Republic of Mining

Unearthing Mining Water Technology Innovation – by Paul O’Callaghan (Water World – January 2015)

January 21, 2015

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

http://www.bluetechresearch.com/

Paul O’Callaghan is CEO of Bluetech Research. The article is based on the report: Wastewater Treatment in Mining Metals.

Water access challenges and new mining discharge regulations are creating opportunities for the application of new water technologies. Yet the size and complexity of operations and cost of treating mining wastewater has slowed innovation. Which technologies/companies are emerging as successful?

As with many industrial sectors, the treatment of wastewater in mining applications is a secondary consideration tied to environmental policy and regulation, rather than a core operating practice.

As a result, many operators focus on well understood processes that require significant civil work, such as lime softening, tailings storage and chemical precipitation to be used as the primary system applied for heavy metals removal. However, in some instances novel and innovative technologies have been adopted with beneficial results.

There are several drivers leading to adoption of more advanced treatment technology, including:

COLUMN-BHP, Rio production show scale of commodity price challenge – by Clyde Russell (Reuters India – January 21, 2015)

January 21, 2015

http://in.reuters.com/

LAUNCESTON, Australia, Jan 21 (Reuters) – The latest production reports from mining giants BHP Billiton and Rio Tinto hammer home an uncomfortable truth: No matter how much output increases and costs are cut, falling commodity prices triumph.

Both BHP and Rio Tinto released reports this week that met market expectations and re-affirmed production guidance for the world’s top two mining companies.

While it’s no doubt positive for the Anglo-Australian miners that they are successfully executing plans to boost output while containing costs, the numbers make for some sobering reading.

Rio Tinto, the world’s second-largest iron ore producer after Brazil’s Vale, said it expected to mine 330 million tonnes of the steel-making ingredient at its Western Australia mines in 2015 on a 100 percent basis, up from 280.6 million tonnes last year. (www.riotinto.com)

The average price achieved in 2014 was $84.30 a tonne, Rio Tinto said, which would yield revenue of about $23.65 billion, on a 100 percent basis from the Pilbarra region. Rio Tinto’s actual share of that would be about $18.95 billion, as some of its mined output accrues to partners.

And given the structural oversupply in the market and muted demand growth from top importer China, it seems unlikely that the price will rally significantly in 2015.

Palladium Is Rarer Than Gold and, Thanks to Cheap Oil, Now Rarer Still – by Laura Clarke (Bloomberg News – January 20, 2015)

January 21, 2015

http://www.bloomberg.com/

America’s renewed love affair with the automobile is tightening global supplies of palladium, a metal rarer than gold.

While each car requires only a few grams of palladium, demand in 2015 will probably exceed supply for a fourth consecutive year, according to Johnson Matthey Plc, a maker of catalytic converters for automobiles that use the metal to reduce harmful tailpipe emissions. Global car sales rose 3.4 percent last year to a record 81.6 million vehicles, Macquarie Group Ltd. said in a report last week.

The lowest oil prices in five years and cheap bank loans are helping to extend a rebound in automobile sales that began in 2009, boosting demand for everything from catalytic converters to Alcoa Inc. (AA)’s aluminum sheets and Goodyear Tire & Rubber Co.’s wheels. Even after palladium prices soared to a 13-year high in September, Morgan Stanley and Deutsche Bank AG remain bullish because car parts account for 70 percent of the metal’s use.

“Palladium is an exciting place to be because of its exposure to gasoline,” Scott Winship, a fund manager at Investec Asset Management, which oversees about $112 billion, said by telephone from London. “U.S. auto demand is incredibly strong and might even surpass previous peaks that we saw before the financial crisis.”

Palladium, used mostly in gasoline-fueled vehicles that dominate markets in North America and China, is approaching a bear market after falling 3.3 percent this month to $770.75 an ounce in London.

Ring of Fire bogged down in bickering – by Len Gillis (Timmins Daily Press – January 21, 2015)

January 21, 2015January 21, 2015

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – The much vaunted Ring Of Fire mining development is bogged down in bureaucratic studies along with bickering over where to build a new road, or rail link, to what is clearly the newest, richest and most promising mining development in Ontario so far this century.

That was part of the assessment offered in Timmins this week at an impromptu news scrum with federal Natural Resources Minister Greg Rickford, the MP for Kenora and the minister for FedNor. But Rickford also said he is still hopeful the project will blossom.

The Ring Of Fire refers to a massive deposit of chromite and other precious minerals located in the McFauld’s Lake and Webequie area, about 600 kilometres northwest of Timmins. Chromite is an important element in manufacturing stainless steel. The Ring of Fire area could become the largest chromite mining site in North America, a venture measured in the tens of billions of dollars.

