Republic of Mining

Coal India Workers Strike to Fight Modi’s Privatization Plans – by Rajesh Kumar Singh and Abhishek Shanker (Bloomberg News – January 6, 2015)

January 6, 2015

http://www.bloomberg.com/

A strike by coal miners in India has shut down some mines and disrupted supply at others as unions vowed the biggest walkout in decades to halt plans by Prime Minister Narendra Modi to privatize the industry.

“The strike is on,” said R. Mohan Das, a personnel director at state-run Coal India Ltd. (COAL), the world’s biggest miner of the fuel. It’s too early to assess supply losses, he said, adding that all workers have walked out at some mines, while others are partially closed.

Unions called a five-day strike starting today after rejecting an offer to meet management this morning. Hundreds of union members protested outside Coal India’s Kolkata office denouncing the privatization plans.

“If this strike intensifies there will be a severe coal shortage,” said Alex Mathews, head of research at Geojit BNP Paribas Financial Services Ltd. “With many power utilities being hand to mouth as far as coal supplies are concerned, the problem may be severe.”

Of the 100 power plants that run on local coal, 42 had supplies for less than seven days as of Jan. 1, according to the power ministry’s Central Electricity Authority. Twenty of these plants had less than four days of stock.

Energy Fuels strikes $179M deal to buy Uranerz amid rough uranium market – by Peter Koven (National Post – January 6, 2015)

January 6, 2015

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

TORONTO – Two Toronto-listed uranium miners are merging as they try to build a stronger company that can thrive amid low uranium prices.

Energy Fuels Inc. announced Monday that it is buying Uranerz Energy Corp. for roughly $179-million in stock. The move brings together two U.S.-focused companies that are struggling to make money and attract investor interest in the stagnant uranium market.

The offer is a 37% premium to Uranerz’s closing price last Friday, and some investors thought that was too rich. Energy Fuels shares plunged almost 15% on Monday after the deal was announced.

“The premium didn’t make a lot of sense to us,” said Aaron Salz, a research associate at Dundee Capital Markets. Dundee concluded that the deal is dilutive to Energy Fuels’ net asset value by 35%, and thinks a competing bid is unlikely.

But from a strategic standpoint, experts said the deal is logical. It gives Energy Fuels more scale, lower operating costs and a uranium mine in Wyoming called Nichols Ranch where production can be expanded.

Baffinland deflects Nunavut regulator’s recommendations (Nunatsiaq News – January 6, 2015)

January 6, 2015

http://www.nunatsiaqonline.ca/

“Changes in the health of caribou because of project activities are unlikely”

Baffinland Iron Mines Corp. has responded to recommendations from the Nunavut Impact Review Board, but the company doesn’t plan to follow many of them at its Mary River mine site.

The NIRB’s 2013-14 monitoring report -— designed to keep Mary River in compliance with its project certificate — did not raise any issues of significant concern, but made some recommendations following a September 2014 site visit.

Most had to do with different wildlife monitoring and waste management programs at the Baffin site, like the NIRB’s recommendation to analyse dust-fall or ash in caribou pellets.

Baffinland said it would continue to gather caribou fecal pellet samples for different kinds of monitoring, but that the program would be limited because there are so few caribou in the project area.

“Samples will be analyzed for ash content when a sufficient sample of fresh pellets are collected,” read Baffinland’s Dec. 12 response to the NIRB.

Breakingviews: Water woes could open taps on corporate risk – by Antony Currie (Reuters U.S. – January 5, 2015)

January 6, 2015

http://www.reuters.com/

NEW YORK – (Reuters Breakingviews) – Water is set to become a more serious risk for companies and investors. It’s already recognized. World Economic Forum attendees named H2O a top-three risk two years running. And two-thirds of the world’s largest companies worry about how constraints may affect their business, according to environmental research firm CDP. Few, though, are well prepared for problems. That is set to change.

A few high-profile droughts have helped shake off some complacency. Taps in Brazil’s Sao Paulo may run dry as early as March. California’s supply is low after three years of scarce precipitation. The likes of Illinois and Indiana are starting to use their relative abundance of water to lure companies to their states.

