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House Democrats launch perpetual U.S. mining reform crusade – by Dorothy Kosich (Mineweb.com – February 16, 2015)

http://www.mineweb.com/

A new year and a newly seated Congress nearly always portend to U.S. miners that the biennial rite of mining law reform is on the horizon.

Despite the layoffs of hundreds in the industry, financial woes, and numerous project delays in U.S. hardrock mining, Democratic Congressional mining opponents have persisted in their introduction of their perennial biennial mining law reform bill, legislation lawmakers say “will finally force corporations to 1) pay royalties for mineral extracted from public lands and 2) contribute to a fund for clean-up costs.”

Ex-officio House Natural Resources Committee member Rep. Raul Grijalva, D-Arizona, Rep. Peter DeFazio, D-Oregon, the ranking member on the Natural Resources Committee and Rep. Alan Lowenthal, D-California, are among the 16 co-sponsors of the H.R. 963, the Hardrock Mining Reform and Reclamation Act of 2015.

The new bill would levy an 8% royalty on new mines and a 4% royalty on existing mines. It would also use those royalties and money raised by new pollution fees to clean up abandoned U.S. hardrock mines.

The legislation would also end the mining claim patenting system, as well as “provide clear authority to federal land managers to reject a proposed mine if it would unduly degrade public lands or resources”.

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Africa Could Mine Its Way to Prosperity if It Addressed Instability – by Frank Holmes (Value Walk.com – February 16, 2015)

http://www.valuewalk.com/

This past week I attended the Investing in African Mining Indaba in Cape Town, South Africa, as both a presenter and a student seeking opportunities. One of the highlights of the conference was former Prime Minister Tony Blair’s keynote address, during which he offered some crucial advice to African governments: To attract and foster a robust mining sector, a commitment to fiscal stability must be made.

Since 2009, Blair has run the Africa Governance Initiative, which counsels leaders in countries such as Rwanda, Sierra Leone, Liberia, Guinea and others.

Simply put, without fiscal stability and predictability in taxation, capital will be unwilling to flow into any country—African or otherwise—for exploration and production. If a government changes its tax policy every three years or so, that instability discourages the inflow of financing. This is bad for Africa.

“The mining sector remains absolutely vital for Africa’s future,” Blair said, “and even with the sharp declines in [commodity] prices, there are tremendous opportunities and there will be, no doubt, an adjustment and reshaping of the face of mining within Africa over these next few years.”

I shared the following map last week, but it’s worth showing again, as it supports Blair’s point. Central and Southern Africa, especially, are extremely commodity-rich and maintain a large global share of important metals and minerals such as platinum, diamonds and gold.

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Indonesia lifts demand on Freeport to build Papua smelter -media – by Fergus Jensen (Reuters India – February 16, 2015)

http://in.reuters.com/

JAKARTA – Feb 16 (Reuters) – Indonesia has dropped its demand that Freeport-McMoran Inc build a $1.5 billion copper smelter in Papua province, saying a regionally owned enterprise would take on the project instead, website Detik.com reported, quoting the mining minister.

The ministry in December said Arizona-based Freeport, which runs the world’s fifth-largest copper mine in Indonesia, should agree to build the Papua smelter in five years if it wanted a mining contract extension beyond 2021.

The latest decision could ease pressure on Freeport, which has already agreed to a $2.3-billion expansion by 2017 of its copper smelting facility in East Java, currently the only one in the country.

The government has been pushing the company to comply with rules that force miners to process and refine minerals domestically.

“If Freeport is burdened in two locations it would be uneconomical,” Energy and Mineral Resources Minister Sudirman Said said on Sunday, according to the Detik website.

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Cliffs CEO: Foreign steel imports are threat to Minnesota mining – by John Myers (Duluth News Tribune – February 16, 2015)

http://www.duluthnewstribune.com/

VIRGINIA — The biggest threat to Minnesota’s taconite industry isn’t the global glut of iron ore mined in other nations but rather the vast amount of foreign steel that’s being imported to build Amercian projects.

That was the warning Monday from Lourenco Goncalves, president and CEO of Cliffs Natural Resources, the largest taconite iron ore producer in the U.S.

