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Lundin bulks up on copper with purchase of Freeport mine – by Rachelle Younglai (Globe and Mail – October 7, 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.

Canada’s Lundin Mining Corp. has agreed to buy a Freeport-McMoRan Inc. copper mine for $1.8-billion (U.S.), a move that will double its production as the red metal slumps on fears of weaker Chinese demand.

Lundin’s deal to acquire 80 per cent of Freeport’s Candelaria mining complex in Chile comes at a rocky time in the mining industry. Mining giants such as Phoenix-based Freeport are trying to divest assets to pay down hefty debt loads incurred during the commodity boom.

Meanwhile, economic growth in China, the world’s largest consumer of copper and other commodities, is slowing. And big new copper mines are expected to start producing next year, which will add to an already well-supplied market and likely weigh on prices for some time.

For Lundin, however, the downturn represents a buying opportunity. The base-metals miner will fund the deal through debt and an equity financing.

Toronto-based mining royalty company Franco-Nevada Corp. will help finance the deal by paying Lundin $648-million for a stream of Candelaria’s future gold and silver production. The Candelaria complex includes an open-pit copper mine, infrastructure and the nearby Ojos del Salado underground copper mines.

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Rio Tinto rejects Glencore merger approach amid iron ore slump – by Sonali Paul (Reuters U.S. – October 7, 2014)

http://www.reuters.com/

MELBOURNE – (Reuters) – Rio Tinto rejected a merger approach from smaller rival Glencore Plc to create a $160 billion mining and trading giant in August just as the price of its most profitable product, iron ore, slid toward a five-year low.

The miner said on Tuesday Glencore had contacted it about a potential merger in July, adding that it turned Glencore down in August and there had been no further contact between the companies on a deal.

A merger would have created the world’s biggest miner, supplanting BHP Billiton. “The Rio Tinto board, after consultation with its financial and legal advisers, concluded unanimously that a combination was not in the best interests of Rio Tinto’s shareholders,” Rio Tinto said in a statement to the Australian stock exchange.

Rio’s Australian shares jumped as much as 4.7 percent to a 9-day high of A$60.28 in a weaker broader market after the company issued the statement.

Rio revealed the approach after Bloomberg reported that Glencore had talked to Rio’s top shareholder, Chinese state-owned Aluminum Corp of China (Chinalco) [ALUMI.UL], to gauge its interest in a deal.

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Glencore, Rio Tinto merger whispers leave analysts skeptical over financial details – by Eric Reguly (Globe and Mail – October 7, 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.

ROME — Is Glencore CEO Ivan Glasenberg about to strike again? The great white shark of the global commodities industry is laying the groundwork for a blockbuster deal that would see Glencore Xstrata PLC merge with Rio Tinto Group to create a mining giant that would displace BHP Billiton Ltd. as the world’s top mining company, Bloomberg reported on Monday.

A Glencore spokesman in Switzerland would not confirm or deny that Glencore, the world’s biggest trader of commodities, from coal to grain, is contemplating a merger with Rio Tinto. “No comment,” he said.

Rio Tinto said late Tuesday that it had rejected a merger approach from its smaller rival in August, finally responding to a string of media reports over the past month that have said Glencore wanted to merge with Rio. It also said there had been no further contact between the companies on a merger.

“The Rio Tinto board, after consultation with its financial and legal advisers, concluded unanimously that a combination was not in the best interests of Rio Tinto’s shareholders,” Rio Tinto said in a statement to the Australian stock exchange.

The American depository receipts (ADRs) of Rio shot up 18 per cent after the Bloomberg story appeared, then slipped back for an 8 per cent gain. On the London exchange, Rio shares rose 1.6 per cent, giving it a market value of £56.3-billion.

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Junior exporers find way to survive – by Barry FitzGerald (The Australian – October 7, 2014)

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

The way veteran minerals economist Richard Schodde from MinEx Consulting sees it, the junior explorers are the cockroaches of the market in that they seem to be able to survive nuclear winters.

Which is just as well, given that there has been no joy for the sector on the commodity price front of late.

The economist in Schodde backs up his assessment that the juniors are supreme survivalists with some hard numbers from an in-depth study, all of which is posted on MinEx’s website (http://www.minexconsulting.com/publications.html).

Basically, Schodde says that most junior companies will weather the current downturn. Shareholders might not be enjoying the experience but at least their bits of paper will continue to be worth something. Pick the right juniors, and they could even make serious money.

In the study, Schodde compiled data on the cash position and market capitalisation status of no fewer than 1980 junior companies in Australia, Canada and other mining market jurisdictions. It showed that one in five Australian junior explorers have less than $200,000 in the bank. The good news in that for ASX-listed players is that the story in Canada is worse, with 50 per cent of the juniors there having less than $200,000 in the till.

