Republic of Mining

The beginning of the end for gold and industrial metals price falls? – by Lawrence Williams (Mineweb.com – January 12, 2015)

January 12, 2015

http://www.mineweb.com/

Or the end of the beginning? … Looking at mixed fortunes ahead for gold, iron ore and base metals – positive, flat to negative and slightly upbeat respectively.

The title of this article could be taken two ways, but our meaning in using it – courtesy of London metals and mining commentator David Hargreaves’ Week in Mining newsletter, which used aspects of the famous Winston Churchill wartime quote in its title and conclusions this week – is that are we perhaps actually nearing the bottom of the prices downturn virtually across the board in resources?

As the newsletter points out – the Brent crude oil price has fallen through $50/bbl, iron ore is staring down the abyss, copper has a look of testing $6,000 per tonne on the downside, while gold has picked up to $1,200 plus etc.

In currencies, the US dollar continues its rise against all, or at least most, others, with the Euro testing nine-year lows. The Eurozone has moved into deflation as the forthcoming Greek elections could put in power a political party which could well implement a default on the country’s debts and lead to Grexit – the possible Greek exit from the European Union.

Further on the geopolitical front, Islamic fundamentalist-inspired terrorism has hit the headlines again with the Paris shootings at the Charlie Hebdo offices, the totally unprovoked murder of a policewoman attending a traffic accident and subsequent hostage taking leading to more deaths.

India on brink of “quantum leap”, Modi tells investors – by RUPAM JAIN NAIR and AMAN SHAH (Reuters India – January 11, 2015)

January 12, 2015

http://in.reuters.com/

GANDHINAGAR – (Reuters) – Prime Minister Narendra Modi promised on Sunday to pursue predictable policies and ensure stable taxes, in a speech that sought to address concerns for foreign investors in Asia’s third-largest economy.

U.S. Secretary of State John Kerry led a roll call of leaders, including U.N. Secretary General Ban Ki-moon and World Bank head Jim Yong Kim, converging on Modi’s home town of Gandhinagar for the Vibrant Gujarat business summit. U.S. President Barack Obama visits India later this month.

Eight months into Modi’s rule, his failure to lift the economy from its longest growth slowdown in a generation has raised questions about how much substance there is behind his promise of “red carpet, not red tape”.

“We’re trying to complete the circle of economic reforms speedily,” Modi told the event that he founded when he was chief minister of the industrial state.

“We are also keen to see that our policies are predictable. We’re clear that our tax regime should be stable,” Modi said, speaking in English but making the occasional aside in Hindi.

Robert Friedland’s mining showdown in South Africa – by Geoffrey York (Globe and Mail – January 10, 2015)

January 12, 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.

MOKOPANE, SOUTH AFRICA — The two men took the cash from an envelope, counted it carefully and spread it on the table in front of Raesetsa Makgabo in her village home. It was exactly 5,250 South African rand (about $450 U.S.).

She says she remembers vividly what the men said next: They told her to take the money and allow the Canadian mining company to begin drilling on her maize fields – or lose her monthly pension.

Illiterate and unable to read the document in front of her, but fearful of losing the $120 monthly pension that was her main income, the 82-year-old villager took the pen and marked the agreement with a humble X beside her name. The two men, including an official from Ivanhoe Mines Ltd., signed the document dated May 10, 2011. Then the drilling began.

Ivanhoe’s $1.7-billion project, forecast to become the world’s biggest new platinum mine, is crucial to the fate of the Vancouver-based company – and to thousands of impoverished villagers near the site.

Ivanhoe says its Platreef mine will provide 10,000 direct and indirect jobs, along with a minority ownership stake for 150,000 residents and employees under South Africa’s black-empowerment rules.

An ‘emerging market’ at home: Canada’s banks making a big push into aboriginal communities – by Barbara Shecter (National Post – January 10, 2015)

January 12, 2015

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

A few years ago, Chief Darcy Bear and the Whitecap Dakota First Nation in Saskatchewan made a practical decision to cut ties with the handful of financial institutions that were backing their infrastructure loans in favour of a single player: Bank of Montreal.

It was a simple choice, Chief Bear explained during an interview in Toronto this week. Along with its domestic peers, BMO has made a concerted push into aboriginal banking. But the bank went further. While the band had in the past been forced to depend on relatively short-term debt, making it harder to make the case for bigger infrastructure projects with extended lifespans — roads, schools, bridges — BMO was offering longer, more favourable terms. The kind of 20- or 25-year deals common in off-reserve municipal projects, instead of forcing the band into five or 10-year arrangements.

