Republic of Mining

Confronting the Potential Extinction of a Canadian Institution – by Tommy Humphreys (CEO.ca – December 10, 2014)

December 11, 2014

http://www.kaiserresearch.com/s/Home.asp

To a packed crowd in Vancouver yesterday, veteran junior resource analyst John Kaiser gave a presentation hosted by AME BC entitled, Confronting the Potential Extinction of a Canadian Institution.

Here is a link to the 59 slide PDF presentation, courtesy John Kaiser.

Mr. Kaiser has been closely involved with Canada’s venture capital markets for over thirty years. In the 80’s and early 90’s, he was a research analyst at various securities firms focused on the junior resource sector. In 1994 he started his own newsletter, known as Kaiser Research or Kaiser Bottom Fish Report, that has earned a reputation for being the most comprehensive data source on Canada’s public venture capital markets.

Mr. Kaiser has a bulletproof reputation and is a sought after guest on business television and at conferences.

In his presentation to the AME, BC’s mining lobby group, Kaiser begins by reviewing the junior resource markets from 1978 until today. In that time span, Canadian venture capital stock exchanges provided the early stage capital for countless wealth creating mineral discoveries, but has undergone a number of structural changes aimed at preventing frauds. In hindsight, Kaiser says these regulations are now overkill.

Kaiser believes there are four key narratives that drive investment in early stage mining equities, and notes that none of them appear to apply today. These Key Narratives are:

Third rail line to Quebec’s north a necessity, says Schefferville – by Marika Wheeler (CBC News Montreal – December 11, 2014)

December 11, 2014

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

The head of Schefferville says experts have it wrong: there can’t be a Plan Nord without another train line

The administrator of Schefferville says despite what experts say, he believes the Plan Nord — Quebec’s plan for the development of the north — depends on having a third train line to get iron to market.

“If the government wants to have some sort of Plan Nord in the Fosse du Labrador, they have to have a third way to ship the iron to Sept-Îles,” said Paul Joncas.

Transportation represents about 40 percent of production costs for iron mines working in the Labrador Trough along the Quebec-Labrador border. Rail is the only way to transport the millions of tons of iron produced each year.

There are currently two tracks that run north. One is owned by ArcelorMittal, and runs from Port-Cartier to Fermont. It only carries ore extracted by ArcelorMittal.

The second track runs from Sept-Îles to Schefferville and is owned, in part, by the Iron Ore Company (IOC). That means other companies working in the Schefferville area must pay a competitor to carry their product.

Experts warn waste of money

COLUMN-Big miners’ coal M&A activity points to price bottoming out – by Clyde Russell (Reuters U.S. – December 11, 2014)

December 11, 2014

http://www.reuters.com/

LAUNCESTON, Australia, Dec 11 (Reuters) – If you were looking for a sign that coal prices have finally bottomed out, then the ramping up of merger and acquisition activity is often a good indicator.

Just as major mining companies tend to buy assets at inflated prices at the zenith of the market, they tend to sell them at discounts at the nadir.

In the past few days, a flurry of announcements have hit the headlines, including Anglo American’s proposed sale of coal assets in Australia and South Africa, and Peabody Energy and Glencore agreeing to form a joint venture at neighbouring mines in Australia’s Hunter Valley basin.

The M&A activity hasn’t been limited to Australia and South Africa, with Brazil’s Vale selling a stake in its Mozambique mine to Japan’s Mitsui, and Consol Energy saying it plans to pursue an initial public offering of some of its U.S. thermal and coking coal assets.

Companies tend to use obfuscatory language in the announcements of these deals, often resorting to terms such as “unlocking shareholder value” or “maximising synergies,” but behind the spin is often the simple message that the assets are loss-making and the pain on the bottom line has become too much to bear, or if they are profitable, they aren’t providing enough of a return on capital.

Editorial: Friendly Manitoba, slow Manitoba – by John Cumming (Northern Miner – December 10, 2014)

December 11, 2014

The Northern Miner, first published in 1915, during the Cobalt Silver Rush, is considered Canada’s leading authority on the mining industry. Editor John Cumming MSc (Geol) is one of the country’s most well respected mining journalists. jcumming@northernminer.com

One of the hottest topics on the sidelines of the recent Manitoba Mining and Minerals Convention in Winnipeg was the provincial lawsuit launched by two prospectors against the Manitoba government for allegedly failing in its “duty to consult” with the Manto Sipi Cree First Nation community near the duo’s mineral claims, which effectively ruined their business.

The statement of claim filed in October by Manitoba prospectors James Campbell in Winnipeg and Peter Dunlop in The Pas may stem from a bureaucratic nightmare that directly impacts only a handful of people, but it’s the kind of conflict that is becoming all too common across Manitoba and Canada.