Schodde says that while bank balances may be depleted, a more important metric for assessing ongoing viability is to look at a company’s market cap.

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INDIGENOUS CANADIANS ARE BLOCKADING A MINE TO PROTEST POLLUTION – by Sarah Berman (Vice.com – October 6, 2014)

http://www.vice.com/en_ca

On Friday, Imperial Metals, the company responsible for Canada’s largest-ever mining waste spill, served an injunction application to indigenous protesters blocking roads to its Red Chris copper and gold mine near Iskut, British Columbia.

A group of Tahltan First Nation elders known as the Klabona Keepers have blocked access to the mine for the second time in two months over concerns that Red Chris is too similar to Mount Polley, a sister mine that spewed 24 million cubic meters of toxic sludge and wastewater into one of the province’s biggest salmon spawning lakes on August 4.

“As a result of the blockades and the conduct of the blockaders, no person and no vehicle are able to access the project site along the access roads,” reads Imperial Metals’ injunction application, which was delivered yesterday morning. “Red Chris has been forced to severely limit its construction activities at the project site, and if the blockade continues, will be forced to halt them altogether.”

Resource companies often use injunctions to break up protests. For example, on October 3, 2013, a company called SWN Resources was granted an injunction to remove Elsipogtog First Nation protesters from a shale gas exploration site north of Moncton, New Brunswick. Two weeks later, the Royal Canadian Mounted Police (RCMP) enforced the injunction with an over-the-top display of force that included beanbag guns, police dogs, snipers, and plenty of pepper spray. Needless to say, shit escalated quickly.

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Indian coal import growth outstrips China – by Neil Hume (Financial Times – October 6, 2014)

http://www.ft.com/intl/commodities-note

Domestic supply growth is weak and unlikely to improve soon

Could India soon overtake China as the world’s biggest consumer of seaborne thermal coal? For many miners and traders, the answer to that question, posed at the Financial Times’ inaugural Commodities Retreat in Singapore last week, is yes.

Coal is India’s most important energy source – supplying more than half of all power stations – and the country, alongside Korea, is emerging as one of the few bright spots in the 1bn tonne a year seaborne thermal coal industry.

In the wake of adverse legal rulings – the Supreme Court recently cancelled more than 200 coal licences held by dozens of private sector groups – miners and traders are tipping strong import growth from India. They say domestic supply growth is weak and unlikely to improve in the foreseeable future because of bureaucratic and infrastructure challenges.

Glencore, the world’s largest producer of high quality thermal coal, told analysts on a recent site visit that it expects Indian annual imports to rise from 150m tonnes, to 180m tonnes in 2015 and 300m tonnes by 2020.

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150th anniversary timeline [Butte, Montana Copper History] (Montana Standard – October 5, 2014)

http://mtstandard.com/

1864 to 1889

1864 – Prospector “Seven-Up Pete” McMahon names Silver Bow Creek.

1866 – Residents of Butte City attempt to form a miners’ union.

1870 – The Emma Mine has a new foreman – Marcus Daly, who later would become one of Butte’s famous Copper Kings.

1872 – W.A. Clark, another soon-to-be Copper King, makes first visit to Butte.

1876 – Mining prospector hits a substantial copper vein in the Parrot Mine.

1876 – Mining begins to boom in Butte with the opening of the Dexter Mill and Centennial Mill.

1876 – Marcus Daly, with the help of investors, takes over Alice Mine.

1878 – Cut wages at the Lexington Mine and Alice Mine trigger Butte’s first-ever strike.

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150 years of Butte spirit [Copper Mining History] – by Matt Hoffman (Montana Standard – October 5, 2014)

http://mtstandard.com/

In 1874, a scant decade after Butte’s founding, the boom town was already on the verge of a bust. It’s population, which had climbed to about a thousand, may have dropped as low as 61. The town was down – but, if you know anything about Butte, far from out.

A few prospectors renewed their interest in the settlement over the next year and found deposits of gold, silver and copper the first wave of miners had overlooked.

“These were daring, innovative individuals,” Chief Executive Matt Vincent said. The character traits of those first rugged miners came to embody the legendary spirit of Butte, an ethos unlike anywhere else in Montana. In this city’s 150-year history, generation after generation of Butte residents have faced new challenges and — somehow — always found a way to thrive.

Sometimes, with a little luck. In those early days, copper was the most abundant but also the least valuable of the findings – until the world changed. The telephone and light bulb were invented over the next few years, and suddenly copper went from an afterthought to a maker of fortunes.