“The relationship has been a good one,” said Chief Bear, smiling as he recounted the story of first meeting Stephen Fay, BMO’s head of Aboriginal Banking five years ago, after patiently waiting around until the very end of a conference in Vancouver conference to make the meeting happen.

Like any banker, Mr. Fay also seems pleased when he recounts the story of having won out over rival financial services institutions by “pushing the envelope” on infrastructure loans for aboriginal communities. But he says he’s “waiting for the other shoe” to drop in the relentless grabs for market share that are characteristic in his competitive industry.

Searching for Burmese Jade, and Finding Misery – by Dan Levin (New York Times – December 1, 2014)

January 12, 2015

http://www.nytimes.com/

MYITKYINA, Myanmar — At 16, the gem trader’s son set out for the jade mines to seek his fortune in the precious stone that China craves. But a month in, the teenager, Sang Aung Bau Hkum, was feeding his own addiction: heroin, the drug of choice among the men who work the bleak terrain of gouged earthen pits, shared needles and dwindling hope here in the jungles of northern Myanmar.

Three years later he finally found what he had come for — a jade rock “as green as a summer leaf.” He spent some of the $6,000 that a Chinese trader paid him on a motorcycle, a cellphone and gambling.

“The rest disappeared into my veins,” he said, tapping the crook in his left arm as dozens of other gaunt miners in varying states of withdrawal passed the time at a rudimentary rehabilitation clinic here. “The Chinese bosses know we’re addicted to heroin, but they don’t care. Their minds are filled with jade.”

Mr. Sang Aung Bau Hkum, now 24, is just one face of a trade — like blood diamonds in Africa — that is turning good fortune into misery.

Driven by an insatiable demand from the growing Chinese middle class, Myanmar’s jade industry is booming and should be showering the nation, one of the world’s poorest, with unprecedented prosperity.

History of Mining: The evolution of shaft sinking systems (Part 7 of 7) – by By C. Graham and V. Evans (CIM Magazine – June/July 2008)

January 12, 2015

http://www.cim.org/en/

1600 A.D. to the present — a summary

Primitive shaft sinkers used their hands and implements of bone, wood and, later, metal to dig the shafts that were necessary to remove the minerals required in their society. With the arrival of a social system, under the Egyptians and the Phoenicians, shaft sinking and mining became more organized, with slaves, criminals and prisoners of war being utilized. In these early days, fire quenching was utilized along with wedges and hammers to break up the rock, which was then removed in baskets.

With the coming of the Middle Ages, mining and shaft sinking alike became a respected profession; however, mining techniques remained much the same as those used under the Romans. The first major change in shaft sinking practice was the use of black powder rather than fire quenching to break the rock, which occurred in the 17th century.

The Industrial Revolution brought about the next major changes — steam-powered hoists and pumps. In the 19th century, the pneumatic rock drill replaced drilling by hand and in the mid-20th century, mechanical mucking machines replaced hand mucking. All these changes, although slow in coming, drastically increased the speed of shaft sinking.

Summarizing the average sinking speeds from the various periods clearly illustrates the changes in technology over time and the resulting increase in sinking rates.

History of Mining: The evolution of shaft sinking systems (Part 6 of 7) – by By C. Graham and V. Evans (CIM Magazine – May 2008)

January 12, 2015

http://www.cim.org/en/

Shaft sinking from 1970 to 2007: mechanical excavation

During the 1970 to 2007 time period, there were a number of changes to traditional shaft sinking systems, both in Canada and in other countries around the world. These include:

the use of shaft jumbos for drilling;
the use of electronic detonators for blasting;
the use of hydraulic drills rather than pneumatic drills;
the use of slurry explosives instead of nitroglycerine-based explosives;
the drilling and blasting of long rounds utilizing drill jumbos suspended from the work stage;
equipping the shaft simultaneously with excavation; and
the development of mechanical shaft excavation systems.

It can be noted that during this period no improvements were made to the mucking, hoisting or concreting segments of the sinking system.

Will We Mine Asteroids? – by Fraser Cain (University Today.com – January 8, 2015)

January 9, 2015

http://www.universetoday.com/

It’s been said that a single asteroid might be worth trillions of dollars in precious rare metals. Will we ever reach out and mine these space rocks? How hard could it be?

Here on Earth, precious metals like gold and silver are getting harder to find. Geologists are developing more elaborate ways to get at the veins of precious metals beneath the surface of the Earth. And for the truly rare metals, like platinum and iridium, forget about it. All the platinum ever mined in the history of the world would fit inside my basement, and it’s not that big of a basement.

