Republic of Mining

Panic time: As oil goes, so does Canada’s economy – by David Parkinson (Globe and Mail – October 16, 2014)

October 17, 2014

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.

Feel free to panic about oil.

Okay, on a day when the stock market sell-off teetered on the edge of a soul-crushing rout (before bouncing back to merely awful), this might seem like I’m sounding the alarm bell about the wrong market. But it’s not like we’ve never seen an October stock market slump before. ’Tis the season when money managers, eyeing their Oct. 31 fiscal-year-end positions, get nervous and jerky in the knees.

Yes, the Canadian stock market is down 11 per cent since early September, but let’s try to remember that this was after rising 23 per cent in the 12 months prior. This is normal and manageable. A standard-order correction in stocks, even if it’s a sudden and dramatic one, is not likely to undermine Canada’s economic recovery.

But oil just might.

The undisputed champion of fossil fuels is falling like a skydiver with an anvil parachute; down 15 per cent in a little over two weeks, nearly 25 per cent in the past four months. The statement that makes about the spiralling gloom over the global economy is bad enough in itself.

In Alberta, anxiety grows over declining oil prices – by Jeffrey Jones (Globe and Mail – October 16, 2014)

October 17, 2014

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.

CALGARY — Alberta’s oil patch and government are watching nervously as the slump in world oil markets threatens the province’s economic boom.

The price of West Texas Intermediate (WTI) crude, a grade used as a benchmark in pricing, fell slightly to $81.78 (U.S) a barrel on Wednesday, extending a recent rout that has taken it down 10 per cent this month alone. Oil prices have tumbled as the demand for crude in major economies has fallen and producing countries have stared each other down, refusing to cut output for fear of losing market share.

For Alberta, the oil plunge is rekindling bitter memories. In the financial crisis of late 2008 and early 2009, skidding oil prices and a credit crunch forced the Canadian industry to cancel or shelve as much as $90-billion (Canadian) worth of energy expansion plans, many in the oil sands. At the time, WTI sank below $40 (U.S.) a barrel.

Suddenly, some high-cost projects in Alberta are again at risk, and sustained weak pricing could hamper the industry’s current forecast for oil sands output to double over the next decade. Any cutbacks will reverberate through the Alberta economy, which has driven economic growth in Canada in recent years.

Energy prices weigh “extremely heavily” on the whole Alberta economy, said Douglas Porter, chief economist at BMO Capital Markets.

Canada By Design: A plan to develop the ‘Mid-Canada Corridor’ – Anna Maria Tremonti interviews John van Nostrand (CBC The Current – October 15, 2014)

October 16, 2014

http://www.cbc.ca/thecurrent/

Click here for a 27 minute interview: http://www.cbc.ca/thecurrent/episode/2014/10/15/canada-by-design-a-plan-to-develop-the-mid-canada-corridor/

We Canadians mostly live in the words of humorist Arthur Black, like weather-stripping along the U.S. border. But North of our Southern metropolises and still South of the treeline lurks an economic sweet spot. Our series By Design considers the Mid-Canada Corridor, home to up to 70 per cent of Canada’s wealth but not a lot of its people.

Humourist Stephen Leacock wrote that he’d likely never go to James Bay, but he’d somehow feel lonely if it wasn’t there. Perhaps its the north that should feel lonely since so few Canadians live there. Today, as part of our ongoing project ;By Design, about design and the impact it has in our lives, we’re taking a look at the possibility of design on a national scale. Most of us Canadians live within a couple hours’ drive of the U.S. border. Vast stretches of Canada — full of resources — remain scarcely populated. John van Nostrand thinks that should change.

Scientists look to mine metals from plants – by Steve Dorsey (Fox News – October 15, 2014)

October 16, 2014

http://www.foxnews.com/?intcmp=logo

Inside a lab at the University of Queensland in Brisbane, Australia, soil samples sit under a row of a glowing light bulbs hanging from a track only a short distance above them. In another room, a centrifuge hums as beakers of Nyquil-colored liquids sit on a nearby shelf. Standard white lab coats hang on hooks outside.

This generic-looking lab feels worlds away from the gritty, dusty mines of Australia—but this is where scientists hope to chart a new path for the industry here, and across the world.

If work being done at the Centre for Mined Land Rehabilitation catches on, it could mean new futures for global communities affected by resource-hungry strip-mining, and new ways for the mining industry to do business.

Australian scientists hope to accomplish this with phytomining—harvesting valuable metals from plants. Essentially, it’s growing plants containing nickel, zinc and cobalt—the bread and butter of the world’s mines, and harvesting the metals above ground, not below.

“We have identified a whole lot of new species which could be used for phytomining which weren’t previously known to science,” said Dr. Peter Erskine, one of the researchers working to make the process suitable for conventional mining companies.

