “So are you thinking about how you’ll survive over the next two years?” he asked. “Because I can tell you it’s not going to get better for a little while yet.”

Critical for the juniors had been the ongoing dearth of finance and liquidity. The major cause of this was the preference among investors for oil and gas over mining when choosing the extractive industries.

Of the money that was moving towards mining, most was being fed into the seniors’ corporate restructuring, leaving the juniors waiting at the back of the line.

Miners descend on Toronto amid brutal market downturn – by Lisa Wright (Toronto Star – March 1, 2015)

March 1, 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.

“This is certainly a trying year for the mining sector and many feel attendance at
the convention will be lower than last year,” says industry observer and mining blogger
Stan Sudol. “Financing is hard to come by, but if you have a good project you will find
the money,” says Sudol, of republicofmining.com (Toronto Star – March 1,2015)

Metal prices are at rock bottom levels, but that won’t stop 25,000 miners from four days of networking at the annual prospectors’ convention

Thousands of miners and investors are flocking to Toronto this week for the world’s largest annual prospectors’ convention, amid a severe downturn in all things metallic.

The frigid temperatures that Toronto has struggled with lately are nothing compared to the deep freeze the mining industry has endured over the last couple of years, analysts say. Everything from gold and platinum to copper and zinc continue to take a beating on metals markets, and small-cap junior exploration companies are desperately seeking financing to stay in the bush.

Even giants such as Canada’s Barrick Gold Corp. and Goldcorp Inc. have suffered record losses, slashed budgets and taken massive write-downs on problematic projects — mainly because it’s not economic to build and operate mines with rock-bottom metal prices.

Platinum CEOs say mechanisation not a panacea – by David McKay (MiningMx.com – February 27, 2015)

February 27, 2015

http://www.miningmx.com/

THE mechanisation of mines has become a buzzword in the South African mining sector construed as something of a panacea for investors especially in the platinum sector where estimates suggest two-thirds of production is still cash negative.

For unions, however, mechanisation implies looming job cuts. According to Chris Griffith, CEO of Anglo American Platinum (Amplats), the Anglo American listed subsidiary, mechanisation is neither quite of these things entirely, although he acknowledges there’s a long-standing debate on the effect of mechanisation and the impact on jobs.

“[I]t is common cause that better productivity is better for the economy,” said Griffith in a presentation at the Mining Indaba conference earlier this month. “Jobs don’t get lost – they get created in new areas,” he said, adding that mechanisation was “… a social and economic imperative”.

Tell that to Lonmin shareholders who witnessed the efforts of former CEO, Brad Mills, who pioneered mechanisation from about 2007 at the group’s operations with the intention of taking mining costs down to 35% of total costs from 65% at that time. It failed and cost him his job.

Said Griffith in an interview with Miningmx: “Mechanisation is not universal panacea; sometimes it’s not the solution. At Lonmin, it was at an early stage of mechanisation but we’ve had a long history since then.

BHP Sounds Warning as Casualties Mount in Iron Ore Price War – by Thomas Biesheuvel and Jesse Riseborough (Bloomberg News – February 24, 2015)

February 27, 2015

http://www.bloomberg.com/

(Bloomberg) — The first fractures are appearing in an escalating iron ore price war that’s putting more producers out of business.

The biggest mining companies led by Rio Tinto Group, BHP Billiton Ltd. and Vale SA have persisted with multi-billion dollar expansion plans, citing still-healthy earnings even in the wake of a price collapse. Now, for the first time, one of the big three has voiced concern they may have gone too far.

“I do fear that other competitors have an awful lot more capital waiting in the wings to invest in expanding,” Andrew Mackenzie, chief executive officer of BHP, the world’s largest mining company, told analysts on a conference call on Tuesday after reporting a 35 percent decline in underlying profit from his iron-ore division. “We do look to the future and see a degree of pressure downwards on iron-ore prices.”

BHP, Rio and Vale have been squeezing smaller rivals in their quest for market share, while demand growth in China, the biggest consumer, slows. From Sierra Leone’s jungle to Sweden’s Lapland, abandoned mines are beginning to dot the global landscape.

“They wanted to make sure no one else entered the market and to maximize their own market share,” said Seth Rosenfeld, an analyst at Jefferies International Ltd. in London. “They’ve now done that as they’re expanding and no one else is.”

Australian coal industry takes another step closer to the abyss – by Peter Ker (Sydney Morning Herald – February 27, 2015)

February 27, 2015

http://www.smh.com.au/

The downturn in the Australian coal industry has deepened, with three major mining companies warning on Friday that more jobs will be cut, mines will close and assets will be written down to a shadow of their former value.

Rio Tinto, Glencore and Brazilian miner Vale have all reiterated their pessimistic view of the coal sector’s future, revealing major changes to their local operations.

Glencore has made the most aggressive move, announcing that it will cut its Australian coal output by 15 million tonnes in 2015, or more than 20 per cent when compared to 2014 volumes.