There are asteroids out there, just floating past us, taunting us, containing mountains of precious minerals. There are iron-nickel asteroids made entirely of metal. Comets of water, dirt and organic materials, everything you’d need to make an orbital farm. Just a single 30-meter asteroid, like the recently discovered 2012 DA14, is worth $20 trillion dollars. Now, if you could just somehow get to it.

Bre-X lawyer’s fight in the spotlight – by Rachel Mendleson (Toronto Star – January 9, 2015)

January 9, 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.

Battle continues in court for man who got client acquitted after mining scandal.

The legal community is closely watching the latest round in Bre-X lawyer Joe Groia’s battle to defend himself against a controversial charge of “incivility,” which is raising fundamental questions of judicial independence and freedom of speech.

In Ontario Divisional Court on Thursday, Groia’s lawyer framed the case as an opportunity to preserve the right of all lawyers to vigorously defend their clients without fear of reprisal from an “overzealous” professional regulator.

“No lawyer wants to be the next Joe Groia,” lawyer Earl Cherniak told the panel of three judges. “Groia (has) defended his prosecution, not only for his own sake, but also in the public interest in the profession.”

The judicial review follows nearly five years of legal wrangling over charges of professional misconduct by the Law Society of Upper Canada, which took issue with Groia’s behaviour in the early stages of the insider-trading trial of former Bre-X geologist John Felderhof.

A mining company, Bre-X Minerals announced a promising find of gold in Indonesia in 1995, sending its stock price soaring. But the samples were found to be fraudulent — the largest mining fraud in Canadian history, driving the company into bankruptcy.

Pebble Mine 2014 Year in Review: “And Then There Were Lawyers . . . .” – by Joel Reynolds (Huffington Post – January 5, 2015)

January 9, 2015

http://www.huffingtonpost.com/green/

Joel Reynolds Become is the Western Director and Senior attorney, NRDC, Los Angeles.

When someday the story of the Pebble Mine is told, 2014 may be best remembered as the year when all that remained of the once formidable Pebble Partnership was a bunch of lawyers for hire. By the end of 2014, all of the mining giants and their funding – Mitsubishi, Anglo American, and Rio Tinto – were gone, leaving only Northern Dynasty Minerals to keep the reckless vision of the Pebble Mine alive.

The Partnership’s new CEO is a lawyer from the Washington, D.C. law firm of Steptoe and Johnson, and mining activities have ground to a halt.

By the end of 2014, Pebble’s public face had become lawsuits and lobbying against EPA, targeting its authority to do what Alaskans had petitioned it to do – i.e., to protect Alaska’s wild salmon fishery. Three lawsuits had been filed against the agency, and legislation to constrain the agency’s review of the Pebble project had been introduced in both houses of Congress.

Once again, permit applications – promised by Pebble for years – were never filed.

Some of the highlights of 2014:

This Week in Range History: THE MESABI IRON COMPANY: TACONITE PIONEER – by Donald C. Wright (Home Town Focus – January 9, 2015)

January 9, 2015

http://www.hometownfocus.us/ Northern Minnesota

This week we’re sharing a story written by Eveleth native Donald C. Wright about the Mesabi Iron Company, predecessor to Reserve Mining Company in Babbitt. Although the Mesabi Iron Company operated the plant in Babbitt for only two years (1922 – 1924), they were taconite pioneers who “proved that high grade iron ore could be produced for America’s steel industry from hard, tough Minnesota taconite.”

Wright’s story was originally published in the June 1984 edition of Range History: The Mesabi Perspective, a quarterly publication of the Iron Range Historical Society, and is reprinted here with their permission. All of the photos published with the story here are also courtesy of the Iron Range Historical Society.

Thank you Iron Range Historical Society for sharing your stories of our history. Cindy Kujala HTF Staff Writer

About the time the American Civil War was coming to a close in Wilmer McLean’s parlor in Appomattox, Virginia, Michigan’s bright copper boom was fading and miners began to cast interested glances at the new state of Minnesota. Minnesota’s North Shore had been opened to settlement by terms of the Treaty of LaPointe with the Chippewa in 1855 and prospectors already were drifting in to investigate rumors of gold, silver and copper.

One of the new arrivals was a German immigrant named Christian Wieland who, with his four brothers, hacked out a settlement on the shore of Lake Superior and called it Beaver Bay.

BRICs Will Be Cut to ICs if Brazil and Russia Don’t Shape Up, Warns Phrasemaker (Bloomberg News – January 9, 2015)

January 9, 2015

http://www.bloomberg.com/

Brazil and Russia’s membership of the BRICs may expire by the end of this decade if they fail to revive their flagging economies, according to Jim O’Neill, the former Goldman Sachs Group Inc. chief economist who coined the acronym.