For that reason, the plaintiffs say they have drawn sympathy and moral support from mining industry professionals and associations across Manitoba and beyond.

The lawsuit centres around Campbell and Dunlop’s Godslith lithium claims in the Gods Lake region of northeastern Manitoba. While the ground had seen earlier exploration by companies such as Inco, Dunlop staked the ground in 1988 and transferred it to Campbell in 2004, who in turn optioned it to Golden Virtue Resources (formerly named First Lithium Resources) in 2009.

NEWS RELEASE: KGHM International: A Legacy of Responsible Mining – by Robert Spence (Mining Global – December 10, 2014)

December 11, 2014

http://www.miningglobal.com/

As a wholly owned subsidiary of KGHM Polska Miedź S.A., KGHM International (KGHM-I) is focused on its operating assets, working to advance its growth pipeline. The company operates a group of projects spread across North and South America including four open-pit mines and two underground mines.

One of the most advanced and responsible initiatives the company has undertaken is the implementation of a mine-for-closure operating plan at its KGHM-I Carlota (“Carlota” or “the company”) mine.

Responsible mining initiatives

Permitted in 1997, the Carlota project is a 100 percent owned open-pit, heap leach mine producing roughly 25 million pounds of copper annually. Located in Arizona, the mine became one of the first copper mines designated and permitted under modern environmental legislation within the National Environmental Policy Act (NEPA).

Since the inception of the mine, Carlota has been pursuing a goal of responsible environmental stewardship and excellent community relations. The company has implemented a mine-for-closure plan that follows suit with the Arizona environmental regulations as well as Federal guidelines. The key component of mine-for-closure is incorporating closure activities into the mine plan during operations and continuing copper production while conducting closure.

Transboundary issues remain thorny – by Elwood Brehmer (Alaska Journal of Commerce – December 11, 2014)

December 11, 2014

http://www.alaskajournal.com/

Alaska groups concerned about the impact of British Columbia mines on Southeast fisheries continue to push for federal intervention in Canada’s project review process.

Leaders from Rivers Without Borders, the Southeast Alaska Conservation Council, Salmon Beyond Borders and the United Tribal Transboundary Mining Working Group urged attendees of the Dec. 2 Bureau of Indian Affairs Tribal Providers Conference in Anchorage to sign a petition requesting Secretary of State John Kerry to initiate the International Joint Commission process — the only way the Alaskans can have their voices heard they said.

The commission, or IJC, consists of five commissioners, two from Canada and three from the U.S., who review transboundary watershed issues. The IJC can only get involved when called upon by both governments. In the U.S., the State Department makes that call.

Rivers Without Borders Alaska Campaign Director Chris Zimmer said there are about a dozen proposed mines in British Columbia that his organization is concerned about. However, the Kerr Sulphurets Mitchell, or KSM, gold proposal on the British Columbia side of the Unuk River drainage seems to be top priority for most individuals worried about the issue.

NEWS RELEASE: Silver Demand for Industrial Applications Forecast to Reach Nearly 680 Million Ounces in 2018

December 11, 2014

https://www.silverinstitute.org/site/

(Washington, D.C. – December 10, 2014) Total silver industrial demand is forecast to grow 27 percent, adding an additional 142 million ounces of silver demand through 2018 compared with 2013 levels, according to a new report issued today by the Silver Institute. Half of this growth will be accounted for by the electrical and electronics sector, but additional demand will be due to growth in other industrial applications, as highlighted in the report entitled, “Glistening Particles of Industrial Silver.”

The unique properties of silver – its excellent thermal and electrical conductivity, as well as its malleability, ductility and optical reflectivity – make it indispensable in many industrial applications, from watch batteries to industrial-scale solar energy systems, according to CRU Consulting, the London-based metals consultancy and authors of the report.

Increasingly, applications for silver are being invented, discovered and, importantly, commercialized. The report outlines the potential for growth from several of the most important industrial silver applications. Increasing demand for silver in solar panels, as well as in the production of ethylene oxide, automobiles, bearings and batteries, has influenced consumers in developed and developing countries to varying degrees, with silver industrial demand shifting among key geographical locations. Increased use of silver has driven consumption growth in both China and India and the trend seems likely to continue.

Silver Consumption in Examined Industrial Sectors – 2013 and 2018F (millions of ounces)

Why OPEC still has oil markets over a barrel – by Yadullah Hussain (National Post – December 11, 2014)

December 11, 2014

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

The oil-importing world has long hoped that the Organization of Oil Exporting Countries — a union of countries often at odds with each other — will fall apart and usher in an era of free-market oil.