Those who put their faith and sweat into the town were richly rewarded. By 1917, Butte was one of the largest cities in the Northwest, and one of the wealthiest. As the town was built, so was something else.

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NEWS RELEASE: NWT Government Releases Plan to Implement Mineral Development Strategy

(Yellowknife, NT – October 6, 2014) In a powerful statement to show that the NWT is “open for business”, the government of the NWT (GNWT) has unveiled NWT Mineral Development Strategy – GNWT Implementation Plan 2014-2015, its first annual plan to support the NWT Mineral Development Strategy with appropriate actions to ensure the continued growth of the NWT minerals industry.

According to Brooke Clements, President of the NWT & Nunavut Chamber of Mines, “This implementation plan lays out the first tangible actions that are designed to improve the investment climate for mining and exploration companies in the NWT. We are hopeful that these actions will help support the continued growth of the NWT mineral resource industry. A healthy and growing mineral industry will help ensure that sustainable and long-term benefits continue to accrue to all residents of the NWT.”

In his Minister’s Message, NWT Minister of Industry, Tourism and Investment David Ramsay stated, “Through a partnership effort with the NWT and Nunavut Chamber of Mines, we were proud to release the NWT Mineral Development Strategy in the fall of 2013.

This Implementation Plan puts that Strategy into action by establishing concrete goals, objectives, and timelines. Putting these initiatives in place will set the wheels in motion to restore a positive investment climate, which is important if we are to discover new deposits and establish new mines to sustain and grow our economy.”

Some highlights of the implementation plan include:

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Glencore Said to Lay Groundwork for Potential Rio Merger – by Matthew Campbell, Anousha Sakoui and Dinesh Nair (Bloomberg News – October 6, 2014)

http://www.bloomberg.com/

Glencore Plc (GLEN) is laying the groundwork for a potential merger with Rio Tinto Group (RIO) in the next year that would create the world’s largest mining company, worth about $160 billion, according to people familiar with the situation.

As a preliminary step, Glencore has reached out to Aluminum Corp. of China, the Chinese state-backed company that is Rio’s largest shareholder, to gauge its interest in a potential deal, said two of the people, who asked not to be identified because the matter is private. The discussions with the company, which is known as Chinalco and controls about 9.8 percent of Rio, took place in recent weeks, one of them said.

Rio executives are well aware of Glencore Chief Executive Officer Ivan Glasenberg’s interest in a deal, which has been made clear in informal settings, the people said. However, no talks are underway between the two companies, no formal offer has been made, none is likely before the end of 2014, and Glencore could decide against an offer, they said.

Glencore views Chinalco as potentially supportive of a change in control after the Chinese company failed to secure a board seat at Rio and has seen little progress on a joint iron-ore project in Guinea, one of the people said. Glencore is also gauging the views of other Rio shareholders, and studying the tactical, financial, and regulatory obstacles to the deal as it considers its next steps, the people said.

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Resources, Empire & Labour: Crisis, Lessons & Alternatives – Edited by David Leadbeater

To order a copy of Resources, Empire & Labour: Crisis, Lessons & Alternatives, click here: http://fernwoodpublishing.ca/book/resources-empire-and-labour

The interconnections of natural resources, empire and labour run through the most central and conflict-ridden crises of our times: war, environmental degradation, impoverishment and plutocracy. Crucial to understand and to change the conditions that give rise to these crises is the critical study of resource development and, more broadly, the resources question, which is the subject of this volume. Intended for researchers, students and activists, the chapters in Resources, Empire and Labour illuminate key aspects of the resources question from a variety of angles through concrete analyses and histories focused on the extractive industries of mining, oil and gas.

Natural Resources in Japanese Imperialism: The Yasuba Critique

To discuss the evidence on the role of natural resources in Japanese imperialism, a useful point of departure, despite many flaws, is Yasukichi Yasuba’s 1996 article “Did Japan Ever Suffer from a Shortage of Natural Resources Before World War II?” Yasuba challenges the resource-shortage explanation of Japanese imperialism.

According to Yasuba, proponents of the resource shortage view emphasize that Japan had a high population density and also suffered from a lack of natural resources. The situation became particularly acute in the 1930s with the rise of protectionism in the high-income countries to which Japan shipped many of its exports.

These features of the situation made it attractive for Japan’s leaders to pursue military expansion. By establishing political control over more territory, it could obtain more resources and it could create a trade bloc and thereby find markets for its exports, markets that would serve as alternatives to the markets of the other imperialist powers and their areas of control. The territories acquired could also provide an outlet for surplus Japanese population.

