Republic of Mining

[Ferrochrome] Merafe Resources Falls on Output Drop, Mine-Halting Strike – by Andre Janse van Vuuren (Bloomberg News – October 17, 2014)

October 21, 2014

http://www.bloomberg.com/

Merafe Resources Ltd. (MRF) declined the most in more than a year after the South African ferrochrome producer said third-quarter output fell 14 percent and some of its mines were shut by a strike.

Merafe, which owns 20.5 percent of the world’s largest ferrochrome operation in a venture with Glencore Plc (GLEN), dropped 8.9 percent in Johannesburg trading, the most since Aug. 7, 2013, to 1.03 rand by the close.

Ferrochrome output for the three months ended Sept. 30 decreased to 74,000 metric tons from 85,600 tons a year earlier as sales declined 18 percent to 60,200 tons, the company said in a statement today.

The venture’s western mines near Rustenburg, northwest of Johannesburg, have been shut since the last week of September after the National Union of Metalworkers started a pay strike, Investor Relations Manager Kajal Bissessor said today by phone. Its eastern operations and all smelters are fully operational, she said.

Merafe’s mines are close to the platinum belt in South Africa, where the world’s biggest producers have operations that were crippled by a five-month strike this year.

Indonesia’s Choice: Coal vs. Environment – by David Fogarty (Epoch Times – October 19, 2014)

October 21, 2014

http://www.theepochtimes.com/

Indonesia cannot build power stations fast enough. And neither can most of its Asian neighbors. Rapid economic and population growth are driving equally rapid demands for electricity as the region builds out power grids to connect up millions of people to fuel prosperity.

Electricity generation is forecast to nearly triple in Southeast Asia between 2011 and 2035, the International Energy Agency says, with fossil fuels providing most of the energy.

With a population of 600 million, nearly twice that of the United States, and about 130 million people without electricity, Southeast Asia faces an immense challenge to meet that demand in a cost-efficient manner that doesn’t cause serious air and water pollution and drive up health costs.

For Indonesia, the Asia energy story is a blessing worth untold riches in terms of royalties, money it needs to develop its economy and provide jobs. The IEA says demand for coal in Southeast Asia will rise 4.8 percent per year, with Indonesia in the geographic sweet spot to be the region’s main supplier.

In the wider Asia-Pacific, demand for coal will increase by 52.8 percent from 2010 to 2035, according to the Asian Development Bank.

News Release: Golden rule: Every new mine would improve Ontario’s finances

October 21, 2014

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Just one new gold mine in Ontario could provide more than 2,200 direct and indirect jobs and pay more than $102 million in tax revenue for all levels of government annually, according to a new study “An Au-thentic Opportunity: The Economic Impacts of a New Gold Mine in Ontario.” University of Toronto economists Peter Dungan and Steve Murphy presented the key findings of their report, which was completed for the Ontario Mining Association with assistance from the Ministry of Northern Development and Mines, today.

“With the increased value and relative importance of gold mining production in the province in recent years, as well as the number of announced projects currently the pipeline, it was decided that the impact of a gold mine would be the subject of our analysis,” said Mr. Dungan. “This study also recognizes the scope for the possible benefits that can be realized by Aboriginal groups.”

The four-pronged study demonstrates the positive economic impacts on an annual basis for both an underground and an open pit gold mine and for both types of operations during an estimated three-year construction phase of a new mine and the production phase of these mines, which could last for decades. The economists have used broad sources of public data, mining company disclosure documents and economic models from the Input-Output Division at Statistics Canada.

For example, an underground gold mine with about $300 million in sales annually with 620 direct employees, would create 894 jobs from mine supply companies and a further 690 induced jobs largely in the retail and service sector.

RPT-UPDATE 3-India’s Modi steps up economic reforms, eyes privatisation [coal sector] – by By Manoj Kumar and Krishna N Das (Reuters India – October 21, 2014)

October 21, 2014

http://in.reuters.com/

NEW DELHI, Oct 20 (Reuters) – India promised on Monday to open up the coal industry to private players and moved closer to selling a stake in a state-run oil company, as Prime Minister Narendra Modi picked up the pace on economic reform days after relaxing fuel price controls.

Using an executive order, the cabinet agreed to allow private Indian companies to mine and sell coal at an unspecified future date, Finance Minister Arun Jaitley said. That sets the stage for the biggest liberalisation of the industry in more than 40 years.

The ruling party’s success in two state elections last week capped several days of action on the economic front and has given Modi more room to cut through a thicket of regulations and state controls he says holds back Asia’s third-largest economy.

“Reform is the art of the possible,” Jaitley earlier told TV network ET Now, hinting that more was to come. “In the first year, when people expect lot of reforms and there is lot of popular support behind the reform process, it is more easily possible.