In a move that is likely to put more than 100 jobs on the line, Glencore said the cuts would “more closely align” its coal output with customer demand, and some expansion projects would be slowed. “We will defer some projects and ensure that inventory management and blending are optimised,” the miner said in a statement.

The move comes less than a year after Glencore tried to merge its Australian coal division with Rio Tinto’s, underlining the predicament the Australian coal sector finds its self in.

Probe’s David Palmer our Mining Person of the Year – by Trish Saywell (Northern Miner – February 25, 2015)

February 27, 2015

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry.

When the discovery of a new gold patch rocks the mining world, it is a wondrous thing. When the discovery is made in an underexplored area with no previously known precious metal deposits it’s even more exciting, and when the discovery stems, in part, from a simple good deed, it becomes extraordinary.

The tale of how David Palmer discovered the Borden Lake gold deposit and earned the prestigious Bill Dennis Award and title to The Northern Miner’s Mining Person of the Year for 2014 begins in 2003, about four years after he graduated from McGill University with a PhD in economic geology.

The geologist, whose PhD thesis focused on ore-forming hydrothermal fluids associated with carbonatites, was working for a junior, when a prospector he didn’t know by the name of Bob de Carle, pitched a nickel property called Sunday Lake, north of Thunder Bay.

The property didn’t fit the company’s model, so it passed. But Palmer thought it still held promise. His view was that the material just hadn’t been presented in the right way, which masked some of what he felt were its most interesting features. So he offered to spend some personal time reworking the geological data to improve the odds that de Carle — a geophysicist by training — could find success the next time he shopped it around.

Cash-strapped North Korea steps up mining output – by Anna Fifield (Washington Post – February 27, 2015)

February 27, 2015

http://www.washingtonpost.com/

SEOUL — The sharp fall in global commodity prices is starting to have an impact on North Korea, economists say, hurting a state that relies heavily on exports of minerals to keep its economy afloat — and its gargantuan military funded.

Combined with China’s economy coming off the boil, the recent slump in coal prices in particular could hurt Kim Jong Un’s “byungjin” policy: his stated desire to simultaneously develop North Korea’s economy and its nuclear weapons program.

“Commodity prices are dropping, so it’s becoming more and more difficult for North Korea to earn foreign currency,” said Choi Kyung-soo, president of the North Korea Resources Institute in Seoul. “I think last year, minerals trade decreased by about 10 percent by volume and about 15 percent by price.”

Mining makes up roughly 14 percent of the North Korean economy, which, although in a parlous state and under heavy financial sanctions, appears to have been growing modestly in recent years, when China still was booming and commodity prices still were surging.

Getting to Yes has never been tougher – by Jeffrey Simpson (Globe and Mail – February 27, 2015)

February 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.

Mines and forest projects can face the same procedural snakes and ladders.
In Northern Ontario, the so-called Ring of Fire chromite deposits will be
tied up for years and years in environment reviews and aboriginal demands.
Already, the major U.S. company interested in developing the deposits has
walked away. Who could blame it? (Jeffrey Simpson – Globe and Mail)

Forget for a moment U.S. President Barack Obama’s doubts about the Keystone XL pipeline. Whether the President decides for or against the project shouldn’t deflect Canadians from asking within their own borders: How do we get to Yes?

Getting to Yes is becoming harder all the time. Fossil-fuel developments, pipelines, mines, dams, hydro-electric transmission lines and wind turbines are frequently contested, delayed or blocked.

Even when they’re approved, the process for getting to Yes can take so long that projects lose their economic rationale, as with the now-abandoned Mackenzie Valley gas pipeline, which shuddered to a halt after 10 years of review because the gas market had changed. Or, projects are postponed or killed because they face tough competition from overseas suppliers where approvals are not so protracted. Proposed liquefied natural gas projects in British Columbia face this very risk.

Giant Mine headframe set for demolition this summer – by Guy Quenneville (CBC News North – February 27, 2015)

February 27, 2015

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

Yellowknife city council abandons plans to take over Con Mine Robertson headframe

One landmark from Yellowknife’s gold mining past is close to disappearing for good, while the future of another is in limbo. Plans are underway to begin dismantling the iconic C-Shaft headframe at Giant Mine this summer, representatives from Aboriginal Affairs and Northern Development Canada said at a public meeting Thursday night.

It’s part of an early “site stabilization” phase of the remediation project triggered in 2013 by concerns about site safety. “People will definitely notice a difference,” said Jane Amphlett, an engineering manager with the project.

“We haven’t finalized the plan, but it’s likely that significant parts of the shaft will come down in the next year, and likely perhaps all of it will come down once [our engineers] finalize the actual plan for it.” Amphlett said the timber tower, which is at the centre of the clean-up site, poses a potential safety risk to remediation workers.

The smaller A-Shaft headframe, near the Yellowknife boat launch area and close to the intended site of a proposed N.W.T. Mining Museum, will also be taken down, though when has not be determined yet, Amphlett added.