Asked if he would still group Brazil, Russia, India and China together as emerging market powerhouses as he did in 2001, O’Neill said in an e-mail “I might be tempted to call it just ’IC’ or if the next three years are the same as the last for Brazil and Russia I might in 2019!!”

The BRIC grouping will be dragged down by a 1.8 percent contraction in Russia and less than 1 percent expansion in Brazil, according to the median estimate of economists surveyed by Bloomberg News. China is seen growing 7 percent and India 5.5 percent.

The BRICs were still booming as recently as 2007 with Russia expanding 8.5 percent and Brazil in excess of 6 percent that year. The bull market in commodities that helped propel growth in those nations has since ended, while Russia has been battered by sanctions linked to the crisis in Ukraine and Brazil has grappled with an unprecedented corruption scandal involving its state-owned oil company.

“It is tough for the BRIC countries to all repeat their remarkable growth rates” of the first decade of this century, said O’Neill, a Bloomberg View columnist and former chairman of Goldman Sachs Asset Management International.

COLUMN-Lead, a market desperately seeking a good story – by Andy Home (Reuters India – January 9, 2015)

January 9, 2015

http://in.reuters.com/

Jan 9 (Reuters) – Lead was the second worst performer among the major industrial metals traded on the London Metal Exchange (LME) last year. It was close but copper, which came under sustained bear attack over the closing weeks of 2014, just pipped it for the booby prize.

Unglamorous lead is now trading consistently below the $1,900-per tonne level, its weakest performance since the third quarter of 2012.

It’s also trading at a discount of more than $300 per tonne to “sister metal” zinc, so called because both have historically been produced at the same mines.

Trading lead and zinc as a relative value pair is a favoured past-time on the LME “Street” but the gap between the two is now as wide as it’s been since the end of 2008.

APATHY RULES, OK?

Lead’s relative under-performance has caused a good deal of head-scratching among analysts. Or at least those analysts who still care, because this market’s real stand-out feature over the last year or so has been collective apathy.

Proposed Murray River mine to rely primarily on foreign workers – by Wendy Stueck (Globe and Mail – January 9, 2015)

January 9, 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 — If the proposed Murray River coal project goes ahead, more than half of its employees would be temporary foreign workers in 2018 – potentially the first year of operation – and it would take nearly a decade for all the hourly jobs at the project to be filled by Canadians.

HD Mining has previously discussed its plan to shift from a work force that is mostly foreign to one that is mostly domestic, saying in 2013 the mine would have a “full Canadian work force” after 10 years of production.

But documents recently filed as part of an environmental-assessment process provide more detail about that transition, and an updated estimate of the cost to build the mine of $554.9-million, compared with a previous estimate of $300-million.

According to an executive summary, the number of temporary foreign workers at the project, for which preparatory work began in 2014, would peak in 2018 at 494 – 382 hourly and 112 management employees – out of a total of 764, or nearly 65 per cent. By 2027, plans call for zero hourly foreign workers and 20 managers out of a total of 764. Those levels are projected to stay the same for the rest of the mine’s life.

The environmental assessment is taking place nearly two years after HD Mining sent more than a dozen Chinese miners home in January, 2013, over uncertainty related to a high-profile court battle.

Big Hydro’s big days are behind it – by Konrad Yakabuski (Globe and Mail – January 5, 2015)

January 9, 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.

To paraphrase what another politician said about another energy megaproject, British Columbia’s plan to build a new $8.8-billion hydro project on the Peace River is hardly a no-brainer.

Depending on your assumptions about future electricity demand, environmental regulations and market trends, you could make a credible case for the 1,100-megawatt Site C power project that Premier Christy Clark has just green-lighted. But Ms. Clark’s refusal to submit her plan to a review by the B.C. Utilities Commission suggests she’s not especially confident of winning the argument.

This raises a broader credibility problem facing all of Canada’s provincially owned electric utilities. They are run by political appointees who answer to politicians who live to cut ribbons. The utilities are fiercely jealous of their prerogatives as near-monopoly suppliers of electricity and fight incursions by the private sector. When they make the business case for a new publicly financed hydro megaproject, it’s hardly an objective exercise.

So, from Newfoundland to B.C., hydro megaprojects are back in fashion. From Muskrat Falls to Site C – with Quebec’s La Romaine and Manitoba’s Keeyask and Conawapa in between – governments are again betting billions on Big Hydro. But they are confusing economic development with sound energy policy.