The project involves KWG Resources Inc., which has about 30% of the Big Daddy property, and Noront Resources, which has the Eagle’s Nest project. They are the two major players involved. Both are Canadian. Another large company, Cliff’s Natural Resources, an American company, was supposed to be the big player in the development, but it pulled out last year, saying it could not get rights to build a transportation link, nor could it get infrastructure concessions from Queen’s Park.

Canadian ore carrier makes historic journey to China via Northwest Passage – by Richard Desgagnes and Andrew Godfrey (Canadian Mining Journal – January 2015)

January 21, 2015

http://www.canadianminingjournal.com/

Richard Desgagnes is a Senior Partner and Andrew Godfrey is an Associate with Norton Rose Fulbright.

Shipping history was recently made in Canada when Fednav’s MV Nunavik sailed from Deception Bay, Quebec to Bayuquan, China via Canada’s Northwest Passage.

The ship carried 24,000 tons of nickel concentrate and became the first commercial vessel to transit the Northwest Passage westward, unescorted, with an Arctic cargo and with Canadian expertise. In doing so the transit time was reduced by about 18 days (or about 5,800 miles) than had it been routed through the Panama Canal.

This and other developments are opening new frontiers of coastal mining transportation in Canada. Wherever a mining project is located, however, there are some key issues that have to be addressed when looking at maritime transportation.

FLAG CONSIDERATION: If the transportation needs are purely domestic (from one point in Canada to another), due to coasting trade restrictions, the vessel must be Canadian flagged and manned by Canadian seafarers. As such, manning costs are much higher compared to some other foreign flag operations. For carriage to a destination outside of Canada however, there is no restriction on the nationality of the vessel or the crew used on-board. All vessels are regulated by the standards of the IMO (International Maritime Organization).

Resource takeovers no cause for national angst – by Howard Green (Globe and Mail – January 21, 2015)

January 21, 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.

What a difference a few years makes. Recall the bygone days when there was a fuss about foreigners wanting to buy our miners and oil companies. Sure, Spain’s Repsol played vulture when it scooped up Talisman last month, but it was welcomed rather than turned into a federal case.

The national harrumphing that went on back in 2006 and 2007 when Inco, Falconbridge and Alcan were sold to outsiders is amazing in retrospect. But who would want to be stuck with a fistful of those shares in their portfolios right now, given where commodities are?

Back then, not only commentators, but also Bay Streeters and big shot executives were critical of the CEOs of those companies, railing about how they were selling out Canada’s birthright to rapacious buyers from abroad. Or worse, that they were not willing to step up and pay up to be acquirers rather than sellers.

If only the country had such problems today. The truth is, Inco’s CEO at the time, Scott Hand, and Dick Evans, the CEO of Alcan, got absolutely brilliant prices for their shareholders when they sold their respective companies. Wouldn’t it be something to hear complaints today about selling resource companies at the top of the market?

Oil slide to shave billions off federal and provincial government revenue – by Bill Curry and Shawn McCarthy (Globe and Mail – January 21, 2015)

January 21, 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.

Ottawa and the provinces will lose a combined $14-billion in government revenue this year as a result of falling oil prices, according to new analysis that comes as the federal Conservatives shift their economic message ahead of Parliament’s return next week.

The federal government alone is set to lose $4.3-billion this year, the Conference Board of Canada said in a report Tuesday. The board is among the organizations that provide forecasts to the finance department and its findings add to the growing private sector opinion that Ottawa’s return to budget surplus is in jeopardy.

The International Monetary Fund lowered its forecast for global economic growth, helping trigger a 4.7 per cent drop Tuesday in the price of North American crude, which closed at $46.49 (U.S.) a barrel Tuesday. The IMF also cut its forecast for Canada. The Bank of Canada is expected to comment in detail Wednesday on the impact of low oil prices in its quarterly Monetary Policy Report. Analysts suggest the Canadian dollar could sink below 82 cents U.S. depending on what the bank has to say.

The rapidly changing economic picture is also leading to some mixed messages from the Conservative government.

Nickel miners shrug off sluggish prices – by Paul Garvey (The Australian – January 22, 2015)

January 21, 2015

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

NICKEL miners Western Areas and Panoramic Resources have shrugged off the sluggish nickel price with respective pieces of good news, with Western Areas flagging a big improvement in its guidance for 2015 and Panoramic surging on the back of a new discovery.

Western Areas said production costs at its high-grade Flying Fox and Spotted Quoll mines in Western Australia had fallen to their lowest in four years, clearing the way for the company to upgrade its guidance at its half-year result.

Each pound of nickel produced by Western Areas cost the company $2.23, compared with its guidance for the full year of between $2.70 and $2.80 a pound.