Modi was elected in May on promises he would create jobs and rejuvenate the Indian economy, but investors and economists were disappointed by his first budget and a lack of early progress on fixing structural economic problems. In the last week, he has gone some way towards quelling those concerns, putting in a reform-minded team at the finance ministry that includes prominent economist Arvind Subramanian to help formulate the budget and policy.

Maximizing the mess with Ontario’s electricity assets – by Parker Gallant (National Post – October 21, 2014)

October 21, 2014

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

Hydro One paid $93-million for Norfolk Power, about 28.5 times profits. That’s pure insanity

Ontario’s electricity sector is in rough shape, burdened with escalating costs and an interfering government. Not much change or improvement is likely if the government takes up the schemes promoted last week in a speech by Ed Clark, the former CEO of TD Bank who now heads the province’s “Advisory Council on Government Assets.” The objective of the council is to look at three current government monopolies so as to “maximize the value to the people of Ontario.”

We’ll leave Mr. Clark’s comments on the liquor business to others. When it comes to the two electricity monopolies – Ontario Power Generation and Hydro One – Mr. Clark and his council’s proposals seem destined to maximize the mess rather than the value of Ontario’s power sector.

On OPG, the $39-billion asset company that owns gas, hydro and nuclear power installations all over the province, Mr. Clark proposed that it be split into two entities: one to manage existing generation sources and another to manage the Darlington nuclear refurbishment. The speech is silent on what happens to the Pickering nuclear plant.

The OPG proposal looks like an effort to simply create another electricity bureaucracy. For that reason it is impossible to see what benefits will be generated that will “maximize value.” Many large European and U.S. generators successfully produce power from a variety of fuels and there is no reason why OPG cannot do the same if properly managed.

[Deltion Innovations] Sudbury company works to develop space drill (CBC News Sudbury – October 20, 2014)

October 21, 2014

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

Deltion Innovations is working to develop drill that would prospect for water and ice on the moon

A Greater Sudbury mining innovation company is getting to literally take some of its equipment out of this world. Deltion Innovations Limited is in the process of developing a drill for the Canadian Space Agency and the goal is to have the drill mine for water and ice on the moon.

CEO Dale Boucher said the drill is being developed in the company’s test facility in Capreol. Testing is being done by using a liquid nitrogen tank that is used to cool down the sample, filled with simulated moon dirt and water, he said.

This test phase involves trying to drill through material at liquid nitrogen temperatures — about minus 180 degrees Celsius. “The moon is a little bit cooler than that,” he said. “The moon is actually about minus 220 Celsius.”

Benefits of space mining

Boucher said the prospecting tool will look for water and ice near the south pole of the moon. “Water is kind of the ore of choice for space mining right now,” he said.

“Water can be broken down into hydrogen and oxygen using a very simple solar cell system. So, if you break it into hydrogen and oxygen you have a couple of things: you have oxygen to breathe, you have hydrogen and oxygen which is the most powerful rocket propellant that we know of.”

How Covergalls [Workwear] inked a $75,000 deal that includes new dragon Michael Wekerle – by Mary Teresa Bitti (National Post – October 20, 2014)

October 21, 2014

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

CBC’s Dragons’ Den is back with two new dragons who are wasting no time making their mark. Each week, Financial Post contributor Mary Teresa Bitti revisits the previous week’s episode. She captures what the cameras didn’t and in the process provides a case study for readers, zeroing in on what pitchers and dragons were thinking and what the challenges for the deal are going forward.

The pitch As sales director for an underground mobile equipment manufacturer, Alicia Woods spends her fair share of time underground, understanding the challenges of customers. She recalls the first time she had to go into a mine 14 years ago. She was handed full Personal Protective Equipment (PPE), coveralls, belt, hard hat but nothing was designed for women. “I was given the smallest men’s sizes but nothing fit properly and it wasn’t convenient, especially if I had to use the washroom facilities, which are typically a port-a-potty,” Ms. Woods says.

The only alternative she found online was a shirt and pants. She preferred the coverall which offers better protection. She sketched a few concepts that got put to the side as her career started to grow and she and her husband started a family. For 10 years, she would have nothing to drink if she knew she’d be going down into a mine, to avoid having to use the washroom.

“Three summers ago, I was underground at a potash mine and before I knew it I had consumed three bottles of water because it was so dry and dusty,” Ms. Woods says. “I had to face what I had avoided for a decade. It was not a pleasant experience.”

Chilean copper boom is losing its lustre – by Fabian Cambero and Rosalba O’Brien (Reuters/Daily Mail – October 17, 2014)

October 21, 2014

http://www.dailymail.co.uk/home/index.html

SANTIAGO, Oct 17 (Reuters) – The shine may soon come off Chile’s decade-long copper boom as technical and regulatory problems in getting new mines into production highlight just how hard it will be to keep ratcheting up the supply.