OPEC’s decision at its November meeting to maintain output at 30-million barrels per day has once again raised the age-old speculation that the 12-member group featuring Saudi Arabia, Iran, Venezuela and Iraq, among others, has become ineffective.

“With oil having to ‘balance itself’ going forward, OPEC has given up on its traditional role of keeping supply and demand in check,” said Francisco Blanch, commodity strategist at Bank of America Merrill Lynch in a report. “The cartel is now effectively dissolved.”

Hold the champagne. Since the 1970s the group’s recalcitrant members have lurched from one oil episode to the next and have a long tradition of holding acrimonious meetings that seem to be their last. Often those meetings have not yielded the desired results, either.

The dysfunctional group has survived bloody wars between member countries (Iraq and Iran; Iraq and Kuwait), overcome US$9 per barrel oil in the late 1990s, and managed to hold regular meetings even as Saudi Arabia and Iran engage in proxy wars for regional influence.

Glencore boss slams iron ore sector (The Australian – December 11, 2014)

December 11, 2014

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

DOW JONES NEWSWIRES – The chief executive of mining giant Glencore, Ivan Glasenberg, again criticised the industry for its over-investment in certain commodities, telling investors that “fortunately we don’t produce iron ore.”

Mr Glasenberg’s apparent distaste for the key steelmaking ingredient comes despite Glencore’s approach earlier this year to Rio Tinto, one of the world’s largest iron ore producers, over a potential tie-up. The approach was rejected and under UK company rules Glencore can’t revive the talks until later next year.

Mr Glasenberg has criticised mining rivals such as Rio and BHP Billiton for continuing to invest in and ramp up iron ore production even though the commodity’s price slumped this year. Speaking at the company’s investor day, he said the reason prices had fallen was that “we’ve all invested too much, we’ve increased supply and unfortunately a big amount has gone in the iron ore market.”

The comments came as benchmark iron ore slid to $US68.90 a tonne overnight, just over 1% above its five-year low. Glencore said it would continue to take a disciplined approach to expanding its production capacity, amid the recent fall in commodity prices.

Mr Glasenberg said “capital misallocation, not a lack of demand, remains a key issue for the sector resulting in a clear need to differentiate by commodity.”

Steel, Vale send message about positive bargaining – by Carol Mulligan (Sudbury Star – December 11, 2014)

December 11, 2014

The Sudbury Star is the City of Greater Sudbury’s daily newspaper.

Some might call it a Christmas miracle.

Representatives from Vale Ltd. and United Steelworkers Local 6500 held a joint news conference Wednesday to signal their intention to work together to settle a new collective bargaining agreement before the current one expires May 31, 2015.

The fact it was held at the Steelworkers’ Hall was unprecedented for a company and a union who were involved in an acrimonious, year-long strike from July 2009 to July 2010.

Both sides want to put that troubled past behind them and move forward so history doesn’t repeat itself.
Rick Bertrand, president of USW Local 6500, told reporters a great deal of work has been done between his union and the company to repair the bad feelings that existed after the longest strike in the union’s history.

Kelly Strong, vice-president of Ontario/UK Operations for Vale, said several meetings have been held between the company and the union in the last two to three years to build a relationship of “mutual respect and trust.”

In the past, the company and the union have met first on neutral territory — usually a hotel boardroom — making a show of exchanging proposals about three months before a contract expired.

Lima marchers, experts want climate deal to respect rights – by Megan Rowling (Reuters India – December 11, 2014)

December 11, 2014

http://in.reuters.com/

LIMA (Thomson Reuters Foundation) – Rights experts and civil society groups issued an open letter on Wednesday to ministers attending U.N. climate talks in Lima, urging governments to enshrine “human rights for all” in the new global climate deal due to be agreed at the end of 2015.

At the same time, thousands of Peruvians and indigenous people from the Andean and Amazon regions marched shoulder to shoulder with climate activists from around the world on the traffic-choked streets of Lima.

They called for urgent action to tackle climate change and the environmental problems affecting communities dependent on natural resources for their survival.

Danitza, whose Quechua name Pilpintu means butterfly, from Peru’s south-central Andean region of Ayacucho, said people must take care of the earth, not least for the benefit of their children. “For the next generations, we should look after our water, the earth, our food,” she said, carrying her baby dressed in traditional clothes.

Many at the march, around 15,000-strong according to organisers, shouted and waved banners demanding clean water, 100 percent renewable energy, and protection of their rights threatened by extractive mining and major development projects, such as hydro-electric dams.

Perry Bellegarde, fiery new AFN grand chief, will ‘reach out’ for larger share of resource revenues – by Mark Kennedy and Richard Warnica (National Post – December 11, 2014)

December 11, 2014

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

Perry Bellegarde, elected grand chief of the Assembly of First Nations on Wednesday and the now the most powerful native politician in Canada, has spent the last 16 years honing a single, unambiguous message.