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Campaign to World Heritage List Cornish mining sites gaining momentum – by Lauren Waldhuter (Australian Broadcasting Corporation – October 6, 2014)

http://www.abc.net.au/news/rural/

An international campaign to have South Australia’s Cornish mining sites World Heritage listed is gaining momentum. In the mid 1800s thousands of Cornish miners flocked to Burra in the state’s Mid North and shortly after to Moonta on the Yorke Peninsula to mine two of the largest copper deposits in the world, at that time.

Philip Payton, a professor of Cornish and Australian Studies from the University of Exeter in the United Kingdom, says the sites deserve global recognition by the United Nation’s heritage organisation (UNESCO).

Cornwall’s own mine sites are already World Heritage listed but Professor Payton says that only tells part of the story. “It’s not really complete until people recognise that actually there’s an international linking,” he says.

“That it’s a global story and if places like Burra and the copper triangle don’t feature in that somehow, the experience in Cornwall is diminished.”

It’s estimated 500,000 Cornish migrants left England between 1815 and the start of World War I, as the once booming mining industry on their home soil slowed down. But their advanced mining skills were an asset to other projects emerging all over the world. “They were cutting edge,” said Professor Payton.

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New report finds mining industry poorly prepared for the demographic time bomb – by Will Coetzer (Stratum International – October 3, 2014)

http://www.stratum-international.com/

Stratum International’s latest research report suggests the mining industry recognises the threat of forthcoming demographic changes but is not well-prepared for the potential impact on future leadership. The reasons are complex and sometimes it’s about short-term survival rather than complacency. But those who can should start to prepare now.

The Demographic Time Bomb in Mining, published today (3 October 2014) is a new research report from Stratum International, based on the results of a survey of more than 900 mining professionals. The report considers the impact of forthcoming demographic changes in the industry from the perspective of leadership and succession strategies, and finds the sector has work to do to secure the next generation of leaders.

Several respondents made the point that for some firms – particularly juniors and mid-tiers, short-term survival is the priority in the current economic environment. So it is unsurprising that long-term leadership needs are not currently troubling them.

Even taking this into account, the findings suggest more could be done in many companies to ensure the leadership of the organisation will be in safe hands in the future. In fact only 1% of the 900 respondents believe the mining industry is well prepared for the demographic changes ahead.

Nearly four fifths believe the industry is completely or somewhat unprepared. This rises to nearly nine out of ten of board executives, who arguably have the most power to put appropriate plans in place.

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First Nations chiefs seek to develop new tribal park in B.C. – by Mark Hume (Globe and Mail – October 6, 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.

VANCOUVER — The concept of what a park is and how it functions to protect the landscape is being redefined in British Columbia by First Nations in ways that some might find surprising.

At a totem pole-raising ceremony on the weekend, the Tsilhqot’in First Nation announced plans to create Dasiqox Tribal Park, the latest in a series of declarations by native organizations aimed at protecting massive swaths of territory.

Dasiqox covers about 300,000 hectares of some of the most spectacular landscapes in Canada. The Valhalla Wilderness Society, which has long advocated protecting the area, describes it as “a vast mountain enclave for grizzlies” and other wildlife.

Unlike federally designated national parks and provincial enclaves, the First Nations concept in B.C. aims to create protected areas under the jurisdiction of native people, with potential room for resource extraction. While not new, these parks allow First Nations to control logging, mining and other activities in a particular region, which might otherwise be open to unfettered use by business.

In a series of interviews, Tsilhqot’in chiefs made it clear that their idea of what a park is, is very different from what most Canadians might think.

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COLUMN-Time to buy commodities? Maybe, but not the old ways – by Clyde Russell (Reuters U.K. – October 6, 2014)

http://uk.reuters.com/

LONDON, Oct 6 (Reuters) – Crazy or brave? That might be the most logical thought if anybody told you now was a good time to invest in commodities, given the sharp declines in the main indexes in the past few months.

But that’s exactly what the overwhelming majority of fund managers and bankers were advocating at last week’s World Commodities Week conference in London.

Their optimism was in contrast to the clutch of analysts who presented at the meeting, who generally reinforced the current bearish theme by pointing to softness in demand in top importer China, as well as plentiful supply for many commodities.

The fund managers and bankers do have more than just blind optimism (and a desire for fresh funds to manage), and can point to a raft of reasons why they believe prices are near a bottom.

But the question remains as to who has the most compelling argument, and whether institutional and other major investors are prepared to buy into an asset class that most would view as having a disappointing recent track record.

While commodities had a good start to the year, outperforming equities, they have since struggled, with the Bloomberg Commodity Index down 13.2 percent from its 2014 peak in late April, and the S&P GSCI 14.9 percent weaker from its June high.

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