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Yukon mining project partners with China (CBC News North – October 22, 2014)

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

Collaboration with Beijing institute could ‘reduce costs by 40%’ says Canadian CEO

A mining project in Yukon is hiring Chinese engineers. Copper North Mining is planning for work in the Carmacks area. The company has announced a firm in Beijing will help design a process to help it recover copper, gold and silver.

The project is at the feasibility study stage but Chinese workers will help design the mine and ship equipment to Canada.

Harlan Meade is President and CEO of Copper North Mining. He says this approach could reduce costs by as much as 40 per cent.

“What (Copper North Mining) is doing is getting them to do the detailed design engineering. We oversee it here in Canada then we get the procured equipment in China. We have it delivered and then our Canadian engineering firm, JDS Energy and Mining Inc, does the construction management, mining, earth works, and the other parts of the project.”

Meade says Chinese engineers would provide “about half” of the work at the feasibility stage with Canadian engineers hired to do the rest.

The project would see also savings as it would obtain its equipment directly from Chinese suppliers.

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Copper hopes ‘bright despite volatility’ – by Neil Hume and James Wilson (Financial Times – October 22, 2014)

http://www.ft.com/intl/markets/commodities

Copper is set for a period of price volatility as the market digests new supply but long-term prospects remain bright due to grade declines and extended lead times for new projects, according to global miner Rio Tinto.

Sentiment toward the red metal, used extensively in construction and electrical applications, has turned increasingly bearish over the past year as new projects have come on stream and concerns about slowing growth in China have intensified.

China accounts for about 40 per cent of global consumption of the commodity. These factors have pushed the benchmark copper price down 9.2 per cent this year to $6,691 a tonne.

However, some traders believe the price will recover. They say rising supply may not lead to a surplus in the refined copper market next year because of a raw material bottleneck.

Jean-Sébastien Jacques, head of copper at Rio Tinto, one of the world’s biggest mining companies, said a “wave” of new supply was set hit the market between now and 2016 as investments made over the past decade stared to bear fruit.

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Taseko seeks to sue Ottawa for damages over B.C. mine rejection – by Peter Koven (National Post – October 22, 2014)

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

Taseko Mines Ltd. claims the federal government acted unlawfully in pushing its British Columbia copper project off the rails. Its solution: Try to sue the government for damages and to find out precisely what happened.

On Wednesday, Taseko will appear in a federal court in Vancouver to argue that its two judicial review applications to Ottawa should be combined into one civil lawsuit seeking damages. The move, which appears to be unprecedented, is being fiercely opposed by the government.

“We haven’t found another instance where a company in precisely this position sues the federal government,” said lawyer John Hunter of Hunter Litigation Chambers, which is representing Taseko.

Taseko claims it was the only logical course of action. The Vancouver-based miner says it has evidence of actual malfeasance by federal officials, including secret meetings with opponents of the $1.5-billion New Prosperity project that could have swung Ottawa’s decision.

The project has been controversial for many years. Taseko’s first Prosperity mine proposal was approved by the British Columbia government in 2010, but rejected by Ottawa later that year. It cited environmental concerns over Taseko’s plan to drain the nearby Fish Lake.

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B.C. remains ‘high-cost environment’ despite lower LNG tax rates, industry group says – by Geoffrey Morgan and Yadullah Hussain (National Post – October 22, 2014)

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

CALGARY/TORONTO – The B.C. government slashed its tax rate proposal for its nascent liquefied natural gas industry in a bid to entice proponents to the West Coast, but some industry players still believe the province has not gone far enough to roll out the welcome mat.

Mike de Jong, B.C.’s finance minister, said he is confident the new rules introduced Tuesday are fair and balanced, but the province is not taking anything for granted. “These proponents have to make decisions worth billions of dollars, and there is still a lot of work to be done,” he said in an interview.

The new Liquefied Natural Gas Income Tax Act would tax an LNG project at a rate of 1.5% when production begins, rising to 3.5% after capital costs are recovered. That rate will rise to 5% after January 1, 2037 — when the government expects the LNG industry will be well established within the province.

“We believe this overall framework strikes the right balance between a competitive and economic environment and a fair return to British Columbians,” Mr. de Jong said in statement announcing the tax.

In February, B.C. floated the idea of a two-tiered tax system for proposed LNG projects, which super-cool natural gas into its liquid state for export off the coast. In addition to adding a third tier, the province Tuesday reduced the rate at which it would tax a project’s net income.