Chile is expected to produce a record 5.83 million tonnes of copper this year, rising to 6.23 million next year, state copper commission Cochilco forecast on Friday. Many in the industry are confident new mines will keep boosting supply, and are worried more by falling demand in the key buyer, China.

But the optimism over output may be misplaced. Already, the official estimate for production in 2014 has been downgraded twice, cut from 6.07 million tonnes – a drop equivalent to the output of a medium-sized mine – after teething problems at three new projects and falling output at older ones.

And soon the growth of recent years will likely grind to a halt, industry experts say. “Next year and towards 2016 we will see the peak of production in this decade but I don’t think we will see very significant increases in Chile until the next decade, when we hope large projects in the pipeline will be unblocked,” said Juan Carlos Guajardo, head of local copper think-tank CESCO.

CESCO sees growth in new production falling off sharply after 2016, with a market “balanced or in deficit through to the end of the decade”, Guajardo said.

Namibia: Mining Industry Will Grow Phenomenally – Malango (All Africa.com – October 20, 2014)

October 21, 2014

http://allafrica.com/

Windhoek — Namibia’s mining activities are still the backbone of the economy and will be for many years to come as the industry grew by 6 percent during the second quarter of 2014, compared to a contraction of 6.6 percent recorded in the second quarter of 2013.

Also, during 2013 the mining industry paid profit tax of N$1.64 billion (2012: N$1.12 billion) and royalties of N$1.12 billion (2012: N957.7million) while dividends paid to government were just over N$500 million (Namdeb Holdings N$351 million and NDTC N$150 million).

This is according to Veston Malango, Chief Executive Officer at the Chamber of Mines of Namibia, who explained that Namibia currently has 17 mines, of which only one is not in operation due to being placed under care and maintenance.

However, with the ongoing construction of three new mines, the Husab Uranium Mine, the Otjikoto Gold Mine and the Tschudi Copper Mine, the country will soon have 20 mines ready for production.

“The mining industry continues to be the backbone of the national economy and will be for many years to come. Overall the industry is expected to grow phenomenally once new mines come into full production,” remarked Malango.

Norilsk to sell African nickel stakes to Botswana’s BCL for $337 mln – by Silvia Antonioli (Reuters India – October 20, 2014)

October 20, 2014

http://in.reuters.com/

Oct 20 (Reuters) – Russia’s Norilsk Nickel , the world’s top nickel and palladium producer, said it had agreed to sell stakes in two African nickel mines for $337 million to BCL, a Botswana-based copper mining firm looking to expand.

Norilsk will transfer to BCL its 50 percent interest in the Nkomati nickel and chrome mine, in South Africa, and its 85 percent stake in the Tati Nickel Mining Company, in Botswana, the two companies said on Monday.

BCL will also assume all attributable outstanding debt and environmental and rehabilitation liabilities associated with the assets.

Norilsk embarked on a new strategy last year that includes pulling out of international assets that it has identified as non Tier-1 mining operations. Tier-1 is an industry designation for what are typically the biggest and lowest-cost mines.

“The sale of the African operations marks a major milestone in our commitment to deliver the new corporate strategy. The transaction is part of the management’s roadmap to release capital from non-core assets and will have a positive impact on the company’s return on invested capital”, Pavel Fedorov, Norilsk Nickel First Deputy CEO said in a statement.

RB Energy meltdown highlights tough times for lithium, rare earth firms – by Peter Koven (National Post – October 20, 2014)

May 13, 2016October 20, 2014

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

TORONTO — As RB Energy Inc. flamed out and fell into creditor protection during the past couple of weeks, investors were shell-shocked.

Despite some start-up problems in recent months, Vancouver-based RB seemed to be in an ideal position. It was emerging as North America’s only serious lithium producer, just as demand for the metal is set to soar because of its use in electric vehicle batteries. Its management team was linked to the legendary Lundin Group, a resource conglomerate with a fantastic track record of success. Lundin companies do not just melt down like that.

But RB did. It filed for protection last Monday after its stock price collapsed and it could not raise capital under reasonable terms.

“I can tell you it’s been a long time since I’ve seen the resource capital market crash as quickly as that,” chief executive Rick Clark said. “I would say the last time was back in the ‘90s.”

There was a time when RB, formerly known as Canada Lithium Corp., had a much easier time raising cash. The company has tapped the capital markets for about $268-million since 2009, according to Financial Post data. RB also received $92-million of debt financing from Bank of Nova Scotia and Caterpillar Financial Services that was partially guaranteed by the Quebec government.

RB Energy says TSX statement a key factor in CCAA filing – by Peter Koven (National Post – October 20, 2014)

October 20, 2014

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

TORONTO — The chief executive of RB Energy Inc. believes the lithium miner might have avoided insolvency if not for a two-sentence statement issued by the Toronto Stock Exchange.