Tin’s price slump seen cutting Indonesian shipments by 30% – by Yoga Rusmana and Eko Listiyorini (Chicago Tribune – October 14, 2014)

October 16, 2014

http://www.chicagotribune.com/

Bloomberg News – JAKARTA, Indonesia — Tin exports from Indonesia, the world’s biggest supplier, will probably plunge this quarter to the lowest in more than a year after prices declined and as the government moves to impose stricter rules on exports.

Overseas sales may drop 30 percent to 16,000 metric tons from 22,825 tons a year earlier, the median of estimates from one analyst and six smelters compiled by Bloomberg showed. That’s the largest decline since the three months to March and the smallest amount since the quarter ended Sept. 30 last year, Trade Ministry data show.

Tin futures have slumped 16 percent from a six-month high in April on concern that slowing economic growth may curb demand in China, the biggest consumer of industrial metals. Prices dropped even as exports from Indonesia declined 16 percent through September from a year earlier. The government tightened rules on trade in August last year to boost exports of higher- value products and smelters have restrained sales in an attempt to counter declining prices.

“Shipments may slow this quarter as prices have dropped to near the cost of production,” said Jabin Sufianto, chairman of the Association of Indonesian Tin Exporters in Jakarta. “Prices of about $21,000 are unattractive to some smelters,” he said in a text message on Oct. 9.

Futures fell 9.8 percent this year to $20,150 a ton on the London Metal Exchange Monday. They reached $23,849 on April 24 after the country required all refined tin to be traded through the Indonesia Commodity and Derivatives Exchange starting August last year, seeking to create a benchmark price and challenge the role of the LME.

Matawa First Nations building an Aboriginal workforce – by Rick Garrick (Wawatay News – October 15, 2014)

October 16, 2014

http://www.wawataynews.ca/

Matawa First Nations is building an Aboriginal workforce through the Kiikenomaga Kikenjigewen Employment and Training Services (KKETS) Ring of Fire Aboriginal Training Alliance (RoFATA) training programs.

“(The trainees are aiming for) full-time employment within the mining sector,” said Mary Meshake, RoFATA career development officer. “There’s a lot of future potential developments that are taking place outside our communities and most of the trainees that are in (the KKETS) programs are really excited to be a part of what is going to be happening.”

Eight RoFATA trainees recently completed the 15-week Welding Level 1 program at Grand River Employment and Training in Six Nations while another 10 trainees completed the 10-week Heavy Equipment Operators program at the Operating Engineers Training Institute in Morrisburg in early July.

“We’re currently running our Security program, which started on Aug. 25,” Meshake said, noting there are 13 trainees in the Security program. “We utilized the new (regional) training facility in Neskantaga.”

The four-week theory portion of the Security program was completed on Sept. 19, with the practical portion scheduled for Sept. 22-Oct. 10 in Ginoogaming.

Mick Davis amasses $4.8bn war-chest for X2 mining deals – by Andrew Critchlow (The Telegraph – October 15, 2014)

October 15, 2014

http://www.telegraph.co.uk/

Former head of Xstrata defies slump in commodities market to secure a further $1bn of funding for mining startup X2 Resources

Mick Davis, the former head of Xstrata, has amassed a $4.8bn (£3bn) war-chest to fund acquisitions for his new mining venture X2 Resources amid growing momentum behind M&A activity in the industry.

X2 Resources, which Mr Davis formed with colleagues from Xstrata after the coal miner merged with Ivan Glasenberg’s Glencore empire, said that it has raised an additional $1bn from investors to fund deals.

“With almost $5bn in equity and access to significant additional debt funding, X2 Resources is uniquely positioned and we are currently reviewing a number of opportunities in the metals and mining sector,” said Mr Davis. “We will build on the team’s unparalleled track record of acquiring and integrating assets and supporting the management teams of acquired businesses to create value.”

The identity of the investors is confidential but the Telegraph understands that it includes pension schemes and sovereign wealth funds.

News of the increased warchest comes a week after it emerged that rival Glencore had attempted an audacious $160bn merger with Rio Tinto, the world’s largest shipper of iron ore. It also comes against a backdrop of sharply falling commodity prices. Iron ore is down 40pc this year adding to declines among most other industrial metals and coal.

Is It Legal to Mine Asteroids? – by Jon Kelvey (Slate Magazine – October 13, 2014)

October 15, 2014

http://www.slate.com/

How space law could cause conflicts—or cooperation—on Earth

There’s gold in them thar skies, or at least some platinum and a substantial amount of water, according to hopeful space prospectors. Over the past several years, a few companies have announced plans to mine asteroids. If successful, they could reinvigorate earthbound industries with infusions of rare earth minerals.

They could also catalyze a new phase of space exploration by creating orbiting caches of material to build spacecraft as well as water, which could fuel them. Even if these efforts fail, they could lead to new technologies and lower the cost of a rocket ride to orbit.