Some firms have taken action. SABMiller has a goal of reducing water used in its breweries by a quarter by 2015. Coca-Cola used 2.08 liters of water for every liter of its own drinks in 2013, down 23 percent since 2004, and wants to be water neutral by 2020. Lockheed Martin, Kimberly-Clarke, AstraZeneca, AT&T and others have implemented water-saving strategies.

That’s not always enough. Often, a company’s idea of water risk is very narrow, CDP points out in a 2014 survey of big companies. Only two-fifths include other local users in their assessments.

Iron Ore Kicks Off 2015 With Rally on China Stimulus Speculation – by Jasmine Ng (Bloomberg News – January 2, 2015)

January 6, 2015

http://www.bloomberg.com/

Iron ore plummeted last year as surging global supplies topped demand. It opened 2015 by posting the biggest weekly gain in 18 months amid speculation that China will take more steps to spur growth in the world’s largest user.

Ore with 62 percent content delivered to Qingdao, China, was unchanged today at $71.26 a dry metric ton, following gains in the previous five trading sessions, according to data from Metal Bulletin Ltd. That took this week’s advance to 5.8 percent, the most since the period to July 5, 2013.

The steel-making ingredient tumbled 47 percent in 2014 as BHP Billiton Ltd. (BHP) and Rio Tinto Group expanded low-cost supplies, pushing the market into a surplus just as growth in China slowed. Data from Asia’s largest economy released on Jan. 1 showed that the government’s Purchasing Managers’ Index (CPMINDX) retreated in December to the lowest level in 18 months, adding pressure on policy makers to do more to bolster growth this year. The country buys two-thirds of global seaborne iron ore supply.

“There’s potential for the Chinese economy to be stimulated sometime soon” given the weaker PMI data, James Wilson, a Perth-based analyst at Morgans Financial Ltd., said by phone. “That may lead to more demand for steel products and iron ore. The December-January period is when the Chinese restock traditionally, so there’s some demand from there.”

The coming showdown between Canadian and Saudi oil producers on the U.S. Gulf Coast – by Geoffrey Morgan (National Post – January 6, 2015)

January 6, 2015

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

CALGARY – A fight between Canadian and Saudi Arabian oil producers is expected to play out on the U.S. Gulf Coast during the course of this year, as the two countries battle for market share in the world’s largest refining district. The fight could help keep oil prices depressed for another six months.

Citigroup analyst Edward Morse released a report Monday that points to an oversupply of oil on the Gulf Coast thanks in part to an influx of heavy crude from Canada, even without TransCanada Corp.’s long-delayed Keystone XL pipeline. At the same time, the report says Saudi Arabia is attempting to regain its market share in the area.

The 2014 showdown between light oil producers — U.S. shale oil companies and OPEC members such as Saudi Arabia — for share of the North American refining market will change, according to Citigroup. “Now the confrontation should shift to sourer and heavier crudes,” the report said.

Oilsands crude is considered heavy, because it has the consistency of molasses, and sour, because of its sulphur content.

Scotiabank vice-president and commodity market specialist Patricia Mohr agreed there is potential for Canadian oilsands shipments to push Saudi Arabian and North African oil out of refineries on the Texas and Louisiana coastline.

NEWS RELEASE: Cliffs Natural Resources Inc. Concludes the Sale of Logan County Coal and Provides Update on Bloom Lake

January 6, 2015

CLEVELAND, Jan. 2, 2015 /PRNewswire/ — Cliffs Natural Resources Inc. (NYSE: CLF) is pleased to announce that it has completed the sale of its Logan County Coal assets in West Virginia to Coronado Coal II LLC, an affiliate of Coronado Coal LLC, for $174 million in cash and the assumption of certain liabilities. The expected tax benefit associated with the transaction will be between 20% to 25% of the previously disclosed pre-tax loss of approximately $400 million, which represents an additional benefit of $80 million to $100 million in future cash tax savings. Cliffs will record the results of this sale in its fourth quarter earnings.