To paraphrase another prairie politician who hit it big on the national stage, in Mr. Bellegarde’s view, the First Nations want in.

A career politician and longtime regional chief from Saskatchewan, Mr. Bellegarde has long argued for a broader interpretation of treaty rights, one that would see First Nations earn a much larger share of resource revenues and jobs.

In a fiery first speech as grand chief Wednesday, Mr. Bellegarde doubled down on that theme. “To the people across this great land, I say to you, that the values of fairness and tolerance which Canada exports to the world, are a lie when it comes to our people,” he said.

“Canada will no longer develop pipelines, no longer develop transmission lines, or any infrastructure, on our lands as business as usual. That is not on.”

His final remarks drew one of the loudest responses from the crowd: “Canada is Indian land,” he said. “This is my truth and this is the truth of our peoples.”

Coal Provocateur Sees Profits in Coal’s Long, Slow Death – by Tim Loh (Bloomberg News – December 11, 2014)

December 11, 2014

http://www.businessweek.com/

Robert Murray is pumped — as though coal-fired steam might be coursing through his veins. Striding purposefully, he ascends a lectern in a conference room at Pittsburgh’s Wyndham Grand Downtown hotel toting a cardboard box with hundreds of copies of his keynote speech to give out later lest anyone miss a word.

It turns out to be a corporate version of a hellfire-and-damnation sermon for the 250 U.S. coal executives assembled at the Platts Coal Marketing Days conference. Satan and his minions aren’t in the room but Murray knows their names.

“Environmental alarmists” and “liberal elitists,” he says, his voice rising as he whips off his glasses. And worse than them all, “the insane, regal administration of King Obama” and Obama’s Environmental Protection Agency.

Murray, 74, pauses for effect and then lowers his voice. “We have the absolute destruction of the United States coal industry. It isn’t coming back. It’s permanent. Virtually all of it is permanent. And if you think it’s coming back, you don’t understand the business. Or you’re smoking dope.”

This is vintage Murray, America’s pro-coal provocateur-in-chief, a coal miner’s son and a former miner himself, a man whose anti-regulation record is so unwavering that he once dismissed acid rain as a hoax, never mind climate change.

Anglo aims to shrink workforce by 60,000 – by Allan Seccombe (Business Day Live – December 10, 2014)

December 10, 2014

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

ANGLO American plans to cut its global workforce by 60,000 people to 102,000 by 2017, with restructuring across its range of businesses and commodities as it seeks to drive up profits in a tough global market.

Anglo will know by the end of March next year whether it will list or sell its Rustenburg and Union platinum mines as it focuses on low-cost, high-margin, mechanised assets, removing about 20,000 employees from its books at a stroke.

Among the other assets up for sale or being considered for disposal are two coal mines in Australia, coal mines supplying Eskom in SA, the two platinum mines, along with two platinum joint ventures and the Thabazimbi iron ore mine in SA.

Copper assets are also being prepared for sale and Anglo was keeping its options open about whether to sell its nickel mine in Brazil, CEO Mark Cutifani said on Tuesday.

Anglo’s 80%-held subsidiary, Anglo American Platinum, has started the sales process for the Union mines, with Sibanye Gold, RBPlatinum and Northam Platinum understood to be the final three out of 81 expressions of interest in the assets. The sticking point is the price Anglo wants for the mines, but Mr Cutifani stressed Anglo was not chasing the best price.

Investors tapped to fund gold fraud film – by Ben Bland (Financial Times – December 10, 2014)

December 10, 2014

http://www.ft.com/home/us

Jakarta – Two of the world’s toughest mining tycoons battle it out with a star geologist, a chancer and a dictator’s children for control of one of the world’s largest gold discoveries in the heart of the Indonesian jungle, until it is exposed as a huge fraud.

The true story of Canadian company Bre-X Minerals, which collapsed in 1997 after attaining a market capitalisation of $6bn, reads like a movie script and the producer of hit film Home Alone is trying to raise $18m from mining investors to put it on the silver screen.

Malcolm Burne, a serial mining entrepreneur and former Financial Times journalist, has given Hollywood producer Scott Rosenfelt $150,000 of seed capital and together they are tapping minerals investors from Canada to Australia to fund a film about a scandal that changed the industry.

“It’s an amazing story with political and financial intrigue and thousands of people’s lives shattered as well as those who are still standing tall like Peter Munk of Barrick Gold,” says Mr Rosenfelt, who has tentatively titled the film Bre X: King for a Day.

Gold-mining companies struggled to raise money for years after the fraud, which prompted stock market regulators in Canada and Australia to bring in rules forcing miners to disclose detailed technical information about new finds.