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Miners ‘Covering Their Eyes’ on China’s Commodity Cliff – by David Stringer (Bloomberg News – December 1, 2014)

http://www.businessweek.com/

After spending $1 trillion since 2002 on projects to feed China’s commodity boom, the world’s mining companies have a lot riding on their biggest customer.

While commodities may be trading at five-year lows, the heads of three top miners BHP Billiton Ltd. (BHP), Vale SA (VALE3) and Rio Tinto Group (RIO) last week all backed China, the world’s second-biggest economy, to keep buying increasing amounts of their products deep into the next decade. Not everyone agrees.

“The commodity guys are just too optimistic,” Tao Dong, chief regional economist for Asia excluding Japan at Credit Suisse Group AG in Hong Kong, said in an interview, without referring to particular companies.

As China moves to a consumer-led from an investment-led economy, there may be a substantial absolute drop in commodities demand, not just slower growth, he said. “This is happening now,” Tao said. “It’s just people are covering their eyes and refusing to believe that what is happening now is not just a cyclical story, but also a structural story.”

Goldman Sachs Group Inc. this year joined other banks in calling an end to the commodities supercycle as China slows. The biggest consumer of industrial metals and iron ore and the largest oil user after the U.S. is headed for the slowest full-year expansion since 1990.

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Wabush woes: Labrador mining town reels from a China slowdown – by Rachelle Younglai (Globe and Mail – November 29, 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.

WABUSH, LABRADOR — Ron Barron has spent 30 years working in the Wabush mine, one of three generations of Barrons who have toiled in the open pits in what western Labrador bills as the iron ore capital of Canada.

The family’s roots run deep here. Mr. Barron’s father was one of Wabush‘s first settlers, who not only got a job in the mine when it opened in the 1960s but also helped organize a union. Five of Mr. Barron’s brothers have worked in the same pits along with his son and nephew.

But now Mr. Barron’s life has been upended along with the rest of city. The Wabush mine, once the cornerstone of this community, is shutting down along with another iron ore mine called Bloom Lake in neighbouring Quebec. More than 1,000 miners will be out of work, not to mention a slew of other job losses from businesses that service the industry. It’s a crippling blow in an area with a population of about 9,000.

“Oh my god, everybody loses. All the organizations, the schools, everything loses. Everything will suffer because of it,” said Mr. Barron, who will be officially out of a job by mid-December. “We have had shutdowns and layoffs before, but this is different. The mine is closing.”

The reason for the closings is simple: The price of iron ore, a key ingredient in steel, has been in freefall, falling 60 per cent in three years. Where the resource once traded as high as $190 (U.S.) a tonne in 2011, it is now below $70.

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Ukraine faces coal shortage with rebels controlling mines (Business Insider – November 29, 2014)

http://www.businessinsider.com/

Kiev (AFP) – With the rich seams of coal in eastern Ukraine under rebel control and Russia cutting off supplies, the Kiev government faces the awkward prospect of turning to its enemies for help.

As winter set in, the biggest fear in recent months was that Ukraine would run out of the natural gas that heats the country. A last minute deal with Russia averted that disaster. But now a new one is looming as coal shortages threaten to leave the country desperately short of electricity.

Ukraine gets some 40 percent of its power from coal-fired plants, and has traditionally had a surplus of coal, producing some 86 million tonnes at last count in 2012.

But the Russian-backed rebellion in the east has cut the government off from large swathes of the coal-rich mining region of Donbass. Then, without warning, Russia announced it was stopping coal supplies to Ukraine last week, claiming “force majeure” but offering no explanation.

“I don’t know for how long Russia intends to stop coal deliveries. If it stops them for a long period, our thermal stations will not be able to function at full power,” said Ukraine’s Energy Minister Yuriy Prodan.

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The progressive war on science – by Margaret Wente (Globe and Mail – November 29, 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.

An epidemic of whooping cough has broken out in California. Not long ago, this ancient scourge had been banished by modern medicine. But now it’s back, thanks to people who believe modern medicine is dangerous.

These folks are not ignorant backwoods hicks. Many of them have advanced degrees. They live in some of the nicest neighbourhoods on Earth – places like Marin County, Napa and Malibu. But they believe that vaccines cause autism or worse. Immunization rates in some of the more fashionable California schools resemble those in the more backward parts of Africa. At the Valley Waldorf City School in Lake Balboa, for example, 88 per cent of students don’t have the standard vaccinations.