Separately, Cliffs confirms that active production at Bloom Lake has completely ceased and the exit from Eastern Canada continued to be executed on schedule as previously announced. The mine has transitioned to care and maintenance status and, consequently, at this time only a small number of employees involved in such activities are still in the payroll. The last shipment of iron ore out of the Port of Sept-Iles will be completed in early January 2015.

Lourenco Goncalves , Cliffs’ Chairman, President and Chief Executive Officer said, “The execution of the strategic initiatives outlined during our Q3 Conference Call in October 2014 continued to progress as planned during the last two months. The sale of Logan County Coal, which included a meaningful tax benefit to the Company, clearly demonstrates our ability to execute complex transactions despite an adverse M&A environment for commodity related transactions. Additionally, as we approach the final steps of our exit from Eastern Canada, we have brought to an end the flawed expansion that has cost Cliffs and its shareholders billions of dollars.”

Fool’s Gold: The limits of tying aid to mining companies – by Marco Chown Oved (Toronto Star – December 15, 2014)

January 6, 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.

Barrick Gold’s massive mine in Peru has sped up community development, including schools and a hospital. So why are so many locals still jobless and poor?

QUIRUVILCA, PERU—Towering atop a pedestal in the main square, a golden statue of a miner with his headlamp and jackhammer gleams in the morning sun, a monument to the mineral wealth on which this town was built.

The Quiruvilca mine opened almost 100 years ago, and its blackened wooden structures still loom on the mountainside above the rooftops. But a century of mining copper, silver, zinc and gold brought little development to this remote settlement, nestled in a steep valley more than 4,000 metres up in the Peruvian Andes. The roads weren’t paved; many people didn’t have electricity.

Nine years ago, another mine opened, operated by Toronto-based Barrick Gold, the world’s biggest gold mining company. It has paid hundreds of millions of dollars in taxes and royalties and the new-found wealth is visible everywhere. The local government has brought power to virtually everyone in town and is now hooking up remote villages. Through an infrastructure-for-taxes program, Barrick has constructed roads, a police college, a hospital and a school. A new highway has cut travel time to the coast from eight hours to 3.5.

Mining: Tragedy, safety and Ring of Fire mark 2014 – by Staff (Sudbury Northern Life – December 31, 2014)

January 6, 2015

http://www.northernlife.ca/

The spring of 2014 was a sombre time for Sudbury’s mining community, marked by three tragic deaths. In April, Vale millwright Paul Rochette was killed by severe head trauma from a malfunction with an ore crusher.

The next month, two drilling contractors, Marc Methe, 34, and Norm Bissaillon, 49, were killed by a fall of material in First Nickel’s Lockerby Mine. Both men worked for Taurus Drilling Services.

The deaths highlighted the importance of province’s ongoing review of mining health and safety, which reached a high point in September with the release of progress report that made several recommendations.

Those included guidelines for bright and reflective clothing for workers underground, and health and safety training that focuses on six of the most common hazards miners face.

The Mining, Health, Safety and Prevention Review committee is expected to release its final report in the New Year. The ongoing standstill in the Ring of Fire was also a dominant mining story in 2014.

Cliffs’ Bloom Lake mine hit with record $7.5-million environmental fine – by Bertrand Marotte (Globe and Mail – December 26, 2014)

January 5, 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.

Cliffs Natural Resources Inc. is feeling more pain from its foray into Canada.

As the Cleveland-based company pulls up stakes at its money-losing Bloom Lake iron ore mine in northeastern Quebec after investing billions in what its chief executive dubbed a “disaster,” the company’s subsidiary has been hit with a record $7.5-million fine for environmental infractions at the site.

Bloom Lake General Partner Ltd. – in which Cliffs has a controlling stake – pleaded guilty on Dec. 18 to 45 offences under the federal Fisheries Act and the Metal Mining Effluent Regulations in the Criminal and Penal Division of the Court of Quebec, according to Environment Canada.

The fine is the largest penalty for environmental infractions in the country’s history, Environment Canada said. Of the $7.5-million, $6.83-million will go to a federal fund that aims to direct money to environmental projects in the location where the incident took place.