CEO Rick Clark said in an interview the company thought it had a $70-million financing package lined up in mid-September that would have resolved its liquidity issues. But then the TSX, following its guidelines, issued a blanket press release saying it was conducting a de-listing review of the stock.

The TSX statement simply repeated what Vancouver-based RB said the day before. But the stock price collapsed as soon as it came out, and Mr. Clark said he could no longer line up financing on reasonable terms.

Instead, he elected to file for creditor protection last Monday. “We got absolutely hit in the side of the head [by the TSX statement],” said Mr. Clark, who was formerly CEO of market darling Red Back Mining Inc. Regardless, he said he does not want to blame the exchange for what happened.

The impact of the TSX announcement on Sept. 16th is undeniable. The stock plunged 25% that day, with 14.4 million shares changing hands. It then fell another 25% during the following five trading days and could not recover.

In Wake of Mount Polley, Union Wants New BC Safety Regime – by David P. Ball (The Tyee.ca – October 14, 2014)

October 20, 2014

http://thetyee.ca/

Ministry defends miners’ exclusion from WorkSafeBC.

It took a spate of deaths in Nanaimo’s coal mines to create a ministry devoted to regulating the industry in 1877. Since that era, the provincial department’s authority over mine health and safety has endured — and subsequent worker protection laws explicitly excluded mines to this day.

But after the near slaughter of workers by the Mount Polley mine tailings dam disaster this summer, the union representing many miners in B.C. is warning about worker safety in the industry.

Thirteen B.C. mine workers have been killed on the job since 2000, according to annual Chief Inspector of Mines reports. The worst year was 2006, when four died from oxygen deprivation at the Sullivan mine near Kimberley, B.C.

Over the same period, a total of 423 people were injured at mine sites, averaging 33 a year. WorkSafeBC’s prevention jurisdiction does not extend to mines to which the Mines Act applies.

All activities conducted in relation to mining within the boundaries of a Mines Act permit area fall within the [occupational health and safety] jurisdiction of [Ministry of Energy and Mines].

Miner Opposition [Canadian Global Mining Sector’s Reputation] – by James Munson (iPolitics.ca – October 1, 2014)

October 20, 2014

http://www.ipolitics.ca/

Where mining and violence meet

James Munson (bitly.com/MinerOpposition) traveled to Guatemala in July to explore the stories of mines caught up in a global debate over the responsibilities of Canadian-owned mining firms in developing countries. With Canada moving toward a new policy for the sector, Munson explores how the Fenix nickel mine in eastern Guatemala became the test case for bringing allegations of murder, rape and assault tied to the mine to an Ontario court room. Meanwhile, Goldcorp Inc.’s Marlin mine in the western part of the country has been the subject of protests and findings that its operations broke human rights standards. The stories of these mines, and the people who live beside them are the starting point for Miner Opposition — http://www.bitly.com/MinerOpposition (Produced with support of the Ford Foundation)

EL ESTOR, GUATEMALA— One night this past April, while poring over legal documents at around four in the morning, Manuel Xo Cu drifted to sleep and had the dream that would save his life.

The dream involved him grabbing onto the roots of two trees to keep from sliding into a dark hole. During a bus ride the next day, he was confronted by three armed men who asked him to move to the back of the bus. He refused, recognizing the back of the bus as the dark hole, and sat beside a woman who he would later use as an excuse to get off at an earlier stop, thinking the would-be assassins could identify him with more certainty if he were to get off at his regular destination.

Iron ore price collapse claims more victims (Northern Miner – October 17, 2014)

October 20, 2014

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

Cliffs Natural Resources (NYSE: CLF) and London Mining (LSE: LOND) have become the latest casualties of falling iron ore prices, with Cliffs declaring a US$6 billion non-cash impairment charge in the third quarter on its iron ore and coal assets, and London Mining placed into administration.

London Mining says it will try to work with its administrator, PwC, to maintain its Marampa iron ore mine in Sierra Leone as a going concern, while Cliffs is working with its banking group to get an amendment that will eliminate the debt-to-capitalization covenant of 45% currently present in its revolving credit facility, as the non-cash impairment charge will increase the debt-to-capitalization ratio over that threshold.

Iron ore prices have fallen to five-year lows and are down about 40% so far this year at about US$80 per tonne. When London Mining’s Marampa iron ore mine in Sierra Leone entered production in December 2011, iron ore was selling for about US$140 per tonne, well above today’s levels.

It’s not the first time Marampa, which was operated between 1933 and 1975 by the Sierra Leone Development Company and William Baird, has suffered from depressed prices. The mine was closed for a period of time in the 1960s due to low prices for the metal.