Of course, there are technical challenges. A vast, radiation-filled vacuum separates the space entrepreneurs from the space rocks of their ambitions, and any actual mining is many years away and might fail. But the current crop of space entrepreneurs are far more credible than the cranks of yesteryear, people who might have sold plots of lunar real estate in the days before the Apollo missions.

There are tech giants with proven track records, such as X Prize Founder Peter Diamandis, whose Planetary Resources boasts James Cameron as well as Google’s Larry Page and Eric Schmidt as investors. There is a real possibility that asteroid mining could become a reality within our lifetimes.

That possibility raises some very interesting questions. First and foremost, it’s not entirely clear whether mining and selling asteroid stuff is even legal, which could really hamper the whole enterprise.

Labour strife, safety concerns spur platinum mining mechanisation – by Ed Stoddard (Business Day Live – October 15, 2014)

October 15, 2014

http://www.bdlive.co.za/

Reuters – FOR decades, production in SA’s platinum mines has rested on the muscular shoulders of men risking life and limb to drill into the rock face with jackhammers.

Three years of labour upheaval and a political push to make the shafts safer and transform the low-wage workforce have set in motion a drive to replace such rock drillers with machines.

“Labour militancy is dictating our push to mechanisation and boardrooms will rubber stamp this stuff,” said Peter Major, a fund manager at Cadiz Corporate Solutions. The costly change is happening despite the obstacles thrown by geology, low platinum prices and capital constraints.

At Anglo American Platinum’s (Amplats’s) Bathopele mine near Rustenburg, west of Johannesburg, technology has already made rock drillers obsolete and hydraulic machines do the job, blazing an automated trail others are keen to follow.

Elsewhere in the platinum shafts, plans are afoot to roll out mechanisation, including at Amplats’s rival Impala Platinum, which recently sent a team to Bathopele to observe the layout — an unprecedented example of co-operation in an industry that has long been fiercely competitive and secretive.

COLUMN-Coal industry still in denial over prices, regulation – by Clyde Russell (Reuters U.S. – October 15, 2014)

October 15, 2014

http://www.reuters.com/

Oct 15 (Reuters) – These days you would expect a gathering of coal industry executives to be a fairly gloomy affair, given the drop in prices to near seven-year lows, the increasing threat of regulation to control pollution and the general image of the fuel as the main climate change culprit.

You might hope for a sense of realism and practical moves to address the issues, but instead the World Coal Conference in Copenhagen this week was characterised by what seemed like a state of denial.

The first instance of denial is over the causes of the dramatic slump in prices, with European API2 futures falling this week to the lowest since 2007, and nearly half of what they fetched in 2011.

Spot thermal coal at Australia’s Newcastle port fell to $64.92 a tonne in the week ended Oct. 10, 1 cent higher than the previous week, which was the lowest since mid-2009.

A common question among the hundreds of delegates at the conference in the Danish capital was what was the outlook for demand in China and India, the world’s two biggest coal importers.

Canadian Diamond Production Estimated to More than Double in Next 4 Years – by Paul Zimnisky (Analyzing Trends in the Global Diamond Industry – October 14, 2014)

October 15, 2014

http://www.paulzimnisky.com/

With Gahcho Kué and Renard now officially in construction phase, I think it’s fair to say that in 4 years time Canadian diamond production will look significantly different than it does today.

In July, Stornoway Diamonds (TSX: SWY) completed a C$964 million financing package to fund construction of Renard. In September, Mountain Province Diamonds (TSX: MPV) closed a C$100 million equity financing and is in the final stages of arranging US$370 million in debt to fund its portion of Gahcho Kué’s capital expenditure.

Canada currently represents an estimated 14.2% of the world diamond production in value, and 8.7% in carat volume. The two new mines, set to commence production in 2016/2017, are estimated to boost Canada’s global market share to 25.2% in value, and 15.1% in volume by 2018, which would give Canada the highest compound annual growth rate of production (20.2% in value and 17.4% in volume) among the worlds 8 largest diamond producing nations over the next 4 years.

Outside of Canada, there are only 3 other large-scale commercial mines scheduled to commence operations within the next 4 years: Lace, Botuobinskaya, and Bunder, all of which have annual production profiles that are below that of both Gahcho Kué and Renard.

DiamondCorp’s (LSE: DCP) fully financed Lace project in South Africa is estimated to produce up to 500,000 carats annually, with first ROM production slated for late next year.

Losing the War on Coal: One Virginia town’s painful decline – by Johnny Giles (Fox News – October 15, 2014)

October 15, 2014

http://www.foxnews.com/?intcmp=logo

APPALACHIA, Va. – Roger Whited doesn’t have to think back too far to remember when Main Street was alive with bustling shops and offices, teeming sidewalks and even traffic jams, all thanks to the industry that was the lifeblood of this tiny mountain town and countless others like it.