The lower production costs reflected higher nickel grades, a renegotiated contract with mining contractor Barminco, and optimisation efforts by the operations team.

Net cash at the company increased from $44.7 million to $53.7m, despite the falling nickel price and the payment of a dividend during the quarter. Western Areas executive director David Southam said the miner had outperformed during the December quarter.

BHP’s Spinoff Offers Glencore an Alternative to Rio: Real M&A – by Brett Foley, David Stringer and Angus Whitley (Bloomberg News – January 21, 2015)

January 21, 2015

http://www.bloomberg.com/

Rebuffed by Rio Tinto Group (RIO) last year, Glencore Plc (GLEN) will soon have another acquisition target to consider for expanding its mining empire: the company formed from the biggest spinoff in the industry’s history.

BHP Billiton Ltd. (BHP) plans to split off assets including its silver, manganese and aluminum operations to focus on larger businesses such as iron ore. The newly formed company — Perth, Australia-based South32 Ltd. — may appeal to Glencore because it’s being spun off near the bottom of the commodity cycle and it produces many of the same metals as the Swiss giant, said Aviate Global LLP.

South32 could command a market value of about $15 billion when it lists in coming months and earnings are set to surge in the next five years with prices of its materials poised to rise, said Macquarie Group Ltd. As his biggest rivals such as Vale SA and Anglo American Plc hunker down to ride out plunging prices of bulk commodities, Glencore Chief Executive Officer Ivan Glasenberg is looking for undervalued acquisition targets.

“He’s got a free pass into these assets,” Paul Gait, a London-based mining analyst at Sanford C. Bernstein & Co., said by phone. “Looking at it from Ivan’s perspective, I’d be thinking the current downturn isn’t going to last. It never does.”

Representatives for Glencore and Melbourne-based BHP declined to comment.

NEWS RELEASE: Antofagasta Investment Company Limited completes acquisition of Duluth

January 21, 2015

TORONTO, Jan. 21, 2015 /CNW/ – Duluth Metals Limited (“Duluth” or “Duluth Metals”) (TSX: DM) (TSX:DM.U) is pleased to announce that it has completed its previously announced proposed arrangement (the “Arrangement”) with Antofagasta Investment Company Limited (“Antofagasta”), a wholly-owned subsidiary of Antofagasta plc. Under the Arrangement, Antofagasta has acquired all of the outstanding common shares of Duluth (the “Duluth Shares”) (other than Duluth Shares held by Antofagasta and its affiliates) at a price of CDN$0.45 per Duluth Share in cash (the “Cash Consideration”).

The Duluth Shares are expected to be de-listed from the Toronto Stock Exchange as soon as practicable.

In order to receive the Cash Consideration in exchange for their Duluth Shares, registered shareholders must complete, sign, date and return the Letter of Transmittal that was mailed to each registered shareholder. The Letter of Transmittal is also available from Duluth’s depositary, Equity Financial Trust Company, by telephone at: (i) 1 (866) 393-4891 (North American Toll Free); or (ii) under Duluth’s issuer profile on SEDAR at www.sedar.com.

Shareholders whose Duluth Shares are registered in the name of a broker, investment dealer, bank, trust company, trustee or other intermediary or nominee should contact that intermediary or nominee for assistance in depositing their Duluth Shares and should follow the instructions of such intermediary or nominee in order to make their election and deposit their Duluth Shares.

COLUMN-China 2014 growth the template for years to come – by Clyde Russell (Reuters U.S. – January 20, 2015)

January 20, 2015

http://www.reuters.com/

LAUNCESTON, Australia, Jan 20 (Reuters) – The important thing from China’s economic deluge isn’t that fourth quarter growth was slightly higher than expected, or even that growth over the whole of 2014 was the weakest in 24 years.

These are merely the headline grabbers. What really matters is that 2014 provided the template for what China’s economy is going to look like in the next decade.

The trends that started to come to fore in the past year are likely to continue, and these include an economy less reliant on export-led manufacturing, slower growth in commodity consumption and imports and a lesser role for state stimulus spending. There will be those who bemoan the slower growth, having grown accustomed to China’s extended and rapid expansion over the past three decades.

However, a gradual slowing of the Chinese growth rate has to be seen as an overall positive, lowering the risk of creating unsustainable bubbles in the economy and transitioning the world’s most populous nation from the source of the world’s cheap labour to being the engine of middle-class consumerism.

Fourth-quarter gross domestic product (GDP) expanded 7.3 percent, above expectations for a gain of 7.2 percent and matching the third quarter number, according to official data released Tuesday.

What can we learn from latest German gold repatriation? – by Lawrence Williams (Mineweb.com – January 20, 2015)

January 20, 2015

http://www.mineweb.com/

German gold repatriation continued in 2014 at a higher pace – but the overall slow speed leaves many questions unanswered and again raises arguments for auditing the Fed. Be careful what you wish for.