Environment Canada said its investigation lasted more than three years. One major infraction involved the breach of a tailings pond dam that allowed more than 200,000 cubic meters of mine tailings and water to be released into fish-bearing waters.

Supply and services sector contributes 41K jobs: study – by Jonathan Migneault (Northern Ontario Business – January 5, 2015)

January 5, 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.

In 2011, Ontario’s mining supply and services sector contributed $3.9 billion to the province’s gross domestic product, and sustained around 68,000 direct and indirect jobs, according to a new study published by the Canadian Association of Mining Equipment and Services for Export (CAMESE).

CAMESE managing director Jon Baird said the study’s findings are historic, because economic contributions from the mining supply and services sector had never been studied to such a degree.

“Nothing was known, or next to nothing was known, about the economic impact of mining supply before this survey,” Baird said. The association partnered with PricewaterhouseCoopers to analyze questionnaires it sent out to 913 supply and service companies across Ontario.

The pan-Ontario mining supply and services sector economic impact study determined 41,000 people in the province are directly employed by mining supply and services companies, while another 27,000 people rely on the sector indirectly, as suppliers or service providers themselves.

Around 78 per cent of the companies that responded to the survey reported doing some business outside of Ontario, while 70 per cent of respondents did business outside of Canada.

2014 in review: Decline and fall in the mining industry – by Rachelle Younglai (Globe and Mail – January 1, 2015)

January 5, 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.

The mining industry hasn’t had much good news in recent years, so further signs of an economic slowdown in China rattled already-skittish producers. With financial-sector reform choking off growth in China’s property sector, which uses vast amounts of raw material, a bloodbath for metal and mineral prices ensued. Companies’ stocks sank to decade lows, and cost cutting became the critical part of every miner’s strategy. Here are 2014’s pivotal moments.

Iron ore glut

Iron ore lost 50 per cent of its value in 2014, falling below $67 (U.S.) a tonne because of weak demand from China and a glut of supply. The world’s biggest producers – Rio Tinto Group, BHP Billiton Ltd., Vale SA and Fortescue Metals Group – responded not by cutting production, but by continuing to increase it, despite the low prices for the steel-making ingredient.

Their strategy has taken a toll on smaller, higher cost producers, such as Cliffs Natural Resources Inc. and Labrador Iron Mines Holdings Ltd. Both have suspended operations at iron ore mines in the Labrador Trough, a 1,600-kilometre-long area that straddles Labrador and Quebec. Two iron ore mines there, Bloom Lake and Wabush, have been shuttered, putting hundreds out of work.

MY SONG FOR THE MINER VIDEO – by Wild Spirit Films ( Junie Boudreau)

January 5, 2015

http://www.wild-spirit-films.ca/ Tribute video dedicated to Canadian miners from Cape Breton, Nova Scotia and across Canada. Music courtesy of Fred White. Pictures courtesy of Cape Breton coal miners and Nova Scotia archives. Video made by filmmaker Junie Boudreau of Wild Spirit Films. This video is dedicated to my grandfather who died of “Black Lung” which is …

Canadian prosperity requires a strong resource industry – by Gwyn Morgan (Globe and Mail – January 5, 2015)

January 5, 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.

“One of the key messages in Mr. Olson’s Rise and Decline of Nations is that
societies who don’t understand how their wealth is generated are destined
to lose it.” (Gwyn Morgan – January 5, 2015)

It’s been thirty years since Mancur Olson, the late American Economist, wrote The Rise and Decline of Nations. The premise of his widely acclaimed book is the longer a society enjoys political stability, the more likely it is to develop powerful special interest groups that erode economic prosperity. His words have proven prescient as we witness Europe’s debt-burdened stagnation and degeneration of the U.S. Congress into fractious ideological gridlock.

Canada weathered the 2008 economic crisis better than other countries, emerging as one of the world’s most financially sound and prosperous countries. The cornerstone that distinguishes Canada’s prosperity is our rich resource endowment, which generates some two million jobs, more than half of all merchandise exports and one-third of all capital investment.

Resource companies are planning capital investment of more than $600-billion over the next decade, creating hundreds of thousands more new jobs each year. But a new dynamic has emerged that threatens to stymie these investments.