But six years into what many term the Obama administration’s “War on Coal,” Appalachia’s main thoroughfare is a tableau of boarded-up buildings, empty storefronts and dilapidated homes. Those who still mill about on streetcorners are looking for jobs, not places to spend their paychecks.

“I remember when the downtown area was more vibrant — streets were packed and businesses were open,” said Whited, who teaches high school social studies in Wise County. “There was the hotel and Bessie’s Diner, which was a popular place to get a meal. There were several other restaurants, but now the only place that serves food is a gas station.”

For generations, coal powered not only Appalachia’s homes and the lights on Main Street, but also the local economy. The salaries paid by companies like Cumberland River Coal Co. were enough to afford the trappings of a middle class, if hard-won, lifestyle. Men and women who toiled in the mines spent their money downtown and sent their kids to the local schools.

Mining deals a positive sign, but bankers and lawyers still skeptical – by Peter Koven (National Post – October 15, 2014)

October 15, 2014

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

TORONTO – The past couple of weeks provided a jolt that the Canadian mining industry’s bankers and lawyers have awaited for a long time.

But is it sustainable? Insiders are far from convinced. Since the start of October, there have been two sizeable private equity mining deals announced, plus a US$1.8-billion asset sale and related financing that got a better reception from the market than almost anyone imagined.

While mining M&A has moved along at a decent pace this year, these transactions stood out from the pack. Private equity, for one, has been the talk of the mining business for months. There have been predictions that a wave of private equity investment is set to pour into the cash-needy sector and give it a lift, but those deals simply have not materialized the way the industry expected.

Two transactions this month gave Canadian miners some renewed hope: Magris Resources Inc.’s private equity-backed $500-million acquisition of the Niobec mine in Quebec, and a $73-million takeover of Chaparral Gold Corp. involving private equity firm Waterton Global Resource Management LP.

Outside of private equity, the big announcement was Lundin Mining Corp.’s US$1.8-billion purchase of Freeport-Mcmoran Inc’s 80% stake in the Candelaria mining complex in Chile. To get the deal done, Lundin arranged a complex US$2.2-billion financing package.

A market fall – and Canada’s suddenly vulnerable energy sector – by David Berman and Brian Milner (Globe and Mail – October 15, 2014)

October 15, 2014

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.

Canadian stocks hit a record high six weeks ago, but have been on a downhill run ever since as nervous investors act on growing worries about deteriorating global conditions and their debilitating effect on demand for Canada’s energy and other resources.

When they returned on Tuesday from the Thanksgiving holiday, traders drove down the benchmark Canadian index 190.7 points, or 1.3 per cent, to 14,036.68. The losses mean the Toronto stock market has now fallen 10.4 per cent since the start of September. Crossing the 10-per-cent threshold signals a market correction and puts the TSX halfway down the path to a full-fledged bear market. This is a troubling milestone, because if stocks continue their slide, it will put a severe dent in the value of individual investments as well as the mutual and pension funds that Canadians count on for retirement.

The list of global stresses is long, including a slowdown in China, a dramatic weakening of the once strong German economy, deepening woes elsewhere in Europe, increased strife in the Middle East, and the spreading Ebola scare. And they do not bode well for Canada, because they would force it to become more reliant on the United States, the one major economy still expanding.

If world energy prices keep dropping from weaker demand and a global glut caused partly by a surge in U.S. production that has sharply reduced imports to the United States, the effects will be felt not only in Alberta but across the Canadian economy.

Three big ‘whoppers’ told about the Ring of Fire – by Jody Porter (CBC News Thunder Bay – October 15, 2014)

October 15, 2014

http://www.cbc.ca/news/canada/thunder-bay

‘Ridiculous’ to compare northern Ontario mineral find to the Alberta oil sands, expert says

Once called Canada’s ‘next oil sands’, the Ring of Fire mining development area in northern Ontario has yet to live up to its promise.

Federal Treasury Board Chair Tony Clement called the Ring of Fire “a game-changer for Canada” with “potential impact…akin to what the oil sands did for Alberta and Canada” just last year.

But that was before Cliffs Natural Resources halted its plans for a chromite mine in November 2013. Now the future of the Ring of Fire is far less certain, and even less likely to live up to what some say were always overinflated claims of its potential.

Here are three big ‘whoppers’ told about the Ring of Fire.

1. Chromium is a rare and valuable mineral.

From the Ontario Chamber of Commerce 2014 report ‘Uncovering the economic potenital of Ontario’s Ring of Fire : “The most promising discovery [in the Ring of Fire] is the first commercial quantities of chromite in North America. Based on current projections, the deposit is significant enough to sustain activity for a century.”