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NEWS RELEASE: Government of Quebec Forms a Partnership with Champion Iron and Adriana Resources to Advance Labrador Trough Rail Feasibility

MONTREAL, QUEBEC and TORONTO, ONTARIO–(Marketwired – Oct. 21, 2014) – The board of Champion Iron Limited (ASX:CIA)(TSX:CIA)(“Champion” or the “Company”) is pleased to advise that the Government of Québec and Lac Otelnuk Mining Ltd., a joint venture between Adriana Resources (“Adriana”) and WISCO International Resources Development & Investment Limited, have formed a partnership with Champion, “La Société ferroviaire du Nord québécois, société en commandite (“SFNQ”).

The SFNQ was formed recently, following the tabling by the Québec government of its 2014-2015 budget in June, as a partnership of government and industry and assigned the responsibility of managing the implementation of the Feasibility Study for a new Labrador Trough rail line.

The Québec government has set aside a maximum of C$20 million from its Plan Nord Fund to contribute to the study. For its part, Champion’s contribution of sunk costs is valued up to C$6 million. Among other major economic and wide-reaching social benefits, the new rail infrastructure when developed will enhance the Québec-based mining industry’s ability to service world markets with competitive long-term tariffs.
Champion’s subsidiary Champion Iron Mines Limited is a founding partner of the SFNQ, which is open to all miners in the region.

Champion’s Chairman and CEO Michael O’Keeffe said, “The SFNQ partnership includes the Government of Québec and fellow mining group Lac Otelnuk Mining Ltd, with an open invitation to others from within industry to join this important initiative”.

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Mining: End of Iron Age – by Honore Banda (The Africa Report – October 21, 2014)

http://www.theafricareport.com/

Douala, Cameroon – Low prices and high supplies are driving iron ore prices down. Analysts say large companies will survive the crunch but many smaller producers and explorers may be faced with tough decisions.

In a red and muddy clearing along Cameroon’s densely forested border with the Republic of Congo, a fleet of diggers stands idle. High above the canopy of trees, dark clouds start to gather. It is an ominous portent for an iron ore project billed as transformative for the country.

Three years ago, the Mbalam mining project, spearheaded by Australian explorer Sundance Resources, was hailed by Cameroon’s President Paul Biya as a potential game changer for the Central African country. Now, as Sundance courts fresh investors to shore up its dwindling cash reserves while iron prices fall, the prospects look bad for the construction of a $5bn railway needed to make the mine economical.

Across the continent, a similar pattern emerges. From Guinea to Angola, mining projects set up to feed China’s seemingly insatiable appetite for raw materials face an uncertain future.

Demand from the world’s largest consumer of iron ore is now cooling, and the determination of the three biggest producers – Rio Tinto, Vale and BHP Billiton – to plough ahead with expansion plans is bad news for smaller rivals, many of whom have chosen Central and West Africa’s undeveloped – and thus higher cost – deposits as their way into the mix.

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Oil: Blind-sided by Technology – by Gwynne Dyer (October 19, 2014)

http://gwynnedyer.com/

“The price of oil will hit its floor and it will rise again,” President Nicolas Maduro assured Venezuelans, whose shaky economy depends critically on a high oil price. “Venezuela will continue with its social plans. Venezuela will move forward.”

No it won’t, and neither will Russia, Iran, or Nigeria. The only major oil exporters that are not in deep trouble are the Arab countries, whose governments have some room for manoeuvre because of low production costs, relatively small populations, and big foreign currency reserves.

Since June the cost of a barrel of Brent crude, the benchmark for world oil prices, has fallen by almost a quarter, from around $110 a barrel (where it was stuck for the past four years) to just above $80 a barrel. Last month, for the first time in decades, Nigeria exported no oil at all to the United States. Even at a big discount, Americans just don’t need it. And the main reason for all that is fracking.

American production has almost doubled in the past five years thanks to the new drilling technologies, and the United States overtook Russia last year to become the world’s largest producer of oil and gas combined. (Saudi Arabia comes a distant third.) With production soaring and world demand for oil stalling due to slow economic growth, a collapse in prices was inevitable. The question is how far they will collapse, and for how long.

The answer is probably not much further, for the moment – but they could easily stay down in the $75-$85 range for a couple of years.

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OBITUARY: Nelson Bunker Hunt, Texas tycoon who lost billions in silver gamble, dies at 88 – by Robert D. McFadden (Globe and Mail – October 22, 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.

The New York Times News Service – Nelson Bunker Hunt, the down-home Texas oil tycoon who owned a thousand race horses, drove an old Cadillac and once tried to corner the world’s silver market only to lose most of his fortune when the price collapsed, died Tuesday. He was 88.

Hunt died after a long battle with cancer and dementia, according to The Dallas Morning News.