Germany’s Bundesbank has made great play of the fact that it managed to repatriate some 85 tonnes of gold from New York in 2014 and 35 tonnes from Paris. Technically, as the Bundesbank points out this is very much on schedule with its promise to bring back into German vaults some 300 tonnes held in New York and 374 tonnes from France by 2020 – but still the question has to be asked: why is the agreed schedule so slow? If Germany truly wants its gold back why would it have to take so long to achieve this?

One assumes the French portion could be just loaded onto a few trucks and shipped cross border, while the U.S. part likewise flown across the Atlantic on a few 747 freighters.

It’s almost certain that the song and dance the Bundesbank is making about the latest repatriation figures is as a direct result of the media furor over the minuscule amounts repatriated in 2013 – only 5 tonnes from New York and 32 tonnes from Paris. That was true fodder for the theorists who, abound in the gold sector, seriously believe that the amounts of gold held in many of the big Central Bank vaults – notably those in the U.S., the U.K. and France – have been leased out and title to any that is remaining may belong elsewhere.

Copper takes shine off Rio Tinto result – by Matt Chambers (The Australian – January 20, 2015)

January 20, 2015

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

MINING giant Rio Tinto has had an uncharacteristically subdued fourth quarter, missing copper guidance and analyst forecasts and not delivering to some expectations on iron ore.

Mined copper output slumped 23 per cent from the previous quarter to 128,300 tonnes, as the big Escondida mine in Chile, which Rio (RIO) owns in a joint venture with BHP Billiton, was hit by water restrictions.

The Rio-operated Oyu Tolgoi copper and gold mine in Mongolia was hit by a fire at the concentrator. Deutsche Bank had been expecting quarterly production of 147,600 tonnes and UBS was predicting 138,900. As a result of the weak quarter, 2014 mined copper production of 603,000 tonnes missed guidance of 615,000 tonnes.

Fourth-quarter shipments (including minor partners’ share) from Rio’s WA-dominated iron ore unit rose 13 per cent to a record 82.2 million tonnes as the company continues to expand its Pilbara region infrastructure and mines.

This brought full-year sales to 302.6 million tonnes, just beating guidance of 300 million tonnes. The quarterly effort missed UBS sales expectations of 83.9 million tonnes but beat Deutsche Bank expectations of 81 million tonnes.

Investors to blame for supporting dithering juniors – by Henry Lazenby (MiningWeekly.com – January 20, 2015)

January 20, 2015

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

VANCOUVER (miningweekly.com) – In the aftermath of several key mining-related indexes having dropped significantly since 2011, the mining industry as a whole, and particularly the junior explorers and project generators, have had to “reset” and undergo a paradigm shift from being project promoters to true value creators.

This was the message institutional investor adviser Jayant Bhandari relayed to affiliated investors attending the Cambridge House International Vancouver Resource Investment Conference 2015.

He pointed to several indexes, such as gold, gold exchange traded funds, the Market Vectors Junior Gold Miners ETF and the TSX, having each shown significant declines since 2011. The fountainhead of the problem, Bhandari argued, was uneducated investors, who were supporting dithering companies that were not creating value.

He had found that investors were often influenced by passions and half-truths such as the myth of price leverage in a rising cost environment and fads, such as the axiom of “grade is king”, or the promise of a new geographic “flavour of the month”, such as Colombia or the Yukon, all while failing to look at the specific company’s financial and legal documents.

Bhandari explained, for instance, that the ‘grade is king’ fad was not always true.

COLUMN – A few rays of sunshine break through coal’s storm clouds – by Clyde Russell (Reuters India – January 19, 2015)

January 20, 2015

http://in.reuters.com/

LAUNCESTON, Australia – The new year has started positively for Asian coal, with prices rallying from a 5-1/2 year low, Chinese imports jumping to the highest in 11 months and renewed merger and acquisition interest.

While these are undoubtedly welcome developments for a sector that has witnessed four years of falling prices, there are still serious questions as to whether these swallows really do indicate a summer of good fortune ahead.

The spot price of thermal coal at Australia’s Newcastle port, an Asian benchmark, rose to $62.91 a tonne in the week ended Jan. 16, up 3 percent from $61.04 the prior week, which was the lowest since April 2009.

The obvious caveat here is that prices are still some way below the breakeven point for many miners in top exporters Australia and Indonesia, and it will take weeks of sustained gains to bring the sector as a whole back into the black.

Chinese imports were 27.22 million tonnes in December, the highest since January last year, again a positive sign but not enough to mask that imports for 2014 as a whole were down 10.9 percent to 291 million tonnes, the first annual drop in a decade.