Nearly 9,000 people in California have come down with whooping cough this year, and a handful have died. Repeated pleas from public health officials have gone unheeded. “Children are the victims of our ignorance,” vaccination expert Paul Offit wrote in The Wall Street Journal. “An ignorance that, ironically, is cloaked in education, wealth and privilege.”

Yet it’s conservatives – religious, less educated, less wealthy and certainly less liberal – who are generally condemned for dogmatically refusing to embrace science. After all, they’re the knuckle-draggers who believe that evolution is just a story and that global warming is a crock.

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Project could create 1,000 jobs – by Jeff Labine (Timmins Daily Press – November 29, 2014)

The Daily Press is the city of Timmins broadsheet newspaper.

TIMMINS – Things are looking good for Timmins’ new talc and magnesium mine, which could create more than a thousand jobs.

William Quesnel, president and CEO of General Magnesium Corp., told The Daily Press the demand for magnesium has doubled over the past few years. Magnesium is a light weight metal and highly sought after in the auto industry. Quesnel said the auto industry is pulling out all the stops to continue to make vehicles like SUVs with the lighter material, which is good news for the company.

“The project is really moving ahead,” he said. “Things take time to do. The thing is, people who are looking at the project to purchase our material have gone above and beyond on their due diligence. Their consultants say we will be a very low cost producer in the world. When you have low costs like that you are able to create jobs that are sustainable because you can deal with the fluctuation in metal prices.

“We have three phases we’re looking at and the jobs could be over a 1,000, which I think is a fairly strong impact for Timmins.”

The Daily Press learned from a source close to the project that the lifespan of the mine could be a hundred years. The three phases will be broken up into building a talc plant, followed by a magnesium concentrator and finally a magnesium thermal reduction plant. Quesnel said that will be the real job creator because it turns the magnesite material into a metal.

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HISTORY: Timmins Pioneers preferred boozy beverages – by Karen Bachmann (Timmins Daily Press – November 29, 2014)

The Daily Press is the city of Timmins broadsheet newspaper.

Karen Bachmann is the director/curator of the Timmins Museum and a local author.

TIMMINS – Now, for something just a little different. I was going to put together another collection of little items and stories from 1940, but, being the short-attention-span kinda gal I am these days, I was sidetracked by an article entitled “Some of the Beverages Used Through the Years” by that goddess of the 1940s kitchen, Edith M. Barber.

She began her informative piece with a definition of beverages (“anything in liquid form which we drink with or between meals” – how helpful), and then proceeded with a description of a variety of rather unsavory drinks from the early Canadian colonial period.

That got me thinking about some of those early drinks, seeing as how we are approaching the holiday season, and festive beverages are once again on the itinerary. I figured, how bad could these early cocktails actually be?

Turns out the answer is, actually, quite horrid. How anyone could stomach some of these concoctions is beyond me (by the way, museum staff who are coming to my place for a glass of Christmas cheer need no longer fear that it will be an 1812 themed event).

The thinking at the time (I mean in the early days of Canada, between 1763 and the mid-19th century) dictated that fermented beverages were so much safer than water.

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On pipelines, politicians are just listening to the people – by Gary Mason (Globe and Mail – November 28, 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.

If you listen closely, you can hear the sound of desperation in the voice of Alberta Premier Jim Prentice when he talks about the Energy East pipeline. One doesn’t have to concentrate quite as hard to detect the same anxiety in the words of Saskatchewan Premier Brad Wall.

Both were taken aback when Ontario and Quebec announced seven conditions for granting approval to the pipeline. One of those includes an assessment of the project’s upstream greenhouse gas emissions – which would appear to take into account the source of the crude moving through the pipeline. In Alberta’s case, that would be the oil sands, a high GHG emitter.

The conditions are similar to ones the B.C. government set out for pipeline projects, including a requirement to consult with First Nations. And we all know how that’s been going for pipeline companies trying to reach tidewater on the West Coast.

Despite conditional approval from the National Energy Board, most believe the Northern Gateway pipeline will never get built because of opposition to it. The courts have given First Nations new powers to fight developments that encroach on their land. Outside of aboriginal communities, public opinion regarding pipelines is at best divided – although there seems to be a growing societal angst about climate change that is palpable.

Kinder Morgan, which also wants to add a pipeline to the West Coast, is encountering that sentiment now.

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Canada’s unfinished business with First Nations is an economic failure – by Diane Francis (National Post – November 29, 2014)

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

“The great themes of Canada are as follows: Keeping the Americans out, keeping the French in, and trying to get the Natives to somehow disappear.” – Will Ferguson, humorist and 2012 Giller Prize winner

Ferguson’s acerbic quote also summarizes the great unfinished business of Canada which is to reconcile the rights and create a role for the country’s 614 First Nations and their 700,000 members. The failure to have done this after centuries not only impedes national economic development, but is at the root of much of the misery and squalor on and off reserves.