“A billion dollars ain’t what it used to be,” he said in 1980 after silver stakes he amassed with two brothers, Herbert and Lamar, fell to $10.80 from $50.35 an ounce. In barely two months, their holdings and contracts for purchases – corralling a third to half the world’s deliverable silver – had plunged from a $7-billion value in January to a $1.7-billion loss in March.

With the Hunts unable to cover enormous margin calls, the debacle endangered financial markets and brokerage houses, forcing federal regulators and the nation’s banks to step in with a $1-billion line of credit, a bailout that saved the system from a stampede and the Hunts from an immediate meltdown.

But for Bunker Hunt, who used his middle name, and his brothers – scions of one of the world’s richest clans – the boom and bust led to years of lawsuits, civil charges, fines, damage claims and bankruptcy proceedings that gobbled up vast holdings in real estate, oil, gas, cattle, coal, thoroughbred stables and other assets. Still, they managed to salvage millions and were not subjected to criminal charges.

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Hopes for Ontario’s Ring of Fire doused as mining companies grow wary – by Rachelle Younglai (Globe and Mail – October 22, 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.

Ontario’s “Ring of Fire” mineral belt was supposed to be a $60-billion natural resources treasure trove that would bring employment and economic prosperity to a remote part of the province’s north. It hasn’t worked out that way.

The project’s key player has given up, leaving the future of the deposit in question and hurting prospects that it will ever reach the lofty expectations of politicians.

Today, not much is happening in the Ring, a 5,000-square-kilometre crescent of mostly chromite in the boggy James Bay lowlands, 500 kilometres north of Thunder Bay.

The region was said to be so rich in resources that it would rival Sudbury’s nickel basin and Alberta’s oil sands. Instead, the area remains undeveloped, a victim of the global slump in commodity prices and bureaucratic red tape.

“I’m disappointed that it hasn’t advanced more. It’s a long time, seven years after discovery,” said Neil Novak, the geologist who made the first discovery in the Ring and is now exploring for other metals as the chief executive officer of Black Widow Resources Inc.

In addition to the complete lack of infrastructure – there are no roads or power in the area – there is no real plan on how to mine the chromite, which is used to harden steel.

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Mining still thrives in bone dry, drought-stricken West – by Dorothy Kosich (Mineweb.com – October 21, 2014)

http://www.mineweb.com/

As the drought rages on in the U.S. West, mining operators and other water users may have to ride a Big Wave of regulatory change and higher water costs.

RENO (MINEWEB) – In speech to the Society of Mining, Metallurgy and Exploration national convention in Salt Lake City earlier this year, Hecla Mining External Relations Vice President, Luke Russell warned attendees that water quantity and quality issues are the fastest growing economic and social challenge the mining industry faces today.

Mining companies spent $12 billion globally in 2013 on water infrastructure, a 275% increase from 2009, Russell observed, yet mining production costs were only up 52% in the same period.

The Western Governor’s Drought Forum held in Arizona last week examined the challenges facing mining, manufacturing and industry during a 15-year long period of drought with more than 70% of the western United States in the grip of a water shortage that shows no signs of ending.

On Monday, the Washington, D.C.-based Brookings Institute and Stanford University Woods Institute for the Environment held a joint session in California to discuss the undeniable fact that the West is bone dry and the water crisis has become as much an economic issue as an environmental concern and demands focused national attention.

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Indonesia Mineral output plummets;new govt urged to lay out policies – by Raras Cahyafitri (Jakarta Post – October 20, 2014)

http://www.thejakartapost.com/

The national output of a number of commodities has dropped significantly this year, as expected, on account of the government’s mineral ore export ban.

The incoming administration, led by president-elect Joko “Jokowi” Widodo, is expected to soon lay out clear policies in the mineral sector, which has been severely impacted by the ban.

Only a few million tons of ore were produced during the January to August period this year, most likely only to meet domestic demand, figures from the Energy and Mineral Resources Ministry’s directorate general of mineral and coal showed.

The production of bauxite, for example, was a mere 2.8 million tons during the January-August period, compared to almost 60 million tons throughout last year. This year’s output is expected to see a few additional tons by year-end.

“The production of several minerals was from newly established smelters, such as nickel pig iron products,” mineral and coal director general R. Sukhyar said.

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Iron Ore Risks Extending Collpapse on Supplies: Moody’s – by Phoebe Sedgman (Bloomberg News – October 20, 2014)

http://www.businessweek.com/

The collapse in iron ore prices may have further to run as global supply increases and steel-demand growth slows, according to Moody’s Investors Service, which said it may reduce ratings on producers.