Goncalves said no foreign iron ore producer can get their product to U.S. steel mills as efficiently as U.S. producers in Minnesota and Michigan. But the U.S. imported 23 percent of its finished steel in 2013, 28 percent in 2014 “and that number hit 33 percent in January,” Goncalves told Iron Range business and political leaders Monday.

“The biggest issue we have in this country is imports,” Goncalves said at the company’s annual mining breakfast to update the region on Cliffs’ problems and prospects at its three Minnesota operations.

Goncalves said America is experiencing a relatively booming economy — including automobile manufacturing and construction — but that too many of the new projects are being built with foreign steel that is made from iron ore from Australia or Brazil, not Minnesota.

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Commentary: Tough markets demand a rethink of rail in Labrador Trough – by Glen Ireland and Mark Apli (Northern Miner – February 13, 2015)

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

During its successful 2014 election campaign, Quebec’s Liberal Party vowed to revive Plan Nord — a cherished blueprint for opening up the province’s vast northern mineral wealth for development. Brainchild of former Liberal Premier Jean Charest, the plan was shelved for two years after his defeat to the Parti Québécois in 2012.

The mining industry has recently given its strong support for Premier Philippe Couillard’s refreshed Plan Nord, which includes an ambitious, greenfield 400+ km multi-user railway corridor and port connecting stranded mineral deposits in the legendary Labrador Trough to Sept-Îles on the coast. Energy and Natural Resources Minister Pierre Arcand, Plan Nord’s helmsman, announced in October 2014 a major technical study of the project by Montreal-based Canarail, whose fees will be paid by Quebec taxpayers and supportive junior miners.

While “Plan Nord redux” now appears to be back on track, some awkward but important questions are being asked: Can an infrastructure mega-project in the Labrador Trough be justified at current, heavily-depressed iron ore prices? And, is a new railway corridor really the only viable logistics solution for planned iron ore mines?

Soon after Premier Couillard’s government took office, a flood of iron ore from newly-expanded mines in Australia’s Pilbara, combined with perceived weakness in core demand markets, drove prices from US$130 per tonne to US$70 per tonne — a five year low.

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A company where copper is as good as gold – by David Milstead (Globe and Mail – February 14, 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.

New Gold Inc. is, as its name suggests, a gold miner. But it’s another metal, copper, that plays a large role at the company – perhaps larger than a casual investor might suspect.

How so? New Gold’s New Afton mine, west of Kamloops, B.C., produces twice as much copper than gold, in dollar terms. That allows New Gold, quite legitimately, to report extraordinarily low company-wide mining costs, much lower than at its properties where gold dominates.

The role of copper at New Gold offers a window into how “byproduct accounting,” as it’s called, can impact miners’ financial statements. And it raises an important point for New Gold’s shareholders: To evaluate the company’s prospects going forward, it’s essential to keep an eye not only on the bullion that gives the company its name, but on the lesser metal that provides New Gold much of its cost advantage.

To be clear: The copper factor is not hidden. Investors can plainly see the effects by carefully reviewing the miner’s reports. New Gold released its preliminary 2014 numbers earlier this month, with full results to come Feb. 20. New Gold reported all-in sustaining costs (AISC), a number designed to capture the true long-term cost of mining, of $845 (U.S.) per gold ounce in the fourth quarter.

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Ottawa’s lump of coal: Search for buyer of Ridley terminal drags on – by Brent Jang (Globe and Mail – February 16, 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 — In late 2012, Ottawa placed a prized coal export terminal up for sale in anticipation of fetching a huge sum for the federal asset in northwestern British Columbia.

While coal prices had softened from record highs in 2011, Ridley Terminals Inc.’s business prospects looked solid, with forecasts for years of rising supplies transported by train from coal producers in northeastern B.C.

But what seemed like a jewel of a Crown corporation valued at more than $1-billion by industry experts 26 months ago looks more like a lump of coal today.

Ridley is struggling through an industry slump that has seen coal prices collapse, hurt by slower-than-expected demand in Asia and a global supply glut. The terminal is expected to suffer a hefty drop in shipments from the West Coast this year.

Ottawa, through Canada Development Investment Corp., is still looking for a buyer. The federal government’s quest to sell comes as coal prices languish at multiyear lows while northeastern B.C. producers have halted production.