The United States did not make deals, but conquered its Native Americans and, under international law, has only been required to compensate them. But here, Britain signed sovereign deals with aboriginals, catapulting them under international law to the rights and privileges of nation-states. Thus they call themselves First Nations. Australia has a similar history, but, unlike here, Canberra has fully addressed the issues.

Canada must now do the same. A recent, landmark Supreme Court of Canada ruling has fully, and radically, defined “aboriginal rights.” Justices unanimously decided that lands in the British Columbia interior, the size of Greater Vancouver, belonged to the Tsilhqot’in Nation, a band with 400 members. They now own and must manage the lands in perpetuity, rights they can relinquish only if they sign ownership over to a government.

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Swiss Reject SNB Gold Initiative, SRF Projections Show – by Catherine Bosley (Bloomberg News – November 30, 2014)

http://www.businessweek.com/

Swiss voters rejected a referendum requiring their central bank to hold a portion of its assets in gold, a measure its President Thomas Jordan termed an “invitation to speculators” that could have hamstrung the economy.

The “Save Our Swiss Gold” proposal stipulating the Swiss National Bank hold at least 20 percent of its 520-billion-franc ($540 billion) balance sheet in gold and never sell any bullion was voted down by 78 percent to 22 percent, according to projections by Swiss television. Polls had forecast the initiative’s rejection. Two other initiatives on tax privileges for foreign millionaires and immigration limits also were rejected.

SNB policy makers warned repeatedly that the measure, which also required the 30 percent of central bank gold stored in Canada and the U.K. to be repatriated, would have made it harder to keep prices stable and shield the central bank’s cap on the franc of 1.20 per euro. That minimum exchange rate was set three years ago, with the SNB pledging to buy foreign currency in unlimited amounts to defend it.

“The key word is relief, but it’s not a reason to crack the champagne corks yet,” said Janwillem Acket, chief economist at Julius Baer Group Ltd. in Zurich. Due to the rejection, “the SNB has more options and fewer constraints on monetary policy,” he said.

Investors anticipating more easing by the European Central Bank helped push the franc to a 26-month high against the euro earlier this month. ECB President Mario Draghi has explicitly cited government bond-buying as a possible policy tool.

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‘Deep Down Dark,’ by Héctor Tobar – by Mac McClelland (New York Times – November 20, 2014)

http://www.nytimes.com/

In 1987, a toddler who became known to the world as Baby Jessica fell into an abandoned well in a backyard in Midland, Tex., where she was stuck for 58 hours. Watching the coverage as a 7-year-old, I couldn’t get an answer from the newscasters or my parents that explained why it was taking so long for so many smart grown-ups to solve such a simple problem. Even now, I find it hard to believe that the human race can be outmatched by such a primitive adversary as a hole in the ground.

Crises of faith are the dominant theme of Héctor Tobar’s “Deep Down Dark,” the story of 33 men who were buried for 69 days in a collapsed Chilean mine in 2010. With his exclusive access to the survivors, Tobar, a Pulitzer Prize-­winning journalist, graphically recounts the quandaries that beset the men as well as their families — camped out at the mine’s entrance — the officials and rescue crews as a worldwide audience watched. There is weeping.

There is acceptance of death. There is the miners’ terror, every time the rescue drill stops, that they have been given up for dead. “The silence just destroyed us,” one man told Tobar. “Without a positive sign, your faith collapses. Because faith isn’t totally blind.” Some men find a stronger connection to God (“Omar realizes that the improbable fact of their survival also carries a hint of the divine. To be alive in this hole, against all odds, speaks to Omar of the existence of a higher power with some sort of plan for these still-living men”). Others struggle with whether to pray or to succumb to the darkness and lie down to die.

The hierarchy that gave the miners order in their workday routine is destroyed almost instantaneously. The shift supervisor buckles under the realities of the collapse and abdicates his authority.

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Conference shines spotlight on deep mining expertise in Sudbury – by Norm Tollinsky (Sudbury Mining Solutions Journal – November 26, 2014)

This column was originally published in the December 2014 issue of Sudbury Mining Solutions Journal.

Delegates from around the world share deep mining solutions

Deep Mining 2014, held in Sudbury September 16 to 18, was a big hit, attracting 302 attendees from around the world.

“It was an overwhelming success,” said conference co-chair and Laurentian University associate professor Marty Hudyma. “We really didn’t know what to expect in view of the fact that the industry is in a downturn. We were optimistic that we would get 200 delegates, and 250 would have been beyond our wildest dreams, so we were ecstatic with 302.”