About 300 million metric tons of new and expanded supply will come on stream over the next few years, analysts including Carol Cowan said in an e-mailed report received today. Global steel-production growth in 2014 remains muted with China, the key driver of consumption, continuing to slow, Moody’s said.

Iron ore tumbled 39 percent this year after companies including Rio Tinto Group (RIO), BHP Billiton Ltd. and Vale SA raised low-cost output in Australia and Brazil, spurring a global glut. The market is in the midst of a transition without precedent in recent commodity history as supply surges and some higher-cost mines are displaced, according to Macquarie Group Ltd.

“Iron ore prices have collapsed,” Moody’s said in the report, which was dated Oct. 17. “With slowing global steel-production growth rates, iron ore prices remain vulnerable to the downside and we expect continued volatility.”

Ore with 62 percent content delivered to Qingdao, China, posted a third straight quarterly loss in the three months to September, and dropped to $77.97 a ton on Sept. 29, the lowest level since September 2009.

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[Ferrochrome] Merafe Resources Falls on Output Drop, Mine-Halting Strike – by Andre Janse van Vuuren (Bloomberg News – October 17, 2014)

 http://www.bloomberg.com/

Merafe Resources Ltd. (MRF) declined the most in more than a year after the South African ferrochrome producer said third-quarter output fell 14 percent and some of its mines were shut by a strike.

Merafe, which owns 20.5 percent of the world’s largest ferrochrome operation in a venture with Glencore Plc (GLEN), dropped 8.9 percent in Johannesburg trading, the most since Aug. 7, 2013, to 1.03 rand by the close.

Ferrochrome output for the three months ended Sept. 30 decreased to 74,000 metric tons from 85,600 tons a year earlier as sales declined 18 percent to 60,200 tons, the company said in a statement today.

The venture’s western mines near Rustenburg, northwest of Johannesburg, have been shut since the last week of September after the National Union of Metalworkers started a pay strike, Investor Relations Manager Kajal Bissessor said today by phone. Its eastern operations and all smelters are fully operational, she said.

Merafe’s mines are close to the platinum belt in South Africa, where the world’s biggest producers have operations that were crippled by a five-month strike this year.

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Indonesia’s Choice: Coal vs. Environment – by David Fogarty (Epoch Times – October 19, 2014)

http://www.theepochtimes.com/

Indonesia cannot build power stations fast enough. And neither can most of its Asian neighbors. Rapid economic and population growth are driving equally rapid demands for electricity as the region builds out power grids to connect up millions of people to fuel prosperity.

Electricity generation is forecast to nearly triple in Southeast Asia between 2011 and 2035, the International Energy Agency says, with fossil fuels providing most of the energy.

With a population of 600 million, nearly twice that of the United States, and about 130 million people without electricity, Southeast Asia faces an immense challenge to meet that demand in a cost-efficient manner that doesn’t cause serious air and water pollution and drive up health costs.

For Indonesia, the Asia energy story is a blessing worth untold riches in terms of royalties, money it needs to develop its economy and provide jobs. The IEA says demand for coal in Southeast Asia will rise 4.8 percent per year, with Indonesia in the geographic sweet spot to be the region’s main supplier.

In the wider Asia-Pacific, demand for coal will increase by 52.8 percent from 2010 to 2035, according to the Asian Development Bank.

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News Release: Golden rule: Every new mine would improve Ontario’s finances

This article was provided by the Ontario Mining Association (OMA), an organization that was established in 1920 to represent the mining industry of the province.

Just one new gold mine in Ontario could provide more than 2,200 direct and indirect jobs and pay more than $102 million in tax revenue for all levels of government annually, according to a new study “An Au-thentic Opportunity: The Economic Impacts of a New Gold Mine in Ontario.” University of Toronto economists Peter Dungan and Steve Murphy presented the key findings of their report, which was completed for the Ontario Mining Association with assistance from the Ministry of Northern Development and Mines, today.

“With the increased value and relative importance of gold mining production in the province in recent years, as well as the number of announced projects currently the pipeline, it was decided that the impact of a gold mine would be the subject of our analysis,” said Mr. Dungan. “This study also recognizes the scope for the possible benefits that can be realized by Aboriginal groups.”

The four-pronged study demonstrates the positive economic impacts on an annual basis for both an underground and an open pit gold mine and for both types of operations during an estimated three-year construction phase of a new mine and the production phase of these mines, which could last for decades. The economists have used broad sources of public data, mining company disclosure documents and economic models from the Input-Output Division at Statistics Canada.

For example, an underground gold mine with about $300 million in sales annually with 620 direct employees, would create 894 jobs from mine supply companies and a further 690 induced jobs largely in the retail and service sector.

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