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COLUMN-Gold has bullish hopes, sobering current reality – by Clyde Russell (Reuters U.S. – February 16, 2015)

http://www.reuters.com/

LAUNCESTON, Australia, Feb 16 (Reuters) – The price of gold appears caught in a holding pattern, stuck between what is actually happening to demand and what potentially may happen.

The World Gold Council’s latest quarterly report provides a snapshot of the different dynamics at work in the gold market, and goes some way to explain why the precious metal has been marooned in a fairly narrow range for almost two years. The broad picture from the council’s Gold Demand Trends 2014 report is that last year was the weakest since 2009.

This fits in with spot gold’s modest 1.8 percent decline over the year, but the breakdown of that demand shows where the pressure points are located.

India regained its status as the world’s top gold market, with demand totalling 842.7 tonnes, but this was still 14 percent below 2013 levels.

China slipped back to number two with 813.6 tonnes, a substantial 38 percent decline as consumers pulled back from buying gold after a record year in 2013. What happens in the two Asian powerhouses is important, as together they represent half of the global gold consumer demand.

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Ottawa sends $2M in bottled water to First Nation – by Joanna Smith (Toronto Star – February 15, 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.

Marten Falls First Nation, a remote reserve that’s been under a boil-water advisory since 2005, relies on water bottles flown in by the government.

OTTAWA—The Conservative government has spent at least $2 million flying bottled water to a small aboriginal community in northern Ontario that has been without its own source of drinkable water for a decade.

“All of our landfill is filled with plastic bottles,” Linda Moonias, the band manager of Marten Falls First Nation, a fly-in reserve about 500 kilometres northeast of Thunder Bay, Ont., said in a telephone interview Friday.

“It’s totally ludicrous,” said Bruce Achneepineskum, the interim chief of the reserve near the proposed Ring of Fire mining development.

Aboriginal Affairs and Northern Development Canada has been reimbursing Marten Falls for the cost of sending bottled water from Thunder Bay by airplane since Health Canada issued a boil-water advisory for the remote community of about 335 people on July 18, 2005.

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Federal investment needed to spur mining innovation – by Jonathan Migneault (Northern Ontario Business – February 13, 2015)

Established in 1980, Northern Ontario Business provides Canadians and international investors with relevant, current and insightful editorial content and business news information about Ontario’s vibrant and resource-rich North.

Sudbury’s Centre for Excellence in Mining Innovation (CEMI) is proposing a program to address the gap between good innovative ideas and finding ways to commercialize them for the mining industry.

While there is no shortage of good ideas and intellectual property related to mining in Canada, many of those ideas and potential innovations lay dormant and are never adopted by companies, said Charles Nyabeze, director of business development.

The centre is making the case for a new program called the Mining Innovation Commercialization Accelerator (MICA). “In Canada we can’t compete by lowering labour costs,” Nyabeze said. “We can only compete by being more innovative.”

The research and development departments at large mining companies have been shrinking almost across the board, said Nyabeze, because those investments are considered risky and don’t immediately improve key performance indicators.

Most innovation in the mining sector, he said, comes from small and medium-sized enterprises like Sudbury-based BESTECH and Symboticware. But many smaller companies struggle bringing their great ideas to market.

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Norilsk, Russia — The inescapability of the company town on the tundra – by Mia Bennett (Cryopolitics.com – February 2015)

http://cryopolitics.com/

There are many ways of framing Arctic climate change.

On the one hand, countries in the south often see themselves as potential victims of the melting Greenland ice sheet and rising sea levels. On the other hand, in the north, Arctic residents often view themselves as the victims of massive levels of industrialization and urbanization in the south. Most of the world’s greenhouse gases emissions, after all, can be traced to the United States, China, Europe, and Russia.

These emissions are driving environmental changes like warming temperatures and ocean acidification, which are exacerbated in the north by the polar amplification effect. Arctic residents then wonder whether it is fair for them to have to pay, often with their traditions and livelihoods, for people in the south to enjoy all the creature comforts of modernity.

But it’s not so simple as that. The Arctic, too, has sooty, polluting cities, some of which have a higher carbon footprint than cities in the middle and southern latitudes. Several of these can be found in the Russian Arctic, which is more industrialized than any other Arctic country’s northern area.