According to Hudyma, approximately half of the delegates were from outside the Sudbury area, including contingents from Australia, South America, Europe and South Africa.

Deep Mining 2014, the seventh International Conference on Deep and High Stress Mining, was hosted by the Australian Centre for Geomechanics. It attracted 62 papers on a wide variety of topics including ground control, seismicity, ventilation, mine design and logistics.

“The feedback I got from delegates was that there were a lot of very good case studies on deep mining and the challenges they have to deal with,” said Hudyma.

“There are three real challenges. The first is the ground conditions and the stresses are getting more difficult, so we have to modify our mining practices to be able to work effectively and safely at great depth.

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HISTORY: Workers at biblical copper mines ate quite well – by By Megan Gannon (Fox News.com – November 28, 2014)

http://www.foxnews.com/

LiveScience – Metalworkers who did skilled labor at biblical-era copper mines in modern-day Israel were rewarded for their efforts with well-rounded meals, new research suggests.

The metalworkers’ diet included good cuts of sheep and goat, as well as pistachios, grapes and fish brought to the middle of the desert from the Mediterranean, according to an analysis of ancient leftovers at “Slaves’ Hill,” a mining camp in Israel’s Timna Valley.

The findings imply that “Slaves’ Hill” might be a misnomer; the people who manned the furnaces probably weren’t slaves, but rather, they held a higher status because of their craft, archaeologists say. [The Holy Land: 7 Amazing Archaeological Finds]

Not-exactly ‘Slaves’ Hill’

“Somebody took care that these people were eating well,” said Erez Ben-Yosef, an archaeologist from Tel Aviv University.

Since 2012, Ben-Yosef has been leading an archaeological expedition in the heart of Timna Valley, the second biggest source of copper in the southern Levant region. (The biggest is Faynan, farther north in Jordan.) People have taken advantage of the copper deposits at Timna for millennia. There are dozens of smelting sites and thousands of primitive mining pits clearly visible in the region today. And the area is still used for copper production; the Mexican mining giant AHMSA has a stake in the region.

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COLUMN-Sliding investment, cost-cutting shows commodity boom-bust lives – by Clyde Russell (Reuters U.S. – November 28, 2014)

http://www.reuters.com/

LAUNCESTON, Australia, Nov 27 (Reuters) – Anybody who still has lingering doubts that the commodity cycle has turned bearish need only delve into two reports released this week on Australia’s resources sector.

The half-yearly report from the Bureau of Resources and Energy Economics (BREE), the government’s forecaster, showed only three projects, worth a total A$597 million ($507 million), reached a positive final investment decision (FID) in the six months to October.

This is not only the lowest number, but the lowest value for more than a decade, and is conclusive proof that investment in projects is waning under the burden of low prices and more muted demand forecasts as growth in top buyer China slows.

The other report released this week came from consultants PwC, with their annual review of mid-tier Australian miners showing companies are now trying to maximise productivity by boosting output while cutting costs.

The problem is so far these efforts aren’t bearing fruit, as prices fall faster than the companies can make improvements. “In fact, the worst may be yet to come, at least for iron ore and coal miners,” PwC said in the Nov. 25 release.

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Central bankers’ love-hate gold relationship – by Lawrence Williams (Mineweb.com – November 28, 2014)

http://www.mineweb.com/

Why are most central bankers so keen not to proceed with gold repatriation? What is the true picture for gold held in official vaults?

LONDON (MINEWEB) – One senses a bit of a momentum growing in the precious metals sector. Is this just wishful thinking from someone who is something of a long-term believer in gold and silver, or is there some substance behind the feeling? After all gold is having trouble making any kind of decisive move above $1,200, being knocked back every time it sticks its head above the 1,200 parapet. But then, despite the knockbacks, it still seems to be clinging on, just about, to the $1180s and 90s with the occasional foray down a few dollars.

On the negative side the Swiss gold referendum looks to be going to come up with a No vote after unprecedented lobbying and scaremongering from the Swiss establishment. Even so the fact that this referendum is even taking place reflects the obvious unease which is running through sectors of the European financial community regarding the true levels of physical gold held on their behalf in the US in particular.

This suggests the beginnings of a growing lack of trust in the political and financial establishment. If this trust evaporates much further then government attempts to prop up their fiat currencies, which might otherwise be failing, will be called further into question as will government statistics purporting to show things are getting better the whole time while most of the people are not seeing the fruits of the so-called financial recovery.

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