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NEWS RELEASE: Could New Geophysics Technology Spark Exploration?

http://www.ageophysics.com/

Val-d’Or, Quebec, Canada, February 9, 2015

Abitibi Geophysics, a mining exploration services company, reported that its new induced-polarization survey technology recently documented the existence of mineral deposits as deep as 450 metres under the bed of Quebec’s frozen Lake Pusticamica.

Under contract to Cartier Resources Inc., a Quebec junior gold-mining company, Abitibi Geophysics deployed its proprietary OreVision-IP system of electrical probes and sensors to map deposits on Cartier’s Benoist Property between the Bachelor and Langlois Mines.

“CEO says technique’s “convincing clarity” could boost investor confidence in projects where OreVision IP is used”

“Having the ability to detect mineralization to these new depths could be a game changer for the Benoist project” commented Philippe Cloutier, President and CEO, adding “since this new method offers depth of investigation unparalleled by other technologies while keeping optimal resolution from surface to depth, it could help us find more mineralization faster for a reasonable investment”.

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Light at the end of the tunnel – by Kip Keen (Mineweb.com – February 13, 2015)

http://www.mineweb.com/

Mineweb’s Kip Keen speaks at Mexican Roundup, sharing some hopeful thoughts about the junior market.

These are Kip Keen’s prepared remarks as the keynote speaker at Mexican Roundup in Hermosillo, Mexico:

Thank you Jackie Stephens, Mexican Roundup and GlobeXplore for having me. Ok. Buenos dias y lo siento.

I’m going to talk about the state of the mining industry. I promise, at least in the end, this won’t sound like a eulogy, at least as far as juniors are concerned. But first: What a year it’s been.

Just when you thought the mining sector, as a whole, had suffered its worst blows halfway through the year, 2014, it took some more.

By mid last year we had already been through a wave of impairments taken after overpriced boomtime acquisitions – Kinross on Redback Mining and Fruta del Norte; Barrick on Pascua; and so on.

The price of iron ore – the lifeblood of the large diversified miners – already was down by nearly half from close to $200/tonne in 2012 to about $100/tonne in the first half of 2014.

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Diamond profit helps Anglo American amid commodities downturn – by Neil Hume and James Wilson (Financial Times – February 13, 2015)

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

Surging profit from diamonds last year brought some relief for Anglo American, which reported a $2.5bn net loss for 2014 after taking a large writedown on its flagship iron ore project.

Anglo on Friday reported a robust performance by De Beers, the diamond miner and marketing group that it bought in 2011, because of strong gem demand in the US and Asia.

By contrast the steep drop in the price of iron ore, used in steelmaking, led Anglo to take a $3.8bn pre-tax impairment in the value of Minas-Rio, a Brazilian project blighted by cost overruns and delays. The mine was the subject of $5bn of impairment charges in 2012.

Benchmark iron ore prices have halved over the past year, affecting Anglo’s anticipated earnings from Minas-Rio. The FTSE 100 group spent $5bn to buy the mine and almost $9bn to develop it, before starting to ship ore in October.

The problems at Minas-Rio contributed to a loss of confidence in Cynthia Carroll, Anglo’s previous chief executive. Anglo also wrote down the value of some coal projects within $4.2bn of impairments outlined at its 2014 results. The miner said underlying group earnings came to $4.9bn last year, down 25 per cent compared with 2013.

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Teck Resources Ltd maintains steady course amid commodity volatility – by Peter Koven (National Post – February 13, 2015)

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

Plenty of companies across the resource sector are panicking, but not Teck Resources Ltd. As its rivals slash outputs, cancel projects and suspend dividends, Vancouver-based Teck is maintaining the same steady course that it has throughout the recent bout of commodity price volatility.

As a result, there were no radical changes to be found in the miner’s fourth-quarter earnings on Thursday. Teck did not reduce its $518-million dividend payout, it did not announce any job reductions or sweeping production cuts, and it maintained a commitment to the costly Fort Hills oil sands project.

“We have continued to execute well by controlling the controllable,” chief executive Don Lindsay said on a conference call on Thursday.

Specifically, that means chipping away at operating costs while preserving liquidity. The company has achieved $640-million of savings under its current cost reduction plan, and has reduced unit costs at 10 of its 13 operations. The balance sheet is in good shape with $1.7-billion of cash and an untapped US$3-billion credit facility.

All the same, the stock has been pummelled.

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